Ethereum is Flashing Signs That a Sizable Bull Run is Looming


Ethereum has seen some rather lackluster price action in recent times, hovering around the $200 level as its buyers and sellers largely reach an impasse.

This price action has not been emblematic of the cryptocurrency’s underlying fundamental strength, however, and one analyst is noting that there are a few major factors that suggest a massive bull trend exists just around the corner.

This trend comes as analysts note that the cryptocurrency could also be strong from a technical perspective as well, with one even offering a lofty near-term price target for the cryptocurrency at $250.

Here are the Fundamental Factors That Suggest Ethereum is on the Cusp of a Massive Uptrend

Although Ethereum’s price action has been rather lackluster as it hovers within the lower $200 region, there are a few key fundamental developments that suggest the crypto is poised to see a major uptrend in the near-term.

Spencer Noon, the Head of DTC Capital, spoke about this in a recent tweet thread, explaining that he sees a host of factors that signal ETH is poised to rally.

Of all the factors he discusses, two of the most bullish – in terms of direct correlation to the crypto’s price action – can be seen while looking towards its institutional inflows and massive net outflow of ETH away from exchanges.

With regards to institutional adoption, Noon explains that the growth of the Grayscale Ethereum Trust (ETHE) over the past three weeks shows that institutions are either investing in ETH, or are locking up their existing holdings at a rapid pace.

“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,” he explained.

Noon also points to the massive outflow of ETH away from exchanges as a reason why the crypto is fundamentally strong, noting that this is a sign of accumulation.

“Post-Black Thursday (March 12) there has been a net outflow of ETH from exchanges, with 62% of days showing net outflows – a sign of accumulation,” he said while pointing to the below chart.

Ethereum

Image Courtesy of Spencer Noon

Where Could This Potentially Imminent Uptrend Lead ETH’s Price?

As for how high this potential uptrend could lead Ethereum, one analyst recently noted that he is watching for a movement up to $250.

This target is labeled on the chart seen below, and it appears to coincide with a descending trendline that has been formed in the time following the cryptocurrency’s rally to highs of $290 in mid-February.

Ethereum

Image Courtesy of Galaxy

In order for Ethereum to push to these highs, it is imperative that the aggregated cryptocurrency market garners greater upwards momentum.

Featured image from Shutterstock.





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Bitcoin May Be the Solution to Africa’s Broken Financial System



A recent report suggests that the lack of traditional financial infrastructure makes Africa a place where cryptocurrency adoption is likely.

The report — shared with Cointelegraph by a Luno representative on May 27 — sheds light on Africa’s financial infrastructure and the role that cryptocurrencies play in it.

The author of the research, which was jointly conducted by market analysis firm Arcane Research and crypto exchange, Luno, wrote that the financial landscape seen on the continent plays a role in forming appetite for crypto in Africa:

“Although it is a diverse region, African nations share some key similarities and trends. Economic problems, from high inflation rates and volatile currencies to financial issues such as capital controls and a lack of banking infrastructure, create a fertile ground for an alternative to germinate.”

Per the report, cryptocurrencies such as Bitcoin (BTC) can potentially solve all the aforementioned challenges. One use case for crypto assets in Africa is remittance, which currently forms an important source of income for local families.

According to a World Bank report published in April, expats sent around $48 billion back to families in Sub-Saharan Africa in 2019 alone. Still, using traditional remittance services to send money to the region allegedly results in an average fee of 9% for a mere $200 remittance. 

According to the Luno-Arcane report, intra-African payments often have to deal with high fees and low speeds. According to World Bank data, in Sub-Saharan Africa there are over 56% less commercial bank branches per 100,000 adults than the world average. This shows that traditional financial infrastructure is not just less efficient, but also less accessible in the region.

Bitcoin adoption in Africa has already started

Bitcoin-enabled services attempting to tackle those issues already exist in Africa. One example of such a service given by the report’s author is Bitpesa; a Kenya-based firm that enables its users to leverage Bitcoin for international payments and remittances with lower fees than traditional services.

Bitpesa was initially only meant to be an exchange platform allowing Kenyan citizens to send money to mobile money wallets, without requiring bank accounts. Later the service expanded to other African countries and now has representatives in London and Luxembourg, among others.

In late January 2019, the World Economic Forum appointed the CEO and founder of BitPesa, Elizabeth Rossiello, as one of two co-chairs of the Global Blockchain Council. This shows how the innovation brought on by this Bitcoin-enabled service was recognized worldwide, also outside Africa.

The report also mentions Paxful, a Delaware-based peer-to-peer, or P2P, crypto exchange competing with Localbitcoins, as another player in the African crypto ecosystem. A recent report showed that surging African demand drove P2P Bitcoin trading volume on Localbitcoins and Paxful higher than what it was at the peak of the 2017 bull run.

Marcus Swanepoel, the CEO of crypto exchange Luno, told Cointelegraph that he believes the adoption of cryptocurrencies in the region will continue to increase. He explained:

“Crypto use in Africa will continue to rise, and it is only a matter of time until digital currencies will become ubiquitous. […] Given how readily they’ve adopted crypto, I would expect countries in Africa to be the first to make the full transition from their traditional financial systems towards crypto.”

Swanepoel claims that Luno was the first such company to operate in Africa and currently has African offices based in Lagos, Cape Town and Johannesburg. He revealed that those “three offices have so far processed approximately $4.5 million per day on average in 2020.“ He also shed some light on his firm’s plans to expand in the continent:

“Africa is one of, if not the biggest early adopter of cryptocurrencies, and a very important market to us, being home to approximately three fourths of our customer base. We’ve seen high rates of adoption in the likes of Kenya and Ghana specifically, but we’re always looking to expand our reach and welcome more customers across the continent. A priority for us has always been education, not just buying and selling cryptocurrencies, and that’s something we’ll continue to do, especially in the territories in Africa that we know have been ravaged by broken financial systems.”



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South Korea is Exploring New Crypto Tax Laws



South Korea’s Ministry of Economy and Finance is preparing an amendment to apply to the nation’s Income Tax Law. This could include rules for profitable sales of cryptocurrencies as well as profits from national crypto mining projects.

According to local newspaper E Daily on May 27, the ministry also mentioned including the profits generated by initial coin offerings, or ICOs. This is tantamount to a change in the country’s rhetoric towards ICOs, which are still banned across the country.

The report specifies that crypto-to-crypto transactions, such as Bitcoin (BTC), will be “likely” exempt from the proposed amendment and only seeks to tax-for-profit transactions and not loss-making ones.

Unclear definition of “gains” in crypto transactions

The ministry issued the following statements on the proposal:

“We are considering capital gains tax or other income tax on profits made by domestic and foreign investors in the transfer of virtual assets.”

An official from the Ministry of Information and Technology clarified that the principle of taxation would be executed under the logic of “taxes where income is located.”

The South Korean government attempted to draft legislation to tax individual crypto profits at the beginning of the year. Since individuals’ profits from virtual currency transactions are not listed as income, these earnings do not fall under income tax taxation.

It is still unclear if the gains in cryptocurrency transactions are similar to profits in other assets like stocks and real estate in the eyes of the government.

According to Decenter, the proposed amendment will be ready by July and will be brought to Parliament in September 2020.

South Korea’s attempts to legislate on crypto taxes

Although the process of creating crypto tax laws in South Korea is just beginning, the National Tax Service imposed 80 billion won ($68.9 million) in December 2019 to the local crypto exchange, Bithumb Korea.

The company undertook administrative litigation over the tax bill, as taxation rules towards foreign corporations that have no permanent establishment in the country have not yet been applied to the crypto industry.



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BitMEX Rejects Bold Lawsuit Claims as ‘Clearly Rehashed’ Internet Bunk



BitMEX, one of the most popular derivatives exchanges in the cryptocurrency market, has come under fire with accusations of being purposefully designed to facilitate “a myriad of illegal activities.” The accusations were made in a lawsuit filed by BMA LLC in the United States District Court for the Northern District of California on May 16.

In the lawsuit, both HDR Global Trading — BitMEX’s parent company — and Arthur Hayes, Ben Delo and Samuel Reed — the exchange’s top executives —— stand accused of either engaging in or facilitating multiple criminal activities including racketeering, money laundering, wire fraud and operating an unlicensed money transmitting business.

Both BitMEX and the plaintiff, BMA LLC, have been or are currently involved in other noticeable lawsuits in the cryptocurrency space. BitMEX, for one, is facing another suit filed by multiple initial investors of the exchange seeking $540 million in damages for violation of their contracts. BMA LLC, a Puerto Rican company whose name stands for “Bitcoin Manipulation Abatement,” has previously sued other noticeable companies in the cryptosphere such as FTX and Ripple.

Despite the multiple accusations, BitMEX has dismissed them, citing the plaintiff’s previous actions as a serial filer of lawsuits. A spokesperson for HDR Global Trading told Cointelegraph that the complaint is “clearly rehashed from information culled from the internet,” adding that the intention is to defend “ourselves vigorously against this spurious claim.”

What’s in the lawsuit?

The filing states that the defender, BitMEX, and its top-level executives have engaged in and hosted illegal activities of a “truly staggering” magnitude. They are accused of “engaging in or abetting multiple crimes” including racketeering, money laundering, wire fraud, operating without a money transmitting license and market manipulation, along with a few other associated claims.

The 106-page document goes through great lengths to show multiple ways in which HDR Global Trading and the individual defendants have a presence in the U.S., especially in California where the suit was filed. The emphasis in highlighting its U.S. presence aims to back the accusations that it is operating in the country without a money transmitting license.

The suit cites unnamed sources “close to the company” when revealing that around 15% of BitMEX’s trading volume in 2019 — roughly $138 billion — came from U.S. citizens. However, it does not show any way in which BitMEX actively marketed to a U.S. user base besides inviting customers in the country to try out the BitMEX testnet version.

While the document doesn’t provide any evidence for active marketing to a U.S. audience, it does make a case for BitMEX’s willfulness to turn a blind eye to its American customers, given the revenue generated by that portion of its user base. The document also recalls that Hayes, BitMEX’s CEO, himself conceded that it is possible to trade on the platform using a virtual private network. The lawsuit reads:

“Defendants knowingly and willfully permitted United States citizens and residents of this District as well as United States based companies to freely trade on the BitMEX exchange because of the lucrative business relationships between Defendants and the aforesaid individuals and companies, which financially benefited Defendants.”

Many of these allegations seem to be substantiated by general perceptions rather than concrete facts. In order to justify accusations of money laundering, for example, BMA LLC claims that BitMEX has allowed illicit funds to pass through the exchange. However, the same can be said for other exchanges and even banks. BitMEX enforces Know Your Customer protocols and seems to comply with all required Anti-Money Laundering laws, which is where the company’s liability ends. The virtually unknown firm’s recent history in targeting cryptocurrency companies suggests the lawsuit may not hold up in court, such as was the case with its previous action against FTX.

While some accusations may not be backed by hard evidence at first sight, others seem to be fairly substantiated and also highlight well-known issues within BitMEX’s platform, including its frequent downtimes that have reportedly caused traders to lose funds and its high leverages which go up to 100 times. According to BMA LLC, these downtimes are used by BitMEX as market manipulation. When asked about this, a spokesperson for HDR Global Trading told Cointelegraph:

“Trading downtime degrades the experience for all customers and it would be against our own interests to fabricate downtime. We have always communicated openly and transparently regarding unscheduled downtime events, as reflected in our live status updates and postmortem blog posts. We’re working hard to further improve the resiliency of our platform and to achieve our ambition of near-zero downtime.”

According to BMA LLC, BitMEX also enables manipulators and money launderers to operate illicitly by allowing them to open an unlimited number of anonymous and unverified accounts, without trading or withdrawal limits, and by cooperating with various manipulation activities such as organized price “pump-and-dumps” and “stop loss hunting.”

BMA LLC: A serial lawsuit filer?

BMA LLC is a fairly unknown entity, but it has been involved in a few lawsuits within the cryptosphere. A spokesperson for HDR Global Trading referenced this very fact, telling Cointelegraph:

“We’re aware of two ‘copy and paste’ complaints filed by Pavel Pogodin of ‘Consensus Law’, the law firm behind ‘Bitcoin Manipulation Abatement, LLC’ which has also filed complaints against FTX and Ripple Labs.”

The small law firm first made the rounds in crypto-centric news outlets in November 2019, when it filed a lawsuit against FTX, another cryptocurrency derivatives exchange incubated by Alameda Research. The claims were similar to the ones BitMEX is now facing: racketeering, market manipulation and unlicensed securities sales, among others. In that case, BMA LLC asked for a payment of $150 million in punitive and exemplary damages. The lawsuit surfaced after, and in possible relation to, Binance CEO Changpeng Zhao’s tweet in September 2019 about an attack attempt on its platform and his belief that it came from a “smaller futures exchange.”

No names were given at the time, but the general belief was that Zhao was talking about FTX. The whole situation was cleared up shortly after in a follow-up tweet stating that everything turned out to be an accident and things were “all good now.” Alameda Research promptly presented a motion to dismiss the lawsuit, which was granted by a judge who dismissed the complaint in its entirety with prejudice.

Before the case was dismissed, Alameda made a public statement responding to the accusations through a post on Medium, sparing no harsh words for BMA LLC and the lawyer behind it. It stated that the whole suit was a “nuisance […] riddled with laughable inaccuracies” and referred to the plaintiff as a “troll [that] has no evidence of any wrongdoing.” In a since-deleted tweet, Binance’s CEO also commented on the lawsuit claims at the time, describing them as “very far fetched.”

Striking once more on May 1, BMA LLC took legal action against yet another crypto giant: Ripple. The Puerto Rican law firm alleged that Ripple and its CEO violated federal and California laws with the company’s $1.1 billion XRP sale. BMA LLC now seeks to have Ripple return all the money from the sale as well as to receive compensatory damage due to its accusation that Ripple promoted the sale to investors in a misleading manner to drive up demand and maximize profits without registering the sale with the relevant regulator. This is not the only lawsuit Ripple is facing, as another class-action lawsuit claims the company has violated securities rules.

BitMEX and the law

While BitMEX and other companies accused by BMA LLC state that the company is somewhat of a serial lawsuit filer hoping to take advantage of the cryptocurrency industry, this is not the first time that BitMEX has faced legal complaints. There is another ongoing lawsuit filed by plaintiffs Frank Amato, RGB Coin Ltd. and Elfio Guido Capone suing the exchange for $540 million. The plaintiffs claim to be early investors of the platform and allege their initial collective investment should have been converted into equity at over $90 million. They are now seeking to receive compensation that includes the equity and $450 million in punitive damages.

But there’s more: On April 3, 11 class action lawsuits alleging unlicensed cryptocurrency sales were presented against 42 defendants in 16 different countries, and BitMEX was one of them. Binance, Tron and Block.one were also mentioned along with BitMEX in the lawsuit filed by the firm Roche Cyrulnik Freedman LLP in a Manhattan federal court.

BitMEX’s bumpy history

Only hours after the lawsuit was reported on by Cointelegraph, BitMEX suffered yet another outage, which has become somewhat of a usual occurrence. In fact, the lawsuit at hand actually accuses BitMEX of “weaponizing deliberate server freezes, using fraudulent ‘system overload’ events to accept some trading orders and reject others” — a market manipulation practice.

A 2019 YouTube video of BitMEX’s CEO, Arthur Hayes, that was shot during the Asia Blockchain Summit has also resurfaced. In the video, when asked about the location chosen to file the company, Hayes stated that “it just costs more to bribe” authorities in the U.S. than it does in Seychelles where the exchange is located. He then jokingly added that the cost of a bribe in Seychelles was “a coconut,” setting the tone for a heated argument with Nouriel Roubini, an American economist and a professor at New York University. It’s clear that the aforementioned statement was made in a playful tone, but the video has not aged well at all given BitMEX’s current legal disputes.

Along with the various accusations and allegations presented in court, BitMEX was also at the center of some controversy in March due to its server issues and liquidation system. At the time, XBT/USD perpetual contracts fell more than 50% in value over a 12-day span even though the price of BTC was rallying, which led to suspicions in the crypto community of market manipulation by the exchange.

What to make of all this?

While BMA LLC seems to bring up a few valid points in its lawsuit, most of the accusations can be quickly dismissed. It’s not clear if the goal of this lawsuit is to “attack” BitMEX’s reputation or to receive actual compensation, but judging by the contents of the lawsuit and BMA LLC’s history, the suit will most likely be dismissed or dropped.

Nevertheless, BMA LLC still raises a few important issues when addressing some of BitMEX’s flaws, especially when it comes to the high leverage trading allowed, which is extremely dangerous to inexperienced traders, and its frequent downtimes. When asked about its high leverage, however, a spokesperson for HDR Global Trading told Cointelegraph:

“We operate a sophisticated trading platform which offers up to 100x leverage on some contracts. This is the upper limit and by no means the norm, with the average effective leverage typically around 8x. On our website and blog, we provide users with a wealth of information on how the platform works.”

If the cryptocurrency industry continues its current trend, however, it is likely that exchanges and other infrastructure players will continue to work on these types of issues, a factor that is crucial for the long-term success of Bitcoin and other cryptocurrencies.





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Roger Ver Wants to Buy Bitcoin.org



In August 2008, an individual believed to be Bitcoin creator, Satoshi Nakamoto, purchased Bitcoin.org through an anonymous domain registrar. 

When Satoshi left the community, he entrusted control of the site to a number of impartial individuals. Since that time, Bitcoin.org has largely operated as an educational resource, helping newcomers to the space learn about Blockchain technology.

However, following Theymos’ departure from the website in April, and news that its current administrator, Cobra, is looking to part with the website, the future for Bitcoin.org appears unclear.

Cobra takes the helm of Bitcoin.org

Bitcoin.org’s anonymous curator, Cobra, was announced as a co-owner of the website six and a half years ago by the site’s then-manager, Theymos — another anonymous figure who has garnered controversy within the space for his administration of r/bitcoin, the Bitcoin wiki page, and the BitcoinTalk message board.

Since assuming the website’s reins, a number of Cobra’s decisions — which include pushing for changes to Bitcoin’s Proof-of-Work, or PoW, algorithm and attempting to alter the Bitcoin Whitepaper — have colored him as a controversial character.

Cobra attracted further criticism amid the Bitcoin hard fork that created Bitcoin Cash in 2017, flipping from staunch opponent to an apparently devoted proponent of the chain sometime in 2018.

Cobra attracts controversy

During early May, Cobra announced that he will gradually reduce his involvement with the website over the course of 2020.

Cobra sought to assure the community that “the domain name will be left in trusted hands, adding that he has “a few people in mind already.” 

The administrator added that he is open to recommendations as well, asserting that he will be “thorough and meticulous here and find the right people.”

Roger Ver may be eying Bitcoin.org

While Cobra did not name any prospective buyers for the domain, a thread on Reddit suggests that Bitcoin.com owner and fellow Bitcoin Cash (BCH) advocate, Roger Ver, is interested in purchasing Bitcoin.org.

Discussing possible new owners for the website, a Redditor asked Cobra if he would sell the coveted domain to Ver if he presents a good offer. 

Roger responded to the comment under his MemoryDealers handle, stating:

“I have cash in hand.”

During the fork which led to the creation of Bitcoin Cash, Roger Ver faced a number of complaints. Some accused him of leveraging his ownership of the Bitcoin.com domain name to create uncertainty as to which chain comprised the “real” Bitcoin — reportedly resulting in crypto newcomers accidentally purchasing Bitcoin Cash instead of Bitcoin Core.

Ver does not expect to acquire Bitcoin.org

Cointelegraph reached out to Ver to ascertain the seriousness of his offer on Reddit.

Ver stated that while he “would gladly buy it,” he does not expect Cobra to sell it to him. He also stated that he has not made any efforts outside of the comment on Reddit to negotiate the website’s sale.

When asked what he would do with Bitcoin.org should it come into his possession, Ver stated he “would use it to promote peer-to-peer electronic cash systems,” however, added that he hasn’t put much thought into the subject as he does not expect to take ownership of the domain.

When asked who would be best suited to take over Bitcoin.org’s administration if not himself, Ver stated:

“Maybe a Bitcoin Foundation-like organization that is made up of the businesses building on crypto. The [Electronic Frontier Foundation] EFF might not be bad either. Anyone who supports free expression of ideas would be better than the current group.”

All Bitcoin.org bidders should be rejected

In a discussion on the topic of Bitcoin.org’s future on Bitcointalk, crypto OG Gregory Maxwell posted that “anyone who is trying to buy [the domain] should under no condition be allowed to have it,” adding:

“Buying it would create a need to recoup the investment which would be at odds with the public interest.”



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After BTC Visits $8.6K, Crypto Traders Predict Bitcoin Price’s Next Stop


The price of Bitcoin (BTC) dropped to as low as $8,600 on May 25 as retail investors on Coinbase led an abrupt short-term downtrend. The price has since fluctuated between $8,800 and $9,200, demonstrating high volatility in a tight range.

Bitcoin is currently at a decisive point where it could fall back below the $8,000 support level and retest lows in the $6,000–$7,000 range or break above $10,500 and initiate a new bull cycle.

Top crypto traders remain mixed on the current trend of Bitcoin. Some believe BTC is heading down to at least $7,100. Such a drop would stabilize the market and establish a stronger foundation for BTC to rally. Others foresee one to two weeks in the low-$9,000 region before a breakout above $10,000 and surge to potentially $14,000, $17,000 and $20,000 in the medium term.

Bullish scenario for Bitcoin

The bullish scenario for Bitcoin in the near term is quite simple. BTC has to surge above $10,600 to surpass its previous peaks in October 2019 and February. For a new bullish uptrend to materialize, BTC has to maintain its momentum above $9,000 and grind to surpass $10,600, eventually establishing a peak above the $11,000 resistance level. The Bitcoin options trader known as Theta Seek wrote:

“Been seeing alot of bearish tweets, but I think that this is the last 1-2 weeks that you’ll EVER be able to buy #BTC under $9K.”

If the price of Bitcoin remains above $9,000 until June 1 and achieves a monthly close above mid-$9,000, it would increase the probability of a sizable rally heading into the third quarter.

One significant data point that supports the theory of bulls is the reluctance of Bitcoin holders to sell. In the last two months, the price of Bitcoin almost tripled from $3,600 to $10,080. Yet on-chain data shows that investors are unwilling to sell at that price. Cryptocurrency analyst Philip Swift said:

“60% of all Bitcoin has not moved on the blockchain for at least 1 year. This is an indication of significant hodl’ing. The last time this happened was in early 2016, at the start of the bull run.”

Hodl Wave shows Bitcoin investors are unwilling to sell. Source: Philip Swift

Crypto market data and blockchain analytics firm IntoTheBlock found a similar pattern. Its researchers said the number of large Bitcoin transactions has noticeably declined since May 19. The drop-off in large transactions indicates whales or big individual holders of BTC are not selling. The researchers explained:

“The number of Large Transactions greater than $100k for #Bitcoin started to decline consistently from 9.71k transactions on May 19 (moving 1.04m #BTC and $10.93b) to 8.94k transactions on May 26 (moving 798.54k $BTC and $7.07b).”

Additionally, Scott Melker, a cryptocurrency investor, emphasized that major hedge fund managers in the financial sector began to struggle as the pandemic caused a steep stock market pullback. Considering the high level of volatility in the financial market and in traditional assets such as oil, Bitcoin has recovered relatively well from its “Black Thursday” plunge to $3,600 on March 13. Melker noted:

“My best friend manages 2 billion at a hedge fund. He just told me they’ve been taking most of their money off of the table because the market makes no sense and ‘you can’t put that much capital to work with no conviction.’ Even the big boys have gotten slaughtered.”

The perception of Bitcoin as a store of value and a newly emerging hedge against inflation has improved as a result, causing a rise in inflow of capital into the Bitcoin market from institutional investors.

In the first quarter of 2019, the Grayscale Bitcoin Trust — an investment vehicle that allows institutions to buy into Bitcoin through the public market — recorded an average weekly investment of $3.2 million. In the first quarter of this year, the average weekly investment rose to $29.9 million, increasing by almost 10 times year over year.

Grayscale Bitcoin Trust average weekly investment since 2018. Source: Kevin Rooke

The rise in institutional activity in the Bitcoin market, the reluctance of many investors to sell at current prices, the drop in large transactions, and the tendency of BTC to see a short squeeze when a negative funding rate emerges all point toward a short-term price uptrend.

Bearish scenario in the short term

The bearish scenario for Bitcoin in the near term is a pullback to the $5,800–$7,100 range. Currently, Bitcoin is technically in a lower high formation dating back to June 2019. A “lower high” is formed when the latest peak is lower than the previous high point. As an example, Bitcoin rose to as high as $10,500 in February. This month, it topped out at $10,080, making it a lower high.

Bitcoin has seen six lower highs in a row in the past 12 months, which indicates a bearish cycle spanning over a long period of time. If BTC fails to break above $10,000, it increases the probability of the resumption of a correction. A cryptocurrency researcher at Market Science known as BitDealer said about the lower high formation:

“[Bitcoin] doesnt look too good. Really interesting to me how we haven’t taken out any of those highs considering how close price got to them. Reminds me how clean the LHs [lower highs] were following the 20k top. Until we get a HH [higher high], good idea to short near the highs/take profit on longs.”

Lower highs on Bitcoin daily chart since June 2019. Source: Bitdealer

Most bearish theories put out by traders anticipate a short-term decline in price but a strong recovery over the medium to long term. Bitcoin trader Nunya Bizniz suggested BTC may be showing a rough inverse head and shoulders pattern, which is regarded as a textbook bottom indicator. For it to materialize, however, Bitcoin has to fall to at least $7,100, which goes in line with predictions by other prominent traders.

A possible inverse and head shoulders pattern forming. Source: Nunya Bizniz

The price of Bitcoin increased from $8,600 to $9,200 on May 27, but it pulled back almost immediately afterward. The $9,200 level was an important CME gap, which was formed when the CME futures market closed during the weekend. The closure of a CME gap could lead to a drop in the price of BTC, as it tends to hit the gap then reverse.

Variables that can affect the price

Bitcoin saw a price spike as Goldman Sachs conducted a client call on the topic of Bitcoin, gold and inflation. The talk of one of the biggest investment banks in the U.S. discussing the dominant cryptocurrency with its clients led to increased anticipation of further institutional adoption. But on the slide presented to clients, Goldman Sachs reaffirmed its neutral stance on Bitcoin. The slide titled “Cryptocurrencies Including Bitcoin Are Not an Asset Class” read:

“We also believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”

Goldman Sachs simply said that Bitcoin does not show evidence of being a hedge against inflation and that the only appeal to institutions is its volatility. Barry Silbert, the CEO of Digital Currency Group and Grayscale, said: “Just reviewed the slides from the Goldman client call later this morning re gold & Bitcoin. This slide header summarizes Goldman’s take.”

The actual content of the presentation by Goldman Sachs about Bitcoin and gold does not describe Bitcoin in a way that would invite the bank’s clients to trade or invest in the asset. Hence, the narrative that it would lead more high-net-worth individuals and institutional clients to perceive Bitcoin as a hedge against inflation is false.

Other than that, there are several other minor variables such as miners selling more BTC than they mine on a daily basis post-halving and the increase in the open interest of the Bitcoin futures market that may fuel additional selling pressure.





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Goldman Sachs Butts Heads With Bloomberg Over Bitcoin


According to a leaked PowerPoint slide, Goldman Sachs, in a May 27 call discussing the U.S. economic outlook, stated that cryptocurrencies are not an asset class. The wording of the slide appears to discourage its clients from investing in the up and coming technology-based asset. This stands in stark contrast to the views of former presidential hopeful, Michael Bloomberg, whose financial reform plan unequivocally called Bitcoin an asset class.

Purported Goldman Sachs Slide From May 27 Call. Source: Ryane Browne’s Twitter Account.

Bloomberg: Better than gold

Michael Bloomberg’s plan openly acknowledged cryptocurrency as a major asset class. It also called for a transparent regulatory framework:

“Cryptocurrencies have become an asset class worth hundreds of billions of dollars, yet regulatory oversight remains fragmented and undeveloped. For all the promise of the blockchain, Bitcoin and initial coin offerings, there’s also plenty of hype, fraud and criminal activity.”

It should be noted that most, if not all, of Goldman Sach’s Bitcoin (BTC) alleged criticisms could also be levied against other established assets, such as gold. Notably, Bloomberg analyst Mike McGlone, who is frequently bullish on the cryptocurrency, believes Bitcoin to be a better store of value than gold because of the inelastic nature of its supply:

“Unlike quasi currency brethren gold, higher prices won’t be an incentive for more supply.”

This article will be updated as more news of the call will become available.





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Stepping Into the World of Mainstream Crypto



Over the last decade, we have witnessed the massive development of crypto. Formerly a geeky trend, crypto was once a questionable and not easily understandable invention that was used for pizza payments. Since those early days, cryptocurrencies have been transformed into a store and measure of value for many people.

Those who were at the forefront of the industry profited greatly, and a new wave of millionaires was born, along with new social groups. Crypto anarchists and Bitcoin (BTC) advocates formed an army, and despite the sharp fall during the crypto winter of 2019, we’ve certainly since gained ground.

After the ashes of investor despair, the advent of stable crypto — stablecoins — began. 2017 and 2018 were both “the year of Bitcoin.” 2019 was the year of decentralized finance, and 2020 already looks like the year of the stablecoin. What’s coming next? Let’s try to unravel the future with possible use case predictions.

Exploring digital currency perspectives

1. Personal enrichment

The primary drivers for crypto popularity up to 2017 had been the basic and understandable desire of many to get rich. The ones who bought Bitcoin during the early years made real fortunes; investors who risked and leveraged an opportunity in early initial coin offerings such as Tezos (XTZ), EOS and Ether (ETH) have seen up to 1,400% increases in incomes. Right now, in the wake of the halving that just passed, speculation on prices is still on the rise.

An example is the controversial John McAfee, who predicted a very bold thought about Bitcoin hitting $1 million per coin by the end of the year. McAfee believes that once Bitcoin takes over the global economy, demand will increase and traditional dollars will no longer be needed. Meanwhile, the owner of Snapchat, Jeremy Liew, and Blockchain co-founder Peter Smith predict that the number one crypto asset’s price will reach $500,000 per Bitcoin by 2030.

At the same time, the CEO of Pantera Capital, Dan Morehead, examined the year-to-date performance of Bitcoin before the May 12 halving in his letter to investors and predicted that Bitcoin will reach a $100,000 valuation by August 2021.

Then there’s Warren Buffett, who has no intention of spending Berkshire’s $137 billion cash pile, and if stocks plummet, Bitcoin may see another significant correction. Speaking at the annual Berkshire Hathaway shareholders meeting, Buffett said that $137 billion is not a large cash pile if bad things start to pile up in the market. Berkshire has significant stakes in leading conglomerates such as Coca-Cola and Kraft Heinz. If the market begins to go in the opposite direction than analysts anticipate, the cash pile can be used to assist Berkshire’s portfolio companies.

2. Reshaped payments

Many people in the world are still not aware of the existence and potential of blockchain and cryptocurrencies. Many regard Bitcoin as being in another bubble. The market capitalization is still not strictly comparable to the asset value of stocks or even the value of tech company Apple. However, major players such as JPMorgan Chase and other banks have already recognized distributed ledger technology as the main driver for system enhancement. There is a lot of ground to cover, as numerous processes strive to reshape this field.

First of all, many companies, thriving businesses and even global brands may start using cryptocurrencies to pay for their services. Doing so will make it possible to remove middlemen from the equation, reducing final costs and securing cheaper, more accessible services for end users.

There are already people who earn income in crypto working in a related field, but mainstream adoption is yet to come. Bitcoin has become a store of value for many people, making it a more convenient investment option than any other, outpacing even gold.

Of course, the digital analogs of United States dollars and euros already serve that role, and with the massive increase in mobile use, estimates suggest that 50% of the world’s population will switch to noncash transactions by the year 2030. In the digital payments segment, the number of users is expected to reach 4.4 billion by the year 2023.

3. Replacement of fiat currencies

Many crypto adopters in traditional venture capital, such as Tim Draper, believe that fiat currencies will disappear over time as more and more people start using various cryptocurrencies such as Bitcoin, Ether and others. The primary reason for this adoption is ever more people believing that cryptocurrencies are a reliable store of value across national borders and political systems.

Taking into account the ongoing COVID-19 pandemic, we can expect an even faster rate of adoption.

Stablecoins represent the latest link of digital asset evolution. Using these assets can be a powerful instrument to ensure stability on volatile cryptocurrency ground. Governments will have more to do with stablecoins than with other crypto assets. Eventually, stablecoins may even replace traditional fiat currency, but that future remains a long way off.

4. Integration with IoT

More than two decades ago, back in 1999, British technologist Kevin Ashton coined the term “Internet of Things” to define a network that connects not only people but also the objects around them. Back in the day, many considered this something worthy of a science fiction film. Today however, IoT is a huge, yet still rapidly growing, network of smart objects that work together in collecting and analyzing data and autonomously performing actions. It has become a reality thanks to the development of incredible wireless communication technologies and data analytics.

By the end of 2019, consumer spending on smart home systems reached more than $100 billion. Spending is expected to continue rising through 2023 to an astonishing level of $157 billion!

From 2015 to 2019, the number of publicly known IoT platforms doubled, reaching 620. Big players such as Amazon, Microsoft and Google have also entered the space in an attempt to capture part of the market.

Global spending on IoT is expected to reach $1.1 trillion in 2022, with new technologies such as 5G driving future market growth.

The fusion of two futuristic technologies that are already here seems quite an exciting development. IoT is growing fast, as reported by International Data Corporation, and it is expected that blockchain and IoT technologies will join forces soon.

This integration will set a new standard for scalability and security frameworks for interaction in the IoT devices sector. Moreover, cryptocurrencies such as stablecoins can really provide a decent and efficient way of conducting investments for smart devices.

5. The new age of gaming

Crypto casinos and gaming have already been using crypto for some years now. Quite contrary to regulatory bodies, crypto and blockchain are considered to be a much-needed evolution for gaming concepts, providing numerous benefits. With the esports sector on the rise, more and more companies will ultimately adopt blockchain technologies. The global esports market was valued at nearly $865 million in 2018, and it’s estimated to reach $1.79 billion in 2022.

Esports and gaming usually involve people that are quite advanced in technology, making it a perfect testing ground for the latest developments in the blockchain field.

Over the next few years, different online systems may enjoy DLT-led advancements, as leading video gaming brands have already started work in the field. Epic Games, the studio behind Fortnite, is researching new ways to incorporate blockchain into gaming experiences. While others talk about the future of blockchain, the gaming industry is already living it.

Opening the box of crypto use cases

At the moment, the world is still at the earliest stages of financial technology development, and the forthcoming impact of blockchain on many fields including cloud computing, IoT and artificial intelligence cannot truly be estimated yet, with the potential so rich and vast — and already in development.

Nevertheless, it is exciting to witness new fusions with existing technologies and rollouts of even newer technologies as blockchain opens up ever more options in the future. Taking into regard high demand in both technology use cases and digital assets, blockchain technology is the future. And even though we’ve had over a decade of development, the best is yet to come.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alex Axelrod is the CEO and founder of Aximetria and Pay Reverse. He is also a serial entrepreneur with over a decade of experience in leading world-class technological roles within a large, number-one national mobile operator and leading financial organizations. Prior to these roles, he was the director of big data at the research and development center of JSFC AFK Systems.



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Bakkt Physical Bitcoin Futures Beat Cash Ahead of Major CME Expiry


Bitcoin (BTC) futures platform Bakkt now sees most of its contracts settled in BTC, not cash, the latest data reveals.

According to analytics resource Skew, the latest date for which data is available in May produced $34 million for Bakkt’s physically-settled Bitcoin futures.

Tide turns against cash settlement

Cash-settled Bitcoin futures recorded $9.3 million in volume, while total open interest was $7.6 million.

The trend reverses the previous status quo, under which futures settled in fiat saw larger volumes. This was the case throughout March and April, as volatility underscored investors’ desire for cash.

May meanwhile also saw a daily record for physically-settled futures at Bakkt at $43 million. 

Bakkt Bitcoin futures chart. Source: Skew

This Friday will further see 50% of open interest expire at fellow non-exchange futures provider CME Group. As Cointelegraph reported, such settlement dates tend to compound downward price pressure on Bitcoin in the short term. 

CME’s open interest hit its own all-time high in the first week of the month.

CME gap filled days after opening

Nonetheless, a “gap” which opened up in the CME order book over the weekend was conspicuously “filled” on Wednesday, in line with another regular trend seen since 2017 when Bitcoin futures began trading.

BTC/USD suddenly rose from $8,900 to $9,200 on the day, sealing the gap, which lay between $9,065 and $9,180.

Institutional Bitcoin investment has returned to the spotlight in recent weeks. A major event for commentators was an admission by billionaire hedge fund player Paul Tudor Jones that he now kept up to 2% of his net assets in BTC.

Thereafter, RT host Max Keiser among others claimed that sooner or later, others would have no choice but to follow his conspicuous endorsement of the cryptocurrency.



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$13B Custodian Launches Retirement Account Supporting Bitcoin



Kingdom Trust, a South Dakota-based financial custodian that manages more than $13 billion in assets, has launched a retirement account that supports legacy, alternative, and crypto assets.

The launch of the account “Choice,” follows the acquisition of Choice Holdings — a digital asset-focussed retirement account that was built by CoinShares.

Kingdom Trust already backs more than 100,000 retirement accounts and custodies over 20,000 assets including Bitcoin (BTC).

To incentivize sign-ups, Kingdom Trust will give $62.50 worth of BTC to the first 1,000 Choice account holders.

Custodian launches crypto-friendly retirement account

Speaking to Cointelegraph, CoinShares founder and Kingdom Trust CEO, Ryan Radloff, estimates that there are 7.1 million Bitcoin holders in the United States.

“By our estimates, there are 7.1 million Americans who own Bitcoin, have a retirement account, but currently don’t have the option to hold Bitcoin in their retirement account with their other assets,” said Radloff.  

“What we are doing, is we are now opening up the ability to not just trade Bitcoin, but you can do digital assets or legacy assets like your stocks and bonds from one [retirement] account,” he added.

Bitcoin can be held in retirement accounts

Radloff stated that the Choice product was motivated by a desire to give people the option of investing their retirement accounts into alternative and crypto assets, allowing people to get out of “the Fed’s rat-trap.”

“When the [Internal Revenue Service] IRS decided to tax Bitcoin, consequently it enabled Bitcoin to be held by IRS and other qualified custodians that are regulated by the IRS and their state divisions. […] It directly enabled [Bitcoin] to be held by qualified custodians and in retirement accounts,” he said. 

“Most of the Bitcoin community doesn’t even know that they can hold Bitcoin in their retirement account yet.” 

“Right now, most of these Americans’ retirement accounts are sitting at some bank that is telling them that Bitcoin is too risky while at the same time forcing them to only own stocks or mutual funds,” Radloff continued.

“I’m mad as hell about that. So we’re out to do something about that, where you can have the choice to own Bitcoin or stocks and bonds from one account for the first time, so that we’re not just dictated by these banks to stay in the Fed’s rat-trap.”



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