Bitcoin Correlates with Gold as It Also Serves as a Hedge against Inflation

Alexander Salazar
-
0
Bitcoin Correlates with Gold as It Also Serves as a Hedge against Inflation

Bitcoin has behaved more like gold over the last 30 days, holding up better than stocks in that period. Jamie Dimon from JPMorgan and the US Federal Reserve (Fed) have warned about an imminent economic catastrophe, which BTC might help face.

The pioneering cryptocurrency might serve as a hedge against inflation if it decouples from stock markets. Bitcoin (BTC) remains more like spot gold than US stocks as the prices of services and products continue rising.

Over the last month, the price of Bitcoin has dropped by 3.11% while stocks have suffered much sharper losses. The S&P 500 index has fallen by 6.7%, the high-tech sector has had more significant losses, and the Nasdaq-100 index has dropped by 8.77%.

While the Correlation between BTC and Stocks Drops, Gold Rises

In contrast to stocks, Bitcoin has behaved more like gold over the last 30 days. While the global economy staggered, gold held up better in that period. Spot gold has dropped by only 1.27% to reach USD 1,643 an ounce. The price action gives credit to the digital gold thesis, at least for the time being.

The premise behind Bitcoin as a scarce digital asset indicates it can provide investors with a hedge against inflation. The cryptocurrency has the scarcity of gold, the portability of an e-mail, and the individual control and privacy of cash.

Earlier this year, Bobby Zagotta, the CEO of the Bitstamp cryptocurrency exchange, said that the above would happen. In March, he predicted that Bitcoin might start trading like gold in the short term. He commented it was only a matter of time before seeing how the asset becomes more mainstream, which has occurred.

This summer, the White House Office of Science and Technology Policy (OSTP) put cryptocurrencies on the table as a regulatory priority. While the Anthony Hopkins NFT Collection sold out in 7 seconds, Google’s Alphabet Inc. started accepting BTC as payment.

Bitcoin Might Serve as Hedge against Expected Inflation

Similarly to gold, Bitcoin might serve as a hedge against increasing inflation.

Financial news media outlets announce that an economic catastrophe will come. Jamie Dimon from JPMorgan and the US Federal Reserve (Fed), among others, have warned about a worse forthcoming recession. While the prices of services and products have skyrocketed, Bitcoin has held up better than stocks.

The price of Bitcoin increased 24 hours after the release of the latest Consumer Price Index data.

The markets believe that users can trust bitcoin more than bureaucracies, which the rest of the sectors must learn eventually.

The Winklevoss twins hope the price of Bitcoin will rise 25 times over the next ten years to be more than a hedge against inflation. The pioneering cryptocurrency might become the best-performing asset of the decade for the second consecutive year.

Meanwhile, Bitcoin is trading at around USD 19,614 and has accumulated a 1.8% gain over the last 24 hours. While its daily trading volume is above USD 24.51 billion, its market capitalization is about USD 376.24 billion, according to CoinGecko.

By Alexander Salazar

New Crypto Regulation in Japan Allows Exchanges to Share Customer Data

Audy Castañeda
-
0
New Crypto Regulation in Japan Allows Exchanges to Share Customer Data

The Japanese government could issue a new rule that would force the sharing of transaction information, to prevent money laundering.

The Japanese government will potentially dictate a change in its remittance rules, to include crypto exchanges that have to share information about crypto transactions and customers.

Also, it is considering adding a new rule in its attempt to regulate the crypto market. Officials discussed a “grouping bill” at a cabinet meeting on Oct. 16. The plan is to combine six bills so that there is no room for money laundering in the crypto market.

Among the laws is the Prevention of Transfer of Proceeds of Crime and the Foreign Exchange Law. This would require crypto exchanges to provide information about the sender and recipients of a transaction.

In addition, it also wants exchanges to create a system where there is a list of sanctioned entities, which could help in asset freezing.

The change focuses on transactions where funds have been moved off the platform, which will help track transactions. Those found guilty of engaging in illicit activities could face punitive action. If the change is approved, the rules are expected to take effect in May 2023.

Japanese Police Say Lazarus Group Is Behind Robberies

The Japanese government has also revealed that North Korea’s Lazarus group was behind years of crypto hacks in Japan. They said that phishing was one of the most common hack methods.

According to information disclosed a few days ago, the National Police Agency, the Financial Services Agency, and the National Center for Incident Preparedness and Cybersecurity Strategy issued a warning in a document published on Saturday.

Based on such document, the North Korean hacker group uses tactics such as sending an email to employees of a crypto asset company, posing as a senior official of the company, and speaking to them through social networks, with the aim of accessing the company’s network and steal cryptocurrency assets.

Officials warn users not to open email attachments unless proper precautions are taken. In addition, it is essential to protect the secret keys to access confidential data outside the Internet and to reflect before opening the documents attached to an email.

The North Korean group is believed to have been involved in the 2017 WannaCry ransomware attack. In April 2022, the US Federal Bureau of Investigation indicated that the group was involved in a case in which that 78 billion yen worth of crypto assets were stolen.

Japan Works on Multiple Regulatory Changes

Like most other nations, Japan is interested in exerting more control over the crypto market. The Financial Services Agency has, time and again, made statements to that effect.

Officials are also reviewing corporate tax rules for crypto companies from 2023, following lobbying from crypto groups who say the tax rules are harsh.

The country passed a landmark law related to stablecoins after the fall of the Terra ecosystem. In the meantime, it is working on its own CBDC, following Sweden’s approach and not China’s.

However, it is also interested in fostering innovation and development in space. The government has announced its interest in Web 3.0 to boost the economy. This would include a social integration of Web 3.0, metaverse, and NFT.

By Audy Castaneda

The Volatility of Bitcoin Causes the Crypto Market to Be a Coiled Spring

Alexander Salazar
-
0
The Volatility of Bitcoin Causes the Crypto Market to Be a Coiled Spring

Glassnode points out that Bitcoin consolidates within a tight range while reaching weekly extreme prices within only 24 hours. There may be volatility, either as a breakout or another rejection, as the weekly aSOPR average approaches the breakeven value of 1.0.

Over the last few weeks, the crypto market has remained quiet, with no significant movement to the upside or the downside.

Occasions driven by events like the announcement of September inflation numbers by the US Bureau of Labor Statistics seem to be the main exceptions. After the value of Bitcoin (BTC) went up like a roller coaster, it dropped and skyrocketed within sixty minutes.

The analytics platform Glassnode describes the crypto market as a coiled spring due to a burst in volatility.

The Consolidation of the Price of Bitcoin Continues

According to Glassnode, the Bitcoin market consolidates within a tight range while reaching most weekly extreme prices in just 24 hours.

Bitcoin traded below USD 18,338 due to incoming US inflation data higher than expected. A quick rally to a high of USD 19,855 followed before completing a round trip at the weekly opening price.

The price of BTC is around USD 19,594 and has accumulated a 2% gain over the last 24 hours. Besides, it has attempted to break above the crucial USD 20,000 resistance level.

Glassnode noted that it is strange for the BTC market to reach such a low volatility period. A highly volatile move has usually followed most cases of this kind before.

For example, the 1-Week Realized Volatility chart shows that volatility values have dropped below 28% in a bearish market. That phase has usually preceded significant moves to the upside and the downside.

Other Signs of Incoming Volatility in the Price of BTC

The Adjusted Output Profit Ratio (aSOPR) metric allows a similar compression. That indicator measures the average realized gain/loss multiple for coins spent on a specified day.

A value of around 1 in a bullish market often acts as support since investors often increase their positions around their cost basis. That usually occurs as a buy-the-dip scenario, but the bearish value of stock acts as resistance as investors try to exit at a cost basis.

The weekly average of aSOPR is approaching the breakeven value of 1.0 from below. Therefore, there may be volatility on the horizon, either as a breakout or another rejection.

Off-Chain Volatility in the Price of Bitcoin Also Brews

Glassnode also indicates that the volatility of Bitcoin seems to be brewing in the derivatives markets. That happens because the short-term implied volatility options price already reached an all-time low of 48% this week.

In the past, that situation preceded violent moves that deleveraging in DeFi and derivatives markets often exacerbated.

Investors should research the all-time high, behavior, and possible future price of Bitcoin before buying it. That will help them find the most convenient investment opportunity to reduce the risk of losing money.

By Alexander Salazar

Germany Becomes World’s Most Pro-Crypto Country, Study Finds

Audy Castañeda
-
0
Germany Becomes World’s Most Pro-Crypto Country, Study Finds

It overtook the United States, which ranked first in the second quarter.

By the third quarter of 2022, Germany overtook the United States at the top of the ranking of the most pro-crypto countries in the world. The USA is downgraded to 7th place. France ranks 17th, despite the government’s desire to make the country the main Blockchain hub in Europe.

The benevolence of a country for cryptocurrencies is often summarized or even confused with its advantageous fiscal policy towards digital currencies, or its legalization as a means of payment in the same way as fiduciary currency.

Germany Tops the Ranking

Countries like El Salvador and Portugal are often thought of as the most pro-crypto nations in the world. In the case of the Central American country, it was the first nation to legalize Bitcoin. As for Spain, its zero tax policy towards digital assets sometimes leads us to call it “El Dorado” of Europe.

However, these two criteria are not enough to qualify the benevolence of a country towards the crypto universe.

In its quarterly report on the ranking of the most crypto-friendly countries, Coincub uses a set of 9 criteria to determine the openness of countries. These include: government regulation, financial services, population adoption, taxes, talent, as well as the presence of cryptocurrency initiatives in the economy, trading, fraud, and the environment.

According to Coincub, Germany is currently the most crypto-friendly country, displacing the United States, which topped the rankings in the previous quarter.

The first power in Europe is followed by Switzerland, a nation recognized for its financing, Australia, the United Arab Emirates, and Singapore. Joe Biden’s country, for its part, ranks 7th.

France is in the 17th position with the same score as Canada, Portugal, and Great Britain. El Salvador, despite its investments, legalization, and the desire to create a Bitcoin City, is ranked 25th. The Central African Republic is ranked 55th in the ranking.

Germany: Very Advanced Crypto Ecosystem

Olaf Scholz’s country is one of the few in the world to clarify its position on cryptocurrencies. Therefore, the German government was the first to adopt a Blockchain strategy to exploit the potential of this new technology in the country. In the document, Coincub explained the following:

“Based on a wide range of ranking criteria, Germany has a positive digital currency outlook and is one of the strongest ‘traditional tax’ crypto economies overall, as opposed to pure tax havens, for example.”

The report also highlights that, “Along with Switzerland, it took a positive stance towards crypto from the start, seeking to clarify policies to deal with the phenomenon from the early days, while many other countries have adopted, and still do, a wait-and-see attitude.”

Furthermore, a report by Kucoin indicated earlier this year that 44% of Germans want to invest in cryptocurrencies in the future.

It is worth noting that, according to said report, the European state became “the first country in the world that (had) a clear set of rules applied to cryptocurrencies” in 2013.

Long before this announcement, the German Savings Banks Association reported that its members were working on apps that would allow their customers to buy or sell cryptocurrencies.

By Audy Castaneda

While Pessimistic US Data Drive Stocks Higher, Bitcoin Approaches USD 20,000

Alexander Salazar
-
0
While Pessimistic US Data Drive Stocks Higher, Bitcoin Approaches USD 20,000

Michaël van de Poppe said the results of the Fed’s survey were much worse than expected, but he believes Bitcoin will rally. According to Glassnode, historical examples with 1-week moving volatility below 28 have preceded significant price moves in a bearish market.

According to data from TradingView, the price of Bitcoin (BTC) reached USD 19,672, 3.5% above its weekend lows.

The BTC/USD pair rose alongside stocks, with the S&P 500 and Nasdaq Composite Index gaining 2.7% and 3.2%, respectively.

Weak US economic data, like the fall of the Empire State Manufacturing Index to -9.1 in October, accompanied the action. That was much lower than the forecast of -4.3 and the -1 reading in September.

The New York Federal Reserve commented that an October survey revealed that manufacturing activity declined in the state.

They said that the General Business Conditions Index fell by eight points to -9.1. While 23% of the respondents reported that conditions had improved during the month, 32% said they had worsened.

Michaël van de Poppe, the CEO of trading company Eight, responded by saying the results were much worse than expected. However, he believes that Bitcoin will rally despite the weakening in the economy.

The US Dollar Index (DXY) continued to pull back on recent gains, targeting 112 and dropping by 0.65%.

Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, believes the 2022 risk asset deflation and the Fed’s tightening portend an elusive endgame despite the global recession.

The expert considers it necessary to pay attention to lower commodity prices to reduce the Fed’s pessimism and falling money supply. He believes that cooling crude oil can help recharge Bitcoin and gold.

Research by Experts Reinforces the Prediction of Imminent Volatility

Traders expect some relief to reach crypto markets weekly, but other perspectives confirmed that nothing had changed for Bitcoin in months.

According to chain analyst Glassnode, it is strange for BTC markets to reach periods of such low volatility. In addition, almost all of those cases occur before a highly volatile move.

Besides a chart of the realized volatility of Bitcoin, researchers like analyst Checkmate said the market had reached a crucial point.

The experts mentioned historical examples with 1-week moving volatility below the current value of 28%. They said they preceded significant price moves in both directions in a bearish market.

Glassnode concluded there was a slightly discernible directional bias in futures markets, although the fuel for a potential price breakout exists. For example, BTC-denominated futures open interest reached new all-time highs.

The report indicated that volatility might be on the horizon while the prices of Bitcoin usually remain stagnant for a long time.

Bitcoin is trading at around USD 19,474 and has accumulated a 1.8% gain over the last 24 hours. While its daily trading volume is above USD 25.73 billion, its market capitalization is about USD 373.55 billion, according to CoinGecko.

Investors should research cryptocurrencies like Bitcoin before buying them to know their all-time high, behavior, and possible future price. It is a matter of time before seeing how the market influences the value of the pioneering cryptocurrency.

By Alexander Salazar

Crypto Twitter Splits, as another NFT Platform Moves towards Listing Royalties

Audy Castañeda
-
0
Crypto Twitter Splits, as another NFT Platform Moves towards Listing Royalties

Solana-based Magic Eden has become the latest NFT marketplace to switch to a royalty-free model, following in the footsteps of X2Y2 in August, albeit reluctantly.

Magic Eden has become the latest NFT marketplace to switch to a royalty-free model. Under the optional reward model, buyers have the power to determine the rewards they wish to contribute to an NFT project, which means there is a chance that some creators may not receive rewards when their artwork is sold.

On October 14, via mail NFT Market noted that the decision was made after “difficult thoughts and discussions with many creators” and came as “the market has been moving towards optional creator rewards for some time.”

NFT Market shared a chart showing that the cumulative number of wallets using royalty-free markets to buy or sell NFTs skyrocketed in late September.

A tweet posted by @MagicEden explains it further, “The market is moving towards optional royalties for a while. These charts (https://t.co/wxiU800l2P) show the accumulated portfolios that have used royalty-free markets to buy or sell NFTs.”

The Community Reacts

The move was met with divided opinions by the NFT community on Twitter, with some seeing the move as positive for the long-term health of the industry, while others described the copyright omission as “theft.”

Noted NFT artist Mike “Beeple” Winkleman noted to his 700,000 followers on October 15 via Twitter that while he doesn’t like what Magic Eden and others are doing, going from a seller fee to a buyer premium could be better for the industry in the long run

Another Twitter user named @CaptainFuego, behind Fuego Labs, told his nearly 10,000 followers that “fees are stupid and shouldn’t exist. I’m excited to see platforms take this approach.”

Others were more critical of the change. Broccoli DAO argued that “rewards are necessary in an immature ecosystem,” noting that according to their calculations they have already lost up to $27,000 in rewards for 0% purchases in other markets.

@BroccoliDAO tweeted that, “Following Magic Eden’s announcement that they will be making copyright optional, we have taken proactive steps to protect the integrity of our project. We have analyzed and determined how much we have lost from rewards for 0% purchases in other markets.”

Cozy the Caller, a self-proclaimed analyst, made a grim prediction to his 108,000 followers, stating that, “I see a scenario where Magic Eden hits 0% and loses market share to a market that imposes rewards in an innovative way.”

“Honestly unrealistic, I don’t know who advises Magic Eden, but imagine screwing up a billion dollar company. I see a scenario where Magic Eden goes to 0% and loses market share to a market that enforces author copyrights in an innovative way.”

Magic Eden’s Reply

Magic Eden said that the change was not taken lightly and that they were “actively trying to avoid this outcome and have spent the last few weeks exploring various alternatives.”

Magic Eden noted in their latest post that, “Unfortunately, the rewards are not applicable at the protocol level, so we had to adapt to changing market dynamics.”

In August, the X2Y2 NFT marketplace announced that they were introducing a similar option that allows buyers to set the royalty rate when purchasing NFTs.

The move did not appear to affect the use of the platform; according to NFTGo data, in the past three months, X2Y2’s transaction volume ranked first, ahead of OpenSea.

By Audy Castaneda

1...636637638...1,654Page 637 of 1,654