ARK and Glassnode Propose a Bitcoin Economic Analysis Framework Using a New Metric

Leonardo Perez
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ARK and Glassnode Propose a Bitcoin Economic Analysis Framework Using a New Metric

The proposed framework offers a comprehensive analysis of the Bitcoin economy using a simple, efficient, and effective metric. This metric measures the time during which Bitcoin has been held while transacting, giving greater weight to holder’s transactions.

ARK Invest and Glassnode White Papers

ARK Invest and Glassnode have published white papers that describe a new framework for analyzing Bitcoin using an on-chain metric. The new method, called Cointime Economics, introduces a fresh metric known as the coinblock.

This metric represents the condition of the Bitcoin network and can be used to express its economic state in place of the pending supply. By using this new system, valuation metrics can be refined, and a new analysis tool can be provided to gauge Bitcoin activity.

According to David Puell from ARK Invest and James Check from Glassnode, the significance of a bitcoin should depend on when it was last moved. For instance, if it had not been moved for 10 years, its informational worth would be higher than one that was only inactive for one week.

The reasoning behind this statement is that the longer a bitcoin remains inactive, the more valuable it becomes. Coins held for a long time indicate ownership by the market group with the longest investment horizon and the most profitable cost base. This reveals the behavior of the most capitalized and historically savvy market participants in Bitcoin’s history.

As a result, when Bitcoins that have been inactive for a long time are transferred, it is likely executed by holders and whales, making it more significant than newly mined stocks of Bitcoin. Lost Bitcoins are not included in this calculation.

Coinblocks the Calculation Unit

The coinblock is the basic unit of calculation, determined by multiplying the number of Bitcoin by the number of blocks produced during mining while Bitcoin aren’t moving. Since the Bitcoin network produces one block every 10 minutes on average, one coin generates around 144 coinblocks daily. The authors state that 6 blocks are produced every hour, which adds up to 24 blocks in a day.

Coinblocks are “destroyed” based on how long the Bitcoin is held. This means that bitcoins that have been held for a longer time result in a higher number of destroyed coinblocks, indicating increased activity on the part of hodlers.

For instance, if two bitcoins have not been moved in seven blocks and are then transacted, 14 coinblocks would be destroyed. This means that bitcoins that have been held for a longer time result in a higher number of destroyed coinblocks, indicating increased activity on the part of hodlers. Coinblocks destroyed is a different version of coindays destroyed, which Glassnode already uses as a metric.

On the other hand, the conventional Unspent Transaction Output (UTXO) model, which is crucial for many settlement systems, assigns equal weight to all Bitcoin. Under UTXO, inactive bitcoins are those that miners have not spent. Cointime Economics refers to them as the “vaulted supply,” calculated as the total number of coinblocks created divided by the total number not destroyed or “stored.”

The white paper cites three use cases to exhibit the practicality of Cointime Economics. Glassnode also has a more in-depth paper for blockchain experts, paired with a group of Cointime Economics measurements.

By Leonardo Pérez

Num Finance Has Launched nCOP, a New stablecoin Anchored to the Colombian Peso

Audy Castañeda
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Num Finance Has Launched nCOP, a New stablecoin Anchored to the Colombian Peso

Num Finance launches nCOP, their latest stablecoin offering with remittance tokenization and 8% returns. It is now available through Polygon Labs, their key blockchain partner. This is a remarkable milestone in the journey to build the #NumNetwork, bringing cutting-edge tools to Latin American users.

The assets backing nCOP exceed its issued value, ensuring robust stability and security, reducing the impact of volatility and enabling efficient cross-border transfers and settlements.

nCOP facilitates smooth transactions and fast remittances, protects against volatility through returns and easy USD trading, and promotes financial inclusion in the region by offering a high-quality financial solution.

As an over-collateralized stablecoin, nCOP claims to provide users with solid stability and enhanced security, enabling borderless transactions and promoting financial inclusion in the region by providing an easy way to send and receive remittances. In addition, nCOP allows businesses to settle in real time, making cash management more efficient.

This is possible because there is no currency risk, as nCOP can be exchanged into Colombian pesos on a 1:1 basis. In addition, this launch includes the Num Yield feature, a unique aspect of nCOP that allows users to earn nCOP rewards based on regulated financial products.

Num Finance, a leader in local stablecoin issuance, continues to expand, offering advanced financial solutions and leading the tokenization of digital assets in emerging markets.

The incorporation of nCOP is a key step in the expansion of the Num Network, an evolving ecosystem created to empower individuals to manage, transact, earn and save money in emerging markets. With a specific focus on Latin America, the Num network provides users with innovative digital financial tools designed to meet their everyday needs.

Furthermore, nCOP creates new opportunities for continuous remittances and payments between individuals and businesses. This is possible because nCOP can be exchanged for Colombian pesos at a 1:1 share, facilitating efficient cross-border transactions.

Growing Potential for Stablecoins to Receive Remittances in Colombia

Agustin Liserra, CEO of Num Finance, has highlighted the potential of tokenizing remittances in Colombia and offering nCOP returns based on regulated financial products.

Colombia is a major recipient of remittances in Latin America, and Num Finance aims to provide a novel way for individuals to send and receive nCOPs as remittances, while earning returns on their holdings.

In particular, stablecoins are having a growing impact not only in Colombia, but throughout Latin America.

Founded in 2021 by experts in the decentralized finance industry (DeFi), Num Finance initially gained recognition by introducing stablecoins such as nARS (pegged to the Argentine peso) and nPEN (pegged to the Peruvian sol).

With recent funding from a pre-stage growth round, Num Finance is expanding. It is expanding rapidly, launching stablecoins in new geographies and exploring the tokenization market for digital assets. In doing so, it is including the substantial money market sector. In this case, the Colombian peso was the currency of choice for the stablecoin benchmark.

The launch of nCOP marks another step forward in Num Finance’s goal to introduce modern financial technology. This is useful especially in areas where traditional financial practices are outdated. The company thanks investors for their continued support of its long-term vision.

By Audy Castañeda

Bitcoin Options Data Points to an Interesting Outcome Following this week’s USD 1.9 billion Expiration

Audy Castañeda
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Bitcoin Options Data Points to an Interesting Outcome Following this week’s USD 1.9 billion Expiration

A combination of macroeconomic and cryptocurrency-specific factors is predicted to impact the USD 1.9 billion options expiration this week.

The approaching monthly Bitcoin options expiration on August 25th, worth USD 1.9 billion, is crucial to determine if the support level of USD 26,000 will remain steady. It may seem reasonable to attribute the recent sell-off in the cryptocurrency market to the US Securities and Exchange Commission (SEC) postponing its decision on Bitcoin spot exchange-traded funds. However, the macroeconomic perspective must also be taken into account.

If the Federal Reserve manages to control inflation, the U.S. dollar will probably continue to strengthen. This was clear on August 22nd when the US dollar index (DXY), which measures the dollar against other currencies, reached its highest point in 76 days.

Bitcoin bulls need to make sure that the Bitcoin price stays above USD 27,000 before August 25th to avoid a potential loss of GBP 280 million from the monthly expiration of Bitcoin options.

Bitcoin Bearish Will Benefit from the Threat of Tough Regulation

Cryptocurrency bulls have been facing regulatory challenges recently. This is because two major cryptocurrency exchanges, Binance and Coinbase, are currently involved in lawsuits with the SEC. Furthermore, the SEC is appealing Ripple’s initial victory against them.

Bitstamp has also recently announced its decision to discontinue its US-based betting services. A major issue in the current US regulatory situation is whether Ether is a commodity or security.

Binance has informed that it has suspended its cryptocurrency debit card offerings in Latin America and the Middle East. This is due to reports that Binance also stopped euro withdrawals and deposits via SEPA on 20th August. The exchange clarified that there is no specific timeframe for restoring service.

Data Indicates that bulls Were overly Optimistic about Bitcoin Price

The open interest for options expiring on August 25th amounts to £1.9 billion. However, the final amount is expected to be lower due to some traders banking on the price to reach USD 29,000 or even higher. The unexpected 12% correction in Bitcoin’s price from August 14th to August 19th is noticeable in Deribit’s Bitcoin options interest chart, and it caught bullish investors off guard.

The ratio of call and put options, at 0.56, exposes a disparity between the USD 1.2 billion of open interest seen in the call options and the USD 685 million observed in the put options. However, if Bitcoin’s value sustains at roughly USD 26,500 come 8:00 am UTC on August 25th, only USD 35 million worth of call options would remain available. This happens because the option to purchase Bitcoin at USD 27,000 or USD 28,000 has no value if BTC is traded below that level when it expires.

Bitcoin Bearish Traders Target below USD 26,000 to Maximize their Profits

The amount of available option contracts for call and put instruments on August 25th changes based on the expiration price. The difference in the number of contracts between the two sides represents the projected profit.

Given Bitcoin’s repeated falls below the USD 19,000 support level between 21 and 23 August, it wouldn’t be unexpected if this level is tested again before options expire. Additionally, with the cryptocurrency’s current regulatory environment, there is minimal motivation for Bitcoin bulls to overturn the existing bearish trend following the USD 1.4 billion monthly options expiration.

By Audy Castañeda

Argentina: Virtual Wallets Must Pay Customers for Uninvested Money

Audy Castañeda
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Argentina: Virtual Wallets Must Pay Customers for Uninvested Money

The Argentinian Central Bank (BCRA) has mandated digital wallets operating in the country to give their customers the earnings they obtain on their deposits. The order applies to the funds placed in wallets that are not invested based on the customer’s choice.

The resolution applies to the funds in wallets that customers do not invest. Payment account holders will now receive periodic returns.

Mercado Pago, one of the strongest companies in the South American country, quickly rejected the decision.

As a result of this update, savers who hold their money in payment accounts will now receive regular profits. Previously, these deposits did not provide any return for clients. Mercado Pago, one of the leading companies in South America, promptly dismissed the decision.

What the BCRA Says in its Resolution

The amount of money deposited in these accounts by payment service providers is 331 million dollars, according to the Central Bank of Argentina’s latest Retail Payments Report.

Previously, the BCRA required these funds to be held in sight accounts by financial institutions. The goal was to protect them from unforeseen events and assure their accessibility, while also allowing for up to 45% of this amount to be invested in National Treasury Bonds denominated in US dollars.

The official communication of the monetary authority remarks that

“Payment service providers that offer payment accounts (known as virtual wallets) will have to pass on to their clients the total return they receive on the peso balances of the deposit accounts in the financial institutions in which those clients’ funds are deposited.”

The news was received very badly in the FinTech world. Mercado Pago was the first to openly show its opposition. The company released a statement expressing its disagreement:

“We refuse this action that benefits no one. It is a form of harassment against the Fintech industry and Mercado Pago. It causes great harm to the industry and reduces investment incentives. It’s difficult to grasp this unpredictable and unexpected action in this situation. We see it as a rule made with hostility.”

Not only do we view the decision as an assault on the industry, but we informed the government that this action was taken previously.

In addition to defining the resolution as an attack on the sector, the firm let the government know that such a measure was adopted some time ago.

Mercado Pago users are already, for the most part, receiving returns on their balances. This product is an absolute success; in terms of number of users and total amount invested (it is already the number one fund in Argentina for retail users). This obviously generates discomfort in the traditional banking system, which pays 0% for balances in savings banks.

Background to BCRA’s Attack on the FinTech Sector

In December 2021, the Central Bank made another change that upset the FinTech industry. They implemented a rule that removed a source of funding. The authority ordered virtual wallets to hold all client deposits in a demand account at the BCRA without the ability to invest the money elsewhere.

In addition, the Central Bank stated that FinTech or payment service providers offering payment accounts could not conduct or assist transactions using digital assets for their clients. This rule only applied to transactions involving cryptocurrencies that were not authorized by the BCRA and not under the jurisdiction of the national authority.

This provision received significant criticism. This is the newest action that has upset the industry.

By Audy Castañeda

Ethereum (ETH) is the Most Traded Cryptocurrency, New Study Suggests

Leonardo Perez
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Ethereum (ETH) is the Most Traded Cryptocurrency, New Study Suggests

Ethereum (ETH) appears to be the most popular top 10 cryptocurrency by market capitalization with 79 million wallets. The asset has potential for high volatility due to the low number of wallets containing 50% of its supply.

On the other hand, Bitcoin (BTC) has the lowest volatility due to low trading activity and the distribution of half of its supply across 4,500 wallets.

A Chainalysis report indicated that the number of Ethereum (ETH) wallets accounts for the majority of crypto participants in July 2023, while the number of Bitcoin (BTC) wallets grew to 50 million, addresses with ETH balance increased to 79 million.

Bitcoin faces the lowest volatility risk, with 4,500 wallets holding 50% of the asset supply. On the other hand, ETH offers the highest probability of price changes, with only 131 wallets accounting for half of its supply.

Staking Pools Increase Ethereum’s Liquidity after “The Merger”

Staking pools such as Lido and Rocket Pool offer investors rewards based on the amount of Ethereum they deposit. As a result, despite the large concentration of ETH in a few wallets, the distribution of ownership means that individual withdrawals are unlikely to be large enough to move the price.

DeFi “liquid staking” protocols such as Lido essentially preserve Ethereum’s liquidity while providing the long-term benefits of staking. Maintaining liquidity is critical to protect prices from market instability.

Lido issues one derivative token to investors for each Ethereum they deposit. The token, called “staked ETH,” is worth the same as ETH and can be invested in decentralized financial protocols to earn returns.

Staking pools became popular in the run-up to The Merge of Ethereum, in which its consensus layer changed from Proof-of-Work to Proof-of-Stake.

By using these services, investors can block ETH to share in some of the rewards that validators get for protecting the Ethereum network.

Ethereum and USDC wallets consistently rank high on the list of how many tokens active traders hold. In July 2023, active wallets held approximately two-fifths of the USDC supply and nearly half of all ETH.

ETH and USDC activity is likely correlated with the widespread use of the pair in decentralized finance (DeFi). Traders often convert US dollars into dollar-linked stablecoins, such as USDC to be used in decentralized financial services.

Ethereum Wallets Have Been More Active

Concerning the 2020 third quarter, during the so-called “DeFi summer,” and the first quarter of 2022, Ethereum wallets have been more active than Bitcoin holders, as they transacted at least once a month and consistently outperformed BTC activity during the 2021 bull market. This is shown in a graphic entitled Ethereum wallet holders remain more active than Bitcoin holders developed by Chainalysis

On the other hand, Bitcoin holders have tended to take a long-term view, and most of the supply is in wallets that do not transact frequently. Statistics show that exchanges have only held 20% of all BTC since 2020.

It is important to point out that subsequent Terra’s bankruptcy in mid-2022, several companies appear to have stocked up on the asset in anticipation of the next bull rally.

By Leonardo Pérez

Bitcoin Cash (BCH) on a Downward Trend

Audy Castañeda
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Bitcoin Cash (BCH) on a Downward Trend

In spite of remaining in 18th place in the CoinMarketCap ranking, BCH has faced turmoil in its value within market volatility. Significant price variations and regional challenges are revealed in Latin America.

Bitcoin Cash (BCH) has been one of the cryptocurrencies that has remained within the top 25 of the ranking maintained by CoinMarketCap. It is currently ranked 18th according to the data provided by the portal.

At the end of June until last August 23rd, the price has fluctuated downward, losing 39.56% of its price, going from being worth about 305.3 to reach the price of $184.5 per token.

Price Evolution, Expectations

Bitcoin Cash recently undertook a hard fork, which means that a major update has been made to its protocol. This Bitcoin Cash hard fork has brought with it a number of new improvements and features that aim to strengthen and improve the user’s experience.

The RSI indicator shows that Bitcoin Cash is currently struggling in a bearish zone, clearly showing that it is in an oversold zone, something that is bearish, logical with the collapse cryptoassets have had. The moving average indicator for the last 20 days shows how the asset is breaking above the $214.5.

Similarly, the same indicator for the last 50 days shows that the price closed at $237.6, meanwhile, the indicator for the last 100 days shows that the price closed at $196.4. The data also indicates that the next target to reach is $196, precisely to return to the levels prior to the rally obtained after the May bifurcation.

Anyway, the crypto ecosystem is still young and volatile, which leaves the window open for a new price drop near $168.1 as a lower band.

Bitcoin Cash Behavior in Latin America

Taking into account this entire panorama about this cryptoasset, it is shown its behavior in the main markets of the region.

Argentina

Starting in Argentina, where there is a relevant variety of platforms for the purchase and sale of cryptocurrencies.

Argentina bitcoin cash (BCH) has been trading at an average price of ARS 144,726.81, according to the four portals that were researched.

According to Binance, the BCH was priced for purchase at a value of ARS 143,177.43. Similarly, Satoshitango offered the possibility to buy BCH on its platform at a value of ARS 151,914.56 and for sale at a price of ARS 144,058.56 showing on the portal a recovery variation of 3.20%.

On the other hand, CryptoMarket offered BCH for purchase at a price of ARS 142,219.27, with an increase in its price of 3.40%. Bitso offered BCH at ARS 141,596 with an appreciation of 7.19%.

Brazil

In Brazil, the BCH price was averaging at BRL 961.93, according to the platforms mentioned below.

CryptoMarket quoted the price of the asset at BRL 954.54 for purchase, up 5.37%. Likewise, OKX showed the BCH purchasing quote at BRL 952.86, up more than 4.80%.

On Satoshitango, the BCH price was quoted for purchase at BRL 983.37 and for sale at BRL 952.86 per unit, up 2.50%. Bitso also offers its services in the South American giant, and the portal indicated the BCH price at BRL 956.98 with 5.92%. increase.

Chile

In the southern country, the BCH price floated around CLP 168,253.96, according to the data provided by the main portals that operate with the crypto-asset.

CryptoMarket showed for purchase the BCH price at CLP 165,770 with an approximate price increase of BCH at 3.57%.

In Satoshitango, BCH was quoted at CLP 175,964 for purchase, and for sale at CLP 170,655, with a 2.0% positive variation in the value reflected by the portal. However, on the OKX platform, the BCH price was displayed at CLP 166,079.21 with an increase of 4.80%.

Coinbase, on the other hand, quoted BCH at CLP 166,750.62 with a rise in its price close to 5.25%. Similarly, Buda.com was trading at CLP 166,706 with a 6.2% increase.

By Audy Castañeda

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