Grayscale Distances Itself from Fox News Shooting Controversy.
After its three-week-old ad aired during a controversial TV segment, Grayscale, a major crypto asset management firm owned by Digital Currency Group (DCG), has distanced itself from the FOX News program in question.
Grayscale made their decision known via a tweet after their ad was aired on a prime-time show during which the host Tucker Carlson shared his opinion on the Kenosha shooting that saw two people killed and one injured. The suspect was arrested on August 26, less than a day after the shooting.
Carlson, as reported by CNN, allegedly suggested that the shooting by a 17-year old was done to maintain order during a Black Lives Matter protest. "How shocked are we that 17-year-olds with rifles decided they had to maintain order when no one else would?," he asked, thus sparking a series of comments from the media world.
This position suggests that the firm might pull its ad support from the show.
The Grayscale ad aimed at “brrring crypto to the masses,” as noted by Grayscale CEO Barry Silbert has been aired on CNBC, MSNBC, FOX, and FOX Business.
Days after the commercial began airing on August 10, Silbert declared that the company had its largest fundraising week in which USD 217 million were invested into the Grayscale funds. Silbert opined that this milestone was achieved probably because people liked the commercial.
Meanwhile, shortly after the Grayscale TV ad began airing, Mike Novogratz’s Galaxy Digital debuted a full-page bitcoin-focused ad on the Financial Times Newspaper. As reported, Silbert didn’t seem to mind the competition, simply commenting “Love it” with a picture of the ad on Twitter the same day.
After its three-week-old ad aired during a controversial TV segment, Grayscale, a major crypto asset management firm owned by Digital Currency Group (DCG), has distanced itself from the FOX News program in question.
Grayscale made their decision known via a tweet after their ad was aired on a prime-time show during which the host Tucker Carlson shared his opinion on the Kenosha shooting that saw two people killed and one injured. The suspect was arrested on August 26, less than a day after the shooting.
Carlson, as reported by CNN, allegedly suggested that the shooting by a 17-year old was done to maintain order during a Black Lives Matter protest. "How shocked are we that 17-year-olds with rifles decided they had to maintain order when no one else would?," he asked, thus sparking a series of comments from the media world.
This position suggests that the firm might pull its ad support from the show.
The Grayscale ad aimed at “brrring crypto to the masses,” as noted by Grayscale CEO Barry Silbert has been aired on CNBC, MSNBC, FOX, and FOX Business.
Days after the commercial began airing on August 10, Silbert declared that the company had its largest fundraising week in which USD 217 million were invested into the Grayscale funds. Silbert opined that this milestone was achieved probably because people liked the commercial.
Meanwhile, shortly after the Grayscale TV ad began airing, Mike Novogratz’s Galaxy Digital debuted a full-page bitcoin-focused ad on the Financial Times Newspaper. As reported, Silbert didn’t seem to mind the competition, simply commenting “Love it” with a picture of the ad on Twitter the same day.
South Africa might impose tighter crypto taxes rules - auditor.
The South African Revenue Service (SARS) could bring in stricter taxes for the country’s cryptoasset holders in the near future, potentially hampering the development of an industry that has emerged as Africa’s biggest, analysts claim.
Wiehann Olivier, a partner in the auditing division of international accounting and tax consultancy Mazars’ South African branch, said, in a statement emailed to Cryptonews.com, that the country’s tax authority is set to introduce a number of measures that would see crypto traders in the nation taxed on their earnings and token holdings.
Olivier added that these interventions could include regulations requiring all South African crypto exchanges to share information with tax authorities, although he added that such steps would require technical know-how acquisition from SARS so that the service could “gear itself to ensure that it can collect on what it is owed.”
SARS currently expects South African taxpayers to report their crypto trading gains, but new measures could seek to ensure all of the nation’s traders actually adhere to these rules.
The South African Revenue Service (SARS) could bring in stricter taxes for the country’s cryptoasset holders in the near future, potentially hampering the development of an industry that has emerged as Africa’s biggest, analysts claim.
Wiehann Olivier, a partner in the auditing division of international accounting and tax consultancy Mazars’ South African branch, said, in a statement emailed to Cryptonews.com, that the country’s tax authority is set to introduce a number of measures that would see crypto traders in the nation taxed on their earnings and token holdings.
Olivier added that these interventions could include regulations requiring all South African crypto exchanges to share information with tax authorities, although he added that such steps would require technical know-how acquisition from SARS so that the service could “gear itself to ensure that it can collect on what it is owed.”
SARS currently expects South African taxpayers to report their crypto trading gains, but new measures could seek to ensure all of the nation’s traders actually adhere to these rules.
Bitcoin Miners Sold 63% More Coins Than Generated In a Day.
With yesterday’s correction in ethereum (ETH) and many DeFi tokens also spilling over into bitcoin (BTC), bitcoin miners sold BTC 844 (USD 9.5m) in a day, or 63% more coins than they generated in the same period of time.
Also, according to data from ByteTree, miners have continued to offload more bitcoin than they have mined this week, with a net outflow of BTC 812 recorded for the past 7 days. The level of weekly outflows from miners follows roughly in line with figures from last week, although it represents significantly increased selling on the part of the miners compared to the situation in mid-August when the weekly outflows stood at BTC 171.
The change in miner balances was also pointed out by analytics provider CryptoQuant, calling the outflows “unusually large,” and added that some of the coins have been sent to exchanges.
With yesterday’s correction in ethereum (ETH) and many DeFi tokens also spilling over into bitcoin (BTC), bitcoin miners sold BTC 844 (USD 9.5m) in a day, or 63% more coins than they generated in the same period of time.
Also, according to data from ByteTree, miners have continued to offload more bitcoin than they have mined this week, with a net outflow of BTC 812 recorded for the past 7 days. The level of weekly outflows from miners follows roughly in line with figures from last week, although it represents significantly increased selling on the part of the miners compared to the situation in mid-August when the weekly outflows stood at BTC 171.
The change in miner balances was also pointed out by analytics provider CryptoQuant, calling the outflows “unusually large,” and added that some of the coins have been sent to exchanges.
'Exclusive Mining' Can Be Used for Money Laundering & Tax Evasion - Report.
Cryptoasset miners are incentivized to keep transactions secret, said a recent paper, warning that the type of mining called "exclusive" allows them to do so while it can also be used for tax evasion and money laundering.
"The authors observe that blockchain nodes have no incentive to forward new transactions to their peers. In fact, miners have an incentive to do the opposite and keep transactions secret in the hope of being the only one who can earn the associated transaction fees," said in a paper Dr. Elias Strehle of the Blockchain Research Lab and Lennar Ante of the University of Hamburg.
Following a new blockchain transaction, "the next step usually is to make miners aware of it by having it propagated through the blockchain’s peer-to-peer P2P network" - but there is "an unintended alternative to peer-to-peer propagation," they argue, called "exclusive mining."
Exclusive mining works through a "collusion between a transaction initiator and a single miner (or mining pool)," whereby this initiator sends a transaction through a private channel outside the blockchain directly to this miner or mining pool, and not through the P2P network. That way, the miner gets the exclusive right to confirm that transaction and collect the reward. Once confirmed, the transaction is already added to the blockchain as any other, and that's when other people learn of it.
According to the paper, there are three possible motivations behind exclusive mining: reducing transaction cost volatility; hiding unconfirmed transactions from the network to prevent frontrunning; and camouflaging wealth transfers as transaction costs to evade taxes or launder money.
"Since transaction costs represent regular income for miners, significantly increased transaction costs could be used to launder money by colluding with a miner," said the paper. All of the initiator’s funds can be transmitted to the miner via transaction fees, the miner declares those together with “clean” fees as regular income, and then exchanges them to fiat on crypto exchanges.
"While Bitcoin and Ethereum are currently most suitable in this regard, they are also the two blockchain where it is most difficult to mine blocks at regular intervals. ... Criminals may see smaller blockchain networks as more suitable vehicles for money laundering or tax evasion via exclusive mining," the paper said.
Cryptoasset miners are incentivized to keep transactions secret, said a recent paper, warning that the type of mining called "exclusive" allows them to do so while it can also be used for tax evasion and money laundering.
"The authors observe that blockchain nodes have no incentive to forward new transactions to their peers. In fact, miners have an incentive to do the opposite and keep transactions secret in the hope of being the only one who can earn the associated transaction fees," said in a paper Dr. Elias Strehle of the Blockchain Research Lab and Lennar Ante of the University of Hamburg.
Following a new blockchain transaction, "the next step usually is to make miners aware of it by having it propagated through the blockchain’s peer-to-peer P2P network" - but there is "an unintended alternative to peer-to-peer propagation," they argue, called "exclusive mining."
Exclusive mining works through a "collusion between a transaction initiator and a single miner (or mining pool)," whereby this initiator sends a transaction through a private channel outside the blockchain directly to this miner or mining pool, and not through the P2P network. That way, the miner gets the exclusive right to confirm that transaction and collect the reward. Once confirmed, the transaction is already added to the blockchain as any other, and that's when other people learn of it.
According to the paper, there are three possible motivations behind exclusive mining: reducing transaction cost volatility; hiding unconfirmed transactions from the network to prevent frontrunning; and camouflaging wealth transfers as transaction costs to evade taxes or launder money.
"Since transaction costs represent regular income for miners, significantly increased transaction costs could be used to launder money by colluding with a miner," said the paper. All of the initiator’s funds can be transmitted to the miner via transaction fees, the miner declares those together with “clean” fees as regular income, and then exchanges them to fiat on crypto exchanges.
"While Bitcoin and Ethereum are currently most suitable in this regard, they are also the two blockchain where it is most difficult to mine blocks at regular intervals. ... Criminals may see smaller blockchain networks as more suitable vehicles for money laundering or tax evasion via exclusive mining," the paper said.
Bitcoin Whales Using 2020 to Accumulate BTC - Research.
Large bitcoin (BTC) buyers used the market crash in March to increase their holdings while the largest "whales" became most active this past summer, a new report suggested.
After exploring transaction data on the Bitcoin blockchain that happened between January 2020 and the beginning of August, OKEx Insights and blockchain data firm Catallact have made the following conclusions:
Small retail investors were "shaken out," somewhat, during the COVID-related panic in March and subsequently took a wait-and-see approach once the price of BTC returned to its pre-crash levels in May.
Medium-sized BTC transactions decreased after the crash in March and in tandem with Bitcoin's third block-reward halving, but it steadily increased throughout the summer. This implies that some accumulation took place from larger retail players and BTC miners.
Large players became very active after the crash, while large transactions have been steadily increasing throughout the summer.
The largest buyers became most active during BTC's price consolidation this summer.
Large bitcoin (BTC) buyers used the market crash in March to increase their holdings while the largest "whales" became most active this past summer, a new report suggested.
After exploring transaction data on the Bitcoin blockchain that happened between January 2020 and the beginning of August, OKEx Insights and blockchain data firm Catallact have made the following conclusions:
Small retail investors were "shaken out," somewhat, during the COVID-related panic in March and subsequently took a wait-and-see approach once the price of BTC returned to its pre-crash levels in May.
Medium-sized BTC transactions decreased after the crash in March and in tandem with Bitcoin's third block-reward halving, but it steadily increased throughout the summer. This implies that some accumulation took place from larger retail players and BTC miners.
Large players became very active after the crash, while large transactions have been steadily increasing throughout the summer.
The largest buyers became most active during BTC's price consolidation this summer.
Bitcoin Strongest In North America, Asia More Open to Stablecoins, Altcoins.
Bitcoin (BTC), the first and largest cryptocurrency, has the strongest positions among crypto users in North America, while stablecoins and altcoins get more attention in Asia, a new report from crypto analysis firm Chainalysis showed.
According to the report, BTC made up 72% of the crypto transfer value in North America, where stablecoins only made up 17%, and other altcoins 11% of the total value. By contrast, bitcoin made up 51% of the value of crypto transfers in East Asia, with stablecoins here taking 33%, and other altcoins 16% of the market.
In explaining the difference between West and East, Chainalysis said that East Asia is “dominated by professional traders.” Further, it noted that these traders tend to “engage in more speculative trading of a wider variety of assets” compared to their North American colleagues, who instead “tend to focus more on bitcoin and hold for longer.”
Regarding Central and Southern Asia, however, the report said that it is the higher level of remittances from abroad, as well as some capital flight from local currencies such as the volatile Indian rupee, that is driving demand for US dollar-pegged stablecoins in particular.
“Whereas exchanging rupees for US dollars directly is difficult due to local regulations, stablecoins like tether give users an easy way to get exposure to the dollar and lock in savings,” the report said.
Meanwhile, it added that traders based in East Asia appear to trade more frequently than those in the West, with Asia-focused exchanges showing a bitcoin trade intensity “between 1.4x and 3.8x higher than those catering to North America.”
And while this may be attributed to the higher share of professional crypto traders in the East Asian market, Chainalysis also noted that buy-and-hold is a more used strategy in North America and Northern & Western Europe. As a result, crypto addresses based in the region also have “a much larger collective balance than East Asia-based addresses,” the report said.
Bitcoin (BTC), the first and largest cryptocurrency, has the strongest positions among crypto users in North America, while stablecoins and altcoins get more attention in Asia, a new report from crypto analysis firm Chainalysis showed.
According to the report, BTC made up 72% of the crypto transfer value in North America, where stablecoins only made up 17%, and other altcoins 11% of the total value. By contrast, bitcoin made up 51% of the value of crypto transfers in East Asia, with stablecoins here taking 33%, and other altcoins 16% of the market.
In explaining the difference between West and East, Chainalysis said that East Asia is “dominated by professional traders.” Further, it noted that these traders tend to “engage in more speculative trading of a wider variety of assets” compared to their North American colleagues, who instead “tend to focus more on bitcoin and hold for longer.”
Regarding Central and Southern Asia, however, the report said that it is the higher level of remittances from abroad, as well as some capital flight from local currencies such as the volatile Indian rupee, that is driving demand for US dollar-pegged stablecoins in particular.
“Whereas exchanging rupees for US dollars directly is difficult due to local regulations, stablecoins like tether give users an easy way to get exposure to the dollar and lock in savings,” the report said.
Meanwhile, it added that traders based in East Asia appear to trade more frequently than those in the West, with Asia-focused exchanges showing a bitcoin trade intensity “between 1.4x and 3.8x higher than those catering to North America.”
And while this may be attributed to the higher share of professional crypto traders in the East Asian market, Chainalysis also noted that buy-and-hold is a more used strategy in North America and Northern & Western Europe. As a result, crypto addresses based in the region also have “a much larger collective balance than East Asia-based addresses,” the report said.
DeFi Unlocked: How to Earn Interest Lending Crypto using Aave.
DeFi is all the rage in the digital asset market. There is seemingly something for everyone among the crypto-savvy folk, from incredibly high-yielding (and unsustainable) new protocols to established blockchain-powered savings apps.
In our new “DeFi Unlocked” series, we will introduce you to the different ways you can make money in the booming decentralized finance market.
This time, we will look at the Aave protocol and explain how you can earn interest by lending cryptoassets using the popular DeFi lending app.
What is Aave?
Aave Protocol is an open-source, non-custodial money market protocol that enables cryptoasset users to borrow and lend Ethereum-based cryptoassets.
The aim of Aave - which means ghost in Finnish - is to provide an open and transparent marketplace for decentralized financial products and services.
Aave supports a wide range of Ethereum-based assets, including BAT, ETH, DAI, USDC, TUSD, USDT, BUSD, and more. Deposit APYs (annual percentage yields) ranged from 0.18% to 25.01% across all available assets, at the time of writing.
Interest is paid in aTokens, which are minted upon deposit and burned upon withdrawal. Each aToken is pegged 1:1 to the underlying asset. So, if you deposit ETH, for example, you will receive aETH as interest. Interest payments accrue on a minute-to-minute basis.
DeFi is all the rage in the digital asset market. There is seemingly something for everyone among the crypto-savvy folk, from incredibly high-yielding (and unsustainable) new protocols to established blockchain-powered savings apps.
In our new “DeFi Unlocked” series, we will introduce you to the different ways you can make money in the booming decentralized finance market.
This time, we will look at the Aave protocol and explain how you can earn interest by lending cryptoassets using the popular DeFi lending app.
What is Aave?
Aave Protocol is an open-source, non-custodial money market protocol that enables cryptoasset users to borrow and lend Ethereum-based cryptoassets.
The aim of Aave - which means ghost in Finnish - is to provide an open and transparent marketplace for decentralized financial products and services.
Aave supports a wide range of Ethereum-based assets, including BAT, ETH, DAI, USDC, TUSD, USDT, BUSD, and more. Deposit APYs (annual percentage yields) ranged from 0.18% to 25.01% across all available assets, at the time of writing.
Interest is paid in aTokens, which are minted upon deposit and burned upon withdrawal. Each aToken is pegged 1:1 to the underlying asset. So, if you deposit ETH, for example, you will receive aETH as interest. Interest payments accrue on a minute-to-minute basis.
Japanese Ruling Party Urges Gov’t to Speed up Digital Yen Issuance.
Japan’s ruling Liberal Democratic Party will call upon the government to release a digital currency “as soon as possible” – or risk falling behind other nations, including China.
Per Jiji, via the Japan Times, the party, which recently elected Yoshihide Suga to become its leader and the country’s Prime Minister, is set to issue a report “before year’s end,” urging Tokyo to “craft a comprehensive law promoting economic security for all of society, including the private sector.”
The report, said the news agency, will seek to create a law that would legislate for the “introduction of a central bank digital currency as early as possible and facilitate its use by working closely with Western nations.”
The report also recommended that Tokyo prioritize work on so-called “6G” technology, with the aim of creating the world's first 6G products and “having them adopted as international standards.”
The party has 113 out of 245 seats in parliament, and is currently in a coalition with the Komeito Party, which has 28 seats – meaning that should the ruling party face a vote on a concerted effort to enshrine the policies into law, it would likely succeed without breaking a sweat.
The central Bank of Japan (BoJ), much like its counterpart in South Korea, the Bank of Korea (BOK), has thus far refused to commit itself to a digital currency issuance – despite feverish levels of activity, with pilots, legal reviews and feasibility checks all underway or in the pipelines in both countries.
Both the BoJ and the BOK had been dismissive about issuing a digital currency until earlier this year. But media and industry experts in both nations have told Cryptonews.com that both Tokyo and Seoul are now concerned that China’s own, fast-developing digital yuan project will allow their East Asian rival to surge ahead in the tech race – particularly as Beijing is hopeful of using the digital yuan in cross-border trade deals with international allies.
Japan’s ruling Liberal Democratic Party will call upon the government to release a digital currency “as soon as possible” – or risk falling behind other nations, including China.
Per Jiji, via the Japan Times, the party, which recently elected Yoshihide Suga to become its leader and the country’s Prime Minister, is set to issue a report “before year’s end,” urging Tokyo to “craft a comprehensive law promoting economic security for all of society, including the private sector.”
The report, said the news agency, will seek to create a law that would legislate for the “introduction of a central bank digital currency as early as possible and facilitate its use by working closely with Western nations.”
The report also recommended that Tokyo prioritize work on so-called “6G” technology, with the aim of creating the world's first 6G products and “having them adopted as international standards.”
The party has 113 out of 245 seats in parliament, and is currently in a coalition with the Komeito Party, which has 28 seats – meaning that should the ruling party face a vote on a concerted effort to enshrine the policies into law, it would likely succeed without breaking a sweat.
The central Bank of Japan (BoJ), much like its counterpart in South Korea, the Bank of Korea (BOK), has thus far refused to commit itself to a digital currency issuance – despite feverish levels of activity, with pilots, legal reviews and feasibility checks all underway or in the pipelines in both countries.
Both the BoJ and the BOK had been dismissive about issuing a digital currency until earlier this year. But media and industry experts in both nations have told Cryptonews.com that both Tokyo and Seoul are now concerned that China’s own, fast-developing digital yuan project will allow their East Asian rival to surge ahead in the tech race – particularly as Beijing is hopeful of using the digital yuan in cross-border trade deals with international allies.
BitMEX Crackdown Will Fuel DeFi, Industry Insiders Hope.
A recent crackdown by US regulators on the crypto derivatives exchange BitMEX has shown once and for all that decentralization is the way to move forward for those offering crypto-related services, several industry insiders argue.
According to the decentralized finance (DeFi)-focused newsletter The Defiant, the charges brought against BitMEX by the US Commodity Futures Trading Commission (CFTC) are “bound to push more cryptocurrency projects towards decentralization.”
The newsletter quoted Jake Chervinsky, general counsel at the DeFi platform Compound Finance, as saying that the regulator’s complaints against BitMEX wouldn’t apply to DeFi protocols since “most governance token holders don't ‘operate’ a protocol in the way that owners of a centralized exchange company ‘operate’ a trading platform.”
Also commenting on the developments, Anil Lulla, co-founder of crypto research firm Delphi Digital, is quoted in the article as saying that he sees the crackdown as good for DeFi “in the long term.” However, he also added that “it will still be interesting to see whether or not DeFi products can really dodge KYC/AML know-your-customer/anti-money laundering in the future,” while noting that regulators “could adapt with different types of penalties.”
Writing on Twitter yesterday, Lulla reiterated this view, saying the incident is “Bearish on CEXs centralized exchanges with no KYC,” and “bullish for DeFi long term.”
Sharing a similar sentiment was also crypto researcher at Messari, Ryan Watkins, who noted on Twitter that we have now seen both “a major exchange hack” (KuCoin) and a “major regulatory crackdown” in just the past week. “If you don't understand the value of DeFi now you're just not paying attention,” the crypto researcher added.
Despite decentralized finance applications largely aiming to avoid the long arms of regulators, however, some believe that government agencies will increasingly come after those who provide these services – often referred to by regulators as Virtual Asset Service Providers (VASPs).
“As DeFi continues to grow, it’s plausible that these decentralized exchanges can fall under the scope of global regulators. FATF Financial Action Task Force already considers decentralized exchanges “VASPs,” and FinCEN applies the same regulatory consideration to DEXs that it does to Bitcoin ATMs (BATMs),” blockchain forensics firm CipherTrace noted in a recent report on KYC practices in the crypto industry.
A recent crackdown by US regulators on the crypto derivatives exchange BitMEX has shown once and for all that decentralization is the way to move forward for those offering crypto-related services, several industry insiders argue.
According to the decentralized finance (DeFi)-focused newsletter The Defiant, the charges brought against BitMEX by the US Commodity Futures Trading Commission (CFTC) are “bound to push more cryptocurrency projects towards decentralization.”
The newsletter quoted Jake Chervinsky, general counsel at the DeFi platform Compound Finance, as saying that the regulator’s complaints against BitMEX wouldn’t apply to DeFi protocols since “most governance token holders don't ‘operate’ a protocol in the way that owners of a centralized exchange company ‘operate’ a trading platform.”
Also commenting on the developments, Anil Lulla, co-founder of crypto research firm Delphi Digital, is quoted in the article as saying that he sees the crackdown as good for DeFi “in the long term.” However, he also added that “it will still be interesting to see whether or not DeFi products can really dodge KYC/AML know-your-customer/anti-money laundering in the future,” while noting that regulators “could adapt with different types of penalties.”
Writing on Twitter yesterday, Lulla reiterated this view, saying the incident is “Bearish on CEXs centralized exchanges with no KYC,” and “bullish for DeFi long term.”
Sharing a similar sentiment was also crypto researcher at Messari, Ryan Watkins, who noted on Twitter that we have now seen both “a major exchange hack” (KuCoin) and a “major regulatory crackdown” in just the past week. “If you don't understand the value of DeFi now you're just not paying attention,” the crypto researcher added.
Despite decentralized finance applications largely aiming to avoid the long arms of regulators, however, some believe that government agencies will increasingly come after those who provide these services – often referred to by regulators as Virtual Asset Service Providers (VASPs).
“As DeFi continues to grow, it’s plausible that these decentralized exchanges can fall under the scope of global regulators. FATF Financial Action Task Force already considers decentralized exchanges “VASPs,” and FinCEN applies the same regulatory consideration to DEXs that it does to Bitcoin ATMs (BATMs),” blockchain forensics firm CipherTrace noted in a recent report on KYC practices in the crypto industry.
Bitcoin and Altcoins Facing Uphill Task, XRP Outperforms.
Bitcoin price found support above USD 10,350 and the bulls managed to avert a sharp decline below the USD 10,250 support. BTC started a sharp increase above USD 10,550, but it failed to surpass USD 10,800. The price is currently (08:30 UTC) trading near USD 10,700 and it might correct lower towards USD 10,550.
Besides, there was a decent upward move in most major altcoins, including ethereum, XRP, litecoin, bitcoin cash, EOS, ADA, TRX, BNB, and XLM. ETH/USD broke the USD 350 resistance, but it is facing a major hurdle near USD 355. XRP/USD outperformed BTC and ETH, with a strong move above the USD 0.245 resistance.
Bitcoin price
After finding strong bids near USD 10,350, bitcoin price started a steady increase. BTC surpassed the USD 10,550 resistance level to move into a short-term bearish zone. The first key resistance for the bulls is near the USD 10,800 level. The main weekly resistance is still near the USD 10,950 and USD 11,000 levels.
As long as bitcoin is trading below USD 10,800 and USD 11,000, there is a risk of a fresh decline. A downside break below the USD 10,550 support level might start a fresh decline towards USD 10,350 or even USD 10,250.
Ethereum price
Ethereum price is up around 2% and it surpassed the USD 350 pivot level. However, ETH is facing an uphill task near the USD 355 level. A close above USD 355 and then a break above USD 363 is a must for upside continuation in the near term.
On the downside, the price might find bids near the USD 345 level. The main weekly support is now forming near the USD 335 level.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price failed to follow other altcoins and it struggled to clear the USD 220 resistance level. The next major resistance above USD 220 is near the USD 230 level. If there is no upside break, BCH could decline towards the USD 205 and USD 200 support levels in the next 2-3 sessions.
Chainlink (LINK) recovered above the USD 9.10 and USD 9.20 levels. It is now struggling to clear the USD 9.50 resistance level. A successful close above the USD 9.50 level might increase the chances of a steady rise towards the USD 10.20 and USD 10.50 resistance levels. The main support seems to be forming near USD 8.80.
XRP price rallied 8% and it broke many important hurdles near USD 0.242 and USD 0.245. The price even spiked above the USD 0.250 resistance, but it faced a heavy resistance near USD 0.255. XRP is currently correcting lower, but the previous resistance near USD 0.245 might provide support.
Other altcoins market today
In the past three sessions, a few altcoins gained over 5%, including ZIL, PMA, STORJ, ADA, ATOM, and XEM. Conversely, SUSHI, HEDG, EGLD, UMA, UNI, EWT, and LRX are down over 5%.
Overall, bitcoin price managed to avoid a breakdown below USD 10,250. BTC is currently showing a few positive signs above USD 10,550. Having said that, the bulls still need to gain strength for a sustained push above USD 10,800 and USD 11,000.
Bitcoin price found support above USD 10,350 and the bulls managed to avert a sharp decline below the USD 10,250 support. BTC started a sharp increase above USD 10,550, but it failed to surpass USD 10,800. The price is currently (08:30 UTC) trading near USD 10,700 and it might correct lower towards USD 10,550.
Besides, there was a decent upward move in most major altcoins, including ethereum, XRP, litecoin, bitcoin cash, EOS, ADA, TRX, BNB, and XLM. ETH/USD broke the USD 350 resistance, but it is facing a major hurdle near USD 355. XRP/USD outperformed BTC and ETH, with a strong move above the USD 0.245 resistance.
Bitcoin price
After finding strong bids near USD 10,350, bitcoin price started a steady increase. BTC surpassed the USD 10,550 resistance level to move into a short-term bearish zone. The first key resistance for the bulls is near the USD 10,800 level. The main weekly resistance is still near the USD 10,950 and USD 11,000 levels.
As long as bitcoin is trading below USD 10,800 and USD 11,000, there is a risk of a fresh decline. A downside break below the USD 10,550 support level might start a fresh decline towards USD 10,350 or even USD 10,250.
Ethereum price
Ethereum price is up around 2% and it surpassed the USD 350 pivot level. However, ETH is facing an uphill task near the USD 355 level. A close above USD 355 and then a break above USD 363 is a must for upside continuation in the near term.
On the downside, the price might find bids near the USD 345 level. The main weekly support is now forming near the USD 335 level.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price failed to follow other altcoins and it struggled to clear the USD 220 resistance level. The next major resistance above USD 220 is near the USD 230 level. If there is no upside break, BCH could decline towards the USD 205 and USD 200 support levels in the next 2-3 sessions.
Chainlink (LINK) recovered above the USD 9.10 and USD 9.20 levels. It is now struggling to clear the USD 9.50 resistance level. A successful close above the USD 9.50 level might increase the chances of a steady rise towards the USD 10.20 and USD 10.50 resistance levels. The main support seems to be forming near USD 8.80.
XRP price rallied 8% and it broke many important hurdles near USD 0.242 and USD 0.245. The price even spiked above the USD 0.250 resistance, but it faced a heavy resistance near USD 0.255. XRP is currently correcting lower, but the previous resistance near USD 0.245 might provide support.
Other altcoins market today
In the past three sessions, a few altcoins gained over 5%, including ZIL, PMA, STORJ, ADA, ATOM, and XEM. Conversely, SUSHI, HEDG, EGLD, UMA, UNI, EWT, and LRX are down over 5%.
Overall, bitcoin price managed to avoid a breakdown below USD 10,250. BTC is currently showing a few positive signs above USD 10,550. Having said that, the bulls still need to gain strength for a sustained push above USD 10,800 and USD 11,000.
Bitcoin-inspired Art Sells for over USD 131,000 at Christie’s.
The link between the worlds of arts and blockchain-powered non-fungible tokens (NFTs) is continuing to deepen for collectors worldwide, with a bitcoin (BTC)-themed work named Block 21 (42.36433° N, -71.26189° E) (from Portraits of a Mind) – a piece inspired by blockchain technology – fetching USD 131,250 at a Christie’s auction.
The winning bid, placed during the auction house’s Post-War & Contemporary Art Day Sale in New York, was over seven times above Christie’s high estimate, which was set at around USD 18,000. The move could help boost the demand for similar works in the future.
The artwork was created by British artist Ben Gentilli, who goes by the alias Robert Alice as part of a project he launched in 2019.
Per information provided by the auction house, the artwork is accompanied by an OpenDime hardware key. The physical element of the work was crafted using 24-carat gold leaf, suspended pigment and acrylic on canvas laid down on a panel.
Like the 20 other pieces in the collection, Block 21 is engraved with 322,048 digits of original Bitcoin code. In total, 40 pieces are set to be released, featuring the cryptoasset’s roughly 12.3 million-digit code.
The link between the worlds of arts and blockchain-powered non-fungible tokens (NFTs) is continuing to deepen for collectors worldwide, with a bitcoin (BTC)-themed work named Block 21 (42.36433° N, -71.26189° E) (from Portraits of a Mind) – a piece inspired by blockchain technology – fetching USD 131,250 at a Christie’s auction.
The winning bid, placed during the auction house’s Post-War & Contemporary Art Day Sale in New York, was over seven times above Christie’s high estimate, which was set at around USD 18,000. The move could help boost the demand for similar works in the future.
The artwork was created by British artist Ben Gentilli, who goes by the alias Robert Alice as part of a project he launched in 2019.
Per information provided by the auction house, the artwork is accompanied by an OpenDime hardware key. The physical element of the work was crafted using 24-carat gold leaf, suspended pigment and acrylic on canvas laid down on a panel.
Like the 20 other pieces in the collection, Block 21 is engraved with 322,048 digits of original Bitcoin code. In total, 40 pieces are set to be released, featuring the cryptoasset’s roughly 12.3 million-digit code.
Institutionals Might Make Bitcoin More Exposed To Economic Headwinds.
While bitcoin (BTC), as an investment, is still attractive because it is an independent, alternative, and uncorrelated asset, a growing institutional investor base could increase bitcoin's correlation with other traditional assets, according to Fidelity Digital Assets (FDA), a crypto arm of US-based mutual fund giant Fidelity.
As BTC is becoming increasingly integrated into institutional portfolios, it could become more and more correlated with other assets, and external events might have a growing impact on bitcoin, “especially if bitcoin’s narrative converges on a single use case”, Ria Bhutoria, Director of Research at FDA, said in a recent report, named Bitcoin Investment Thesis.
"In other words, if bitcoin becomes more correlated with certain assets in light of this potential trend, its portfolio diversification benefits relative to certain assets could decline," Bhutoria said.
As for now, due to its multifaceted narratives and persisting retail and growing institutional sentiment, “bitcoin is fundamentally less exposed to the prolonged economic headwinds” that are threatening other assets. As such, it “could be a potentially useful and uncorrelated addition to an investors’ portfolio toolkit,” the researcher said.
The report comes in the light of recent news that Fidelity plans to start its first Bitcoin fund.
Meanwhile, Chamath Palihapitiya, CEO of venture capital firm Social Capital, Chairman of commercial spaceline Virgin Galactic, recently argued that BTC can't be correlated to traditional assets because it's the opposite of today's financial infrastructure.
In spite of that, the report acknowledged bitcoin’s ability to mature into a fully-fledged independent asset class. And while “bitcoin simply does not fit into defined asset categories,” it is still a legit alternative for institutional investors looking for alternative investments in a portfolio.
Meanwhile, many in the Cryptoverse took Fidelity’s hypothetical example as a recommendation for considering a 5% allocation in bitcoin. In either case, recent reports show that institutional investors seem to be more interested in this alternative asset.
US-based investment company Stone Ridge Holdings Group recently revealed that it owns BTC 10,000, while Jack Dorsey’s Square said last week that it acquired USD 50m worth of BTC, after MicroStrategy, an American software company, used its balance sheet to buy over USD 400m worth of BTC.
While bitcoin (BTC), as an investment, is still attractive because it is an independent, alternative, and uncorrelated asset, a growing institutional investor base could increase bitcoin's correlation with other traditional assets, according to Fidelity Digital Assets (FDA), a crypto arm of US-based mutual fund giant Fidelity.
As BTC is becoming increasingly integrated into institutional portfolios, it could become more and more correlated with other assets, and external events might have a growing impact on bitcoin, “especially if bitcoin’s narrative converges on a single use case”, Ria Bhutoria, Director of Research at FDA, said in a recent report, named Bitcoin Investment Thesis.
"In other words, if bitcoin becomes more correlated with certain assets in light of this potential trend, its portfolio diversification benefits relative to certain assets could decline," Bhutoria said.
As for now, due to its multifaceted narratives and persisting retail and growing institutional sentiment, “bitcoin is fundamentally less exposed to the prolonged economic headwinds” that are threatening other assets. As such, it “could be a potentially useful and uncorrelated addition to an investors’ portfolio toolkit,” the researcher said.
The report comes in the light of recent news that Fidelity plans to start its first Bitcoin fund.
Meanwhile, Chamath Palihapitiya, CEO of venture capital firm Social Capital, Chairman of commercial spaceline Virgin Galactic, recently argued that BTC can't be correlated to traditional assets because it's the opposite of today's financial infrastructure.
In spite of that, the report acknowledged bitcoin’s ability to mature into a fully-fledged independent asset class. And while “bitcoin simply does not fit into defined asset categories,” it is still a legit alternative for institutional investors looking for alternative investments in a portfolio.
Meanwhile, many in the Cryptoverse took Fidelity’s hypothetical example as a recommendation for considering a 5% allocation in bitcoin. In either case, recent reports show that institutional investors seem to be more interested in this alternative asset.
US-based investment company Stone Ridge Holdings Group recently revealed that it owns BTC 10,000, while Jack Dorsey’s Square said last week that it acquired USD 50m worth of BTC, after MicroStrategy, an American software company, used its balance sheet to buy over USD 400m worth of BTC.
Bitcoin Mining Difficulty Set For New Record High.
Mining news
Bitcoin (BTC) mining difficulty, or the measure of how hard it is to compete for mining rewards, is expected to rise more than 3% during the next adjustment tomorrow, October 17. According to the BTC.com estimates, the mining difficulty will reach a new all-time high of 19.96 T, nearing the never-before seen 20 T, as BTC hashrate, or computing power of the network, has also reached its new all-time high this week.
Crypto adoption news
Coinbase said it will sponsor at least two Bitcoin developers who contribute directly to the Bitcoin Core codebase or closely associated Bitcoin projects, with first Crypto Community Fund grants. Per the announcement, the proposals will be shortlisted by current Bitcoin Core developers and several community members, while Coinbase will be making the final decision.
Investments news
London-based, the Financial Conduct Authority (FCA)-regulated, digital securities exchange Archax said it has successfully closed overfunded seed raise, providing the regulatory capital and runway needed to launch. According to the press release, the company secured funding totalling USD 8m, after extending the raise, initially targeting USD 5m. Among the investors are VC firms Alameda Research, Amnis Ventures, Bridgetower Capital, CoinFund, Edge196, Hudson Capital, QBN Capital, and 7percent Ventures.
Exchanges news
Coinbase Global Marketing Head John Russ became the latest employee to leave the major US crypto exchange. Per his tweet, he made the decision after CEO Brian Armstrong recently announced Coinbase's apolitical policy, offering a severance package to those who disagreed and wished to leave the firm.
Upbit Indonesia, a subsidiary of South Korea’s market-leading Upbit crypto exchange, has created a joint-venture consortium that said will launch a cryptoasset futures exchange. Per Digital Today, the new project will be named the Digital Futures Exchange and will see Upbit Indonesia team up with Indonesian firms Kliring Berjangka Indonesia, the Jakarta Futures Exchange and Bappebti – companies that have received official recognition from the Indonesian commodity futures trading regulator. The group of companies said they hoped to enlist more partners before the end of this month and would be seeking regulatory approval for their new exchange.
CBDCs news
The central Bank of Korea (BOK) said it is not lagging behind other countries when it comes to timeframes for central bank digital currency (CBDC) issuance. Per Herald Kyungjae, the BOK governor, Lee Ju-yeol, declared that the digital won would be ready to pilot next year and dismissed claims that the bank was now lagging behind China in the tech race. He stated, "The speed of the BOK’s CBDC research and future plans are not behind other nations." He also opined that China would be able to issue its digital yuan faster than others as there are so few e-payment systems in operation in the country. Lee added that while WePay and Alipay usage was widespread in China, these two platforms are predominantly used by younger customers – a fact that had driven up the need to speed up issuance in the nation.
Stablecoin news
The Centre Consortium, an entity established by Circle and Coinbase to manage USD Coin (USDC), has announced that Stellar (XTZ) has become another official blockchain for USDC. According to the announcement, the coin is expected to be available on Stellar in the first quarter of 2021.
Mining news
Bitcoin (BTC) mining difficulty, or the measure of how hard it is to compete for mining rewards, is expected to rise more than 3% during the next adjustment tomorrow, October 17. According to the BTC.com estimates, the mining difficulty will reach a new all-time high of 19.96 T, nearing the never-before seen 20 T, as BTC hashrate, or computing power of the network, has also reached its new all-time high this week.
Crypto adoption news
Coinbase said it will sponsor at least two Bitcoin developers who contribute directly to the Bitcoin Core codebase or closely associated Bitcoin projects, with first Crypto Community Fund grants. Per the announcement, the proposals will be shortlisted by current Bitcoin Core developers and several community members, while Coinbase will be making the final decision.
Investments news
London-based, the Financial Conduct Authority (FCA)-regulated, digital securities exchange Archax said it has successfully closed overfunded seed raise, providing the regulatory capital and runway needed to launch. According to the press release, the company secured funding totalling USD 8m, after extending the raise, initially targeting USD 5m. Among the investors are VC firms Alameda Research, Amnis Ventures, Bridgetower Capital, CoinFund, Edge196, Hudson Capital, QBN Capital, and 7percent Ventures.
Exchanges news
Coinbase Global Marketing Head John Russ became the latest employee to leave the major US crypto exchange. Per his tweet, he made the decision after CEO Brian Armstrong recently announced Coinbase's apolitical policy, offering a severance package to those who disagreed and wished to leave the firm.
Upbit Indonesia, a subsidiary of South Korea’s market-leading Upbit crypto exchange, has created a joint-venture consortium that said will launch a cryptoasset futures exchange. Per Digital Today, the new project will be named the Digital Futures Exchange and will see Upbit Indonesia team up with Indonesian firms Kliring Berjangka Indonesia, the Jakarta Futures Exchange and Bappebti – companies that have received official recognition from the Indonesian commodity futures trading regulator. The group of companies said they hoped to enlist more partners before the end of this month and would be seeking regulatory approval for their new exchange.
CBDCs news
The central Bank of Korea (BOK) said it is not lagging behind other countries when it comes to timeframes for central bank digital currency (CBDC) issuance. Per Herald Kyungjae, the BOK governor, Lee Ju-yeol, declared that the digital won would be ready to pilot next year and dismissed claims that the bank was now lagging behind China in the tech race. He stated, "The speed of the BOK’s CBDC research and future plans are not behind other nations." He also opined that China would be able to issue its digital yuan faster than others as there are so few e-payment systems in operation in the country. Lee added that while WePay and Alipay usage was widespread in China, these two platforms are predominantly used by younger customers – a fact that had driven up the need to speed up issuance in the nation.
Stablecoin news
The Centre Consortium, an entity established by Circle and Coinbase to manage USD Coin (USDC), has announced that Stellar (XTZ) has become another official blockchain for USDC. According to the announcement, the coin is expected to be available on Stellar in the first quarter of 2021.
Bitcoin Surpasses USD 11,800, Ethereum, Altcoins Slide.
Bitcoin price remained in a positive zone above the 11,550 resistance. BTC extended its rise above the USD 11,800 resistance and it even spiked above USD 11,900. The price is currently (13:00 UTC) up 3% and it might soon attempt an upside break above the USD 12,000 resistance.
Conversely, most major altcoins trimmed gains and moved into the red zone, including ethereum, XRP, litecoin, EOS, XLM, LINK, BNB, TRX, bitcoin cash, and ADA. ETH/USD failed to settle above USD 380 and declined sharply below USD 375. XRP/USD is also declining below USD 0.245 and it might continue to move down.
Bitcoin price
In the past two sessions, bitcoin price mostly traded with a bullish bias above the USD 11,550 level. BTC extended its rise and broke the USD 11,800 resistance. The next major resistance is near the USD 12,000 level, above which the bulls might aim for a test of USD 12,000. An intermediate resistance is near the USD 12,200 level.
If there is a downside correction, the USD 11,650 level is an initial support. The main support is now forming near the USD 11,550 level (the recent breakout zone).
Ethereum price
Ethereum price topped near the USD 385 level today and started a fresh decline. ETH broke the USD 375 support and it even spiked below USD 372. The next key support is near the USD 365 level, below which the bears might aim for a test of USD 360.
On the upside, the USD 375 level might once again act as a resistance for the bulls. The next major resistance is still near USD 380.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price failed to surpass the USD 250 resistance. As a result, there was a bearish reaction below the USD 245 support. BCH is now approaching the USD 240 support level. Any further losses could open the doors for a test of USD 232. On the upside, the USD 250 level remains a major hurdle for the bulls.
Chainlink (LINK) struggled to clear the USD 10.80 resistance and reacted to the downside. The price is down 4% and it broke the USD 10.50 support level. It is approaching the USD 10.25 support level, below which the next stop for the bears could be USD 10.00. On the upside, the USD 10.50 and USD 10.60 levels are short-term barriers.
XRP price is down 2% and it is now trading below the USD 0.245 support. An initial support is near the USD 0.242 level. The main breakdown support is at USD 0.240, below which the price might test USD 0.232. On the upside, the USD 0.245 level might act as a pivot zone.
Bitcoin price remained in a positive zone above the 11,550 resistance. BTC extended its rise above the USD 11,800 resistance and it even spiked above USD 11,900. The price is currently (13:00 UTC) up 3% and it might soon attempt an upside break above the USD 12,000 resistance.
Conversely, most major altcoins trimmed gains and moved into the red zone, including ethereum, XRP, litecoin, EOS, XLM, LINK, BNB, TRX, bitcoin cash, and ADA. ETH/USD failed to settle above USD 380 and declined sharply below USD 375. XRP/USD is also declining below USD 0.245 and it might continue to move down.
Bitcoin price
In the past two sessions, bitcoin price mostly traded with a bullish bias above the USD 11,550 level. BTC extended its rise and broke the USD 11,800 resistance. The next major resistance is near the USD 12,000 level, above which the bulls might aim for a test of USD 12,000. An intermediate resistance is near the USD 12,200 level.
If there is a downside correction, the USD 11,650 level is an initial support. The main support is now forming near the USD 11,550 level (the recent breakout zone).
Ethereum price
Ethereum price topped near the USD 385 level today and started a fresh decline. ETH broke the USD 375 support and it even spiked below USD 372. The next key support is near the USD 365 level, below which the bears might aim for a test of USD 360.
On the upside, the USD 375 level might once again act as a resistance for the bulls. The next major resistance is still near USD 380.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price failed to surpass the USD 250 resistance. As a result, there was a bearish reaction below the USD 245 support. BCH is now approaching the USD 240 support level. Any further losses could open the doors for a test of USD 232. On the upside, the USD 250 level remains a major hurdle for the bulls.
Chainlink (LINK) struggled to clear the USD 10.80 resistance and reacted to the downside. The price is down 4% and it broke the USD 10.50 support level. It is approaching the USD 10.25 support level, below which the next stop for the bears could be USD 10.00. On the upside, the USD 10.50 and USD 10.60 levels are short-term barriers.
XRP price is down 2% and it is now trading below the USD 0.245 support. An initial support is near the USD 0.242 level. The main breakdown support is at USD 0.240, below which the price might test USD 0.232. On the upside, the USD 0.245 level might act as a pivot zone.
Get Ready For Crypto Banking, DeFi & CBDC Surprises - Venture Capitalist.
Banks will likely open crypto accounts next to fiat accounts, decentralized finance (DeFi) will claim its trillion-dollar company, while central bank digital currencies (CBDCs) will suprise many by entering our lives sooner than expected, Marc van der Chijs, entrepreneur, crypto-focused venture capitalist, and co-founder of VC firm First Block Capital (FBC).
The good and bad of crypto banking
If banks decide to open such crypto accounts, "this will have major implications, because it allows people to more easily buy and hold bitcoin or other crypto tokens," according to the entrepreneur.
"Once people realize that they are losing money by holding dollars or other fiat currencies, it will be an easy switch to putting money into bitcoin," van der Chijs said.
A bumpy DeFi road towards first trillion
The FBC founder also discussed DeFi, describing it as "very interesting," but something that "has a long way to go before it will go mainstream." And while "the current hype is good because early adopters now all know about the future of finance," there will be a lot of disappointment in the space "because it will take much longer than most people think." Van der Chijs estimated that it will be at least five years before DeFi will grow out of its current niche space.
He further noted that now is a great time to build DeFi tools, but warned people not to expect that their solution and their token will be one of the winners a decade from now. "The innovation in DeFi is amazing but it's still too early for long-term investors," he said. "Eventually it might replace traditional finance, but most of the current DeFi tokens will be long gone by then, just like most of the top altcoins from 2013 are not around anymore."
"That being said, the next trillion-dollar company will likely be a DeFi company. It will disrupt the banks and the insurance companies, and I don't think they see it coming yet," van der Chijs added.
CBDCs coming sooner than one may think
Van der Chijs mentioned other trends that he has noticed in the crypto/blockchain space, and which are not necessarily discussed as much as they should be.
The trend towards CBDC in the entrepreneur's opinion is very important, and it will come sooner than many people think, because it gives central banks power by distributing money directly to the people, instead of through commercial banks.
"It allows Central Banks to let commercial banks go bankrupt without blowing up the financial system," he said, adding that he's not a fan of CBDCs, as they allow the government to decide what somebody's money can be used for, and they can take people's money whenever they want.
But there is a silver lining here as well, van der Chijs finds.
"This is scary, but it will likely lead to a lot more people learning about bitcoin. Suddenly there will be a very important new use case for bitcoin, because that currency will give you the freedom to do whatever you want."
Banks will likely open crypto accounts next to fiat accounts, decentralized finance (DeFi) will claim its trillion-dollar company, while central bank digital currencies (CBDCs) will suprise many by entering our lives sooner than expected, Marc van der Chijs, entrepreneur, crypto-focused venture capitalist, and co-founder of VC firm First Block Capital (FBC).
The good and bad of crypto banking
If banks decide to open such crypto accounts, "this will have major implications, because it allows people to more easily buy and hold bitcoin or other crypto tokens," according to the entrepreneur.
"Once people realize that they are losing money by holding dollars or other fiat currencies, it will be an easy switch to putting money into bitcoin," van der Chijs said.
A bumpy DeFi road towards first trillion
The FBC founder also discussed DeFi, describing it as "very interesting," but something that "has a long way to go before it will go mainstream." And while "the current hype is good because early adopters now all know about the future of finance," there will be a lot of disappointment in the space "because it will take much longer than most people think." Van der Chijs estimated that it will be at least five years before DeFi will grow out of its current niche space.
He further noted that now is a great time to build DeFi tools, but warned people not to expect that their solution and their token will be one of the winners a decade from now. "The innovation in DeFi is amazing but it's still too early for long-term investors," he said. "Eventually it might replace traditional finance, but most of the current DeFi tokens will be long gone by then, just like most of the top altcoins from 2013 are not around anymore."
"That being said, the next trillion-dollar company will likely be a DeFi company. It will disrupt the banks and the insurance companies, and I don't think they see it coming yet," van der Chijs added.
CBDCs coming sooner than one may think
Van der Chijs mentioned other trends that he has noticed in the crypto/blockchain space, and which are not necessarily discussed as much as they should be.
The trend towards CBDC in the entrepreneur's opinion is very important, and it will come sooner than many people think, because it gives central banks power by distributing money directly to the people, instead of through commercial banks.
"It allows Central Banks to let commercial banks go bankrupt without blowing up the financial system," he said, adding that he's not a fan of CBDCs, as they allow the government to decide what somebody's money can be used for, and they can take people's money whenever they want.
But there is a silver lining here as well, van der Chijs finds.
"This is scary, but it will likely lead to a lot more people learning about bitcoin. Suddenly there will be a very important new use case for bitcoin, because that currency will give you the freedom to do whatever you want."
Bitcoin and Altcoins Correcting Gains But Holding Key Supports.
Bitcoin price
After a short-term downside correction, bitcoin price found support just above USD 12,800. BTC started a fresh increase and climbed back above USD 13,000. An initial resistance on the upside is near the USD 13,200 level. The first major resistance is near the USD 13,350, above which the bulls might aim for a break above the USD 13,500 level.
On the downside, an initial support is near the USD 13,000 level. The main weekly support seems to be forming near the USD 12,750 level.
Ethereum price
Ethereum price started a downside correction from the USD 420 resistance. ETH/USD is currently trading with a positive bias above the USD 400 and USD 405 levels. An immediate resistance is near the USD 412 level, but the main resistance for upside continuation is near the USD 420 level.
If there is another downside correction, the USD 400 support holds the key. A clear break below USD 400 could push the price towards the USD 385 weekly support zone.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price climbed higher above the USD 270 and USD 275 levels, but it failed to test the USD 280 resistance. BCH is currently consolidating near the USD 270 level and it might correct a few points. The first major support is near the USD 265 level, below which the USD 260 zone could provide a strong support.
Chainlink (LINK) rallied above the USD 11.00 and USD 12.00 levels. It traded to a new monthly high at USD 12.95 before starting a downside correction. The price is now trading near USD 12.35, with a strong support near USD 12.20 and USD 12.00. On the upside, the bulls might struggle to clear USD 13.00.
XRP price corrected lower, but it remained well bid above the USD 0.250 and USD 0.252 levels. The price is now rising and trading above USD 0.255. However, the bulls need to gain strength above the weekly hurdles at USD 0.260 and USD 0.262 to start another major increase.
Other altcoins market today
In the past few hours, many altcoins gained over 5%, including FIL, QNT, NEAR, RSR, HEDG, DOGE, EGLD, XMR, BAL, BSV, and AR. Conversely, ABBC, EWT, OCEAN, UMA, ATOM, and AMLP are down over 5%.
Overall, bitcoin price is showing a lot of positive signs above USD 12,750 and USD 13,000. There could be more range moves in BTC, but there are high chances of an upside break above USD 13,200 and USD 13,350 in the near term.
Bitcoin price
After a short-term downside correction, bitcoin price found support just above USD 12,800. BTC started a fresh increase and climbed back above USD 13,000. An initial resistance on the upside is near the USD 13,200 level. The first major resistance is near the USD 13,350, above which the bulls might aim for a break above the USD 13,500 level.
On the downside, an initial support is near the USD 13,000 level. The main weekly support seems to be forming near the USD 12,750 level.
Ethereum price
Ethereum price started a downside correction from the USD 420 resistance. ETH/USD is currently trading with a positive bias above the USD 400 and USD 405 levels. An immediate resistance is near the USD 412 level, but the main resistance for upside continuation is near the USD 420 level.
If there is another downside correction, the USD 400 support holds the key. A clear break below USD 400 could push the price towards the USD 385 weekly support zone.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price climbed higher above the USD 270 and USD 275 levels, but it failed to test the USD 280 resistance. BCH is currently consolidating near the USD 270 level and it might correct a few points. The first major support is near the USD 265 level, below which the USD 260 zone could provide a strong support.
Chainlink (LINK) rallied above the USD 11.00 and USD 12.00 levels. It traded to a new monthly high at USD 12.95 before starting a downside correction. The price is now trading near USD 12.35, with a strong support near USD 12.20 and USD 12.00. On the upside, the bulls might struggle to clear USD 13.00.
XRP price corrected lower, but it remained well bid above the USD 0.250 and USD 0.252 levels. The price is now rising and trading above USD 0.255. However, the bulls need to gain strength above the weekly hurdles at USD 0.260 and USD 0.262 to start another major increase.
Other altcoins market today
In the past few hours, many altcoins gained over 5%, including FIL, QNT, NEAR, RSR, HEDG, DOGE, EGLD, XMR, BAL, BSV, and AR. Conversely, ABBC, EWT, OCEAN, UMA, ATOM, and AMLP are down over 5%.
Overall, bitcoin price is showing a lot of positive signs above USD 12,750 and USD 13,000. There could be more range moves in BTC, but there are high chances of an upside break above USD 13,200 and USD 13,350 in the near term.
Trump Hackers Spur US Interest in Monero…But Not Prices.
Crypto scammers who successfully hacked into United States President Donald Trump’s election campaign looking for payment in monero (XMR) appear to have sparked a new interest in the most popular privacy coin – albeit one that has failed to save it from a price slide.
The move has sent scores of Americans to search engines to hunt for data about XMR, with a spike recorded on the Google Trends analytics site on October 28.
Meanwhile, at pixel time (09:52 UTC), XMR, ranked 14th by market capitalization, trades at USD 133 and is down by 2% in a day, trimming its weekly gains to less than 9%.
The scammers appear to have hacked into the donaldjtrump.com site, replacing the contents with a bogus Department of Justice-approved notice stating that “this site has been seized.”
The hackers, who appeared more proficient in computer skills than English writing abilities, wrote,
“The world has had enough of the fake-news spreaded daily by president Donald J. Trump. It is time to allow the world to know truth [sic].”
The hackers also claimed to have a host of information, ranging from “origin” data on the coronavirus pandemic to juicy exposes on Trump himself provided by the President’s own family.
All they would need to finance their campaign, they claimed, was generous donations to two XMR addresses.
On Reddit, one poster opined that internet pranksters may have been behind the prank, writing,
“That takedown notice reeks of 4chan.”
Another claimed that the move could be “bullish for XMR.”
But one Redditor claimed on the same thread that they were still “too scared to buy monero.”
As for President Trump’s own feelings about crypto – well, he long ago made his own feelings on the matter crystal clear.
Crypto scammers who successfully hacked into United States President Donald Trump’s election campaign looking for payment in monero (XMR) appear to have sparked a new interest in the most popular privacy coin – albeit one that has failed to save it from a price slide.
The move has sent scores of Americans to search engines to hunt for data about XMR, with a spike recorded on the Google Trends analytics site on October 28.
Meanwhile, at pixel time (09:52 UTC), XMR, ranked 14th by market capitalization, trades at USD 133 and is down by 2% in a day, trimming its weekly gains to less than 9%.
The scammers appear to have hacked into the donaldjtrump.com site, replacing the contents with a bogus Department of Justice-approved notice stating that “this site has been seized.”
The hackers, who appeared more proficient in computer skills than English writing abilities, wrote,
“The world has had enough of the fake-news spreaded daily by president Donald J. Trump. It is time to allow the world to know truth [sic].”
The hackers also claimed to have a host of information, ranging from “origin” data on the coronavirus pandemic to juicy exposes on Trump himself provided by the President’s own family.
All they would need to finance their campaign, they claimed, was generous donations to two XMR addresses.
On Reddit, one poster opined that internet pranksters may have been behind the prank, writing,
“That takedown notice reeks of 4chan.”
Another claimed that the move could be “bullish for XMR.”
But one Redditor claimed on the same thread that they were still “too scared to buy monero.”
As for President Trump’s own feelings about crypto – well, he long ago made his own feelings on the matter crystal clear.
Tron's JustLink Said to be a Chainlink 'Copy-Paste'; Tron Mainnet Attacked.
Following the launch of JustLink as an "oracle answer for Chainlink on Tron," some are thinking it's more than just an answer - accusing the team behind the network and the project's founder Justin Sun of another blatant copy-paste. Meanwhile, the network's mainnet suffered an attempted attack today.
Just a couple of days ago, on October 30, Tron (TRX) founder Justin Sun announced that JustLink went live as "the first decentralized blockchain oracle on the Tron network." It's said it can feed smart contracts with real-world data, including but not limited to lending prices, stablecoin exchange rates, derivative prices, and market estimations.
Additionally, according to the announcement by the Just Foundation, JustLink is "the oracle answer for Chainlink on Tron."
As soon as the news hit the Cryptoverse, however, industry observers have started drawing parallels between JustLink's whitepaper and that of the decentralized oracle platform Chainlink (LINK). Some have gone as far as to argue that: "It's the Tron brand. If you don't copy paste, it's not a Tron "product"."
Chainlink supporter Timo Harings, for example, shared two images, side by side, showing minor differences in phrasing of the subtitles within the two whitepapers. Overall, very generally, Chainlink's whitepaper has more sections and is 38 pages long, compared to JustLink's 10 pages.
"Not just the paper either, but basically the entire code base as well. It's a shameless copy and paste," added SmartContent co-founder ChainLinkGod.eth. This poster claimed that Sun "has done it again" and warned that, "with Tron having zero expertise on the subject of oracles, this will only result in an oracle attack and loss of user funds."
The arguments ChainLinkGod.eth made include changing all mentions of "Chainlink," but allegedly forgetting to do the same for "LINK."
Others, however, argued that every invention was copied by others, but also that "copying is the ultimate form of flattery." Twitter user 'D' stated that Tron is "ahead and winning with user base across multiple industries with lower fees within blockchain. So, higher likelihood of mass adoption," and adding: "Blockchain for the people. Not just crypto nerds."
Meanwhile, this isn't the first time Tron and Justin Sun were accused of copy-pasting other projects' work, as plagiarism accusations have been plaguing them for years - including reports that they've plagiarized their whitepaper, which Sun denied and blamed on the translation from the original version in Chinese.
Much of what the team behind Tron is offering or plans to offer seems to be a version of existing projects, including Ethereum (ETH) which it's reportedly emulating, aiming for its users, as well as Uniswap, MakerDAO, etc. As reported previously, JustLink is the third part of the announced DeFi ecosystem that's currently being formed around the Tron blockchain. Tron launched its own decentralized token swap protocol, Just Swap, in August.
Following the launch of JustLink as an "oracle answer for Chainlink on Tron," some are thinking it's more than just an answer - accusing the team behind the network and the project's founder Justin Sun of another blatant copy-paste. Meanwhile, the network's mainnet suffered an attempted attack today.
Just a couple of days ago, on October 30, Tron (TRX) founder Justin Sun announced that JustLink went live as "the first decentralized blockchain oracle on the Tron network." It's said it can feed smart contracts with real-world data, including but not limited to lending prices, stablecoin exchange rates, derivative prices, and market estimations.
Additionally, according to the announcement by the Just Foundation, JustLink is "the oracle answer for Chainlink on Tron."
As soon as the news hit the Cryptoverse, however, industry observers have started drawing parallels between JustLink's whitepaper and that of the decentralized oracle platform Chainlink (LINK). Some have gone as far as to argue that: "It's the Tron brand. If you don't copy paste, it's not a Tron "product"."
Chainlink supporter Timo Harings, for example, shared two images, side by side, showing minor differences in phrasing of the subtitles within the two whitepapers. Overall, very generally, Chainlink's whitepaper has more sections and is 38 pages long, compared to JustLink's 10 pages.
"Not just the paper either, but basically the entire code base as well. It's a shameless copy and paste," added SmartContent co-founder ChainLinkGod.eth. This poster claimed that Sun "has done it again" and warned that, "with Tron having zero expertise on the subject of oracles, this will only result in an oracle attack and loss of user funds."
The arguments ChainLinkGod.eth made include changing all mentions of "Chainlink," but allegedly forgetting to do the same for "LINK."
Others, however, argued that every invention was copied by others, but also that "copying is the ultimate form of flattery." Twitter user 'D' stated that Tron is "ahead and winning with user base across multiple industries with lower fees within blockchain. So, higher likelihood of mass adoption," and adding: "Blockchain for the people. Not just crypto nerds."
Meanwhile, this isn't the first time Tron and Justin Sun were accused of copy-pasting other projects' work, as plagiarism accusations have been plaguing them for years - including reports that they've plagiarized their whitepaper, which Sun denied and blamed on the translation from the original version in Chinese.
Much of what the team behind Tron is offering or plans to offer seems to be a version of existing projects, including Ethereum (ETH) which it's reportedly emulating, aiming for its users, as well as Uniswap, MakerDAO, etc. As reported previously, JustLink is the third part of the announced DeFi ecosystem that's currently being formed around the Tron blockchain. Tron launched its own decentralized token swap protocol, Just Swap, in August.
Bitcoin And Altcoins Regain Strength, Hurdles Remain.
After a major downside correction, bitcoin price found support near the USD 14,450 zone. BTC started a fresh increase and climbed above the USD 15,000 resistance. The price even cleared the USD 15,350 resistance, but it is currently (05:30 UTC) struggling to clear the USD 15,550 and USD 15,600 resistance levels.
Similarly, there was a fresh increase in most major altcoins, including ethereum, XRP, litecoin, EOS, XLM, LINK, BNB, TRX, bitcoin cash, and ADA. ETH/USD is back above USD 440 and USD 450, but it is facing an uphill task near the USD 460 level. XRP/USD is stuck below USD 0.255 and it is consolidating above the USD 0.250 support.
Bitcoin price
After a fresh increase above USD 15,000, bitcoin price gained strength. BTC even surged above the USD 15,350 and USD 15,400 levels. However, the bulls seem to be facing a strong selling interest near the USD 15,550 and USD 15,600 levels. A successful break and close above USD 15,600 is a must for a sustained upward move towards the USD 15,850 and USD 16,000 resistance levels.
An initial support on the downside is near the USD 15,350 level. The main weekly support is now forming near the USD 15,050 and USD 15,000 levels.
Ethereum price
Ethereum price is up 3% and it managed to climb back above the USD 440 and USD 450 resistance levels. To continue higher, ETH must surpass the USD 258 and USD 260 levels. The next major weekly resistance is waiting near the USD 470 zone.
If there is a fresh decline, the USD 440 level might act as a strong support. If the bears manage to clear the USD 440 support, the price might slide towards the weekly support at USD 425.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price is up 5% and it is gaining pace above the USD 260 and USD 265 resistance levels as its hard fork is approaching. An immediate resistance is near the USD 270 level, above which the bulls might aim for a test of the USD 280 barrier. If there is a downside correction, the USD 260 level might provide support. The next key support is near USD 250.
Chainlink (LINK) formed a strong support base near USD 10.50 and USD 10.60. It gained pace and surged above the USD 11.20 resistance level. The price even climbed towards the USD 13.00 level before correcting back to USD 12.50. LINK is currently consolidating gains above the USD 12.20 and USD 12.00 support levels.
XRP price remained well bid above the USD 0.245 support and it climbed back above USD 0.250. The price is now trading above USD 0.252, with a key hurdle near the USD 0.255 level. A clear break above the USD 0.255 resistance might lead the price towards the USD 0.262 and USD 0.264 resistance levels.
Other altcoins market today
In the past few hours, many altcoins gained over 5%, including RUNE, MANA, AAVE, EWT, RSR, LRC, AMPL, STX, BAND, OCEAN, REN, KSM, UNI, SNX, and CEL. Conversely, ABBC and TMTG are showing bearish signs.
Overall, bitcoin price is trading in a positive zone above the USD 15,350 and USD 15,200 levels. Having said that, BTC might start another corrective decrease if it continues to struggle near USD 15,550 and USD 15,600.
After a major downside correction, bitcoin price found support near the USD 14,450 zone. BTC started a fresh increase and climbed above the USD 15,000 resistance. The price even cleared the USD 15,350 resistance, but it is currently (05:30 UTC) struggling to clear the USD 15,550 and USD 15,600 resistance levels.
Similarly, there was a fresh increase in most major altcoins, including ethereum, XRP, litecoin, EOS, XLM, LINK, BNB, TRX, bitcoin cash, and ADA. ETH/USD is back above USD 440 and USD 450, but it is facing an uphill task near the USD 460 level. XRP/USD is stuck below USD 0.255 and it is consolidating above the USD 0.250 support.
Bitcoin price
After a fresh increase above USD 15,000, bitcoin price gained strength. BTC even surged above the USD 15,350 and USD 15,400 levels. However, the bulls seem to be facing a strong selling interest near the USD 15,550 and USD 15,600 levels. A successful break and close above USD 15,600 is a must for a sustained upward move towards the USD 15,850 and USD 16,000 resistance levels.
An initial support on the downside is near the USD 15,350 level. The main weekly support is now forming near the USD 15,050 and USD 15,000 levels.
Ethereum price
Ethereum price is up 3% and it managed to climb back above the USD 440 and USD 450 resistance levels. To continue higher, ETH must surpass the USD 258 and USD 260 levels. The next major weekly resistance is waiting near the USD 470 zone.
If there is a fresh decline, the USD 440 level might act as a strong support. If the bears manage to clear the USD 440 support, the price might slide towards the weekly support at USD 425.
Bitcoin cash, chainlink and XRP price
Bitcoin cash price is up 5% and it is gaining pace above the USD 260 and USD 265 resistance levels as its hard fork is approaching. An immediate resistance is near the USD 270 level, above which the bulls might aim for a test of the USD 280 barrier. If there is a downside correction, the USD 260 level might provide support. The next key support is near USD 250.
Chainlink (LINK) formed a strong support base near USD 10.50 and USD 10.60. It gained pace and surged above the USD 11.20 resistance level. The price even climbed towards the USD 13.00 level before correcting back to USD 12.50. LINK is currently consolidating gains above the USD 12.20 and USD 12.00 support levels.
XRP price remained well bid above the USD 0.245 support and it climbed back above USD 0.250. The price is now trading above USD 0.252, with a key hurdle near the USD 0.255 level. A clear break above the USD 0.255 resistance might lead the price towards the USD 0.262 and USD 0.264 resistance levels.
Other altcoins market today
In the past few hours, many altcoins gained over 5%, including RUNE, MANA, AAVE, EWT, RSR, LRC, AMPL, STX, BAND, OCEAN, REN, KSM, UNI, SNX, and CEL. Conversely, ABBC and TMTG are showing bearish signs.
Overall, bitcoin price is trading in a positive zone above the USD 15,350 and USD 15,200 levels. Having said that, BTC might start another corrective decrease if it continues to struggle near USD 15,550 and USD 15,600.
Bitcoin Breaches USD 16,000 For The First Time Since January 2018.
Today, the most popular cryptocurrency, bitcoin (BTC), surpassed the USD 16,000 level for the first time since January 2018, getting closer to its all-time high of USD 20,000.
BTC was above USD 16,000 for around half an hour before correcting lower. At pixel time (10:39 UTC), BTC trades at USD 15,923 and is up by 3% in a day and 10% in a week. The price jumped by 41% in a month and 83% in a year.
It took a week for BTC to increase from USD 15,000 to USD 16,000. Other major coins are almost unchanged today.
As reported last week, according to Northman Trader founder Sven Henrich, as long as BTC can remain above the breakout trend line it has "significant technical room higher."
"Also note BTC is showing some retracement action and has room lower for a potential retest of the trend line. But note that inside the larger wedge consolidation a potentially much more bullish pattern has emerged, that of a potential inverse which would point to near [USD] 17,000," he said.
"Over the past few years, we’ve been waiting to see how crypto would make the leap forward to the mainstream, wondering what it would take to catapult it over the chasm. We found out the answer just this month," Matt Hougan, Chief Investment Officer (CIO) at Bitwise Asset Management, argued in a commentary this week, reminding of PayPal crypto news, bullish statements by JPMorgan, among other drivers.
"In the coming months, we expect to see major banks launch crypto custody services, and brokerages open up access to crypto products; we expect to see retailers proudly displaying “we accept crypto” signs; we expect large institutions to start building major applications on public blockchains; and we expect investment conversations to transition from “why should I invest” to “why aren’t we already invested?” he said, adding that the "next six months are likely to change the game."
Today, the most popular cryptocurrency, bitcoin (BTC), surpassed the USD 16,000 level for the first time since January 2018, getting closer to its all-time high of USD 20,000.
BTC was above USD 16,000 for around half an hour before correcting lower. At pixel time (10:39 UTC), BTC trades at USD 15,923 and is up by 3% in a day and 10% in a week. The price jumped by 41% in a month and 83% in a year.
It took a week for BTC to increase from USD 15,000 to USD 16,000. Other major coins are almost unchanged today.
As reported last week, according to Northman Trader founder Sven Henrich, as long as BTC can remain above the breakout trend line it has "significant technical room higher."
"Also note BTC is showing some retracement action and has room lower for a potential retest of the trend line. But note that inside the larger wedge consolidation a potentially much more bullish pattern has emerged, that of a potential inverse which would point to near [USD] 17,000," he said.
"Over the past few years, we’ve been waiting to see how crypto would make the leap forward to the mainstream, wondering what it would take to catapult it over the chasm. We found out the answer just this month," Matt Hougan, Chief Investment Officer (CIO) at Bitwise Asset Management, argued in a commentary this week, reminding of PayPal crypto news, bullish statements by JPMorgan, among other drivers.
"In the coming months, we expect to see major banks launch crypto custody services, and brokerages open up access to crypto products; we expect to see retailers proudly displaying “we accept crypto” signs; we expect large institutions to start building major applications on public blockchains; and we expect investment conversations to transition from “why should I invest” to “why aren’t we already invested?” he said, adding that the "next six months are likely to change the game."
Not Every Country Can Shake The Magical Money Tree Amid Coronavirus Pandemic.
COVID continues to ravage societies around the world, and a key issue is how governments can afford to fight it. As economies are disrupted, governments are stepping in to increase their spending to bail out companies, pay the cost of health measures, and subsidise workers’ wages.
Before COVID, when people argued that the state should be able to offer free healthcare and free education, among other services, and welfare measures, a standard political response was that state resources were limited. Asked by a nurse in 2017 why her wages hadn’t increased from 2009 levels, then British prime minister, Theresa May, said: “There is no magic money tree that we can shake that suddenly provides for everything that people want.”
Except, a few years later, the government has not only been able to pay the wages of millions, it has also created rescue packages for thousands of firms and offered people vouchers to eat out in restaurants. A number of European countries have also taken the unprecedented step of underwriting the wages of millions of workers in response to the pandemic.
How is the British state and others capable of this radical increase in spending at a time when revenues from taxes are collapsing?
‘Magic money tree’
The answer to this lies in the debt market. Over the past few months, world governments have drastically increased their borrowing to cover the costs of the pandemic. It might appear logical that the cost of credit will go up during uncertain economic times. The reality, however, is that capital often goes to safer sovereign debt during economic downturns, particularly as the equity markets become unstable and volatile.
Over recent months, rather than struggling to find lenders or having to pay more for debt, the governments of the major economies have been awash with credit at historically low rates. In October, the EU, until now a small player in the debt market (as borrowing mostly is by national governments of member states), began a major borrowing campaign as part of the efforts to fight COVID through the SURE programme (Support to mitigate Unemployment Risks in an Emergency) which was created in May.
The first sale of bonds worth EUR 17bn was met with what some described as “outrageous demand”, with investors bidding a total of USD 233bn to buy them. This intense competition was for bonds that offered a return of -0.26% over ten years, meaning that an investor who holds the bond to maturity will receive less than they paid today.
The EU is not the only borrower that is effectively being paid to borrow money. Many of the advanced economies have been in recent years and months selling debt at negative rates. For some countries, the shift has been dramatic. Even countries such as Spain, Italy and Greece that were previously seen as relatively risky borrowers, with Greece going through a major debt crisis, are now enjoying borrowing money at very low rates.
The reason for this phenomenon is that while these bonds are initially bought by “traditional” market actors, central banks are buying huge quantities of these bonds once they are circulated in the market. For a few years now, the European Central Bank (ECB) has been an active buyer of European government bonds – not directly from governments but from the secondary market (from investors who bought these bonds earlier). This ECB asset purchase programme was expanded to help weather the COVID crisis, with the ECB spending EUR 676bn on government bonds from the start of 2020 until September.
Other central banks in the major advanced economies are following the same strategy. Through these programmes, those central banks encourage investors to keep buying government bonds with the knowledge that the demand for those bonds in the secondary market will remain strong.
COVID continues to ravage societies around the world, and a key issue is how governments can afford to fight it. As economies are disrupted, governments are stepping in to increase their spending to bail out companies, pay the cost of health measures, and subsidise workers’ wages.
Before COVID, when people argued that the state should be able to offer free healthcare and free education, among other services, and welfare measures, a standard political response was that state resources were limited. Asked by a nurse in 2017 why her wages hadn’t increased from 2009 levels, then British prime minister, Theresa May, said: “There is no magic money tree that we can shake that suddenly provides for everything that people want.”
Except, a few years later, the government has not only been able to pay the wages of millions, it has also created rescue packages for thousands of firms and offered people vouchers to eat out in restaurants. A number of European countries have also taken the unprecedented step of underwriting the wages of millions of workers in response to the pandemic.
How is the British state and others capable of this radical increase in spending at a time when revenues from taxes are collapsing?
‘Magic money tree’
The answer to this lies in the debt market. Over the past few months, world governments have drastically increased their borrowing to cover the costs of the pandemic. It might appear logical that the cost of credit will go up during uncertain economic times. The reality, however, is that capital often goes to safer sovereign debt during economic downturns, particularly as the equity markets become unstable and volatile.
Over recent months, rather than struggling to find lenders or having to pay more for debt, the governments of the major economies have been awash with credit at historically low rates. In October, the EU, until now a small player in the debt market (as borrowing mostly is by national governments of member states), began a major borrowing campaign as part of the efforts to fight COVID through the SURE programme (Support to mitigate Unemployment Risks in an Emergency) which was created in May.
The first sale of bonds worth EUR 17bn was met with what some described as “outrageous demand”, with investors bidding a total of USD 233bn to buy them. This intense competition was for bonds that offered a return of -0.26% over ten years, meaning that an investor who holds the bond to maturity will receive less than they paid today.
The EU is not the only borrower that is effectively being paid to borrow money. Many of the advanced economies have been in recent years and months selling debt at negative rates. For some countries, the shift has been dramatic. Even countries such as Spain, Italy and Greece that were previously seen as relatively risky borrowers, with Greece going through a major debt crisis, are now enjoying borrowing money at very low rates.
The reason for this phenomenon is that while these bonds are initially bought by “traditional” market actors, central banks are buying huge quantities of these bonds once they are circulated in the market. For a few years now, the European Central Bank (ECB) has been an active buyer of European government bonds – not directly from governments but from the secondary market (from investors who bought these bonds earlier). This ECB asset purchase programme was expanded to help weather the COVID crisis, with the ECB spending EUR 676bn on government bonds from the start of 2020 until September.
Other central banks in the major advanced economies are following the same strategy. Through these programmes, those central banks encourage investors to keep buying government bonds with the knowledge that the demand for those bonds in the secondary market will remain strong.
