bitcoin: November 2022

Wednesday, November 30, 2022

Price analysis 11/30: BTC, ETH, BNB, XRP, ADA, DOGE, MATIC, DOT, LTC, UNI

BTC and many altcoins are kicking up dust after the Federal Reserve chairman Jerome Powell discussed the possibility of smaller rate hikes in 2023, but is the momentum sustainable?

Bitcoin (BTC) has shrugged off the weakness in the United States equities markets and is attempting to start a recovery on Nov. 30. Buyers are attempting to achieve a monthly close above $17,000. This suggests that the selling that had picked up due to the FTX crisis may be reducing.

Usually, smaller investors panic and dump their holdings in a bear market but it has been the opposite with Bitcoin investors. According to Glassnode data released on Nov. 27, investors holding less than one Bitcoin, also called shrimps, bought 96,200 Bitcoin since the FTX crash.

Along similar lines, investors holding between 1 to 10 Bitcoin, classified as crabs, bought 191,600 Bitcoin over the past 30 days. This shows investors are continuing to accumulate at lower levels.

*Daily cryptocurrency market performance. Source:* *Coin360*

However, a sharp recovery in Bitcoin’s price is unlikely for some time. Trading firm QCP Capital believes that the United States Consumer Price Index data on Dec. 13 and the U.S. Fed’s policy decision on Dec. 14 could act as risk factors because many investors could be “forced to continually sell assets to raise liquidity.” QCP expects the situation to turn around only in the second or third quarter of next year after the Fed possibly pivots and releases liquidity in the system.

Could Bitcoin lead the cryptocurrency markets higher? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin turned up from $15,995 on Nov. 28 and broke above the developing descending triangle pattern on Nov. 30. This invalidated the bearish setup and may have attracted buying from the bulls who are trying to push the price above the 20-day exponential moving average ($16,910).

A close above the 20-day EMA will be the first sign that the bears may be losing their grip. The BTC/USDT pair could then rally to $17,622 and later to the 50-day simple moving average ($18,434). The sellers are expected to defend this zone with vigor.

If the price turns down from the overhead zone but bounces off the 20-day EMA, it will suggest that bulls are buying the dips. That could increase the possibility of a rally to $20,000 and then to $21,500.

Another possibility is that the price turns down from $17,622. If that happens, it will suggest that the pair may consolidate between $15,476 and $17,622 for some more time.

ETH/USDT

Ether (ETH) turned down from the 20-day EMA ($1,234) on Nov. 26 but the bulls arrested the decline at $1,151 on Nov. 28. This indicates a pick-up in demand and a sign that the sentiment could be turning positive.

Buyers have pushed the price above the 20-day EMA and will next attempt to break above the 50-day SMA ($1,335). If they succeed, the ETH/USDT pair could rally to the resistance line of the descending channel. This level may attract strong selling by the bears because a break above the channel could indicate a possible trend change.

To invalidate this bullish view, the bears will have to defend the 50-day SMA and pull the price back below $1,051. The pair could then decline to the support line of the channel.

BNB/USDT

BNB (BNB) bounced off the moving averages on Nov. 29 but the bulls are struggling to build upon this move. This suggests that bears are likely to pose a strong challenge between $300 and $318.

The 20-day EMA ($292) is flattening out and the RSI is just above the midpoint, indicating a balance between supply and demand. The advantage could tilt in favor of the buyers if they catapult the price above $318. That could clear the path for a rally to $338 where the bears may again erect a stiff barrier.

This positive view could invalidate in the near term if the price turns down and plummets below the moving averages. The pair could then decline to the support at $258.

XRP/USDT

The bulls successfully defended the retest of the breakout from the symmetrical triangle on Nov. 28. This is a positive sign as it shows that traders are buying the dips in XRP (XRP).

The bounce has reached the overhead resistance at $0.41, which is an important level to keep an eye on. If bulls catapult the price above this resistance, the XRP/USDT pair could attempt a rally to $0.45 and then to $0.51.

On the other hand, if the price turns down from the current level, it will suggest that the bears are aggressively selling near $0.41. They will then again try to pull the price inside the triangle. If they can pull it off, the pair could drop to $0.34.

ADA/USDT

Cardano (ADA) remains in a downtrend but the bullish divergence on the RSI suggests that the bearish momentum may be weakening.

The bulls will have to thrust and sustain the price above the 20-day EMA ($0.32) to signal strength. If they do that, the ADA/USDT pair may start a recovery to the downtrend line. The 50-day SMA ($0.36) may act as a resistance but is likely to be crossed.

Conversely, if the price turns down from the 20-day EMA, it will indicate that bears are selling on minor rallies. The bears will then try to resume the downtrend and sink the price to the support line.

DOGE/USDT

Dogecoin (DOGE) bounced off the 20-day EMA ($0.09) on Nov. 28, indicating that the sentiment has turned positive and traders are buying the dips.

The upsloping 20-day EMA and the RSI above 60 suggest that bulls have the upper hand. Buyers are trying to extend the recovery to the 50% Fibonacci retracement level of $0.11 and next to the 61.8% retracement level of $0.12.

The sellers are likely to mount a strong defense in this zone. If the price turns down from it, the DOGE/USDT pair could again drop to the 20-day EMA.

On the contrary, if buyers thrust the price above the overhead zone, the pair could complete a 100% retracement and rally to $0.16.

MATIC/USDT

Polygon (MATIC) remains stuck between the 20-day EMA ($0.88) and the uptrend line. The 20-day EMA is flattening out and the RSI is near the midpoint, indicating a balance between supply and demand.

The bulls are trying to drive the price above the moving averages and gain the upper hand. If they succeed, the MATIC/USDT pair could climb to $0.97 and then rally to $1.05. This level could again attract selling by the bears but if bulls clear this hurdle, the bullish momentum could pick up.

This positive view could invalidate in the near term if the price turns down from the moving averages and slides below the uptrend line. The pair could then drop to the important support at $0.69.

DOT/USDT

Polkadot (DOT) turned up from $5.06 on Nov. 28, indicating that bulls are attempting to form a low at $5. The price reached the 20-day EMA ($5.52) on Nov. 30, which is likely to act as a formidable resistance.

The RSI has formed a bullish divergence as it has not tracked the DOT/USDT pair lower. This indicates that the selling pressure could be weakening and increases the likelihood of a break above the 20-day EMA. If that happens, the pair could rise to the 50-day SMA ($6) and later attempt a rally to the downtrend line.

Alternatively, if the price turns down from the 20-day EMA, it will suggest that bears are viewing the relief rallies as a selling opportunity. A break below $5 could signal the resumption of the downtrend. The next support on the downside is $4.32.

LTC/USDT

The long tail on Litecoin’s (LTC) Nov. 28 candlestick shows strong buying at lower levels. This suggests that buyers are trying to flip the breakout level of $75 into support.

The rising 20-day EMA ($69) and the RSI in the positive territory indicate the path of least resistance is to the upside. Buyers will have to push the price above $84 to start a new up-move, which could reach $104.

Instead, if bulls fail to propel the price above $84, the bears will again try to sink the LTC/USDT pair below the 20-day EMA. If they manage to do that, several aggressive bulls may get trapped resulting in long liquidation. The pair may then fall to the 50-day SMA ($60).

UNI/USDT

The bulls are buying the dips to the support line of the symmetrical triangle pattern. This is a positive sign as it indicates demand at lower levels. Buyers are trying to strengthen their position by pushing Uniswap (UNI) above the 20-day EMA ($5.67).

The RSI has risen close to the midpoint, indicating that the bearish momentum may be weakening. If buyers sustain the price above the 20-day EMA, the UNI/USDT pair may attempt a rally to the resistance line of the triangle. A break above the triangle will suggest a potential trend change.

Contrarily, if the price fails to rise above the moving averages, it will suggest that the bears continue to sell on rallies. They will then again try to pull the price below the triangle and open the doors for a decline to $4.60 and then $3.33.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Senate Banking Committee chair calls for coordination with Treasury on crypto

The committee chair cited crypto exchange FTX’s “alarming fraud”, liquidity crunch, and bankruptcy as an example of financial risk Treasury and regulators should address.

Sherrod Brown, chair of the United States Senate Banking Committee, has called on Treasury Secretary Janet Yellen to work with financial regulators and lawmakers on comprehensive crypto legislation “in the wake of FTX’s implosion.”

In a Nov. 30 letter to Yellen, Brown requested the Treasury Secretary coordinate with regulators to address crypto based on recommendations from the Financial Stability Oversight Committee, or FSOC. The committee chair cited crypto exchange FTX’s “alarming fraud”, liquidity crunch, and bankruptcy as an example of financial risk that should not “spillover into traditional financial markets and institutions.”

“I ask that you coordinate with the other financial regulators to further work on the recommendations from the FSOC Report, including the development of legislation that would create authorities for regulators to have visibility into, and otherwise supervise, the activities of the affiliates and subsidiaries of crypto asset entities,” said Brown. “As noted in the FSOC Report, single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities.”

He added:

“As the FTX failure makes clear, given crypto asset entities’ broad use of proprietary crypto tokens combined with opaque financial arrangements and the reliance on arbitrary valuation and data sources, the financial regulatory agencies should continue to find ways to enhance entity and crypto asset disclosures, market integrity, and transparency.”

In October, the FSOC released a report in accordance with U.S. President Joe Biden’s executive order on crypto, aimed at exploring potential regulatory gaps and financial stability risks of digital assets. The council recommended lawmakers pass legislation to determine which “rulemaking authority” will be responsible for regulating parts of the crypto spot market — i.e. the Securities and Exchange Commission or the Commodity Futures Trading Commission. At the time, Yellen said the report provided “a strong foundation for policymakers” but did not offer a timeline for action.

Brown’s response was the latest from U.S. lawmakers jumping in to offer their two cents on FTX’s bankruptcy and possible regulatory and legal action. On Nov. 23, Senators Elizabeth Warren and Sheldon Whitehouse penned a letter to the Justice Department to potentially prosecute individuals involved in wrongdoing at FTX as well as investigate the exchange’s downfall with the “utmost scrutiny.” Committees in both the House of Representatives and the Senate will be conducting separate hearings in December to address the collapse of the crypto exchange.

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INX submits bid for Voyager Digital's assets

FTX US won a $1.4-billion bid to purchase Voyager’s assets in September, but with the firm filing for bankruptcy, the funds were once again up for grabs.

Trading platform INX has submitted a bid for an undisclosed amount to purchase the assets of crypto brokerage firm Voyager Digital.

In a Nov. 30 announcement, INX said it had sent a non-binding letter of intent for Voyager’s assets following the platform filing for bankruptcy in July. According to INX CEO Shy Datika, the bid was aimed at providing “credibility, technology, and unique regulatory positioning” for Voyager users seeking stability in a volatile market.

Voyager’s original bankruptcy filing from the Southern District Court of New York suggested the firm could owe between $1 billion to $10 billion to more than 100,000 creditors amid a bear market and exposure to Three Arrows Capital. In September, FTX US won a $1.4-billion bid to purchase Voyager’s assets, but with FTX Group itself filing for bankruptcy in November, the funds were once again up for grabs.

Binance has reportedly been considering a bid for Voyager’s assets, while crypto exchange CrossTower was one of the firms that made an offer prior to FTX’s downfall. Cointelegraph reported on Nov. 13 that CrossTower had been working on a revised bid following FTX Group’s bankruptcy filing. INX was not part of the bidding process in September.

Cointelegraph reached out to INX for comment, but did not receive a response at the time of publication.

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Crypto Stories: John McAfee tells the story of how he first found out about Bitcoin

British-American businessman John McAfee talks about his crypto story and how he discovered BTC.

From the Cointelegraph archives, John McAfee tells his crypto story and takes a look back at his very fascinating life.

Early in his life, the computer programmer landed a job at the United States National Aeronautics and Space Administration, also known as NASA, and worked on the world’s first weather satellite. There, he learned about computer security and people’s concerns over unauthorized actors gaining access to private data.

McAfee also shared that he made all his money not from the popular “McAfee” antivirus software but from other projects. He explained:

“People know me from McAfee, but no, that was not my greatest success. That was some trivial thing. It was my future things, which I did not attach my name to, that taught me and made me all of my money.”

In 2011, McAfee’s friends pressured him into reading the Bitcoin (BTC) white paper published by its pseudonymous creator Satoshi Nakamoto. The computer programmer was impressed with the power of Bitcoin’s mathematics and saw the digital asset’s world-changing potential.

According to McAfee, his entry to crypto started with being the chairman and CEO of MGT, which was the world’s sixth largest BTC mining firm, valued at $800 million. However, McAfee noted that it eventually folded when BTC sank after going sky-high.

The company was delisted by the New York Stock Exchange, which McAfee claimed was a warning shot — an attempt to silence him and a threat that he would be destroyed if he didn’t be quiet. McAfee continued the story:

“First of all, they tried to collect me in America when they convened a grand jury. I found out about it beforehand, so we left the following day to Florida. We picked up our yacht with Janice, myself, four large dogs and seven of my staff and sailed away, went to the Bahamas.”

McAfee said that they eventually went to Cuba and then to the Dominican Republic, where they were arrested before getting off the boat.

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Uniswap launches NFT marketplace aggregator

Developers say the tool can help users save upwards of 15% on gas fees when shopping for NFTs.

According to a new post on November 30, decentralized exchange (DEX) Uniswap announced that users can now trade nonfungible tokens, or NFTs, on its native protocol. As told by Uniswap, the function will initially feature NFT collections for sale on platforms including OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, X2Y2, Foundation, NFT20, and NFTX.

"To bring users the first-rate experience they've come to expect with Uniswap, we built the aggregator to deliver better prices, faster indexing, more unassailable smart contracts, and efficient execution."

Uniswap developers claim that users can save up to 15% on gas costs compared to other NFT aggregators when using Uniswap NFT. unifies ERC20 and NFT swapping into a single swap router. Integrated with Permit2, users can swap multiple tokens and NFTs in one swap while saving on gas fees.

The NFT aggregator is powered by the Universal Router smart contract and optimized by UX smart contract Permit2, both Uniswap inventions. According to the DEX, it "unifies ERC-20 and NFT swapping into a single swap router. Integrated with Permit2, users can swap multiple tokens and NFTs in one swap while saving on gas fees."

"We originally conceived Permit2 and Universal Router to improve our own products, optimizing gas costs, simplifying user transaction flows, and strengthening security. As we ideated, we realized that other applications could greatly benefit from integrating these contracts."

As part of launch efforts, Uniswap says it is airdropping approximately 5 million USDC to certain historical users of NFT aggregator Genie, based on a wallet snapshot on April 15, 2022, and offering gas rebates to the first 22,000 NFT users. However, the gas rebate will only run for two weeks and is capped at 0.01 Ether (ETH).

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Tuesday, November 29, 2022

OpenSea Seaport Protocol onboards creators and NFT holders on BNB Chain

BNB Chain’s integration into the Seaport Protocol aims to provide BNB Chain creators with multiple creator payouts, real-time payouts and collection management.

Crypto collectibles and nonfungible token (NFT) marketplace OpenSea announced plans to integrate BNB Chain on Seaport Protocol by the end of Q4 2022. The integration will allow users to buy, list and trade BNB Chain NFTs on the OpenSea marketplace.

BNB Chain was built by Binance to operate as a Web3-focused blockchain network powered by the exchange's in-house token, Binance Coin (BNB). BNB Chain’s integration into OpenSea's Seaport Protocol aims to provide BNB Chain creators with multiple creator payouts, real-time payouts and collection management, among others.

Sharing insights into the move, Gwendolyn Regina, Investment Director at BNB Chain, revealed her intent to deliver better experiences to NFT creators and users. She added:

“The integration will bring a large number of creators into the wider system, as well as empower the creators and NFT initiatives inside the BNB Chain ecosystem.”

The integration aims to lower gas fees, provide easier signature confirmation actions and eliminate setup fees. In addition to BNB Chain, OpenSea plans to leverage Seaport across multiple blockchains to reach more users.

OpenSea recently confirmed to continue enforcing royalties across all collections after receiving significant public backlash for considering otherwise.

The community pushback came after OpenSea announced the launch of an on-chain tool that would allow creators to enforce royalties for any new collections on the platform but stopped short of offering the same to existing collections.

The on-chain tool, as described by OpenSea CEO Devin Finzer as a “simple code snippet,” was aimed at taking over the existing system of voluntary creator fee payment. The code would also restrict NFT sales to only marketplaces that enforce creator fees criteria.

Well… For instance, I committed myself to a 100 piece collection. I’m currently at 96 out of the 100… And now I’m stuck with this message and I can’t complete it. Ever. Thanks! pic.twitter.com/DdLRNpiucI
— Hammy.eth (@HamsterNFT) January 27, 2022

In January 2022, OpenSea had to backtrack its attempt to impose hard limits on minting NFTs after the community retaliated. The platform had temporarily changed its policy to only allow five NFT collections with 50 items per collection, which was previously unlimited.

While reversing the decision, OpenSea had argued that smart contracts were being misused and that “over 80% of the items created with this tool were plagiarized works, fake collections, and spam.”

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Coinbase Wallet will stop supporting BCH, ETC, XLM and XRP, citing 'low usage'

The crypto wallet plans to stop support for the four tokens on Dec. 5, but added any remaining funds would still be tied to users' existing addresses.

Starting on Dec. 5, the Coinbase Wallet will no longer support four major tokens.

In a Nov. 29 notice on its help pages, Coinbase said the wallet will no longer support Bitcoin Cash (BCH), XRP (XRP), Ethereum Classic (ETC), and Stellar (XLM) as well as their networks. The crypto firm cited "low usage" of the four tokens in its decision to stop support starting on Dec. 5.

"This does not mean your assets will be lost," said the announcement. "Any unsupported asset that you hold will still be tied to your address(es) and accessible through your Coinbase Wallet recovery phrase."

This story is developing and will be updated.

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FTX Fiasco boosts Bitcoin ownership to new highs: analysts weigh in

Data analytics firm Glassnode, hardware provider Trezor and Bitcoin exchange Relai observe an uptick in Bitcoin self-custody.

The bear market has inspired the little guy to accumulate vast amounts of Bitcoin (BTC). The number of wallets holding 1 BTC or more recently hit new highs while those with 10 BTC or less are setting accumulation records.

However, to what extent are these newly minted “wholecoiners” taking custody of their private keys? Has the recent spate of insolvency among centralized exchanges (CEX) encouraged Bitcoin enthusiasts to move their Bitcoin into cold storage, removed from third party risk?

For Checkmate, lead analyst at Glassnode, the data would point to this result. Checkmate told Cointelegraph, “Overall looks like, at least a short-term, movement towards self-custody. Partly out of concern for CEX solvency.”

“Last few weeks have been the largest monthly decline in exchange balances in history, peaking at 177.9k BTC/month in withdrawal volume.”

He also shared that withdrawals from exchanges have made new records, as users have taken thousands of Bitcoin from exchanges. The spike is shown in red on the graph.

Customers withdrawing Bitcoin from exchanges has impacted exchange supply. The number of Bitcoin available on exchanges has “fallen to its lowest % of supply (11.99%) since Dec 2017. This means pretty much every coin that flowed in over the last 12 months, has flowed out,” Checkmate observed.

Plus, according to Glassnode data, withdrawals from exchanges accounted “for ~30% of all transactions in recent weeks.” The data would suggest an overall shift to self-custody: Bitcoin is being sent to hot or cold wallets.

When Bitcoin investors "withdraw" from exchanges, it can be to an offline hardware wallet, sometimes called cold storage, or an online wallet (hot). Hardware wallets or signing devices are tools that manage a user’s cryptocurrency wallet and private keys. Popular hardware wallets include Ledger, Trezor and ColdCard; hot wallets include Blue Wallet or Exodus Wallet.

Josef Tětek, Bitcoin analyst at Trezor, one of the world’s largest hardware wallet providers has observed a considerable drive in sales in the past mont. Tětek told Cointelegraph, “We have seen a dramatic rise in interest in Trezor devices and new Trezor Suite downloads. Our sales are hitting historic highs over the past few weeks.”

“Normally, a bear market is rather a quiet period for us, so this uplift in sales only shows how big of an impact the collapses of FTX and BlockFi have on people's trust in custodian services.”

Cointelegraph had previously reported that Trezor benefited from a 300% increase in hardware sales due to the FTX fiasco. That's despite the price per Bitcoin grinding down to the mid-teens.

For Swiss-based Bitcoin exchange Relai, it’s a similar story; the company shared with Cointelegraph that it’s seen plenty of new users as well as increased volume since FTX shenanigans.

Imo Bábics, the Chief Marketing Officer at Relai told Cointelegraph:

"Well, we are non-custodial, to begin with. We have definitely noticed more people buying bitcoin due to the FTX crash.”

November was the best month in the Bitcoin exchange’s history. Relai added, “We know from our friends at ShiftCrypto that there's been a huge increase in demand for their BitBoxes."

ShiftCrypto is a hardware wallet provider like Trezor. The company’s social media feeds shared countless stories of users who recently became Bitcoin self-custody advocates following the FTX fiasco.

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EIB settles €100 million digital bond on private blockchain

"Unlike some cryptocurrencies using blockchain technology, the EIB's blockchain bond issues do not lead to extensive energy use," the bank wrote.

According to a new press release on Nov. 29, the European Investment Bank, or EIB, issued a first-ever euro-denominated €100 million digital bond on a private blockchain-underpinned platform with tokenization help from Goldman Sachs.

The latter, along with Société Générale Luxembourg, also act as the on-chain custodians for the financial instrument. The bond bears interest at a coupon rate of 2.57% per year with a maturity date of Nov. 29, 2024, and is governed by Luxembourger laws.

Banque de France and the Banque Centrale du Luxembourg participated in the project to provide a digital representation of euro central bank money. The EIB says that "the transaction paves the way for future on-chain derivative solutions, by using the first interest rate swap hedge represented through the industry-developed common domain model."

In addition, the bond represents the "first cross-chain Delivery vs. Payment (DVP) settlement using an experimental CBDC [Central Bank Digital Currency] token."

Last April, the EIB successfully issued the first digital euro bond on a public blockchain. Goldman Sachs, Banco Santander, and Société Générale led the sale of the two-year €100 million digital bond. Regarding today's novel digital bond issuance on a private blockchain, Ricardo Mourinho Félix, EIB's Vice President, commented:

"Blockchain has the potential to disrupt a wide range of sectors. It plays a central role in the success of Europe’s green and digital transitions, and strengthens our technological sovereignty. Innovation is part of the EIB’s identity and issuing this fully digital bond is another important step in helping to develop a fully digital ecosystem."

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Bitcoin capitulation 4th-worst ever as BTC hodlers lose $10B in a week

Bitcoin hodlers lost big after FTX, on-chain data confirms, with BTC since becoming a major target for buy-the-dip opportunists.

Bitcoin (BTC) hodlers have capitulated more than at almost any point in Bitcoin’s history this month.

Data from on-chain analytics firm Glassnode confirms that the November 2022 BTC sell-off was the fourth-largest ever.

Bitcoin investors see multi-billion-dollar losses

In the latest edition of its weekly newsletter, “The Week On-Chain,” Glassnode got to grips with the impact of the FTX debacle on BTC investors.

The results have been mixed, it reveals, with a major loss of confidence, on one hand, triggering loss-making divestment of funds, while “strong accumulation” has also occurred.

For those entering BTC in current conditions, however, life has been anything but easy.

“One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale,” Glassnode explained.

“November has seen the fourth largest capitulation event on record, recording a 7-day realized loss of -$10.16B. This is 4.0x larger than the peak in Dec 2018, and 2.2x larger than March 2020.”

*Bitcoin realized loss 7-day sum annotated chart (screenshot). Source: Glassnode*

While the dollar-value capitulation can be explained thanks to BTC/USD trading five times higher than in late 2018 and 4.5 times higher than in March 2020, it is no secret that cold feet have characterized crypto markets since FTX imploded.

As Cointelegraph reported, directly following the event, hodlers were sitting on 50% of the BTC supply at an unrealized loss.

Glassnode referenced Bitcoin’s adjusted market-value-to-realized-value (MVRV) ratio, which shows that coins moving on-chain are returning loss-making levels rarely seen before in what it calls “peak under-performance.”

Adjusted MVRV ratio is the relationship between the market value of BTC and its realized value, minus the profit impact of coins dormant for seven years or longer.

“This metric is currently returning a value of 0.63 (average unrealized loss of 37%), which is very significant since only 1.57% of trading days in bitcoin history have recorded a lower Adjusted MVRV value,” the newsletter stated.

“In other words, if we discount profit held across the presumably lost supply, the current market is the most underwater it has been since the near pico-bottom set in Dec 2018 and Jan 2015.”

*Bitcoin adjusted MVRV ratio annotated chart (screenshot). Source: Glassnode*

Buying the dip like it’s December 2018

“The Week On-Chain” nonetheless contains some good news for market participants.

Despite the previous losses, hodlers have been accumulating BTC aggressively since — and the trend is encompassing everyone, from the smallest “shrimps” to the largest whales.

“From a comparative point of view, the recent strong accumulation score following the recent sell-off resembles that of late 2018,” Glassnode stated.

It added that similar black swan events in Bitcoin’s past, including recent ones such as the collapse of Terra’s LUNA, sparked similar investor reactions.

An accompanying chart, the seven-day moving average (MA) of the Accumulation Trend Score, showed current conditions as purple — characteristic of mass accumulation. Yellow, conversely, points to mass distribution of BTC on the market.

*Bitcoin Accumulation Trend Score (7-day MA) annotated chart (screenshot). Source: Glassnode*

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

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Monday, November 28, 2022

MakerDAO community votes against CoinShares' 500M investment proposal

About 72.43% of the community votes went against CoinShares' proposal to invest MakerDAO’s funds into various traditional assets

Decentralized lending protocol, MakerDAO, has voted against crypto investment firm CoinShares' proposal to invest between 100million and 500million worth of the community’s funds, into a portfolio of corporate debt securities and government-backed bonds for yield, as an investment strategy.

72.43% of the community votes went against CoinShares' proposal to invest MakerDAO’s funds into various traditional assets. If the community had voted in favor of CoinShare’s proposal, the crypto investment firm would have provided “a variable APY above the SOFR interest rate (3.01% as of October 26, 2022) in the community’s preferred currency (DAI, USDC, USD…) to MakerDAO'', which would have been withdraw-able on-chain.

On the community board of MakerDAO, a few members explained why they voted against the proposal. A community member with the username “Feedblack Loops LLC" shared:

“Since governance has voted on excess USDC then available, going to just say no to proposals of this type moving forward until the house gets in order. Coinshares had many incongruencies up front but did a decent job of articulating confusing portions of their proposal. Optimistic for a revision / different approach.”

Another user by the name Llama, who also voted against the proposal, said: “We believe this proposal to be extremely beyond protocol risk tolerance.”

In October, the MakerDAO community approved the custodianship of $1.6 billion worth of the stablecoin USD Coin (USDC) with the institutional prime brokerage platform for crypto assets, Coinbase Prime. The custodianship was expected to allow the MakerDAO community to earn a 1.5% reward on USDC held with Coinbase Prime.

On Oct. 14, Cointelegraph reported that MakerDAO’s revenue plummeted in the third quarter of 2022, caused by a fall in loan demand and few liquidations, while expenses remained high.

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Price analysis 11/28: SPX, DXY, BTC, ETH, BNB, XRP, ADA, DOGE, MATIC, DOT

Turmoil in China, concerns over the global economy and BlockFi’s bankruptcy filing are all weighing on crypto markets this week.

China witnessed a spike in Covid cases and that has resulted in strict lockdown restrictions in several parts of the country. This triggered widespread protests in China and has possibly pulled the global stock markets lower.

In addition to the turmoil in China, the cryptocurrency markets, which are already in a bear grip, are reeling under pressure from the Chapter 11 bankruptcy filing by BlockFi and its subsidiaries. Bitcoin (BTC) is down 21% in November, on track to its worst November performance since 2018.

The sharp fall in Bitcoin’s price has drastically reduced the number of wallets holding more than $1 million worth of Bitcoin. There were 112,898 millionaire wallets on Nov. 8, 2021, but Glassnode data shows that as of Nov. 25, only 23,245 wallets boast of a Bitcoin balance worth $1 million or more.

Could the weakness in the S&P 500 index (SPX) pull Bitcoin below $16,000? Let’s study the charts to find out.

SPX

The recovery in the S&P 500 index has risen close to the downtrend line. The bears are likely to defend this level as they had done on two previous occasions.

The sellers will have to sink the price below the 20-day exponential moving average (3,922) to tilt the short-term advantage in their favor. Post that, the index could drop to the 50-day simple moving average (3,794) and later to 3,700.

Contrarily, if the price turns down from the current level or the overhead resistance but bounces off the 20-day EMA, it will suggest that traders continue to buy on dips. That could improve the prospects of a break above the downtrend line. If that happens, the index could rise to 4,300. Such a move will suggest that the downtrend has ended.

DXY

The U.S. dollar index (DXY) turned down from 108 on Nov. 21, indicating that the sentiment has turned bearish and the traders may be using the rallies to lighten long positions and establish short positions.

The downsloping 20-day EMA (108) and the relative strength index (RSI) in the negative territory indicate that bears are in command. If bears succeed in pulling the price below 105, the selling could intensify and the index may slide to 103.50 and then 102.

On the other hand, if the rebound off $105 sustains, the recovery could reach the 20-day EMA. If the relief rally again faces rejection at this level, the likelihood of a break below 105 increases.

On the upside, buyers will have to pierce the resistance at 108 to signal a strong comeback. The index could then rise to the uptrend line where it may face tough resistance from the bears.

BTC/USDT

Bitcoin’s relief rally could not even reach the 20-day EMA ($16,972), indicating that traders are hesitant to buy at higher levels. The sellers will now try to pull the price to the crucial support at $15,476.

The BTC/USDT pair is forming a descending triangle pattern, which will complete on a break and close below $15,476. This negative setup has a target objective at $13,330.

The downsloping moving averages indicate advantage to bears but the bullish divergence on the RSI suggests that the bearish momentum could be weakening.

If the price turns up and breaks above the downtrend line, it could invalidate the negative setup. That could open the doors for a possible rally to the overhead resistance at $17,622. Buyers will have to kick the price above this level to indicate that the downtrend could be ending.

ETH/USDT

Ether (ETH) reached the 20-day EMA ($1,233) on Nov. 26 but the bulls could not propel the price above it. This suggests that the bears continue to defend the 20-day EMA vigorously.

The sellers may try to pull the price to the support line of the descending channel pattern, which is close to the psychologically critical level of $1,000.

Buyers are likely to defend this level with all their might but they will have to clear the overhead obstacle at the 20-day EMA to start a sustained recovery. The ETH/USDT pair could then rise to the 50-day SMA ($1,337) and subsequently to the resistance line.

On the downside, a break and close below the channel could accelerate selling and sink the pair to the June low at $881.

BNB/USDT

BNB’s (BNB) recovery turned down from $318 on Nov. 26 and plunged back below the breakout level of $300 on Nov. 28.

The bears will try to solidify their position by pulling the price below the moving averages. If they succeed, it will suggest that the break above $300 may have been a bull trap. The BNB/USDT pair could then decline to $275 and later to $258.

If the price turns up from the moving averages, it will suggest that lower levels are attracting buyers. The pair could then again rise to $318. If bulls drive the price above this resistance, the pair could rally to $338.

XRP/USDT

XRP (XRP) rose above the overhead resistance of $0.41 on Nov. 25 but the bulls could not sustain the higher levels as seen from the long wick on the day’s candlestick.

This may have attracted selling by the bears who pulled the price below the 20-day EMA ($0.39) on Nov. 28. The price has dipped to the breakout level from the symmetrical triangle.

This is an important level to keep an eye on because a break below it will suggest that the XRP/USDT pair may extend its stay inside the $0.30 to $0.41 range for a few more days. The flattening 20-day EMA and the RSI near 45 suggest that the bullish momentum has weakened in the near term.

Buyers will have to push and sustain the price above $0.41 to signal the start of a new up-move.

ADA/USDT

Cardano’s (ADA) relief rally could not even reach the 20-day EMA ($0.33), indicating a lack of demand at higher levels.

The bears will try to build upon their advantage and resume the downtrend by pulling the ADA/USDT pair below the support near $0.30. If they do that, the pair could drop to the support line where buyers may step in and arrest the decline.

This bearish view could invalidate in the near term if the price rebounds off the support near $0.30 and rises above the 20-day EMA. The pair could then attempt a rally to the downtrend line, indicating that the bears may be losing their grip.

DOGE/USDT

Dogecoin (DOGE) soared above the psychological level of $0.10 on Nov. 27 but the bulls could not sustain the higher levels. Profit booking pulled the price back into the range on Nov. 28.

The 20-day EMA ($0.09) is gradually sloping up and the RSI is in the positive territory, indicating that buyers have a slight edge. If the price springs up from the 20-day EMA, the bulls will try to resume the up-move by pushing the DOGE/USDT pair above $0.11. If they manage to do that, the rally could reach the 61.8% Fibonacci retracement level of $0.12.

On the contrary, if the price turns down and breaks below the moving averages, it will suggest that the break above the range may have been a bull trap. The pair could then drop to the support at $0.07.

MATIC/USDT

Buyers are struggling to push Polygon (MATIC) above the 20-day EMA ($0.88). This suggests that bears are viewing the relief rallies as a selling opportunity.

The MATIC/USDT pair could again drop to the uptrend line. This level has acted as a strong support on four previous occasions, hence the bulls will again try to defend it aggressively. If the price bounces off the uptrend line, the pair could rise to the 50-day SMA ($0.90).

A break above this level will suggest that the bulls are on a comeback. The pair could then rise to $0.97. On the contrary, if the price breaks below the uptrend line, the pair could drop to the important support at $0.69.

DOT/USDT

Polkadot (DOT) is in a strong downtrend. Attempts by the bulls to start a recovery fizzled out at $5.53 on Nov. 24. This suggests that the sentiment remains negative and traders are selling on rallies.

The bears have pulled the price near the crucial support at $5. This is an important level for the bulls to defend because if they fail to do that, the DOT/USDT pair could resume the downtrend. The pair could then decline to $4.06.

Alternatively, if the price turns up from the current level or rebounds off $5, it will suggest demand at lower levels. Buyers will again try to push the price above the 20-day EMA ($5.57) and extend the relief rally. The pair could then rise to $6.50.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Kraken settles with US Treasury's OFAC for violating US sanctions

The U.S.-based crypto exchange agreed to pay more than $362,000 as part of a deal “to settle its potential civil liability” related to violating sanctions against Iran.

The United States Treasury Department’s Office of Foreign Assets Control, or OFAC, has announced a settlement with crypto exchange Kraken for “apparent violations of sanctions against Iran.”

In a Nov. 28 announcement, OFAC said Kraken had agreed to pay more than $362,000 as part of a deal “to settle its potential civil liability” related to violating the United States’ sanctions against Iran. The U.S.-based crypto exchange will also be investing $100,000 into sanctions compliance controls as part of the agreement with Treasury.

“Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform,” said OFAC.

In a statement to Cointelegraph, Kraken chief legal officer Marco Santori said the exchange had "voluntarily self-reported and swiftly corrected" its actions to OFAC:

"Even before entering into this resolution, Kraken had taken a series of steps to bolster our compliance measures. This includes further strengthening control systems, expanding our compliance team and enhancing training and accountability."

The United States has imposed sanctions on Iran that prohibit the export of goods or services to businesses and individuals in the country since 1979. However, Kraken had allegedly been violating these controls since 2019 by allowing a reported more than 1,500 individuals with residences in Iran to have accounts at Kraken — giving them the means to buy and sell crypto.

According to a July report from The New York Times, then CEO Jesse Powell — who in September announced he would step down — suggested he would consider breaking the law, through not specifically mentioning sanctions, if the benefits to Kraken outweighed any potential financial or legal penalties. The crypto exchange also reportedly allowed access to crypto for individuals in Syria and Cuba, countries sanctioned by the United States.

In September 2021, the U.S. Commodity Futures Trading Commission ordered Kraken to pay more than $1 million in civil monetary penalties for allegedly violating the Commodity Exchange Act by offering “margined retail commodity transactions in digital assets” to ineligible U.S. customers from June 2020 to July 2021. Kraken's incoming CEO, Dave Ripley, said in September he did not see a reason to register with the Securities and Exchange Commission as "there are not any tokens out there that are securities that we’re interested in listing."

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Jack Dorsey’s Block sues Bitcoin.com for trademark infringement

“The use of the designation "VERSE" constitutes an infringement of our client's trademarks under German trademark law,” Block’s legal counsel said in a letter to Bitcoin.com.

Digital payments company Block Inc. is pursuing legal action against Roger Ver’s Bitcoin.com over alleged trademark infringement involving its newly launched Verse token, which concluded a $33.6 million private sale in May 2022.

In a letter addressed to Bitcoin.com CEO Dennis Jarvis and the company’s legal counsel Joseph Collement, lawyers representing Block claimed that Bitcoin.com’s use of “Verse” constituted trademark infringement under German trademark law. The letter, dated Aug. 10, 2022, was a follow-up to a July 4, 2022 notice in which Block’s legal counsel, Bird & Bird, first laid out its trademark infringement case in Germany. A person familiar with the matter shared the letter with Cointelegraph.

The alleged trademark violation stems from Block’s acquisitions of Verse Technologies Inc. and Decentralized Global Payments S.L. in 2020. “The portfolio of Verse and Decentralized also included a peer-to-peer payment app under the name "VERSE". Since the takeover, our client has been operating this app,” the letter read.

Block’s legal counsel explained that the “VERSE” app is available in Europe, including Germany, and can be accessed on both Apple and Android devices. The letter detailed Block’s rights over a figurative mark that contains the word “Verse” as well as the “VERSE” word mark, with priority for computer and application software for mobile devices.

“The use of the designation "VERSE" constitutes an infringement of our client's trademarks under German trademark law,” the letter concluded, adding:

“Our client therefore has claims against you to cease and desist from the infringing acts. Furthermore, our client has claims for information about the scope of the infringing acts as well as claims for compensation for all damages that our client has incurred or will incur as a result of the infringement. Finally, our client is also entitled to reimbursement of the costs incurred by us in connection with this letter.”

Block’s legal counsel requested that Bitcoin.com sign a declaration of discontinuance and undertaking by Aug. 17, 2022, or face further legal action. It also requested that Bitcoin.com “cease and desist” its Verse token operations in the European Union or face a contractual penalty of $10,400 (€10,000) “for each case of contravention.” Block also requested to be reimbursed for legal fees of $3,906.54 (€3,744.50).

Bitcoin.com is owned by early Bitcoin (BTC) investor Roger Ver, who served as CEO until Aug. 1, 2019. Bitcoin.com operates a digital asset exchange and wallet and provides daily news on the cryptocurrency market. Many in the crypto community know Ver for his strong support of Bitcoin Cash (BCH), which emerged in 2017 after departing Bitcoin’s original blockchain due to philosophical differences around scalability and transaction speed. However, its supporters believe BCH aligns more with the vision set out for Bitcoin in Satoshi Nakamoto’s 2008 white paper.

Founded in 2009 by Jack Dorsey, Block rebranded from Square in December 2021 as its focus shifted to blockchain technology and Bitcoin. Dorsey has increasingly focused on Bitcoin hardware and payment solutions since stepping down as Twitter CEO in November 2021.

Ver and Dorsey have been involved in personal disputes over the years, including in 2019 when Ver accused Dorsey of supporting Lightning Network because of his alleged romantic involvement with Lightning Labs CEO Elizabeth Stark. Some have speculated that these personal issues are why Twitter never verified Bitcoin.com’s handle when Dorsey was CEO.

My theory for why @jack is so irrationally hot for #LightningNetwork is because he has / had a romantic relationship with @starkness, the CEO of @lightning
— Roger Ver (@rogerkver) August 10, 2019

The Verse token at the heart of the legal dispute is publicly advertised on Bitcoin.com’s Twitter page. Verse is described by its creators as a “cross-chain token” focused on expanding into low-fee Ethereum Virtual Machine (EVM) chains. It has a fixed supply of 210 billion tokens distributed over seven years. Its private sale, which concluded this past May, raised $33.6 million.

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Game7 allocates $100M in open-source technology grants for Web 3.0 gaming companies

"We're looking to support teams building innovative open-source infrastructure that can accelerate the blockchain gaming space and foster collaboration," wrote Game7 in its FAQ.

On November 28, blockchain gaming accelerator Game7 announced that it would allocate $100 million in open-source technology grants to upcoming Web 3.0 startups. As told by the Game7, distributions will support individuals and entities building blockchain games, smart contracts, core software infrastructures, and community tooling. The grants will be paid in USD Coin (USDC).

What's first?

Open source technology grants are the first to launch - and we'll be supporting individuals, DAOs, and companies working on:

Game development tooling
Smart contracts and standards
Core infrastructure
Community tooling
— Game7 (@G7_DAO) November 28, 2022

Beyond the initial funding, the team said developers will also gain access to tech support, mentoring, and early Game7 initiatives. The decentralized autonomous organization, or DAO, claims it is chain agnostic and will support applications from any blockchain network. While award amounts have not been disclosed, in a list of frequently asked questions, Game7 explained that "applicants should not view grants as a substitute for venture funding."

In addition, upfront payments are only awarded "in exceptional cases," and most payments will only be issued contingent on the completion of certain project milestones. Developers must also undergo know-your-customer checks, sign a contract, and apply with their digital wallets. However, developers are not bound by any exclusivity agreements and can also apply for other grants or VC funding. Game7 estimates that after submission, its due diligence process will take four to six weeks before a decision is issued.

Game7 was created on November 18, 2021, as part of a $500 million blockchain ecosystem accelerator backed by BitDAO. Most of the funding came from its namesake decentralized treasury. At the same time, Forte, Mirana Ventures, Warner Music Group, Aleo, Avalanche, Interchain Foundation, Off-chain Labs, OP Games, Polygon Studios, Solana Ventures, and now defunct Alameda Research also participated in the seed round.

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Sunday, November 27, 2022

TON Telegram integration highlights synergy of blockchain community

Independent developers from The Open Network community developed a Telegram bot for trading and transferring cryptocurrency.

As a result of a recent upgrade to the wallet bot, users of the Telegram app are now able to purchase and sell cryptocurrencies without leaving the application. The wallet bot was developed by The Open Network (TON, formerly Telegram Open Network) in April. The bot initially enabled users to buy, sell and trade Toncoin (TON) within the Telegram app, but a new update has added a fully functioning cryptocurrency wallet to the application.

An independent team of TON developers created the wallet bot to simplify crypto transactions for Telegram users. A representative from the TON Foundation told Cointelegraph, “The creation of the wallet bot is handled by an independent development team, and we are certainly happy that more and more projects are choosing TON as the basis for creating new products,” continuing to say:

“TON is intended for millions of users, and one of our goals is to make the use of blockchain no more complicated than using applications that users are used to.”

The wallet bot also serves as a fiat on-ramp, allowing users to buy TON using their credit cards within the Telegram app. The currently supported fiat currencies for buying and selling Toncoin are United States dollars, euros, Ukrainian hryvnia, Belarusian rubles and Kazakhstani tenge.

Regarding transactions within Telegram, the exchange service that facilitates them also functions as a guarantee and resolves any required conflicts that may arise between the two parties involved in the transaction. The other party may carry out the transactions in complete anonymity; nevertheless, users must provide the bot with their cell phone numbers before participating in any cryptocurrency-related activities made accessible by the application.

Recent: Bitcoin miners look to software to help balance the Texas grid

The wallet bot doesn’t charge any fees for buying crypto through Telegram, but sellers will be charged a commission fee equivalent to 0.9% of the selling price for each complete transaction. Currently, the app can only be used to purchase Toncoin (TON) and Bitcoin (BTC). However, the TON Foundation plans to expand the number of cryptocurrencies available for purchase. In addition, in order to transfer crypto through the peer-to-peer functionality on Telegram, users need to register with The Open Network.

When transferring crypto to another person, users send the coins to the recipient’s Telegram handle instead of their address. The TON Foundation representative highlighted this feature, saying, “The @wallet bot team is making great strides in this direction, as you can now buy, exchange, and send Toncoin to your contacts without leaving Telegram. There is no need for long addresses or special applications. We think that the future lies in projects like this.”

History of Telegram and The Open Network

Telegram Messenger grew massively in popularity within the crypto community due to its encrypted messaging and ability to create group chats. The bot functionality also makes automating tasks within the groups and chats easier. For example, bots can ban users, respond to questions and link users to useful resources for a project.

In 2017, Telegram began monetization plans for the application since it did not use ads. As part of this plan, Telegram Open Network, or The Open Network, was founded by Telegram founders Pavel and Nikolai Durov, and the white paper was released in January 2018. The Open Network was developed as a platform for decentralized apps and an alternative payment processing network to major networks like Visa.

To raise funds for the development of TON, Telegram held a private sale for the GRAM, which investors could exchange for the TON token when launched. However, the United States Securities and Exchange Commission would later class the token sale as an unregistered securities offering. As a result, Telegram decided to end its active involvement with TON in 2020.

On June 11, 2020, Telegram and the SEC reached a deal in which Telegram agreed to reimburse $1.22 billion as a termination fee in GRAM purchase agreements and pay an $18.5 million penalty to the SEC. Telegram also agreed to provide the SEC prior notice if the company planned to sell any digital assets during the next three years.

On May 7, 2020, Free TON was launched as an independent venture to continue the development of the Telegram Open Network, using the freely available source code. The community later grew to over 30,000 members by January 2021, and the Telegram team later transferred the ton.org domain and GitHub repository to the TON Foundation by August 4, 2021.

The TON foundation has assumed responsibility for the Telegram token’s underlying cryptocurrency (TON). Before this, users of the apps collaborated on a fundraising effort for the cause. As a result, they contributed more than $1 billion to the growth of the TON ecosystem, which was made possible by their donations.

What the future holds for TON and Telegram

It is possible that the TON Foundation’s new Telegram bot update may pave the way for a global cryptocurrency payments service. Furthermore, since the app has over 500 million active users globally, it can act as a catalyst for further crypto adoption if the wallet bot proves to be popular.

When asked about the future of Telegram and The Open Network, a TON Foundation representative told Cointelegraph, “Telegram is a user-friendly platform for everyone in the Web3 world — both for communication and developing products using their disruptive technologies. Furthermore, the open platform allows developers to create working products with real-world use cases that can be deployed in the app.”

“The wallet bot, based on TON, is a great example of this. There are also many services on Telegram that already use TON, such as donate, mobile and others,” they stated, adding, “A significant development is the launch of the Telegram username auction, which is a great demonstration of how the simplicity of tokenization on TON can open up many real-world examples of the use of blockchain technology.”

As well as the wallet bot, The Open Network has developed additional Telegram bots that serve different purposes. The donate bot allows creators to post messages that accept donations via special action buttons that will facilitate a payment process within the Telegram application. The process works by a user contacting the donate bot and following the instructions.

Recent: FTX’s collapse could change crypto industry governance standards for good

The user will also have to add the bot as an administrator on the channel and submit payout information so they can receive the donations. The mobile bot allows users to access the internet when Wi-Fi is unavailable. The Telegram username auction allows users to purchase and auction off their Telegram handles for TON tokens.

The recent update to Telegram’s wallet bot can open up a wider range of the public to using cryptocurrency. It can also further solidify Telegram’s reputation as one of the go-to apps for blockchain-based projects seeking to build a community, especially if additional tokens are added to the platform. Telegram already has a lot of the crypto community using the application, and the ability to buy and transfer crypto could bring non-crypto users into the market.

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The reason bots dominate crypto gaming? Cash-grubbing developers incentivize them

Users who have the most ability to profit from the crass profiteering mechanisms are those who use automated systems to “play” the games.

Think back to the communities you’ve been genuinely excited to be a part of throughout your life. It’s likely these were groups formed on the basis of shared interests, right? That’s because we feel a sense of belonging when we bond with others over any particular thing we feel a particular way about. For example, I love games, and I never get tired of exploring or fostering communities where I can meet other gamers.

That’s how I know that the current GameFi space is no breeding ground for gamers like myself and my enthusiastic peers: It’s a breeding ground for bots.

And the main issue at play is a structural one.

A strong community signals potential to venture capital (VC) funds, so GameFi projects find themselves trying to raise funds at the community level before they can meet with investors. Therefore, they sell nonfungible tokens (NFTs) and other cryptocurrencies to get through the initial-stage-level hoops and try to earn enough cash to continue building. The more they sell, the better their chances. It’s easy to see how this makes builders inherently vulnerable to what a little bit of hype can do: It can, quite literally, make or break a project.

So, they take their incentive, accept the challenge posed to them by the very industry they love, and through no real fault of their own, they fall victim to the appeal of empty hype. They appoint influencers to spread the good word about their teaser trailer and how it’s going to result in a $200 million movie — when in reality, it might only have cost $10,000 to make. They build fan communities and exploit them for their own gain. They give away gaming assets through giveaways in a system that resembles a multilevel marketing scheme and often promises unreasonably profitable returns it cannot possibly deliver.

This further fuels an influencer-based and incentive-driven economy that only drives projects to boast numbers and fail to actually build groundbreaking products. Take Star Atlas, for example: It’s been three years of promises and nothing has been released to the public.

Plus, when people come together because of incentives instead of genuine interest, they fail to form real, solid communities. Look at 90% of GameFi Discord servers, and you’ll only find empty conversations alongside a distinct lack of what could pass as sincere excitement. With more than 100,000 members but only four people who talk, it’s obvious that operators keen on projecting a positive image of their brand are hiring shills to make their communities seem more populated than they are.

This makes both builders and ecosystems fragile, as they are standing on very shaky ground: In the absence of reliable fans, everyone’s participation is for sale. Offer an influencer a better deal than the one they’re currently promoting, and they’ll have no problem jumping ship. Often, so will builders, who are ready to run as soon as the token price is pumped high enough for their liking. This exact scenario happened when the Squid cryptocurrency, unaffiliated with the Netflix series, but hoping to bank on the association, rose to $2,800 in value and then crashed to almost zero after it was discovered that it was only a scam.

In this case, scammers made away with $3.38 million — so you could argue that empty hype and incentive-based MLM-type schemes do work.

But don’t gamers deserve better?

True gamers — the ones who are loyal to their community and come together in the name of something they truly believe in — will stay as far as they can from these dynamics. People who love what they do, not the incentives it may bring, will have no reason to join the GameFi economy as long as this is the reality they’re presented with when they approach it. Those who have spent a long time building real communities have no reason to dupe their fans in the name of bloated numbers, and they know it’s a losing game (pun absolutely intended).

Just as interesting as the economic incentives is the psychological aspect of the dynamics at play. As humans, we are governed (as in, motivated and activated) by emotions: our “value system is made up of a hierarchy of emotionally created sensations that rank what is important to us,” which is to say, our brains are physiologically primed to look for emotional rewards, even more so than financial ones. Think entertainment, dependability and a sense of belonging. If there is no emotional attachment to a specific game beyond cashing in and getting out, gamers will do just that. They’ll earn what they can through gameplay, then withdraw their native tokens and move on to the next incentive.

Who do you think will find this most attractive? Who stands to profit the most from this insanely bleak treatment? That’s right, bots.

Bots are specifically “programmed to take advantage of incentive structures to extract value, harming the game’s ecosystem,” and for blockchain games, they are a major roadblock on the road to widespread adoption. It’s not terribly hard to estimate how many bots a specific game might attract, as data companies can simply link any wallets belonging to the same person and cross-check the list. Using this method, anti-botting company Jigger analyzed more than 60 games and services and found 200,000 bots. Jigger also estimates that bots make up 40% of total GameFi users, while for some games (MetaGear, AnRkey X, and ARIVA), the percentage rises to a staggering 80%, and for Karmaverse Zombie, 96%.

That’s almost the total user base. And that’s unacceptable.

As long as this sorry state of affairs doesn’t improve, the GameFi industry will remain vulnerable to bots, scams, and hyped-up incentives that are unable to drive projects forward. And it will keep real, enthusiastic players like me away.

Shinnosuke “Shin” Murata is the founder of blockchain games developer Murasaki. He joined Japanese conglomerate Mitsui & Co. in 2014, doing automotive finance and trading in Malaysia, Venezuela and Bolivia. He left Mitsui to join a second-year startup called Jiraffe as the company’s first sales representative and later joined STVV, a Belgian football club, as its chief operating officer and assisted the club with creating a community token. He founded Murasaki in the Netherlands in 2019.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. 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.

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Bitcoin 'millionaire' wallets drop 80% in year of BTC price bear market

Twelve months after Bitcoin's last all-time high, seven-figure BTC balances have taken a hit.

Bitcoin (BTC) millionaires are becoming an increasingly rare breed as numbers fall 80% in a year.

According to the latest data from on-chain analytics firm Glassnode, there are now just 23,000 wallets with a BTC balance worth $1 million or more.

1 year, 90,000 fewer million-dollar BTC wallets

In yet another indication of how far the crypto market has fallen since Bitcoin’s last all-time highs, Bitcoin millionaires have been seriously feeling the pinch.

Glassnode, which tracks multiple cohorts of BTC wallets, confirms that as of Nov. 25, there were 23,245 with a balance worth over $1 million.

Contrast that with the scene from Nov. 8, 2021, when the tally hit its peak as BTC/USD approached its latest $69,000 all-time high — then, there were 112,898 “millionaire” wallets.

*Bitcoin wallets with a balance of $1 million or more chart. Source: Glassnode*

Such addresses have fallen in line with spot price itself, subject to modest selling by owners at various points of Bitcoin’s year-long bear market.

Millionaire wallet numbers are down around 79% in that period, while BTC/USD saw a maximum drawdown of 77% this month, data from Cointelegraph Markets Pro and TradingView shows.

*BTC/USD 1-week candle chart (Bitstamp). Source: TradingView*

Bitcoin address numbers in "up only" mode

As Cointelegraph reported, meanwhile, the picture looks somewhat different in BTC terms. Since the FTX implosion, certain classes of wallet have been accumulating.

Related: How low can the Bitcoin price go?

In addition, as noted by co-founders of trading suite Decentrader this week, exchange users withdrawing funds to private storage and consolidating wallets likely account for the significant increase in wallets with 1 BTC or more.

As of Nov. 27, these totaled over 952,000 — a record in Bitcoin’s history.

*Bitcoin wallets with a balance of 1 BTC or more chart. Source: Glassnode*

Glassnode nonetheless shows that even the smallest classes of investor — those with 0.01 BTC or more in their wallets — have also grown in numbers recently.

Overall, however, addresses with a non-zero balance have been in decline since Nov. 18, its data shows — a comparatively rare trend break last seen in April 2021.

*Bitcoin addresses with a non-zero balance chart. Source: Glassnode*

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

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