BitMEX Co-Founder Arthur Hayes Predicts that Bitcoin and Ethereum Will Bottom out

Alexander Salazar
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BitMEX Co-Founder Arthur Hayes Predicts that Bitcoin and Ethereum Will Bottom out

Hayes thinks cryptocurrencies could collapse in the second quarter, which led him to invest in put options as a hedge. Since BTC and ETH have a high correlation with the Nasdaq-100 Index, he promised to buy the drop if that indicator stalled.

Bitcoin entrepreneur and BitMEX co-founder Arthur Hayes recently expressed a bearish short-term view on cryptocurrencies. He indicated it is impossible to recognize the cyclical nature of markets and the truth that Bitcoin moves in tandem with traditional stocks.

He predicted that the trend of Bitcoin to move alongside tech stocks means its price might drop to USD 30,000 in June.

The former CEO of BitMEX said cryptocurrencies could collapse in the second quarter due to the poor state of global stock markets. For that reason, he is investing input options as a hedge.

Hayes stated cryptocurrencies were moving along with US tech stocks and that the conflict between Russia and Ukraine would hurt both.

Although he is still bullish about the long-term prices of cryptocurrencies, he thinks they are on the edge of the cliff.

He said many people must decide whether to sell fiat money and buy cryptocurrencies, but he recommends being patient.

He explained a drop in the Nasdaq-100 Index would drag cryptocurrencies downward. Several charts show the correlation between traditional markets and cryptocurrencies, supporting that suggestion.

Why Arthur Hayes Argues that the Nasdaq-100 Index Will Drop

The impact of the invasion of Ukraine by Russia will slow down global growth due to higher commodity prices. Hayes thinks the continuation and possible escalation of the war between the two countries would hurt the share price.

While falling interest rates tend to support the Nasdaq-100 Index, higher ones currently emerge in response to inflation.

Based on the Nasdaq 100 chart, Hayes said the tech index did not bounce significantly at a crucial technical level, suggesting a drop.

BitMEX Co-Founder Makes Some Predictions about Cryptocurrencies

Arthur Hayes predicted the correction of the Nasdaq-100 Index in the crypto market would cause a strong ripple effect.

Hayes explained Bitcoin (BTC) and Ethereum (ETH) have a high correlation with the Nasdaq-100 Index. He promised he would buy the drop of June with both cryptocurrencies if that indicator stalled.

The entrepreneur believes Bitcoin and Ethereum will bottom out before the Fed changes its policy from strict to flexible. In addition, he forecast BTC and ETH would be trading at USD 30,000 and USD 2,500, respectively, by the end of the second quarter.

For that reason, Hayes said he has been accumulating other cryptocurrencies, given that they are much cheaper. He considers some of those coins would not be able to escape the upcoming crash despite being already 75% below their all-time highs.

Finally, the co-founder of BitMEX pointed out that the above is just a forecast, and he could be either right or wrong. He added he was only trying to trade a short-term situation that would occur in risk markets if altcoins had attractive prices.

By Alexander Salazar

Elon Musk Officially Offers to Acquire Twitter for $41.3 Billion, but Justin Sun Would be Offering Way More

Jenson Nunez
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Elon Musk Officially Offers to Acquire Twitter for $41.3 Billion, but Justin Sun Would be Offering Way More

Twitter shares rose more than 12% in premarket trading following Musk’s officially filed offer with the Securities and Exchange Commission.

CEO Elon Musk made the network explode on April 4 when he purchased 9.2 percent of Twitter shares. It is worth considering that they rose immediately after the revelation.

Later, it became known that he would not play a role on the board of directors, despite being the largest shareholder, and he was joking about the strong criticisms that currently rely on Twitter.

But something else was at hand and revealed by a document from the United States Securities and Exchange Commission, SEC. In said document, Elon Musk himself offers to acquire the social media company Twitter (TWTR) for at least $41.3 billion in cash.

The letter to the SEC, revealed by the institution, says that Elon decided to invest in Twitter

because he firmly believes in its potential to be the platform ideal for freedom of expression worldwide, and freedom of expression is a social imperative for solid democratic systems.

However, since investing, Elon noted that the company would not thrive and meet this social imperative in its current form. According to the Chairman, Twitter needs a transition and become a private company.

Elon is currently offering to purchase 100% of Twitter for $54.20 per share in cash, a 54% premium before he started investing in Twitter, and a 38% premium over the day before the public revelation of his investment.

Twitter has Extraordinary Potential

Jack Dorsey, the founder of Twitter, has not yet explicitly commented on this offer. Neither has the current CEO of the platform, Parag Agraval, but Twitter shares rose more than 12% in premarket trading following Musk’s announcement.

Due to Musk’s interest in digital assets, especially Dogecoin, the doggy meme cryptocurrency appeared in the news, rising 5.28% in the last 24 hours, according to CriptoMercados. Of the first 15 with more capitalization, it is the currency with the highest percentage of increase in the day. Also, Dogecoin rose when Musk said he would be a shareholder of Twitter, but then it did not hold.

Shortly after the news of Elon Musk’s offer, and the posting of his offer on Twitter, Tron CEO Justin Sun stated that he also wanted to acquire Twitter and made an even bigger offer, registered at $60 per share.

He said he wants to encourage more users to get engaged and start developing procedures to clean up fraud and bots. After these statements, Twitter shares soared 2.56% compared to yesterday. At 9:50 am in New York, they are at US$47.02.

By: Jenson Nuñez

Three Chinese Banking and Securities Associations Wish to Suppress NFTs

Jenson Nunez
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Three Chinese Banking and Securities Associations Wish to Suppress NFTs

First, the entities went against digital assets; now, the associations revealed various warning statements linked to NFTs.

Non-fungible tokens, NFTs, have been an explosion worldwide and in all sectors. From sports and art to movies and the political environment, every single industry is including these collectibles as a way to consolidate their economy.

China couldn’t avoid the crescent event, and it got reported that the 2022 Asian Games that would take place in Hangzhou will sell torch NFTs, supported by Alipay.

However, not everyone is happy regarding these freedoms of NFTs. The China Internet Finance Association, the China Association for Banks, and the Chinese Securities Association revealed a statement highlighting their desire to suppress the trends of non-fungible tokens.

They intend to get supported and securitized and set a border to combat the risk of illegal financial activities linked to the items.

The Associations Released a Statement

The statement mentions that the NFT market in our country has kept expanding its dominion in recent years. As an improved application linked to Blockchain technology, NFT has demonstrated a vast value in helping the crypto economy model grow and encouraging the expansion of the cultural and creative environment.

On the other hand, there are some constant risks such as speculation, money laundering, and illegal trade that appear to worry the authorities.

The Association put Forward the Following Proposals on NFTs

Adhere to integrity and innovation to boost the real economy, allow the possibility to opt for application scenarios reasonably, set standards on applying Blockchain technology, and become a vibrant actor within the NFT environment by encouraging industrial development and digital industrialization.

The proposal also makes sure that the value of NFT products gets fully backed up, guides consumers to use their resources reasonably, and helps prevent inflation.

It also builds a shield to cover the intellectual property rights of the underlying items and support genuine digital creative and cultural works. True, assertive, and total disclosure of NFT product information protects consumers’ right to acknowledge, choose, and go through trusted and confident transactions.

The association wants to stop the securitization trend of NFTs because this measure would strictly prevent the risk of suspicious and illegal financial behavior, representing a potential danger to the economic system.

Called to Resist Speculation

It concludes by warning consumers about setting up proper consumption concepts, enhancing their self-protection awareness, consciously resisting NFT speculation, being aware of the situation, staying away from NFT-related illegal financial activities, and effectively shielding their property.

Critics, residents, and people with knowledge of the case confirmed that with this, the Chinese government is not saying anything new since, in previous years, it presented these same prohibitions and is simply remembering it in light of the fluctuations seen in recent weeks.

By: Jenson Nuñez

Bitcoin Bulls Need to Reclaim $41,000 Level before Friday’s $615M BTC Options Expiration

Audy Castañeda
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Bitcoin Bulls Need to Reclaim $41,000 Level before Friday’s $615M BTC Options Expiration

BTC staged a small relief rally, but securing the $41,000 level is the key to whether or not the current selloff is over.

In the last three months, the daily closing price of Bitcoin (BTC) fluctuated between $35,050 and $47,550, which is a range of 35.7%. Although it may seem excessive, it is not surprising; especially considering the 68% annualized historical volatility of BTC.

The relief rally that occurred after the April 11 drop below USD 40,000 came after the report of the Consumer Price Index (CPI) for March from the United States, which announced 8.5% for March, the highest since 1981. Meanwhile, in the UK, the CPI jumped to 7%, a 30-year high.

For these reasons, cryptocurrency traders are increasingly concerned about the ability of the US Federal Reserve rate hikes, expected throughout 2022, to contain inflationary pressure. If global economies enter a recession, investors will likely move away from risky asset classes like cryptocurrencies.

Additionally, the Bitcoin price correction was costly for leverage traders, as aggregate liquidations reached $428 million on derivatives exchanges.

Bulls Placed their Bets Starting at $50,000

The open interest for the April 15 options expiry in Bitcoin is $615 million, but the actual figure will be much lower as the bulls were too bullish. These traders might have naively followed the short-lived rally to $48,000 on March 28, as their bets for the April 15 options expiry extend beyond $50,000.

Bitcoin’s recent drop below $41,000 caught the bulls by surprise, and they have placed below that price level only 18% of the April 15 call options.

The 1.21 ratio between calls and puts shows the dominance of $335 million of open interest for calls versus $280 million for puts. However, with Bitcoin hovering near $41,000, most bullish bets are likely to be worthless.

If the price of Bitcoin stays below $42,000 at 8:00 a.m. UTC on April 15, only $62 million of these call options will be available. This difference is because a Bitcoin call at $42,000 is worthless if BTC trades below that level at expiration.

Bulls Target $43,000 to Balance the Scales

Below there are the four most likely scenarios based on the current price action. The number of option contracts available on April 15 for call (bullish) and put (bearish) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Scenario 1: Between $39,000 and $41,000 – 950 purchase options (calls) vs. 5,400 put options. The net result favors put instruments (bearish) by USD 180 million.

Scenario 2: Between $41,000 and $42,000 – 1,500 purchase options (calls) vs. 3,950 put options. The net result favors the bears by $100 million.

Scenario 3. Between $42,000 and $43,000 – 1,850 purchase options (calls) vs. 3,300 put options. The net result favors put instruments (bearish) by USD 60 million.

Scenario 4: Between $43,000 and $45,000 – 2,700 purchase options (calls) vs. 2,800 put options. The net result is balanced between the call and put options.

This simple estimate considers put options used on bearish bets and calls exclusively on neutral or bullish trades. Even so, this oversimplification does not take into account more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price, but unfortunately, there is no easy way to estimate this effect.

Bears, Meanwhile, Will Try to Pin BTC below $41,000

Bitcoin bears need to push the price below $41,000 on April 15 to lock in a $180 million profit. On the other hand, the bulls’ best-case scenario calls for a push above $43,000 to neutralize any impact.

Bitcoin bulls had $180 million in leveraged long positions liquidated on April 10 and 11, so they should have less margin than needed to drive the price higher. That said, the bears would no doubt try to sink BTC below $41,000 ahead of the April 15 options expiry.

By Audy Castaneda

Quantum Computing Company Simulates Cryptocurrency Payment Adoption

Audy Castañeda
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Quantum Computing Company Simulates Cryptocurrency Payment Adoption

“We wanted to test the power of quantum computing in a research case that is difficult to solve using classical computing techniques,” explains Maryam Haghighi.

Multiverse Computing, a quantum computing company with offices in Canada and Spain, has collaborated with the Bank of Canada to run simulations on how the adoption of cryptocurrency as a payment method might proceed.

In a statement on Thursday, Multiverse Computing said it used its team as part of a proof-of-concept project with the Bank of Canada to generate examples of how non-financial companies could end up adopting cryptocurrencies. Quantum simulations used scenarios with 8-10 financial networks with more than 1.2 octillion possible configurations.

The Bank of Canada has become the first G7 country to use quantum computing to simulate scenarios in which cryptocurrencies and fiat currency can co-exist.

This week, Multiverse Computing, Canada’s leading research firm, has reached a milestone: Its model can evaluate more than an octillion possible scenarios in 30 minutes. An octillion is a 10 followed by 30 zeroes.

Cryptocurrency Payment Simulation

According to Multiverse Computing, it was “important to develop a deep understanding of the interactions that can take place in payment networks” to understand how companies can adopt different forms of payment. Simulations suggest that cryptocurrency payments may end up coexisting with bank transfers and “cash-like instruments” in certain sectors, with the market share of each depending on economic costs, as well as on how financial institutions respond to greater adoption.

Most of the model scenarios showed that the adoption of cryptocurrencies by non-financial institutions should be slow, as there are costs associated with converting fiat currencies into a digital asset. It was also possible to simulate how banks might react: reduce wire transfer fees to compete with the very low costs of crypto transactions.

The research itself has only reached the proof-of-concept stage, so there are no practical consequences of the study on Canadian crypto regulations yet.

However, the ability to use quantum computing models to simulate how fiat and digital currencies might compete for usage and adherence is a big step forward, says a Canadian central bank official.

“We wanted to test the power of quantum computing in a research case that is difficult to solve using classical computing techniques,” said Bank of Canada data science director Maryam Haghighi. “This collaboration helped us learn more about how quantum computing can provide new insights into economic problems by running complex simulations on quantum hardware.”

How the Bank of Canada got involved

The Bank of Canada initially contacted Multiverse Computing in 2019 due to its work in predicting financial crises. The startup’s flagship product, the Singularity software development kit, augments leading financial quantitative tools, such as the Python programming language or Microsoft Excel, with quantum-level cloud computing power.

According to Multiverse Computing CTO Sam Mugel, the bank’s decision to have the team simulate cryptocurrency adoption was a bit of a macroeconomic push.

“The Canadian economy is too stable to have a high probability of financial collapse. So they basically said that any financial collapse that we predicted would probably be wrong,” said the computational physicist Decipher in an interview. Therefore, they asked to see “something more volatile. Let’s take a look at cryptocurrency exchanges and predict cryptocurrency failures.”

With advances in quantum computing, often come many suggesting the use of the technology to “crack” the security of Bitcoin (BTC) or other Blockchain networks by breaking the underlying cryptography.

In February, banking giant JPMorgan Chase published research on a Blockchain network resistant to quantum computing attacks. However, at least one expert at the MIT Technology Review argued in March that the technology was years away from such applications.

By Audy Castaneda

A Woman lost her Funds after Becoming a Victim of an ATM Attack

Jenson Nunez
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A Woman lost her Funds after Becoming a Victim of an ATM Attack

The retired nurse brought one bitcoin to scammers posing as fake bank agents. She did not know that the bitcoin address employed to carry out the transaction got owned by the attackers.

A woman from Buffalo, a region located in the north of the State of New York in the United States of America, lost at least one bitcoin after becoming a victim of an attack. The victim expressed that she had lost the funds she had kept in her account for a long time due to her retirement savings strategy.

The scam victim remained anonymous, although she highlighted that she previously worked as a nurse, and after retirement, she supported herself with a part-time job. On his work computer, she came to know that a pop-up window appeared in which she got warned that the equipment used got obstructed and that to solve it, she had to call an included telephone number.

The advertisement turned out to be fake, but she understood that it was something tangible. Hence, the victim immediately called the number, where she got told that her bank account got hacked and that she should move the money she had there quickly as possible, as reported by local media.

So the woman decided to remove in cash the USD 43,000 she housed in her profile, equivalent to a little more than one bitcoin, at the current price appearing in the market.

Later, the retired nurse decided to apply more guidance she had received from a fake bank representative. So, she sent at least $13,500 to a bank in East Asia and housed $29,500 at one of the bitcoin ATMs based at Fastrac on Bailey Avenue in her hometown.

The struggles of the affected woman began to get reflected shortly after when she realized that the funds were no longer under her control. She then filed a legal complaint with the local authorities to get the extracted funds returned to her wallet.

The Buffalo woman explained that the attackers had brought her with a barcode that she scanned at the ATM. She then placed assets into the ATM, going straight into a digital wallet under the attackers’ control.

Grandparents are Common Victims of Scammers who Look for Bitcoin and Other Crypto-Assets

 Kathy Stokes, director of an organization focused on retired Americans, expressed that people over 50 years old usually get harmed by different attacks related to cryptocurrencies.

There are often “copycat scams” or people pretending to be someone trusted, usually through phone calls and the internet. Thus, they report a struggle that never happened with a bank account under their control to request later that they click on a link to fix it.

Older people are not the only ones aimed at by cybercriminals, and young people are. In December, a New York-based artist and non-fungible token user, Toddkramer, became the victim of an attack that temporarily made him lose at least 16 tokens belonging to the popular Bored Ape Yacht Club collection.

By: Jenson Nuñez

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