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Crypt0 B0unce

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The amount of bureaucracy and regulation that goes on in the European Union is simply incredible. The entire continent is a virtual minefield of political tripwires and multi-level legal landmines. Sometimes it’s a wonder that they can even move forward at all.

So, when thinking about the legalization of digital currencies in the single market it will no doubt be a tough nut to crack. That said, some major headway has just been made.

A private bank in Switzerland has just announced some alternative investment services that include storing and trading on Bitcoins.

Now, Switzerland is not an official EU member but they are part of the single market and do play a leadership role especially when it comes to financial services within Europe and across the globe. Gaining acceptance from a Swiss Bank is indeed a huge step forward for the global adoption of Bitcoin and for all blockchain technology.

Many thanks to Lawrence Patrick for tagging me with this headline. 😉

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures, and graphs below are valid as of July 13th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Great green stocks!

Virtually all major indices are in deep green over the past 24 hours. Janet Yellen’s testimony was a huge boost of confidence in the global economy and corporate profits.

Many of the Senators used their time questioning Yellen to point out how strong the economy is and many of them even cleverly worded their questions to debate the issue if the economy is running well because of the current president or the previous one.

As far as unwinding their $4.5 Trillion balance sheet, very little was said. Only that it would happen gradually over the course of a few years and a small admission that it may cause long term interest rates to rise.

The Dow Jones closed last night at a brand new record high.

Today’s Agenda

More of the same. Janet Yellen will have another Q&A session with members of the US Congress. This will very likely be her last appearance before Washington as the Fed Chief. When asked whether she will seek another term as Chair of the Federal Reserve her answer did not seem very enthusiastic.

We do not expect Janet to end her speech with a mic drop.

Also, today is a landmark meeting between Angela Merkel and the new President of France Emanuel Macron. Over the past few years, due to weak leadership from France, Germany was forced to take on a stronger role in guiding the young European Union. Now that France has a new young energetic leader perhaps we’ll see a greater collaboration between the two strongest economies in the bureaucratic block.

Here we can see the German and French stock indices over the past year. The strong upward push from Yellen yesterday certainly a very comforting move. Now let’s see if they can knock it out of the ballpark.

But what may cause bigger headlines is Trump’s arrival in Paris today to meet Macron. With all the heat at home, this seems like another great chance for Trump to get out of town.

Crypt0 B0unce

The fall has certainly been painful for some. Especially those who got in at the top. It’s great to see the faith of those who got in early and hodling long term throughout this gut wrenching pullback.

Many alternative analysts are now saying enough is enough and it’s time to start looking for a bottom. Indeed, over the past 24 hours, 92 of the top 100 digital currencies are in the green. Many of them with double and even triple digit percentage gains.

The number one question that I’ve been getting from clients is about Ethereum of course. So here’s my answer….

Now that blockchain technology is gaining recognition from more and more developers there is a huge push and tremendous excitement around the idea of making an internet that revolves around Decentralized Apps.

Ethereum is a ground breaking platform both in creating these Dapps and in creating new digital assets. So far, it’s the best platform that we’ve seen and certainly the most popular.

However, in the future, we may see another platform that works just as good if not better. Think about the browser wars of the 1990s. At first, Netscape was the king, then Microsoft stole most of their market share with the Internet Explorer. After that many went to Firefox but these days most people use Google Chrome.

For now, almost all of the hot ICOs are using Ethereum. While hope this continues, any investment in the crypto market it is very high risk and if Ethereum does hold its spot as the Dapp and ICO king over the next decade it may very likely pay off in a big way.

In this graph, we can see the incredible journey from $50 a coin all the way up to $428 and now back to $200.

Here we can see eToro’s volume on this incredible asset. As can be expected, our clients are trading the momentum. That’s why we seem more positions executed on days that there was a significant movement.

eToro sentiment on Ethereum is now and has always been above 98% buying.

Have an awesome day!!

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 152 rated postsSenior Market Analyst at Etoro.com.




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3 Comments

3 Comments

  1. embersburnbrightly

    July 13, 2017 at 11:50 am

    I laughed out loud at this sentence: “We do not expect Janet to end her speech with a mic drop.”

    🙂

  2. chavs69

    July 13, 2017 at 1:32 pm

    Some have indicated that ETC may be an undervalued dark horse when it comes to the IOT. What are your thoughts?

  3. Columbo

    July 15, 2017 at 12:56 pm

    yeah but Falcon has a bad history:
    http://nypost.com/2016/08/13/swiss-private-bank-linked-to-malaysia-scandal/
    I am not sure if overall that’s more good than bad.

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Cryptocurrencies

Top 4 Tether Alternatives: Best Stablecoins To Hodl Crypto Gains

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Top Tether Alternatives

Stablecoins are one of the most effective ways for a trader to lock in his crypto gains and ride out that volatility.

This has been the case for a number of years as traders have used the Tether stablecoin. However, this has been viewed with a great deal of suspicion more recently.

Now, there are an array of newer stablecoins that have hit the market. They are all vying to win a piece of of the stablecoin pie.

In this post, I will take a look at some of the most attractive alternatives to Tether – In search of the “most stable” stablecoin.

Coinbase & Circle USDC

The USD Coin was developed by the Centre Consortium which is a collaberation between Coinbase and Circle Internet financial. The latter is a Goldman Sachs backed Fintech company that owns the Poloniex Exchange whereas the former is self explanatory.

Like Tether supposedly is, the USDC is backed by actual US dollars that are kept in a bank account. Each USDC that is issued is backed 1 to 1 with a US dollar. These U.S. dollars are held in reserve accounts and are regularly audited to unsure the reserve match the issuance of USDC.

Technologically, the USDC is an ERC20 token that has been developed on the Ethereum blockchain. This was done in order to support the rapid transfers of the coins on the network. Moreover, there is the added benefit security provided by a robust and established network.

Of course, it also helps a great deal that this is backed by the likes of Coinbase and Circle. This makes the coin that much more reputable than the likes of Tether. It also means easy redemption on Coinbase and conversion into Fiat.

Exchanges to buy USDC
List of exchanges to buy USDC

Moreover, USDC is listed on a number of different exchanges for trading. It has strong liquidity and is currently sitting at 23 in Marketcap rankings. This places it at the top of the list among the other stablecoins.

You can also create a USDC account and convert the coins into Fiat right from the issuer. This will cut out the middleman and reduce your fees.

So, is there a catch?

Well, this is still a centrally controlled stablecoin. It is not really “trustless” as you have to place your trust in Coinbase and Circle.

Paxos Standard

Another interesting Fiat backed stablecoin is that of Paxos Standard (PAX). This is issued by the Paxos Trust Company. They have described themselves as the “first regulated Trust company with blockchain expertise”.

This is also an ERC20 token that was built on top of the Ethereum blockchain. Every dollar that they hold in their bank account  corresponds to the total supply of PAX. When there is a redemption of the PAX then the corresponding coin is burned.

What is interesting about them is that they are regulated and approved by the New York State Department of Financial Services.

Paxos DFS
Image via Paxos Standard and NY DFS

Paxos standard also owns their own exchange (itbit.com). This means that when trading on this exchange users will be able to withdraw other digital assets to PAX instantaneously and without fees. PAX is also listed on a number of different exchanges so you can trade out of your altcoins there.

Finally, as is the case with the USDC, you can create an account at Paxos standard and get an instant conversion into Fiat. This is actually something that a number of traders have been doing recently.

However, it has not been plain sailing for all.

There have been reports that the company has been making it difficult for legitimate traders to cash out their PAX. Some traders have reported that even after completing numerous requests for information, their accounts have still been shut down.

So if you are going to be using PAX for large scale fiat conversion then you will have to consider this possible risk. In the end, redemption is in the hands of the compliance team at the trust.

Gemini Dollar (GUSD)

The third fiat backed stablecoin on our list is the offering from the Gemini exchange. This is the Gemini dollar (GUSD) that was launched at about the same time as the Paxos Standard token.

An ERC20 based token, GUSD will be backed by fiat that is held at State Street bank. They have also retained a pass-through insurance product to provide FDIC insurance within specific limits. Gemini stablecoin will also be regularly audited by BPM Accounting and Consulting.

GUSD is also listed on a number of exchanges which makes trading into and out of it quite easy. Sitting at a market cap ranking of 123, it has a much lower cap than the other centralized stablecoins I have mentioned above.

If you are looking for an easy off-road into fiat then you can always use the Gemini exchange. However, much like the case with PAX, your redemption is completely in the hands of Gemini.

There have also been reports that the exchange is making it difficult for their traders and clients to redeem their tokens. In fact, there are many OTC dealers which have large accounts at Gemini that are concerned about converting their tokens as they do not want to risk their accounts being shut down.

While there may have been unique cases around the PAX and GUSD closure, it is always disconcerting to hear stories like this.

Up till now all of the Stablecoins that I have mentioned have been centrally issued and backed by US dollars. The only reason that they have been able to keep their peg to the USD is because of certain “trust” in the redemption of these tokens.

Of course, as we saw with Tether in July of 2017, loss of confidence in a the central issuing authority can lead to a breaking of the peg.

Tether breaking peg
Tether (USDT) breaking the peg in 2017. Source: Coingecko

If the authority is not able to keep up with the pace of the redemption then this could lead to a “run on redemptions”. This is a self perpetuating crisis that can feed on itself and lead to a full blown crisis.

However, are there alternative stablecoins that are “trustless” and do not rely on a centralized authority?

MakerDAO DAI Stablecoin

The MakerDAO stablecoin is an interesting alternative as it is one of the few coins that does not have a centralised structure with fiat that backs the coins in a bank account. DAI is backed by collateralized cryptocurrency debt.

More specifically, DAI is created when you lock up a certain amount of Etheruem in a Collateralized Debt Position (CDP). This is the collateral that you are staking for the DAI and can be unlocked again with DAI.

The method by which it is able to maintain its peg is really quite ingenious. It uses economic incentives which encourages users in the ecosystem to stabilise the price through their actions.

More specifically, when the price of DAI is above the $1 peg then they can issue DAI at $1 and sell it for an instant profit. However, if the price is below the peg then they can easily unlock their ETH in the CDP at a discount.

Given that DAI was created by the MakerDAO team, there is also a unique relationship with the MKR token. Those who hold the CDP are able to earn an annual interest rate of 0.5% on the loan. This interest is only payable in MKR. This encourages an increase in the value of MKR since the supply of MKR is always falling, but demand should be increasing as more CDPs (and DAI) are created.

DAI Holding Peg
DAI holding 1:1 Parity while ETH Collapses. Source: Tradingview

This decentralized stabilization mechanism has worked quite well so far. Despite the price of the collateral (ETH) falling by over 80% last year, it was still able to hold the peg. This was all through a protocol defined mechanism that required no “trust” whatsoever.

What is more, the DAI mechanism can be used to peg a stablecoin to any other asset value (cryptocurrency included). The Maker team plans to eventually peg the DAI to Digix (DAO) which is a token that is backed by physical gold.

So, are there any drawbacks?

Well, given that the loans are denominated in crypto, there isn’t a simple Fiat conversion mechanism. If you want to convert your DAI into a Fiat currency then you will have to send them to a centralized exchange and withdraw the fiat.

There is currently quite a bit of liquidity across a range of exchanges and DAI is ranked at 55 in market cap. Of course, this means that you may have to incur trading fees on the exchange.

Other than that, it could be a really attractive option.

Conclusion

So, which stablecoin should you use then?

Well, this will really comes down to your own personal preferences and risk tolerance. There is no “one size fits all” approach when it comes to stablecoin selection.

All of the coins on the list meet the most fundamental requirement of a stablecoin in that they are able to maintain the peg. This is beneficial to those traders that are looking for a crypto method to lock in their dollar gains.

Indeed, there may be challenges that come with a withdrawal into fiat. This is especially true if it is a large amount of money and it is through one of the coin issuers that traders have had troubles with before.

The USDC appears to the the most prominent Dollar backed stablecoin on the market at the moment. However, if you are concerned about the prospect of a centralized issuer then you can always opt for the much more sophisticated DAI stablecoin.

Of course, it goes without saying that no stablecoin is as stable as the USD. Stablecoins are still a relatively new phenomenon and do not come risk free.

Do Your Own Research (DYOR).

Featured Image via Fotolia

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 10 rated postsNic is an ex Investment Banker and current crypto enthusiast. When he is not sitting behind six screens trading Bitcoin, he is maintaining his numerous mining rigs. Twitter: @nicrypto




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Analysis

Crypto Update: Bitcoin Touched $4000 as Broad Rally Continues

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Yesterday’s break-out to new short-term highs continued today in the cryptocurrency segment, with Bitcoin’s push towards the $4000 making headlines in the segment. The most valuable coin surged past the $3850 level, dragging most of the majors higher, but Ethereum and most of yesterday’s leaders lagged behind BTC during today’s session.

That said, the short-term trend remains positive in case of the majority of the coins, and even though some of the top currencies are overbought, the counter-trend move could continue. In light of the increased activity, trading volumes, and volatility in the market, the majors might be in for a more sustained bullish, move, and as now only Ripple is showing clear signs of relative weakness, despite today’s rally, the leadership of the short-term move looks healthy.

While the long-term picture is still clearly negative in the segment, until the newly established short-term uptrends remain intact, traders could still play the move, sticking to strict risk management rules and relatively small position sizes.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin left behind the initial resistance level near $3850, and quickly rallied up to the strong longer-term zone between $4000 and $4050, it might need to consolidate before another push higher. BTC is slightly overbought from a short-term perspective, and given the significance of the resistance, traders could exit a part of their positions here.

The $4000-$4050 zone stopped the year-end rally (outside of a brief, failed break-out), and a move above it could open up the road towards the $4250 and the crucial $4450 levels. Below $3850, further support is found near $3600 and just above $3450, and our trend model remains on a short-term buy signal and long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade near the $145 resistance level following yesterday’s surge, and bulls are still eyeing a test of the next major resistance zone near $160, which marked the top of the previous counter-trend move in the coin.

While the coin is still overbought form a short-term perspective, given the momentum if its recent move, the rally could continue after a brief consolidation period. The newly-established uptrend is intact in ETH, and traders could enter new positions should the overbought readings got cleared, with support levels found near $130 and $112.

XRP/USDT, 4-Hour Chart Analysis

Although Ripple continues to be relatively weak compared its major peers, today it spiked to a new 5-week high, riding the market-wide trend and testing a strong declining trendline in the process. The coin triggered a short-term buy signal in our trend model by topping its January swing high, but given its relative weakness, traders should focus on the more bullish coins during the current counter-trend move.

The long-term setup remains negative, and from a broader perspective, odds still favor the test of the key long-term $0.28 and $0.26 levels, with further support levels found near $0.32 and $0.30, and with short-term targets being ahead near $0.3550, and $$0.3750.

EOS Continues to Lead but Litecoin Struggles to Gain Ground

LTC/USD, 4-Hour Chart Analysis

LTC continues to trade slightly above last week’s highs but compared to the leaders of the current leg of the rally it remained relatively weak today. With that and the still negative long-term setup in mind, traders should exit a part of their positions here, even as the short-term uptrend is intact and a push towards the next major resistance level near $51 is still possible. Our trend model is still on a buy signal, as a failed break-out is not yet confirmed, with support levels still found near $44, $38, and $34.50.

EOS/USD, 4-Hour Chart Analysis

EOS remained relatively strong today, spiking above the $3.80 level after leaving behind the $3.50 resistance. Now, the coin is clearly overbought from a short-term perspective, and that led to a downgrade in our trend model as a pullback is now likely.

The short-term trend remains bullish despite the correction risks, and should the coin clear the overbought momentum readings traders could reenter their position following strict risk management rules. Support is now found near $3.50, $3, and $2,80 while strong resistance is ahead near $4.50 and $5.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 466 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Altcoins

Busiest Day in Tether’s History as USDT Volume Matches Bitcoin’s $10 Billion

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Tether (USDT) was utilized to a greater extent than ever before on Tuesday, as traders pumped $9.95 billion worth of trades through the stablecoin.

That’s the highest value of daily trades recorded in Tether’s history. While the global cryptocurrency market cap climbed to $136 billion, USDT trades were just a few hundred thousand off that of Bitcoin. Tether accounted for 27.7% of Tuesday’s $36 billion market wide daily volume.

Tether Volume Nears That of Bitcoin

After processing $4 billion worth of trades on Sunday, USDT volume rose steadily throughout Monday. By the time of the market peak Tether was processing the second most trades in the crypto space, second only to Bitcoin.

Excluding transaction mining, BTC/USDT trades dominated ahead of Ethereum and EOS. There’s an opportunity for arbitrage trading between Coineal and Binance at time of writing, where USDT is valued at $0.999847 and $1.01 respectively.

The algorithms that keep Tether stable did their job well today, as the coin avoided the kind of major fluctuation that often accompanies a market pump. Besides Coineal, aggregate prices remained between $1.00 and $1.01.

Tether’s Stablecoin ‘Price Predictions’

In an example of an article that seems like it was written by algorithm, this post details some Tether price predictions for 2019. According to the author, USDT will hit $1.50 before the end of the year:

“Tether price prediction 2019 is up to 1.50$. It seems very less. For now if you buy Tether for 100$ right now then you will get 100 USDT (Tether). So price prediction 2019 shows you will get profit of 50$ within a year. Its mean your 100$ will turn in to 150$.”

The rationale behind the prediction? Corrective and impulse waves:

“Tether forecast shows that price shows a corrective wave. After every corrective wave there will a impulse wave. Inverters should wait for that impulse wave and after that they will gain 50% profit.”

Tether’s clearly defined function as a dollar-backed stablecoin hasn’t stopped others from taking shots at USDT price predictions.

Has Tether Had a Negative Effect on Bitcoin?

When Tether burst onto the scene in 2014 (as Realcoin), many Bitcoin adherents immediately saw doom on the horizon. Rightly or wrongly, they foresaw the prospect of Tether becoming a more convenient on-ramp to the altcoin market than Bitcoin, and so eliminating one of Bitcoin’s useful functions.

Five years on from the birth of Realcoin and that vision hasn’t really come to pass. Bitcoin remains the on-ramp to the altcoin market, while the rebranded Tether has become the off-ramp. How different would the Bitcoin market cap look today if BTC was still the beneficiary of all of the altcoin profits.

Over $30 billion of today’s volume came from top-ten major alts – all of which have USDT pairs on major exchanges. Combined BTC and USDT trade volume today would be just $2 billion less than Bitcoin’s own all-time high changeover.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 146 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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