"Voters are less likely to support candidates perceived as standing in the way of a decentralized internet,” said Haun Ventures.
A poll of 800 likely midterm voters in four U.S. swing states suggested that the overwhelming majority favored ideas around decentralization, and many were HODLers.
According to a Sept. 29 report from venture capital firm Haun Ventures conducted by business intelligence company Morning Consult, roughly 1 in 5 voters polled in New Hampshire, Nevada, Ohio, and Pennsylvania said they owned cryptocurrency or nonfungible tokens. In addition, 91% of respondents supported a “community owned, community governed” internet that “gives people greater control over their information.”
Poll of 800 swing state voters who own digital assets. Source: Haun Ventures
“Significantly, and reflective of how the values that voters associate with Web3 will drive electoral behavior, voters are less likely to support candidates perceived as standing in the way of a decentralized internet,” said Haun Ventures. “In other words, as both parties consider how good Web3 policy will translate into good politics, the values of Web3 are what voters want to see elected officials supporting, not standing in the way of.”
Today, we're sharing a poll commissioned by Haun Ventures and conducted by Morning Consult of likely 2022 midterm voters in four key swing states (OH, PA, NH and NV) that surveyed voters’ views on web3 and how they might impact their vote in November. https://t.co/NhMSviztDJ
The survey noted that the voters polled leaned slightly Democratic, but promoting a decentralized and democratized internet seemed to be a bipartisan issue, with both sides having “limited faith in the government’s ability” to regulate Web3. Haun Ventures reported 55% of voters surveyed would be less likely to vote for political candidates who opposed internet decentralization policies, while 72% of HODLers in the poll said they owned digital assets “because they want an economic system that is more democratized, fair, and works for more people.”
“This poll makes it clear that in these swing states, Web3 Voters now represent a significant cohort of the middle class electorate, and are younger and more diverse than the population as a whole.”
The poll targeted people planning to vote in the 2022 midterm elections in the United States, to be held in November with candidates taking office in January. Morning Consult conducted the survey from Sept. 15-20. Katie Haun, a Coinbase board member and former board member for OpenSea, raised $1.5 billion to form Haun Ventures in March for investments in Web3.
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Equities markets have extended their decline, but Bitcoin and select altcoins have not given up much ground, leading some traders to believe that the bottom is in.
The United States equities markets have been under a firm bear grip for a large part of the year. The S&P 500 and the Nasdaq Composite have declined for three quarters in a row, a first since 2009. There was no respite in selling in September and the Dow Jones Industrial Average is on track to record its worst September since 2002. These figures outline the kind of carnage that exists in the equities market.
Compared to these disappointing figures, Bitcoin (BTC) and select altcoins have not given up much ground in September. This is the first sign that selling could be drying up at lower levels and long-term investors may have started bottom fishing.
In the final quarter of the year, investors will continue to focus on the inflation data. Any indication of inflation topping could bring about a sharp recovery in risk assets, but if inflation remains stubbornly high, then a round of sell-offs could follow.
Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to determine if a recovery is on the cards.
SPX
The S&P 500 index (SPX) has been under intense selling pressure for the past few days but the bulls have held their ground. This indicates that bulls are buying the dips near 3,636.
SPX daily chart. Source: TradingView
The first resistance on the upside is 3,737. If bulls thrust the price above this level, the index could rise to the 20-day exponential moving average (3,818). In a downtrend, this is the important level to keep an eye on because a break and close above it will suggest that the bears may be losing their grip.
Sharp declines are usually followed by strong rallies. That could carry the index to the downtrend line and then to the 50-day simple moving average (4,012).
The bears are likely to have other plans. They will try to extend the downtrend by sinking and sustaining the price below 3,636. If they manage to do that, the index could plummet to 3,500 and later to 3,325.
DXY
The U.S. dollar index surged to 114.77 on Sept. 28, which pushed the relative strength index (RSI) into deeply overbought territory. This may have attracted profit-booking by the short-term traders which pulled the price near the 20-day EMA (111).
DXY daily chart. Source: TradingView
The bears will have to yank the price below the 20-day EMA to suggest that the bullish momentum could be weakening. That could clear the path for a possible drop to the 50-day SMA (108).
The zone between the 50-day SMA and the uptrend line is likely to witness aggressive buying by the bulls because if they fail to defend the zone, it will indicate that the index may have topped out.
On the other hand, if the price turns up from the current level or rebounds off the 20-day EMA, it will indicate that the bulls continue to buy on dips. Buyers will then again attempt to thrust the price above 114.77 and resume the uptrend. The next target objective on the upside is 118.
BTC/USDT
Bitcoin bounced off the strong support at $18,626 on Sept. 28, indicating that the bulls continue to fiercely defend this level. The long tail on the candlestick of the past two days shows that bulls are buying the intraday dips.
BTC/USDT daily chart. Source: TradingView
The bulls pushed the price above the 20-day EMA ($19,602) on Sept. 30 but are struggling to sustain the higher levels. This shows that bears are selling near the 50-day SMA ($20,621).
If bulls do not allow the price to drop below the 20-day EMA, the likelihood of a rally to the downtrend line increases. The bears are expected to mount a strong resistance at this level but if bulls clear this hurdle, the BTC/USDT pair could signal a short-term trend change. The pair could then rise to $22,799.
Contrary to this assumption, if the price turns down from the current level or the 50-day SMA ($20,625), the pair could again drop to the $18,626 to $17,622 support zone.
ETH/USDT
Ether (ETH) has been declining in a descending channel pattern for the past several days. In the short term, the price has been stuck between $1,250 and $1,410, indicating demand at lower levels but selling near the resistance.
ETH/USDT daily chart. Source: TradingView
The price action inside the range is usually random and volatile. Hence, it is difficult to predict the direction of the breakout with certainty.
If the price breaks above $1,410, it will suggest that the bulls have absorbed the supply. That could propel the price to the resistance line of the channel. The bulls will have to overcome this barrier to suggest a potential trend change.
On the other hand, if the price turns down and breaks below $1,250, the bears will attempt to cement their advantage by pulling the ETH/USDT pair below the channel. If they succeed, the pair could drop to $1,000.
BNB/USDT
Binance Coin (BNB) turned up sharply from $266 and broke above the 20-day EMA ($278) on Sept. 28. This indicates that lower levels are attracting strong buying by the bulls.
BNB/USDT daily chart. Source: TradingView
The bulls pushed the price above the resistance line of the descending channel on Sept. 29 but are facing resistance at the 50-day SMA ($288). If bulls do not allow the price to plummet back below the 20-day EMA, it will improve the prospects of a break above the 50-day SMA. The BNB/USDT pair could then rally to $300 and later to $338.
On the contrary, if the price turns down and breaks below the 20-day EMA, it will suggest that bears continue to sell at higher levels. The pair could then decline to the strong support at $258.
XRP/USDT
XRP rebounded off the 20-day EMA ($0.43) on Sept. 28, indicating a change in sentiment from selling on rallies to buying on dips. However, the bears are unlikely to give up as they will try to stall the recovery in the $0.52 to $0.56 zone.
XRP/USDT daily chart. Source: TradingView
If buyers do not give up much ground from the current level, the possibility of a break above the overhead zone increases. A break above $0.56 will signal the resumption of the uptrend. The XRP/USDT pair could then rise to $0.66.
Conversely, if the price continues lower, the pair could drop to the breakout level of $0.41. The bulls are likely to defend this level vigorously. If the price rebounds off this level, the pair may enter a range-bound action for a few days.
ADA/USDT
The long tail on Cardano’s (ADA) Sept. 28 and 29 candlestick shows that the bulls bought at lower levels in an attempt to defend the uptrend line. Although the price rose above the uptrend line on Sept. 29, buyers could not sustain the recovery.
ADA/USDT daily chart. Source: TradingView
The price has again tumbled below the uptrend line on Sept. 30. The downsloping moving averages and the RSI in the negative territory suggest that the path of least resistance is to the downside. If the price breaks below $0.42, the ADA/USDT pair could decline to the crucial support at $0.40. The bulls are expected to defend this level with vigor.
Contrarily, if the price turns up from the current level and closes above the uptrend line, it will suggest strong buying at lower levels. The bulls will then again try to push the price above the 20-day EMA ($0.45) and challenge the resistance at the 50-day SMA ($0.47).
Buyers are attempting to form a higher low in Solana (SOL). The price rebounded off $31.65 on Sept. 28 and reached the 50-day SMA ($34.70) on Sept. 30.
SOL/USDT daily chart. Source: TradingView
The 20-day EMA ($33.30) is trying to turn up and the RSI is just above the midpoint, suggesting that the bulls are attempting a comeback. If the price breaks and sustains above the 50-day SMA, the bullish momentum could pick up and the SOL/USDT pair could rally to $39. The bears are expected to mount a strong resistance at this level.
Alternatively, if the price turns down from the 50-day SMA, the pair could drop to $31.65. A break below this support could sink the pair to $30.
DOGE/USDT
Dogecoin (DOGE) dipped below the 20-day EMA ($0.06) on Sept. 25 and the bears thwarted attempts by the bulls to resume the recovery on Sept. 27.
DOGE/USDT daily chart. Source: TradingView
The 20-day EMA is flattish and the RSI is just below the midpoint, indicating a balance between supply and demand. This balance could tilt in favor of the bears if they sink the price below the support near $0.06. The price could then plunge to $0.05.
The bulls will gain the upper hand if they drive and sustain the price above the 50-day SMA ($0.06). The DOGE/USDT pair could then attempt a rally to $0.07 where the bears may again mount a stiff resistance.
DOT/USDT
Polkadot (DOT) has been trading in a tight range between $6 and $6.64 for the past few days. This indicates a tough battle between the bulls and the bears.
DOT/USDT daily chart. Source: TradingView
The gradually downsloping moving averages and the RSI in the negative territory suggest that bears have a slight edge. If the price drops below $6, the DOT/USDT pair could start the next leg of the downtrend. The pair could then slide to $4.
To invalidate this negative bias, bulls will have to push and sustain the price above the 20-day EMA ($6.64). If they do that, it will suggest that the consolidation near the support may have been an accumulation phase. The pair could then rise to the 50-day SMA ($7.26) and later to $8.
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.
Market data is provided byHitBTCexchange.
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The world’s largest holder of Bitcoin is looking for a software engineer to create cybersecurity solutions and enable e-commerce use cases on the Lightning Network.
MicroStrategy, the business intelligence and tech company that holds the world’s largest Bitcoin (BTC) reserve, is hiring a Bitcoin Lightning software engineer to create a Lightning Network-based software-as-a-service platform.
The new engineer will be responsible for building a Lightning Network-based platform to address enterprise cybersecurity challenges and enable new e-commerce use cases, according to a job posting linked to the MicroStrategy website. Besides “an adversarial mindset,” the applicant should have certificates, knowledge of tools and programming languages, and experience with decentralized finance technologies.
MicroStrategy is looking to hire a Bitcoin Lightning Software Engineer to build a Lightning Network-based SaaS platform. #bitcoinpic.twitter.com/XFYrkIaFA9
MicroStrategy, founded in 1989, began a Bitcoin buying spree in August 2020 that has culminated in a reserve of 130,000 BTC, worth $2.57 billion at the time of writing. The purchase of the final 301 BTC of its holdings was announced on Sept. 20, paying around $3.98 billion for the entire reserve. Bitcoin profitability for long-term holders recently hit a four-year low. MicroStrategy now holds 0.62% of all the BTC that will ever exist.
The Lightning Network is a Bitcoin layer-2 protocol designed to raise payment throughput and lower transaction fees. It has been making slow progress in facilitating peer-to-peer transactions since it debuted in 2018.
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Axelar's co-founder shared his views on blockchain infrastructure and adoption at Converge22 in San Francisco.
Cross-chain communication between blockchains is more than just moving data from point A to B, but how it can connect applications and users for enhanced experiences and fewer gas fees in Web3, outlined Sergey Gorbunov, Axelar Network co-founder and CEO, speaking to Cointelegraph's business editor Sam Bourgi on Sept. 28 at Converge22 in San Francisco.
As the crypto industry has developed over the past few years, blockchain interoperability has seen a surge in demand, attracting venture capital and welcoming players, such as Axelar, which reached unicorn status in February. According to Gorbunov, the company, founded in 2020, started with a premise that cross-chain and multichain capabilities would come to define the crypto space. "The idea is not just to talk about how to connect A to B, but how to connect many to many, right? How to connect everybody with everyone else. And that includes applications and includes users," he explained.
Interoperability is a buzzword in the crypto industry that refers to the ability of many blockchains to communicate, share digital assets and data, and work together, thereby sharing economic activity. As an infrastructure, interoperability is crucial for broader adoption of the technology, as Gorbunov explained:
"We need an ability for the user to execute one call on one chain, and that transaction actually taking place on other chains without them having to go and get a native token of that chain, pay gas, execute themselves and move it back and forth."
Axelar's CEO highlighted that, beyond better experiences for users, interoperability also means higher economic outcomes, as interoperable chains can have unified liquidity and thus spend less on gas fees for transactions. "Our Web2 experience is a lot simpler, and we have to get to the same level in Web3 with simpler experiences, and that is what cross-chain enables us to do, to help build those simple experiences."
At Converge22, Axelar was announced as one of the networks set to integrate with Circle, the financial technology company behind the USD Coin (USDC) and Euro Coin (EUROC). Circle is launching a new cross-chain transfer protocol to help developers build frictionless experiences for sending and transacting USDC natively across blockchains.
Earlier this week, Axelar disclosed a partnership with Mysten Labs, the infrastructure company behind the Sui blockchain, to deliver cross-chain communication for developers through General Message Passing and advance the prospect of a so-called "super DApp."
Writer and editor Sam Bourgi contributed to this story.
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Analysts fear NEXO price could come under pressure if regulatory action in the United States begins to intensify.
Crypto lending firm Nexo is at risk of losing half of the valuation of its native token by the end of 2022 as doubts about its potential insolvency grow in the market.
Is Nexo too centralized?
For the unversed: Eight U.S. states filed a cease-and-desist order against Nexo on Sep. 26, alleging that the firm offers unregistered securities to investors without alerting them about the risks of the financial products.
In particular, regulators in Kentucky accused Nexo of being insolvent, noting that without its namesake native token, NEXO, the firm’s “liabilities would exceed its assets.” As of July 31, Nexo had 959,089,286 NEXO in its reserves — 95.9% of all tokens in existence.
“This is a big, big, big problem because a very basic market analysis demonstrates that Nexo would be unable to monetize a significant chunk of these tokens,” noted Mike Burgersburg, an independent market analyst and author of the Dirty Bubble Media Substack, adding:
“Given that fact, the true value of the $NEXO tokens on Nexo’s balance sheet is likely close to $0.”
NEW: “IS NEXO NEXTO?”
According to state regulators, Nexo is insolvent without counting $NEXO tokens on their balance sheet.
This is the same situation Celsius Network was in… and basic market analysis suggests real value of their $NEXO is ~$0 https://t.co/txt1kOSydH
Burgersburg also alleged that Nexo faces insolvency risks because it holds the vast majority of NEXO’s token supply on its platform. He drew comparisons to Celsius Network, a now-defunct crypto lending firm that owned more than 50% of its native token, CEL.
The top 100 NEXO holders collectively own 95.53% token supply. Source: Etherscan
Celsius ended up holding over 90% of the total CEL tokens in circulation after attracting deposits and collateral from customers. This made CEL extremely illiquid and, thus, volatile. In other words, CEL became a deeply imperfect asset for patching Celsius’ troubling balance sheets.
“NEXO token is even more illiquid than the bankrupt Celsius Network’s CEL token,” warned Burgersburg, noting that the token’s average daily trading volume comes to less than 1% of its market capitalization.
However, a Nexo spokesperson denied the allegations, clarifying that the data they provided to Kentucky regulators was for one of the Nexo Group’s entities.
“We can confirm that on a consolidated basis, NEXO tokens represent less than 10% of the company’s total assets,” they told Cointelegraph, adding:
“That, in return, exceeds the company liabilities even when excluding the company’s net position in NEXO tokens.”
As to why Nexo holds more than 90% of the NEXO supply, the firm’s spokesperson cited the token’s economics and utility, saying that they create natural incentives for clients to keep their tokens on the platform.
“In addition to earning higher interest rates on their digital asset balances by holding NEXO tokens on the Nexo platform, clients can use NEXO tokens as collateral, earn interest on them and exchange them directly on the Nexo platform,” they explained, adding:
“The same is true for the tokenomics of companies with similar value propositions such as FTT, BNB and CRO, held predominantly on FTX, Binance and Crypto.com, respectively.”
NEXO price could get rocky
The fear, uncertainty and doubt surrounding the rumors of market volatility or stringent regulation against crypto lending platforms could create negative investment sentiments toward NEXO. Unfortunately, the token’s technical setup suggests the same.
Notably, NEXO’s price has been forming what appears to be an ascending triangle on its longer-timeframe charts since June 12. Ascending triangles are considered bearish continuation patterns in a downtrend, which makes NEXO susceptible to extreme price declines.
By the rule of technical analysis, an ascending triangle resolves after the price breaks below its lower trendline and continues falling in the same direction until it reaches the level that is at length equal to the triangle’s maximum height.
In the event that the pattern confirms, the price of NEXO could fall toward $0.47, down about 50% from its current price.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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New Zealand lawmakers and regulators largely have not imposed strict guidelines for crypto firms to operate in the country, nor for Kiwis to use cryptocurrencies freely.
Global cryptocurrency exchange Binance has registered with New Zealand’s Ministry of Business, Innovation and Employment and opened local offices in the country.
In a Sept. 29 tweet, Binance said it was registered as a financial service provider in New Zealand, allowing residents to access services including spot trading, nonfungible tokens and staking. The move to the crypto-friendly Pacific nation followed regulators in Dubai, Abu Dhabi, Kazakhstan and Italy giving the green light for Binance to open an offshoot.
“New Zealand is an exciting market with a strong history of fintech innovation,” said Binance CEO Changpeng Zhao.
New Zealand lawmakers and regulators have largely not imposed strict guidelines for crypto firms to operate in the country, nor for Kiwis to use cryptocurrencies freely. The country’s tax authority said in 2019 that income from crypto was legal, and the Reserve Bank of New Zealand has been exploring the potential benefits and risks of a central bank digital currency.
In June, Huobi Global secured registration as a registered financial service provider in New Zealand but later suspended its derivatives trading services for residents, citing compliance with local regulations. With a population of roughly 5.1 million, New Zealand is a smaller market compared with that of its neighbor Australia, where a reported 4.2 million people own crypto.
Though expanding to many countries around the globe, Binance has still been the target of some regulators. In July, the Netherlands’ central bank fined Binance Holdings $3.3 million for offering crypto services without registering. The firm also formed a task force called the Global Advisory Board on Sept. 22 aimed at tackling regulatory issues related to crypto, blockchain and Web3 adoption.
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Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining 3% in a single hourly candle to hit local highs of $20,171 on Bitstamp.
The move followed predictions from traders, who were looking for slightly higher levels to precede a fresh downside move.
"Moving my stop to my entry now at 19.3k but letting it ride first to 21.7k where I think there's some major resistance," popular trader Pentoshi wrote in part of a fresh Twitter update about his trading plans.
"Looks like strength to me," trading account IncomeSharks continued.
"Great way to finish the week off after seeing people switch back to being bearish every other day depending on the candle color."
Fellow trader Cheds called $20,000 a "pivot," focusing attention on the psychologically significant level, having previously flagged declining U.S. dollar strength — a classic catalyst for risk asset performance.
The downturn in the U.S. dollar index (DXY) continued on the day, approaching 112 points after meeting resistance during a rebound.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
A further macro catalyst came in the form of United States Personal Consumption Expenditures Price Index (PCE) data, which came in hotter than expected, increasing pressure on the Federal Reserve.
In Europe, record Consumer Price Index (CPI) readings caused shock for some, highlights including The Netherlands' 17.1% year-on-year increase.
The fate of September's candle hangs in the balance
With hours to go until the September monthly candle close, meanwhile, eyes were firmly on whether bulls could stay the course.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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Bears have controlled BTC price by forcing 111 daily closes below $25,000 and derivatives data shows a reversal of this trend is highly unlikely.
One hundred and eleven days have passed since Bitcoin (BTC) posted a close above $25,000 and this led some investors to feel less sure that the asset had found a confirmed bottom. At the moment, global financial markets remain uneasy due to the increased tension in Ukraine after this week’s Nord Stream gas pipeline incident.
The Bank of England's emergency intervention in government bond markets on Sept. 28 also shed some light on how extremely fragile fund managers and financial institutions are right now. The movement marked a stark shift from the previous intention to tighten economies as inflationary pressures mounted.
Currently, the S&P 500 is on pace for a consecutive third negative quarter, a first since 2009. Additionally, Bank of America analysts downgraded Apple to neutral, due to the tech giant’s decision to scale back iPhone production due to "weaker consumer demand." Lastly, according to Fortune, the real estate market has shown its first signs of reversion after housing prices decreased in 77% of United States metropolitan areas.
Let's have a look at Bitcoin derivatives data to understand if the worsening global economy is having any impact on crypto investors.
Pro traders were not excited by the rally to $20,000
Retail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders' preferred instruments because they prevent the fluctuation of funding rates that often occurs in a perpetual futures contract.
The three-month futures annualized premium, as seen in the chart above, should trade at +4% to +8% in healthy markets to cover costs and associated risks. The chart above shows that derivatives traders have been neutral to bearish for the past 30 days while the Bitcoin futures premium remained below 2% the entire time.
More importantly, the metric did not improve after BTC rallied 21% between Sept. 7 and 13, similar to the failed $20,000 resistance test on Sept. 27. The data basically reflects professional traders' unwillingness to add leveraged long (bull) positions.
One must also analyze the Bitcoin options markets to exclude externalities specific to the futures instrument. For example, the 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.
In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 12%. On the other hand, bullish markets tend to drive the skew indicator below negative 12%, meaning the bearish put options are discounted.
The 30-day delta skew has been above the 12% threshold since Sept. 21 and it's signaling that options traders were less inclined to offer downside protection. As a comparison, between Sept. 10 and 13, the associated risk was somewhat balanced, according to call (buy) and put (sell) options, indicating a neutral sentiment.
The small number of futures liquidations confirm traders’ lack of surprise
The futures and options metrics suggest that the Bitcoin price crash on Sept. 27 was more expected than not. This explains the low impact on liquidations. Despite the 9.2% correction from $20,300 to $18,500, a mere $22 million of futures contracts were forcefully liquidated. A similar price crash on Sept. 19 caused a total of $97 million in leverage futures liquidations.
From one side, there's a positive attitude since the 111-day long bear market was not enough to instill bearishness in Bitcoin investors, according to the derivatives metrics. However, bears still have unused firepower, considering the futures premium stands near zero. Had traders been confident with a price decline, the indicator would have been in backwardation.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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Users in 100 countries can now connect their digital wallets, post and share nonfungible tokens.
Meta, Facebook and Instagram's parent company, announced another development in its digital arts initiative. As of Sept. 29, all users on both platforms can connect wallets and share nonfungible tokens (NFTs) across 100 countries.
As part of the feature, which has been in testing since May, users will be able to tag creators and collectors, and cross-post digital collectibles between platforms without paying any fees.
In August, Meta started allowing users to post digital collectibles that they own across Facebook and Instagram and announced an international expansion to countries in Africa, Asia-Pacific, the Middle East and the Americas.
The company also added support with third-party wallets such as Rainbow, MetaMask, Trust Wallet, Coinbase Wallet and Dapper Wallet, along with support for the Ethereum, Polygon and Flow' blockchains.
The ECB’s two-year investigative phase is halfway completed, with key use and policy issues clarified; more stakeholder engagement is planned before the decision is made to proceed.
The European Central Bank (ECB) Eurosystem digital euro project’s two-year investigative phase has reached its halfway point. The ECB published a progress report Sept. 29 that looked at design and policy issues that are under consideration or have been decided.
The report said commerce in physical stores and online is the biggest use case for a euro central bank digital currency (CBDC). Currently, most digital payment solutions are limited in reach and not of European origin. Thus, a digital euro could harmonize payment solutions and strengthen European strategic autonomy in line with policy goals. The report said:
“A digital euro would preserve the role of public money as the anchor of the payments system in the digital age. It would ensure the smooth coexistence, convertibility and complementarity of the various forms that money takes.”
The ECB Governing Council has approved exploration of online payments validated by a third party as part of a first digital euro release, as well as an offline peer-to-peer validated solution with no timeline. Online peer-to-peer solutions will not be pursued further in this phase.
Anti-Money Laundering requirements and the desire to limit the CBDC’s use in investments prevent the full anonymity of a digital euro, but the report suggested a digital euro would have privacy provisions similar to current digital payment options, with potentially greater privacy for low value and low-risk transactions.
The digital euro will restrict large holdings and be designed to limit its use as an investment tool, due to financial stability considerations. The Governing Council has approved a waterfall mechanism that could transfer digital euro holdings above the limit to a commercial bank account. An offline holding limits may also be imposed. A “wide set of tools” will be incorporated into the design to respond to future financial conditions.
The European Commission will propose a regulation to establish the digital euro in the first quarter of 2023. The Governing Council will decide in October 2023 whether to move on to development and testing. That phase may last around three years.
In a statement in front of the EU Parliament, ECB board Panetta confirmed that the ECB’s Governing Council has now endorsed a first set of foundational design choices for the digital euro.
The progress report looked exclusively at a retail CBDC. ECB executive board member Fabio Panetta recently discussed the possibility of creating a wholesale digital euro for use by banks and financial institutions. Panetta summed up progress on the digital euro in his quarterly presentation to the Committee on Economic and Monetary Affairs of the European Parliament also on Sept. 29.
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The 10-year U.S. Treasury yield recently hit its highest level in 12 years, but how might this impact investors’ sentiment toward stocks and cryptocurrencies?
Across all tradeable markets and currencies, U.S. Treasuries — government bonds — have significant influence. In finance, any risk measurement is relative, meaning, if one insures a house, the maximum liability is set in some form of money.
Similarly, if a loan is taken from a bank, the creditor has to calculate the odds of the money not being returned and the risk of the amount being devalued by inflation.
In a worst-case scenario, let’s imagine what would happen to the costs associated with issuing debt if the U.S. government temporarily suspended payments to specific regions or countries. Currently, there is over $7.6 trillion worth of bonds held by foreign entities and multiple banks and governments depend on this cash flow.
The potential cascading effect from countries and financial institutions would immediately impact their ability to settle imports and exports, leading to further carnage in the lending markets because every participant will rush to reduce risk exposure.
There are over $24 trillion in U.S. Treasuries held by the general public, so participants generally assume that the lowest risk in existence is a government-backed debt title.
Treasury yield is nominal, so mind the inflation
The yield that is widely covered by the media is not what professional investors trade, because each bond has its own price. However, based on the contract maturity, traders can calculate the equivalent annualized yield, making it easier for the general public to understand the benefit of holding bonds. For example, buying the U.S. 10-year Treasury at 90 entices the owner with an equivalent 4% yield until the contract matures.
U.S. Government Bonds 10-year yield. Source: TradingView
If the investor thinks that the inflation will not be contained anytime soon, the tendency is for those participants to demand a higher yield when trading the 10-year bond. On the other hand, if other governments are running the risk of becoming insolvent or hyperinflating their currencies, odds are those investors will seek shelter in U.S. Treasuries.
A delicate balance allows the U.S. government bonds to trade lower than competing assets and even run below the expected inflation. Although inconceivable a few years ago, negative yields became quite common after central banks slashed interest rates to zero to boost their economies in 2020 and 2021.
Investors are paying for the privilege of having the security of government-backed bonds instead of facing the risk from bank deposits. As crazy as it might sound, over $2.5 trillion worth of negative-yield bonds still exist, which does not consider the inflation impact.
Regular bonds are pricing higher inflation
To understand how disconnected from reality the U.S. government bond has become, one needs to realize that the 3-year note's yield stands at 4.38%. Meanwhile, consumer inflation is running at 8.3%, so either investors think the Federal Reserve will successfully ease the metric, or they are willing to lose purchasing power in exchange for the lowest risk asset in the world.
In modern history, the U.S. has never defaulted on its debt. In simple terms, the debt ceiling is a self-imposed limit. Thus, the Congress decides how much debt the federal government can issue.
As a comparison, an HSBC Holdings bond maturing in August 2025 is trading at a 5.90% yield. Essentially, one should not interpret the U.S. Treasury yields as a reliable indicator for inflation expectation. Moreover, the fact that it reached the highest level since 2008 holds less significance because data shows investors are willing to sacrifice earnings for the security of owning the lowest risk asset.
Consequently, the U.S. Treasury yields are a great instrument to measure against other countries and corporate debt, but not in absolute terms. Those government bonds will reflect inflation expectations, but could also be severely capped if the generalized risk on other issuers increases.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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Though the SEC has pursued many enforcement actions related to initial coin offerings, the regulator’s stance on airdrops’ role in alleged token schemes is unclear.
The United States Securities and Exchange Commission, or SEC, has announced charges against Hydrogen Technology Corporation and its market marker Moonwalkers Trading Limited related to allegedly perpetrating a scheme to manipulate the trading volume and price of Hydro tokens.
In a Sept. 28 announcement, the SEC said former Hydrogen CEO Michael Ross Kane hired Moonwalkers and its CEO Tyler Ostern “to create the false appearance of robust market activity” following the distribution of Hydro tokens through an airdrop, bounty programs and direct sales in 2018. Kane then had Moonwalkers sell the tokens in the “artificially inflated market” for more than $2 million in profit on behalf of Hydrogen.
“As we allege, the defendants profited from their manipulation by creating a misleading picture of Hydro’s market activity,” said Joseph Sansone, chief of the SEC Enforcement Division’s market abuse unit. “The SEC is committed to ensuring fair markets for all types of securities and will continue to expose and hold market manipulators accountable.”
According to the SEC, Kane’s, Ostern’s and the companies’ actions constituted manipulation of the crypto market, violating provisions of U.S. securities laws. The regulator reported Ostern had consented to pay more than $40,000 in disgorgement and interest, subject to approval by a New York federal court “with civil monetary penalties to be determined at a later date.” The SEC’s complaint sought similar actions against Kane, as well as having the former CEO barred from holding officer and director positions.
Many in the crypto space criticized the SEC complaint as an example of regulation by enforcement — in this case, claiming the regulator was extending airdrops to its purview.
“They say airdrops meet the Howey test's "investment of money" prong, even if no one makes an investment and no money changes hands,” said Jake Chervinsky, head of policy at the crypto advocacy group Blockchain Association. “The SEC talks a lot about airdrops, but then only seems to argue that distributions via direct sales, bounty programs and employee compensation are securities transactions.”
Others suggested that while the SEC’s actions may have been seemingly par for the course on crypto enforcement, they may not have necessarily been targeting token airdrops:
To be fair, the complaint seems to suggest that the “bounties” where users were rewarded with tokens for a promotional action count for that clause. Not the generic airdrop.
I still don’t think that should merit an “investment of money” but there is arguably more precedent.
Though the SEC has pursued many enforcement actions against initial coin offerings among crypto firms, the regulator’s stance on airdrops’ role in alleged token schemes is unclear. Commissioner Hester Peirce said in a February 2020 speech that the SEC has hinted a token airdrop “might constitute an offering of securities.”
“Since the SEC has found that some tokens can be securities, if you are considering using an airdrop token distribution, be warned that even giving away tokens is not necessarily free from scrutiny under securities law,” said crypto lobbying group Coin Center’s research director Peter Van Valkenburgh in a 2017 blog.
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Politicians continue to argue about whether the U.S. economy is in recession, even as data highlights two consecutive quarters of negative growth. Meanwhile, BTC holds $19,000, for now.
Bitcoin (BTC) wobbled in its narrow trading range at the Sep. 29 Wall Street open as official data put the United States economy in recession.
The pair weathered gloomy figures for the U.S., with the second quarter gross domestic product (GDP) growth estimated at -0.6%. This, despite protests of the White House to the contrary, meant that the U.S. met the standard criteria for recession — two consecutive quarters of negative growth.
"Everyone talks about recessions as if they should never happen," financial commentary resource The Kobeissi Letter reacted.
"Any economy that is healthy in the long run will have many recessions. If you never have a recession, you just have a bubble. In this case, we just have a bubble and a recession. Fake markets don’t work."
Analyzing the situation in Europe, meanwhile, Robin Brooks, chief economist at the Institute of International Finance (IIF), warned that a "deep" recession was also about to hit the Eurozone on the back to consumer confidence data.
"With the second quarterly GDP revision negative, reminder the White House has stated that this is not the definition of a recession," popular Twitter account Unusual Whales continued about the confusion over what constitutes a recession which began earlier this year.
"Rather, they advocate for NBER’s, which is 'a significant decline in economic activity spread across the economy lasting more than a few months.'"
The event follows the Bank of England abruptly intervening in the United Kingdom bond market, returning to quantitative easing (QE) in a move reminiscent of the atmosphere at Bitcoin's birth.
$19,000 looks unstable
Bitcoin price action nonetheless managed to avoid any significant volatility as the figures flowed in, even with the monthly close just a day away.
At the time of writing, BTC/USD was attempting to break through $19,000 support.
Noting that the -0.6% GDP result was better than the forecast -0.9%, on-chain analytics resource Material Indicators nonetheless had little reason to celebrate.
Alongside a screenshot of the BTC/USD order book on Binance, Material Indicators warned that the market bottom was "not in."
"Strong economic report means FED tightening hasn't had much if any impact yet. Translation: More aggressive rate hikes through Q4 and into 2023," it predicted in part of accompanying comments.
BTC/USD order book data (Binance) chart. Source: Material Indicators/ Twitter
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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Allaire believes that privacy and identity are two fundamental pillars of a new Web3.
At the Converge22 conference in San Francisco, Jeremy Allaire, CEO of stablecoin issuer Circle, said that the world is finally moving from the speculative value phase of crypto to the utility phase. Drawing parallels to the early days of the internet, he said:
“It is an architecture that the internet was founded on many decades ago — this idea of open networks, of open standards and protocols, of connecting entities, devices and people in interoperable ways, of a globally intertwined world of decentralized systems.”
As told by Allaire, there are currently on-chain mechanisms to ensure safe, trustworthy interactions between crypto users. However, there need to be “advancements” in technologies such as zero-knowledge proofs that prove identities and credentials while simultaneously ensuring individuals’ privacy:
“People need to be able to interact with apps, and services, and content and transactions without knowing that they’re using crypto. I don’t know I’m using SMTP [Simple Mail Transfer Protocol] when I send an email with Gmail — I do know that, but a lot of people don’t know that, and that’s okay.”
Allaire explained that for mass crypto adoption to happen, participants would need to be introduced to a much more simplified version of the underlying technology. “People don’t need to know what chain they’re on or even what stablecoin they’re using,” he said. “They just need to know that it’s frictionless interaction with data and money.”
Finally, Allaire said we are reaching the next “broadband” phase of blockchain, referencing the dial-up era in the early days of the internet. “We need safe, scalable and energy-efficient public blockchains” just as we did with the internet, he stated, raising the example of new developments such as Ethereum’s recent move to proof-of-stake and the emergence of layer-2 and layer-1 scaling models. He said the step was “necessary for this [blockchain] to become something that is used by everyday society for mission-critical applications.”
Converge22 in San Francisco.Source: Sam Bourgi
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In a lengthy appraisal of distributed ledger technology, Cunliffe weighed its technical implications, which will be examined in greater detail when the FMI Sandbox premiers in 2023.
There’s more to crypto than just assets, Bank of England deputy governor Sir Jon Cunliffe reminded the Association for Financial Markets in Europe Conference in London on Sept. 28. The distributed ledger technology (DLT) behind crypto assets has far-reaching implications for traditional markets and interoperability.
DLT will touch on trading, clearing, settlement and custody as it is integrated into capital markets, Cunliffe said. One of the biggest differences Cunliffe identified in DLT was its speed. Instantaneous settlement can reduce risk by removing the chance of drastic market movements while a transaction is being processed, but:
“The development of instantaneous settlement also poses challenges for the management of liquidity as it requires all cash and securities to be in place at the time a trade is struck […] though I should stress that it [settlement] need not be instantaneous or decentralized.”
Smart contracts combine activities and thus reduce the number of intermediaries and the fees associated with them, Cunliffe said. They could increase resilience in the system for the same reason and incorporate related services like the payment of coupons on bonds or “management of more sophisticated securities trades.”
Today’s first keynote is given by Deputy Governor for Financial Stability, @bankofengland, Sir Jon Cunliffe, who focused his speech on the potential impacts of the crypto world on post trade infrastructure #OPTIC2022pic.twitter.com/1fY4A7omPw
Cunliffe, a longtime advocate of greater crypto regulation, had a number of caveats to share. First, he said, DLT is relatively unproven. In addition, decentralization may need to be constrained:
“It is very difficult to see how risks can be managed to the right level without a legal entity accountable for the services provided and responsible for the proper functioning of the system.”
Currently, “central banks provide the rails on which those [settlement] assets are transferred in their jurisdictions,” Cunliffe said, and the Bank of England could create its own DLT to accommodate transactions in the future or create ways to “plug in” the current real-time gross settlement system to DLT systems. European Central Bank executive board member Fabio Panetta discussed the same options at a symposium held on Sept. 26.
The Bank of England, the Financial Conduct Authority and HM Treasury will have a Financial Markets Infrastructure (FMI) Sandbox in place by 2023 to explore performance and regulatory issues, Cunliffe said.
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The level of security provided by SMS pales in comparison to authenticators or physical security keys, CertiK's Jesse Leclere says in an interview.
Using SMS as a form of two-factor authentication has always been popular among crypto enthusiasts. After all, many users are already trading their cryptos or managing social pages on their phones, so why not simply use SMS to verify when accessing sensitive financial content?
Unfortunately, con artists have lately caught on to exploiting the wealth buried under this layer of security via SIM-swapping, or the process of rerouting a person's SIM card to a phone that is in possession of a hacker. In many jurisdictions worldwide, telecom employees won't ask for government ID, facial identification, or social security numbers to handle a simple porting request.
Combined with a quick search for publicly available personal information (quite common for Web 3.0 stakeholders) and easy-to-guess recovery questions, impersonators can quickly port an account's SMS 2FA to their phone and begin using it for nefarious means. Earlier this year, many crypto Youtubers fell victim to a SIM-swap attack where hackers posted scam videos on their channel with text directing viewers to send money to the hacker's wallet. In June Solana NFT project Duppies had its official Twitter account breached via a SIM-Swap with hackers tweeting links to a fake stealth mint.
With regards to this matter, Cointelegraph spoke with CertiK's security expert Jesse Leclere. Known as a leader in the blockchain security space, CertiK has helped over 3,600 projects secure $360 billion worth of digital assets and detected over 66,000 vulnerabilities since 2018. Here's what Leclere had to say:
"SMS 2FA is better than nothing, but it is the most vulnerable form of 2FA currently in use. Its appeal comes from its ease of use: most people are either on their phone or have it close at hand when they're logging in to online platforms. But its vulnerability to SIM card swaps cannot be underestimated."
Leclerc explained that dedicated authenticator apps, such as Google Authenticator, Authy, or Duo, offer nearly all the convenience of SMS 2FA while removing the risk of SIM-swapping. When asked if virtual or eSIM cards can hedge away the risk of SIM-swap-related phishing attacks, for Leclerc, the answer is a clear no:
"One has to keep in mind that SIM-swap attacks rely on identity fraud and social engineering. If a bad actor can trick an employee at a telecom firm into thinking that they are the legitimate owner of a number attached to a physical SIM, they can do so for an eSIM as well.
Though it is possible to deter such attacks by locking the SIM card to one's phone (Telecom companies can also unlock phones), Leclere nevertheless points to the gold standard of using physical security keys. "These keys plug into your computer's USB port, and some are near-field communication (NFC) enabled for easier use with mobile devices," explains Leclere. "An attacker would need to not only know your password but physically take possession of this key in order to get into your account."
Leclere points out that after mandating the use of security keys for employees in 2017, Google has experienced zero successful phishing attacks. "However, they're so effective that if you lose the one key that is tied to your account, you will most likely not be able to regain access to it. Keeping multiple keys in safe locations is important," he added.
Finally Leclere sa that in addition to using an authenticator app or a security key, a good password manager makes it easy to create strong passwords without reusing them across multiple sites. "A strong, unique password paired with non-SMS 2FA is the best form of account security," he stated.
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“We want to provide liquidity for people that are kind of giving up because we’re still very bullish for the next 10 or 20 years,” said CEO Dan Morehead.
Dan Morehead, founder and CEO of Pantera Capital, reportedly said the hedge fund was planning to raise $1.25 billion for a second blockchain fund.
According to a Sept. 28 Bloomberg report, Morehead said Pantera aimed to close the blockchain fund by May. The fund will reportedly invest in digital tokens and equity in an effort to appeal to institutional investors.
“We want to provide liquidity for people that are kind of giving up because we’re still very bullish for the next 10 or 20 years,” said the Pantera CEO, according to the report.
Pantera Capital is seeking $1.25 billion for its second blockchain fund, founder Dan Morehead says https://t.co/H5AXy55hqa
Launched in 2013, Pantera was one of the first crypto funds in the United States at a time when the price of Bitcoin (BTC) was largely under $100. Morehead said in a 2019 interview that BTC had the potential to reach $356,000 by 2022. Pantera has since grown to have $4.5 billion in assets under management, according to its website.
Should the reported second blockchain fund close as planned, it would follow Pantera's launch of its first blockchain fund in May 2021, targeted at $600 million. Cointelegraph reported in April that the hedge fund was set to close the fund backed by roughly $1.3 billion — double its target. Pantera also offered a liquid token fund, an early-stage token fund, a BTC fund and venture funds with “exposure to companies building products and services in the nascent blockchain ecosystem.”
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A lack of interest below the June macro lows could spell serious problems for Bitcoin, Glassnode warns.
Bitcoin (BTC) is in a “dire condition” when it comes to adoption — but a silver lining is already visible, new research says.
In the latest edition of its weekly newsletter, the Week On-Chain, crypto analytics firm Glassnode said that Bitcoin was going through a “great detox.”
Bitcoin adoption returns to March 2020
Current BTC price action is pressuring everyone from long-term holders (LTHs) to miners, and relief is hard to come by.
Macro turmoil and resistance at $20,000 is keeping BTC/USD at levels visited only once since 2020.
With this week’s push above $20,000 accompanied by major profit-taking, warnings remain that more pain is due for the market first before a recovery takes place.
For Glassnode, sustained lower levels are causing a seismic shift in the Bitcoin investor profile, with retail and speculators — so-called short-term holders (STHs) — now pushed out.
“Network activity remains in a dire condition as network adoption levels slump to levels last seen during the COVID crisis,” it summarized.
“However, one constructive observation would be the expulsion of retail participants from the network leaving just the HODLers class, career traders and everyday Bitcoin users remaining. This suggests the user-base is at its foundational level.”
This reset in network composition could provide a positive nuance in the face of flatlining on-chain adoption.
LTHs, as Cointelegraph reported this week, are notorious for their stubbornness during bear markets, and data shows that they are in no mood to sell.
“The HODLer class remain resolute with both mature coin USD wealth reaching ATHs, and a multitude of lifespan metrics fully resetting to historical lows, emphasizing the unwillingness to spend held coins,” Glassnode continued, referencing its latest data analysis.
“This suggests the majority of current market churn is associated with the Short-Term Holder class.”
"Large supply airgap" threatens a return to $12,000
Despite the increasing prevalence of LTHs as an investor majority, STHs could nonetheless produce some dramatic downside in the event of Bitcoin falling below the $17,600 macro lows seen in June this year.
This, Glassnode explains, comes as a result of the volume gap below that level — meaning that any sell-off could easily snowball into the next bid zone, currently at $12,000.
“A large supply airgap is apparent below $18k until the $11k–$12k range,” the Week On-Chain states elsewhere.
“Trading below the current cycle low would put an extraordinary volume of Short-Term Holder coins into a deep unrealized loss, which may exacerbate downside reflexivity, and trigger yet another wide ranging capitulation event.”
An accompanying chart showed the lack of volume between the two price areas, this contrasting starkly with the area around $20,000, now full of STH interest.
Macro factors, meanwhile, have chiefly contributed to other warnings over BTC price stability in recent weeks and months, with predictions including BTC/USD dropping below $10,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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BTC’s attempt to recapture $20,000 as support failed, but on-chain data reveals a handful of positives.
Markets briefly flashed green on Sept. 27 as equities markets bounced back from Sept. 26’s pullback, bringing the Bitcoin (BTC) price back to the long-term descending trendline resistance, which currently resides at $20,100.
Unfortunately for bulls, the positive momentum for stocks and cryptocurrencies rapidly eroded and Bitcoin price gave up a majority of the intraday gains as it slipped back below $19,000.
As has been the case since March 25, BTC price has been unable to kick above the resistance for more than a few hours and the Sept. 27 breakdown at the trendline continues the trend of successive bear flags that see a continuation to the downside.
BTC/USD 1-day chart. Source: TradingView
According to Arcane Research, Bitcoin’s tight rally above $20,000 is relatively insignificant, given that futures premiums are still low and it “contributes little to improving the market risk appetite.”
BTC perpetual contract funding rate versus Bitcoin price. Source: Arcane Research
Additional data from Arcane Research shows funding rates flipping neutral for the first time since Sept. 13, but generally, traders are reluctant to add longs, given the concerns over macro challenges and the continuous threat of unfriendly crypto regulation.
There is a silver lining
As mentioned in previous analysis, despite the breakouts and breakdowns, BTC price is simply trading within the exact same $24,300 to $17,600 range of the past 103 days. To date, a catalyst to set off a breakdown below swing lows or to push price above resistance and confirm the former hurdle as support has yet to occur.
Fortunately, it’s not all doom and gloom for Bitcoin. A positive bit of news comes from on-chain analytics provider Glassnode, who noted that more mature investors have decided to hunker down and hold their positions rather than sell at the current price.
According to the Revived Supply 1+ Years metric, an indicator that tracks the “total amount of coins that come back into circulation after being untouched for at least 1 year,” the flow of latent supply shifting back into the active supply pool is “extremely low.”
Revived Supply 1 year+ Z Score. Source: glassnode
The compression in mature spending seen in the last stages of the 2018 bull market is not present during the most recent revisits below $20,000, suggesting that long-term holders are well accustomed to volatility and unwilling to sell at the current prices.
Revived Supply 1 year+ Z Score. Source: glassnode
Given that BTC is 72% down from its all-time high and a portion of investors expect prices to crumble toward $10,000 in the next unexpected capitulation event, one could interpret the lack of panic selling from mature investors as positive.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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