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As the world turns more digital, crypto’s pioneer asset Bitcoin (BTC) could take on gold’s store of value role, according to the CEO and co-founder of Digital Assets Data, an analytics firm.   

“I see Bitcoin replacing gold as the hardest money for savers with long time horizons,” CEO Mike Alfred told Cointelegraph. “Young people are far more interested in Bitcoin in a world where the economy becomes increasingly online and virtual,” he added.

Bitcoin has gained significant status since inception

Since its launch over a decade ago, Bitcoin has travelled a price path from less than a dollar, all the way up to nearly $20,000. In that time period, the asset has changed roles several times, from a transactional currency to a financial asset, and everything in between, according to analysis from crypto Twitter analyst PlanB.

“The most compelling use cases continue to be in emerging markets where monetary instability and inflation makes it extremely risky to save in the local currency,” Alfred said. 

Venezuela, for example, was hit hard by inflation in recent years, finding itself drowning in 10,000,000% inflation by the latter half of 2019. Bitcoin, however, found greater popularity in the middle of such cash troubles. 

“As Bitcoin becomes more accepted, it will be used in more financial transactions and accepted by an increasing number of tax authorities,” Alfred posited. “Eventually Bitcoin could be completely interwoven into the fabric of the global economy.”

Others prefer gold 

Not everyone sees Bitcoin in a positive light. Economist and BTC sceptic Peter Schiff has tweeted a number of comments against Bitcoin, preferring gold as an investment. 

Bitcoin posted astronomical price gains over the last decade, as crypto space participants often point out. Noting such statistics, Schiff predicted the coming years as gold’s time to shine as Bitcoin loses value.

“Over the past several years Bitcoin hodlers poked fun at gold investors because Bitcoin gained so much more than gold,” Schiff tweeted. “Over the next several years those roles will reverse, but not because gold rises more than Bitcoin, but because gold moons as Bitcoin crashes back to earth,” the gold bug added. 

Banking giant, Goldman Sachs, also recently said it does not view Bitcoin as a legitimate asset category.

Plenty of crypto industry participants have countered various arguments against BTC over the years, however, including Anthony Pompliano’s Bitcoin hedge argument. 

CME Bitcoin (BTC) futures and options markets are set to mature this Friday and traders are closely watching to see how spot prices will react to this event. The contracts expire every two months and according to market analysts, they negatively influence BTC’s price in spot markets. In fact, recent data from Cointelegraph and Arcane Research found that there is a 2.3% drop ahead of CME expiry.

Although some investors claim manipulation could have been behind the price drops preceding CME contracts expiration, the futures average daily volume has been around $380 million. 

More importantly, the instrument is cash-settled, meaning no Bitcoin is effectively changing hands. This brings forth the question of whether investors should be worried about Bitcoin’s price action on May 29. If so, what indicators can be used to predict eventual price swings?

Investors must look past volume

Open interest is actually a much better metric to understand professional investors’ actual positions as it measures the total number of contracts held by market participants. 

An investor could have bought $50 million worth of futures and sell the entire position a couple of days later. This $100 million in traded volume does not currently represent any market exposure, therefore it should be disregarded.

Bitcoin Futures Open Interest – USD. Source: Skew

As per the above chart, CME Bitcoin Futures open interest soared from a mere $130 million in late March to $386 million this month. That’s far more significant than Bitmex and OKEx 50% growth. 

Also, it should be noted that there’s no way to know if an unregulated venue’s figures are inflated, especially when there’s little to no KYC involved.

Closely observe what happens in the options markets

Options markets are an entirely different derivatives contract. There are endless strategies traders employ, but in the most basic one the buyer of a call option can acquire Bitcoin for a fixed price on a predetermined date. 

As recently reported by Cointelegraph, institutional investors’ growing appetite for CME Bitcoin Options saw a 1000% increase in open interest.

Bitcoin Futures Open Interest. Source: Skew

Total open interest for the May 29 expiry options is currently sitting at 32,000 BTC, although only 19,000 BTC between $7,500 and $10,500 strikes which equates to a little over $170 million. 

Interestingly enough, at CME, open interest for this Friday is almost entirely composed of call (bullish) options. The same pattern can be seen at LedgerX, another regulated venue for institutional traders.

Measuring the potential impact contracts expiry 

Undoubtedly, such large open interest both from futures and options will almost certainly create a huge arm wrestle between buyers (long) and sellers (short). The problem is, there’s no way to know exactly how much of those derivatives are exclusively used for hedging.

An investor holding 1,000 BTC may have recently been spooked about Bitcoin’s halving or the possibility of a price drop due to the decreasing hashrate. While selling their stake is  an option, another strategy would be to sell a $7,000 strike put option. 

Doing this allows the investor to be paid upfront, therefore acquiring more cash as long as BTC closes above $5,000 on May 29.

The same problem occurs in the futures market. For every trade there must be a buyer (long) and a seller (short) of equal size no matter if the exchange is BitMEX, CME, OKEx, Binance or LedgerX. 

The once catch is there’s no way to know if the short seller holds an equally sized long position in the spot market or at another futures venue.

Futures contracts roll over

To better gauge the potential impact of the upcoming expiry, traders should monitor CME open interest for the May contract. Investors typically roll over the position over the last few weeks. 

In order to carry a long position one needs to buy the June contract and sell the one from May, thereby reducing short-term contract open interest. This is unlike perpetual contracts that make up the lion’s share of BitMEX and OKEx volume.

If these investors decide to not roll over their positions, this would likely increase the odds of additional volatility during expiry. 

Bitcoin Futures Open Interest – contracts (5k BTC). Source: CME

The latest data from CME shows an open interest of 3,473 ($158 million) contracts for May with each contract representing 5 BTC, so this amounts to $158 million. 

Investors should keep an eye on this figure as CME average daily volume seldomly surpasses $400 million in a single day.

A significant change in open interest could lead to more intense movements by investors.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Pavel Durov, founder and CEO of popular messaging app Telegram, has purportedly resumed his charity activity soon after terminating Telegram’s blockchain project.

Known for philanthropic activity, including a $1 million donation to Wikipedia, Durov has donated 10 bitcoins (BTC) to a charity project in Russia. The coins are worth around $96,000 at time of publication.

Donation will help people facing financial difficulties due to coronavirus

The new donation intends to support a project backed by political activist, Yegor Zhukov — who established himself as a symbol of anti-Kremlin protests. The donated Bitcoin will be spent to help people facing financial difficulties due to the coronavirus pandemic, including distributing free food packages, Zhukov’s team announced on Instagram on May 28.

Dubbed “Mutual Aid,” the Zhukov’s team-led project was launched in early April and has reportedly provided support to almost 3,000 people to date. The project was initiated in response to the coronavirus-fueled crisis, aiming to bring people together to help each other independently from the government.

Durov uses public Bitcoin address for donation

A spokesperson for the project told Cointelegraph that Durov reached out to Zhukov on Telegram before making the donation. The person said that Durov expressed his willingness to support the project.

According to the representative, Telegram CEO completed the donation in a series of five transactions on May 24 and May 25. Durov used the Bitcoin address set aside for general donations by the project, the person said. As of press time, the address holds 12.7 BTC, or about $120,000, according to public data from Blockchain.com.

“Main goal of both crypto and Telegram is independence from the government”

The donation comes amid years of legal uncertainty toward cryptocurrencies like Bitcoin in Russia. While Russia has not yet adopted any crypto-related laws, the government is now considering fines and prison terms of up to 7 years for illegal issuance and use of crypto. Alongside crypto uncertainty, Russia is also facing disagreement over lifting the Telegram ban in the country. In the meantime, both Telegram and crypto continue operating in Russia.

Addressing the issue, Zhukov emphasized that Telegram and crypto basically share the same objectives. Particularly, they are designed to bring freedom from the government and cannot be regulated, Zhukov told Cointelegraph. Expressing gratitude to Durov’s support, Zhukov said:

“The main purpose of both crypto and Telegram is independence from the government. Thus, neither of the two should basically be regulated.” 

By expressing his libertarian stance, Zhukov echoed some words of Durov. “In the 21st century, the best legislative initiative is the absence of one,” Durov argued in a manifesto published in Russian publication Afisha back in 2012.

In a Bloomberg interview, the SEC commissioner, Hester Peirce, said the approval of a Bitcoin (BTC) ETF by the regulator could help price Graysclale’s GBTC more fairly.

The commissioner has again reiterated that in her opinion, the SEC is treating crypto related financial instruments unfairly, applying to them unique requirements:

“Recently I issued a second dissent, saying: to me, it appears that the current Commission is not interested in approving any exchange traded products that’s available to a retail audience that has crypto underlying  <…> which suggests to me that we have one standard for crypto products and then another standard for other types of products. And I don’t think that’s right.”

Exchanges make price discovery easy

When asked whether the lack of an approved exchange traded BTC instrument makes Grayscale’s Bitcoin Trust (GBTC) a more risky investment, she concurred:

“No, I think that’s a great point. And I think it is. I mean, I don’t want to think about any product and I haven’t tracked that product the way that you have. But I think that in general, with the reason that products that trade on exchanges are attractive is because they do offer this really good price discovery process and they work really, really well. And so that’s why people like to trade products on exchanges.”

Toilet paper ETF

She also jokingly said that if she were creating her own ETF right now, it would be something related to toilet paper:

“If I were making an ETF ticker now, I guess it would have to be something related to toilet paper. So PP or something like that.”

Joking aside, the lack of an approved Bitcoin ETF remains an obstacle to greater crypto adoption.

What goes up, must come down. That saying just applied to the cryptocurrency named Theta, which recently became a topic of hot discussion due to a supposed Google partnership.

Details about the “partnership” however bring up questions about if there’s any validity to the claim, or if Theta is simply a client of the tech giant. The initial news caused a massive pump, but uncertainty led to a 50% collapse just as fast.

Google Partnership Speculation Causes Altcoin To Pump and Dump Over 50%

Earlier this week, news broke that Google would be “teaming up” with the Theta Network to onboard users of the blockchain-based video delivery service via Google Cloud.

The asset’s price pumped over 65% in 24 hours due to the news. The small cap cryptocurrency added the 65% to an outrageous 1,500% climb from its Black Thursday bottom in March 2020.

Sharp-eyed cryptocurrency traders began to question the “partnership,” however.

Related Reading | It’s Official: Tether Flippens XRP After Recent Crypto Crash

The Block’s director of research Larry Cermak calls the partnership “classic announcement nonsense,” stating that “Google didn’t team up with anyone.”

LMAO Google didn’t team up with anyone. Classic announcement nonsense pic.twitter.com/yjizXbA6ej

— Larry Cermak (@lawmaster) May 27, 2020

As soon as the crypto community began calling attention to the details of any deal that may have taken place, the rumor turned quickly into a sell the news event.

Theta crashed just as fast as it climbed, dropping 50% from the local high. With the asset still up over 750% from lows set earlier this year, the loss isn’t overly significant.

Theta Performance Hints At Return To Cryptocurrency Bull Market

The fact that Theta pumped 1500% and then later still spiked on news of a partnership that wasn’t valid, brings back memories of the 2017 cryptocurrency hype bubble.

That year, thousand percent gains for altcoins and even Bitcoin weren’t uncommon. The wealth generated put the asset class on the map, and FOMO into the speculative asset class caused the bubble to burst.

Asset valuations came back to realistic pricing, and the entire asset class of cryptocurrencies fell into a bear market.

Over two years have since passed. The dominoes are now stacked in favor of a new uptrend, and once the first one falls, the momentum won’t be easily stopped.

Related Reading | Chartered Market Technician Claims Crypto Poised For Strong Uptrend 

Cryptocurrencies pumping and dumping just as Theta has will return to being commonplace.

If Bitcoin can break through $10,000, a new bull market may finally here. After that, it could be altcoins time to finally shine. Once that happens, it will be off to the races towards a new all-time high.

Cryptocurrency assets are fundamentally screaming buy, and their hard-capped supplies make them especially viable during hyperinflation. Is Theta pumped and dumping a sign that a new crypto bull market is starting to form?

Leading crypto exchanges are holding around 1.36 million BTC, worth around $12,920,000. The last time major trading firms had such low Bitcoin reserves, the price of the dominant cryptocurrency surged from $3,150 to $14,000.

Market data indicates a growing number of investors are moving their Bitcoin holdings out of exchanges. It shows traders have no intention of selling BTC at the current price of $9,400.

Top crypto exchanges record 1-year low Bitcoin reserves. Source: CQ Live

Why are Bitcoin investors moving their funds out of exchanges?

In the first quarter of last year, the price of Bitcoin ranged between $3,150 to $4,500 for nearly four months. When the inflow of BTC from exchanges started to decline, the cryptocurrency began to rally. Within three months, BTC increased from $4,000 to $14,000, recording a 250% price surge.

At $9,500, Bitcoin is seeing the same BTC inflow volume into exchanges seen in early 2019. Fewer traders are depositing Bitcoin to trading platforms, which shows investors have no interest in risking their BTC to sell in the $9,500 to $10,000 range.

The 12-month low inflow of BTC into top cryptocurrency exchanges coincides with long-term indicators signaling the start of a new uptrend. Macro indicators like the golden cross and the Puell Multiple show Bitcoin is on the verge of a major bull run as seen at the start of 2019.

The Puell Multiple is a metric that considers the circulating supply by looking into miner revenue to measure if BTC is overbought or oversold. Currently, the Puell Multiple of BTC is hovering at 0.4. In mid-December 2019, when Bitcoin was at $3,150, it dropped to as low as 0.3.

The supply-focused metric shows Bitcoin could see another minor pullback in the short-term. But, in the short to medium-term, Bitcoin is expected to see a sizable rally.

Puell Multiple shows Bitcoin is nearing oversold levels. Source: LookIntoBitcoin

Bitcoin also recently recorded its seventh golden cross in history. Three out of the past six golden crosses led to a massive long-term rally. 

A golden cross occurs when two long-term exponential moving average (EMA) lines cross one another. It typically happens when BTC is recovering rapidly from a steep sell-off.

Bitazu Capital founding partner Mohit Sorout said:

We recently witnessed the 7th Golden CrossOx of bitcoin’s existence. Previous 3 out of 6 led to gigantic rallies. But sure any tool without a 100% win rate is a meme, must be shunned & discarded immediately.

Bitcoin sees its seventh golden cross in history. Source: Mohit Sorout

Two variables that are different from rallies in 2018 and 2019

The ongoing rally of Bitcoin is fundamentally and structurally different from previous rallies seen in the last two years.

This time around, there are a significantly higher number of retail investors and institutions leading the upsurge of Bitcoin rather than investors in the futures market that trade with high leverage.

With a lower risk of a major long squeeze, long-term macro indicators hinting at a major uptrend in the coming months are considered a positive factor for the medium-term price trend of Bitcoin.

Ethereum appears to have entered a stagnation phase without giving any clear signals of where it is heading next. Its price action has been mostly contained within a narrow trading range over the last couple of weeks. But a decisive price movement that defines the direction of its trend has yet to occur.

Spencer Noon, the head of DTC Capital, believes that despite the lackluster there are different factors that suggest that Ether is poised to rally.

The renowned analyst maintains that the growth of the Grayscale Ethereum Trust (ETHE) has seen since the beginning of the month shows the interest that institutions have for this digital asset.

“1 million new shares of [Grayscale Investment’s] ETHE have been issued in the past 3 weeks – a sign that institutions are either investing in ETH or locking up their existing holdings at a pace of roughly $1 million per day,” affirmed Noon.

This might be the reason why the number of addresses with millions of dollars in Ethereum, colloquially known as “whales,” has been increasing at an exponential rate.

Ethereum Whales Fill Up Their Bags

Santiment, a behavior analytics platform, pointed out that the amount of Ether held by large investors recently reached a 10-month high.

The behavior analytics platform explained that the cumulative holdings of the top 100 non-exchange addresses currently hold more than 21.8 million ETH.

At the time of writing, this massive sum of Ether is equivalent to nearly $4.6 billion, which represents “the largest collective balance held within the top 100 addresses since May 2019,” according to Santiment.

Top 100 Non-exchange Ethereum Addresses. (Source: Santiment)

The most intriguing part about this is that in the last 48 hours, these whales have added an additional 145,000 ETH to their bags. Such high levels of accumulation could be the reason why the price of Ethereum surged over 7% within this period of time.

Amount of Ethereum in Top Holders. (Source: Santiment)

The enormous holdings of these large investors allow them to have a disproportionate impact on prices. They have the ability to coordinate buying and selling activity and manipulate the market at their will.

If the buying spree continues, the smart contracts giant may be bound for a further advance.

A Bullish Impulse on the Works

A look at IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that Ethereum indeed has the ability to climb higher.

The IOMAP cohorts show that the most significant supply barrier that may impede this altcoin from a bullish impulse sits between $210 and $215. Here, roughly 1.4 million addresses bought over 1.7 million ETH.

But breaking through it, leaves Ether open for a rally towards the next major level of resistance at around $233.

In/Out of the Money Around Price. (Source: IntoTheBlock)

On the flip side, nearly 3 million addresses purchased 13.5 million ETH between $187 and $201. Such a massive supply barrier could hold Ethereum from a steeper decline in the event of a sudden correction.

Even though the future looks bright for the second-largest cryptocurrency in the market, it is crucial to implement a robust risk management strategy to avoid getting caught up on the wrong side of the trend.

Bitcoin (BTC) hit $9,400 on May 28 in its latest attempt to upend a downward trend which had seen $8,640 lows just days before.

Cryptocurrency market daily overview. Source: Coin360

BTC price: 3-day gains near 8%

Data from Cointelegraph Markets and CoinMarketCap showed BTC/USD retaking new ground in Thursday trading, with daily gains at 3%.

At press time, $9,400 had just been clinched, rising to $9,460 before a slight reversal. Those levels come a day after Bitcoin reclaimed the $9,000 and $9,200 zones respectively.

Bitcoin 1-day chart. Source: CoinMarketCap

$9,500 next key target

As Cointelegraph reported, this has come in tandem with a stronger outlook for traditional markets, and places BTC/USD ever closer to five figures. 

Resistance has so far kept $10,000 from reentering, while last week was characterized by losses as miners upped sales of BTC despite themselves earning much less after the halving earlier this month. 

Later, it emerged that institutional fund giant Grayscale is now buying one-and-a-half times the amount of Bitcoin now being mined.

This week, meanwhile, factors such as Goldman Sachs claiming that cryptocurrency is “not an asset” failed to dent market sentiment in any noticeable way. 

$9,500 — a level which has provided a focus for price fluctuations in recent weeks — is now the next hurdle to clear.

• XTZ, the native cryptocurrency of the Tezos blockchain platform, recently defeated a long-standing Head & Shoulder pattern.
• If successful, the bearish technical indicator could have crashed XTZ to as low as 523 sats.
• Its failure now puts the crypto en route to record highs.

XTZ is trading almost 28 percent lower from its all-time high at 4,073 sats, but the cryptocurrency has enough fuel to retest the top.

The upside sentiment for the Tezos blockchain’s native asset takes cues from its recent response to a bearish technical indicator. Since it started trading in 2019, the XTZ/BTC daily chart was gradually forming a Head & Shoulder pattern, hereto H&S.

The classic indicator appears after an asset form three price highs, with the middle peak highest than the other two. Meanwhile, these peaks stand on a price floor called the neckline. Together, they appear like two shoulders with one head in the middle, which explains the term H&S.

A Winning Cryptocurrency

Traders perceive H&S as a bullish-to-bearish trend reversal indicator. Despite its standalone limitations, the pattern is prevalent in predicting an asset’s potential negative breakouts and their downside targets. XTZ was making a similar indicator on its bitcoin-focused chart, as shown below.

H&S formation on the Tezos token’s chart | Source: TradingView.com, Binance

The circled peaks represent XTZ’s head and shoulders, while the red ascending trendline is its neckline. After confirming the Right Shoulder peak on April 25, 2020, the XTZ/BTC rate corrected lower to retest the redded floor.

Ideally, the pair could have broken below it to establish a downward breakout move to as low as 523 sats – the price target of the H&S pattern. But instead, it established the neckline as its support, invalidating the technical indicator entirely.

The price jumped by as much as 21 percent after testing the red line.

The overall move verified the redded Ascending Trendline as a crucial support level for XTZ. A favorable buying sentiment near the line kept the cryptocurrency from dwelling into risky bearish territories. As a result, XTZ remains one of the best performing crypto tokens in 2020, beating even its top rival, Bitcoin.

What’s Next

Supported by optimistic fundamentals, XTZ would most likely retest the red trendline for a pullback towards its 23.6% Fibonacci level – at 3,085 sats. Meanwhile, a break above the said resistance would set its upside target towards 3,769-4,073 sats range.

Bitcoin’s corrective sentiments could also support XTZ’s uptrend. As the top crypto remains capped by its long-term Descending Trendline, it would move profit-seekers to the altcoin market, benefitting rivals like Tezos and Ethereum.

Completing its second independent developer grant, crypto exchange OKCoin has donated $100,000 to open-source crypto payment processor BTCPay Server. 

In addition to its worldwide fiat on-ramp/off-ramp focus, the OKCoin exchange sees the importance of furthering the industry’s framework, OKCoin CEO Hong Fang told Cointelegraph, explaining:

“We also have a special responsibility to support free or open-source software (FOSS) development which provides the building blocks in which exchanges are built upon.”

OKCoin initiated its grant in 2019

OKCoin started up its Independent Developer Grant in 2019, according to a statement provided to Cointelegraph. The grant aims to give capital to open-source Bitcoin (BTC) product builders. 

OKCoin gave its inaugural developer grant to Bitcoin Core developer Fabian Jahr back in February 2020, detailed in a blog post from OKCoin. The post noted the OKCoin’s view on the importance of independent developers, calling them, “the real founders of the crypto industry.”

Fang explained:

“We created the OKCoin Independent Developer Grant that embodies three tenets we believe are crucial to supporting crypto developers: focus on free or open-source software (FOSS), protect independence and encourage decentralization.”

The new grant puts funding toward crypto payment adoption 

BTCPay Server gives online vendors and sites a way to accept and incorporate global Bitcoin payments, thus, giving BTC greater usability, the statement said. Programmers can also construct various solutions using BTCPay as a base, as the project’s framework is decentralized and open-source.

BTCPay differs from other payment processors, such as BitPay. “BTCPay Server is a free and open-source payment processor,” BTCPay Server contributor Pavlenex told Cointelegraph. “BTCPay Server is a code, not a company, it relies on the network of contributors around the internet.” BTCPay also does not involve third parties or added fees, Pavlenex added. 

Additionally, BTCPay’s framework holds vastly greater potential above basic transaction facilitation. “It’s a tech-stack that allows you to build business and develop on top of it,” Pavlenex said. 

OKCoin’s move supports a project adding crypto payment channels to the mainstream world, while keeping with the decentralized and open-source movement. Last fall, Square Crypto also donated $100,000 to BTCPay as part of a similar gesture.