DeFi Is a ‘Complete Scam,’ Says Controversial Entrepreneur Craig Wright

nChain chief scientist Craig Wright has delivered an obscenity-laden interview discussing decentralized finance and stablecoins, calling such projects a "complete scam" and "illegal."

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USD has ‘more room to fall’ — 5 things to watch in Bitcoin this week

Amid multiple warnings over the world’s reserve currency, Bitcoin stands to gain if recent macro correlation remains intact.

Bitcoin (BTC) is heading for a bullish start to another week’s trading after shrugging off lower levels to hit $11,700.

Cointelegraph takes a look at five things that could shape price performance in the coming days after BTC/USD saw little impact from both the Fed and futures settlements last week.

Stocks put in higher highs

In a classic continuation of the eerie post-coronavirus setup, stock markets are headed even higher on Monday.

Despite the difficulties faced by many after months of sporadic coronavirus lockdowns and associated economic hardship, large-cap stocks around the world are showing no signs of bearishness.

The Dow Jones made brisk progress before moving slightly lower towards the end of trading, up 0.5% on the day. In the United States, S&P 500 futures were also up modestly at 0.3% as of press time. 

The progress comes as geopolitical tensions also fester, with the U.S. and China sparring over issues such as Washington’s planned enforced sale of social media platform TikTok.

Speaking to Bloomberg, however, one analyst sounded more like a Bitcoin bull when describing the outlook for equities.

“I can’t see what’s going to change people’s perspective on why we should stop buying,” Randy Frederick, vice president of trading and derivatives at U.S. multinational financial services giant Charles Schwab told the publication on Saturday. 

“If we continue to buy and we have a few more pullbacks, which I think is likely, people will just continue to jump in and buy those dips.”

Bitcoin Vs. S&P 500 3-month chart. Source: Skew

Dollar index bounces after a fresh slump

After most macro assets saw losses on the back of the Fed speech on Thursday, Bitcoin has nonetheless managed a conspicuous turnaround. Since the speech, BTC/USD is up by over 4.2%.

The same is true for safe-haven gold, which also recovered over the weekend. Curiously, the U.S. dollar currency index, or DXY, which plumbed two-year lows after Thursday, has also bounced back — analysts continue to eye inverse correlation between the two assets.

At publication time, Bitcoin circled $11,600, having reached $11,720 in an early morning rally. Despite the broad push forward post-Fed, the consensus among Bitcoin commentators remains that long-term policy will drive interest in hedges against the dollar.

“Powell’s speech is as much about employment as it is inflation. The Fed wants full and healthy employment and are expanding the ways they look at it,” Galaxy Digital CEO Mike Novogratz tweeted.   

“Inflation will be tolerated to get to these goals. Bullish for gold. Bullish for BTC.”

Should DXY action continue to continue its inverse relationship with Bitcoin, the largest cryptocurrency may get a further boost sooner rather than later.

“The dollar has far more room to fall than almost anyone thinks,” gold bug Peter Schiff summarized, pointing to another Bloomberg piece in which investment company Pimco warned that the dollar’s fall was just getting started.

U.S. dollar currency index 1-month chart. Source: TradingView

Futures gap still untested

Back within Bitcoin and the return of a CME Group Bitcoin futures gap greets traders on Monday. 

Modest in size, the void between the end of last week’s futures trading and the start of this week’s lies between $11,645 and $11,735. 

That will cause little interest, however, as a more significant interplay with a lower gap remains more of a topic of interest. Located at around $9,700, bets remain that that price will form a short-term price target for BTC/USD.

As Cointelegraph reported, futures “gaps” have historically functioned as reliable indicators of market direction, but the time taken to “fill” them can vary significantly. 

CME Bitcoin futures chart showing a gap at $9,700. Source: TradingView

Hash rate heads towards all-time highs

Bitcoin hash rate is staging a fresh comeback after a slight correction this month — data shows seven-day average values back over 125 exahashes per second (EH/s).

The Hash rate represents the computing power dedicated to validating the Bitcoin blockchain by miners. The metric is impossible to measure exactly, but hash rate numbers allow for a rough idea of miner sentiment.

125 EH/s is not far off all-time highs for hash rate seen earlier in August, and coupled with all-time highs for network difficulty, it is clear that miners are bullish. 

Bitcoin 7-day average hash rate 1-month chart. Source: Blockchain

PlanB, the creator of Bitcoin’s stock-to-flow price prediction models, agreed last week as difficulty reached its highest-ever levels of 17.6 trillion.

Responding, Saifedean Ammous, the author of “The Bitcoin Standard,” argued that even freak events that wipe out mining hardware would not cause a headache for market participants more broadly.

“In my mind, the destruction of miners would make mining more profitable for other miners,” he wrote in Twitter comments. 

“It would only affect the price to the extent it forces miners to sell more than they otherwise would, which I don't imagine to be a very strong effect.”

Inventors stay greedy

As Bitcoin heads closer to $12,000, investor sentiment may yet see a return to the “extreme greed,” which itself warns a sell-off is incoming.

The Crypto Fear & Greed Index, which challenged its highest reading on record this month, is still lingering in the upper quadrant of its scale — 75/100 on Monday.

Crypto Fear & Greed Index 3-month chart. Source: Alternative.me

When BTC/USD hit $12,500, readings of 84/100 appeared, which according to the Index’s creators means a correction is likely. 

The Index has not been out of the “greed” zone since the end of July.

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Cryptocurrency Earned From Carrying Out Microtasks Is Taxable, Says IRS Memo

The U.S. tax department has provided guidance around crypto revenue earned from microtasks via crowdsourcing platforms, and yes, such income is taxable.

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Binance advertising BTC at London bus stops in advance of UK launch

‘Money is evolving,’ Binance’s new ads across London state, showing four generations of coins ending with Bitcoin.

The world’s largest cryptocurrency exchange, Binance, has targeted London commuters with new ads featuring Bitcoin.

According to an Aug. 28 tweet from Binance.UK, the crypto exchange has placed new ads at 17 bus stops in London. The image shows two older generations of coins as well as a current two-pound coin used in the U.K, followed by the largest, Bitcoin. 

“Money is evolving,” the ad states. “It’s time to adapt.”

#Bitcoin is taking over London! 🇬🇧 pic.twitter.com/FBGeEe3pgV

— Binance (@binance) August 30, 2020

Binance announced its expansion into the U.K. market in June, with a planned regulated exchange platform scheduled to launch this autumn. The exchange will reportedly be registered by the country’s Financial Conduct Authority and offer up to 65 digital assets for trading.

In advance of the launch, Binance’s British arm hasn’t limited itself to advertising. The crypto exchange recently announced it would be joining the self-regulating industry association CryptoUK as an executive member.

London has recently been the hotspot for crypto firms looking for new investors. Richard Heart’s controversial HEX token has ads plastered on London’s buses and newspapers, and was even featured during the English Premier League soccer games. Mike Novogratz’s Galaxy Digital bought a full-page ad in the U.K.-based international business newspaper Financial Times, in which Bitcoin (BTC) also appeared prominently.

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Japanese crypto traders ditching XRP and MONA for Bitcoin

Most Japanese crypto traders may be leaving altcoins behind entirely.

The vast majority of Japanese crypto traders who started getting into the market in the last year may be investing solely in Bitcoin.

According to data published on Aug. 19 from the Japan Virtual and Crypto Assets Exchange Association (JVCEA), Bitcoin’s dominance relative to altcoins in the Japanese market reached more than 87% in April. No other token accounted for more than 6% of monthly volume traded. In the same month, the number of active accounts for spot crypto trading in Japan increased by 13,987, an all-time high at the time.

“It seems like Japanese investors’ overall interest in altcoins has been shrinking over time relative to their interests in Bitcoin,” said Yuya Hasegawa, a market analyst at Japan-based crypto exchange bitbank. “Given the growth in the number of active accounts, the vast majority of the newer market participants in Japan, particularly since last summer, are likely to be interested only in Bitcoin.”

Dominance chart for crypto monthly traded value in Japan. Source: JVCEA

Hasegawa’s analysis indicates that XRP was one of the biggest losers among Japanese crypto traders. The altcoin once accounted for about 40% of monthly traded value in Japan’s crypto market, but that number dropped to almost 5% in April. Bitcoin (BTC) also briefly lost ground to MonaCoin (MONA) in February, but regained its dominance following the early stages of the pandemic in March.

Bitcoin’s dominance worldwide hasn’t exceeded 70% since Q1 2017 according to data from CoinMarketCap. As of this writing, the coin represents roughly 58% of the $373.6 billion combined crypto capitalization, its lowest point in 12 months.

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Ethereum price rallies above $400 resistance on bullish ETH options data

Ethereum’s put-call ratio dropped to its lowest level in 3 months, suggesting that traders expect Ether price to rise higher.

Ether (ETH) options open interest grew by 230% to reach $393 million in the past three months. Although this is an impressive figure, it doesn’t fully reflect how the derivative instruments being used.

Ether options open interest, USD. Source: Skew

Strike levels appear bullish

The first thing one should take note of is the most used price levels (strikes). Once again, this information does not provide a clear picture of whether these options are mostly used for bullish or bearish strategies.

In general, a chart heavily populated with strikes below the current market level indicates that either traders were taken by surprise due to a recent hike, or fewer investors are currently bullish.

Ether options by strike level, (thousands). Source: Skew

According to the above data, there are presently 535K Ether options open interest with strikes at $380 and below. On the other hand, there are only 243K Ether options at $425 or higher.

This could be partially be explained by the 68% bull run to the $400 level which occurred  in late July, although this is not necessarily a positive indicator.

Unlike futures contracts, options are divided into two segments. Call (buy) options allow the buyer to acquire Ether at a fixed price on the expiry date. On the other hand, the seller of the instrument will be obliged to make the Ether sale. 

By measuring whether more activity is going through call (buy) options or put (sell) options, it is possible to gauge an overall market sentiment.

Ether options put/call ratio. Source: Skew

There are currently 21% fewer put (sell) options open interest relative to call (buy) instruments. This is the lowest level in 3 months and indicates an overall bullishness from options traders.

Although a good indicator, the put-call ratio reflects trades that might have happened over a month ago. Therefore, to better gauge current market sentiment, one should focus its attention on the 25% delta skew indicator.

Skew indicator confirms bullishness

The 25% delta skew compares side-by-side equivalent call (buy) and put (sell) options. If the protection for price upswings using call options is more costlier, the skew indicator shifts to the negative range. The opposite holds when investors are bearish, causing put options to trade at a premium, causing skew indicators to shift positively.

Ether 3-month options 25% delta skew. Source: Skew

The above chart shows a shift to a bullish stance since late-May, reaching a quasi-extreme 20% optimist level late July. Currently the -12% skew lies in bullish terrain, confirming the put-call ratio indicator.

Generally, Ether options seem bullish despite the concentration of strikes below $400 level. 

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.

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YFI surges to $38K, BTC comeback predictions, Ryanair CEO’s fury: Hodler’s Digest, Aug. 24–30

The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — one week on Cointelegraph in one link!

Coming every Sunday, Hodlers Digest will help you track every single important news story that happened this week.

 

Top Stories This Week

 

YFI price soars to $38,800 hitting $1 billion market cap Can it go higher?

Yearn.finances founder, Andre Cronje, has warned that YFI tokens are worthless but this hasnt stopped them from rising even higher over the weekend.

YFI surged by more than 75% in 24 hours achieving a new all-time high of $38,883. (Prices have cooled since then, falling to $29,876 at the time of writing.)

DeFi enthusiasts remain upbeat about YFI, pointing to Cronjes fast-paced product releases as a positive long-term catalyst for YFI. And over the long term, some analysts believe yearn.finance could achieve a valuation of several billion dollars. One of them, Tyler Reynolds, says $500,000 YFI is possible and this would equal a $15-billion market cap.

There are long-term dangers. Cronje is under significant pressure to consistently release new products and features and like all DeFi tokens, declining yield is also a danger.

In the near term, valuation and liquidity could slow down the momentum of YFI. One cryptocurrency researcher, Hasu, warned:

$YFI may be ripping right now, but its illiquid as hell as very little of the supply is available on exchanges. Try selling even 100K and youll tank the price by 3%.

 

History shows Bitcoin price may take 312 months to finally break $20,000

Bitcoins price showed weakness in recent days but still managed to show resilience as bears failed to push it below $11,200.

And now, a new analysis suggests that if BTC remains stable for several more months, it could set the groundwork for an explosive rally as seen between 2016 and 2017.

Bitcoin has had four market cycles since its inception in 2009, from a bottom to a new peak. The cycles ranged from over 600 days to around 1,050 days. The most recent cycle has just surpassed 300 days, which suggests it could last 312 more months.

The price of Bitcoin was at a mere $3,596 on BitMEX on March 13. Within six months, BTC has recorded a 220% upsurge, outperforming most traditional assets and indices. But the steep vertical rally could raise the chances of whales and large individual Bitcoin hodlers taking profit and this could result in a deep pullback.

Dan Tepiero, a co-founder of 10T Holdings, said: Prepare to be patient in Bitcoin. Each up cycle takes longer to play out and is less extreme as absolute dollar value gets much larger. May or may not be another 6 to 12 months before price breaks up.

 

I would never invest one cent in Bitcoin, says Ryanair CEO

Fed up after his image was used on a crypto scam the brash billionaire owner of the Irish airline Ryanair, Michael OLeary, has launched a scathing attack on Bitcoin.

A bogus article on a fake news outlet claimed that, on a late-night talk show, OLeary shocked the audience by showing how much money he was making through a scheme known as Bitcoin Lifestyle.

Asked by The Times of London whether the advert was legitimate, the entrepreneur issued a vociferous denial reserving his ire for the crypto, rather than the crypto scammers. He said:

I have never, and would never, invest one cent in Bitcoin, which I believe is equivalent to a Ponzi scheme. […] I would strongly advise everyone with any shred of common sense to ignore this false story and avoid Bitcoin like a plague.

Using the image of wealthy and famous people to promote cryptocurrency scams is a very common tactic to gain credibility among potential investors. Others have featured Prince Harry and Meghan Markle, Kate Winslet and Elon Musk.

 

China plans to use its digital yuan at the 2022 Winter Olympics Games

The Peoples Bank of China is planning to put its digital currency to use at the 2022 Winter Olympic Games in Beijing.

But although trials are currently taking place in Shenzhen, Suzhou, Xiongan and Chengdu, officials say theres no timetable for the rollout.

Cointelegraph recently reported that the bank is planning to roll out the digital currency for pilot tests across other regions including Beijing, Tianjin, Hebei and Hong Kongs Greater Bay Area.

A recent official statement from the bank also noted that they were only testing the digital yuan for small retail transactions. The PBoC also clarified that the digital yuan was a legal tender that users can convert into banknotes at a 1:1 ratio.

 

Starbucks lets customers trace their coffees provenance from bean to brew

The worlds biggest coffee shop chain now allows its customers to trace the origins of their drink using Microsofts blockchain technology.

Customers can scan a code on their bags to find out where their beans came from, where they were roasted, and even get brewing tips from baristas.

Its also good news for farmers, who will be able to find out where their produce ends up.

Microsoft is one of the leading providers of blockchain-as-a-service platforms, though IBMs Food Trust platform is better known in the space.

As consumers become more concerned about the ethical sourcing of the products they purchase, the blockchain-tracing trend could rapidly begin to take hold.

 

Winners and Losers

At the end of the week, Bitcoin is at $11,638.11, Ether at $413.32 and XRP at $0.28. The total market cap is at $369,682,907,987.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are DFI.Money, UMA and bZx Protocol. The top three altcoin losers of the week are OMG Network, HedgeTrade and Qtum.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.

 

Most Memorable Quotations

 

Since so many of you Bitcoin guys are ribbing me because my son bought Bitcoin, why not really rub it in by gifting him some as a belated birthday present.

Peter Schiff, crypto skeptic

 

Inflation is coming. Money stored in a bank will get run over. Money invested in assets like real estate or the stock market will keep pace. Money stored in gold or bitcoin will outrun the scourge. And money stored in bitcoin will run the fastest, overtaking gold.

Tyler Winklevoss, Bitcoin billionaire

 

Bitcoin doesnt need the Fed to succeed but if they insist on throwing gasoline on the fire then so be it.

Bill Barhydt, Abra CEO

 

Within a year or two, most crypto exchanges will probably only allow withdrawals to whitelisted addresses. Well have separate ecosystems for coins: clean coins that can be traced to a regulated institution, and everything else.

Ari Paul, BlockTower Capital co-founder and CIO

 

If JPMorgan, one of the biggest companies ever, cant drive adoption, even when they have a great internal use case, you have to ask yourself why?

Will Martino, former lead engineer, JPMorgans Juno blockchain

 

2020, the year of Tether. The road to 20B+ and beyond.

Paolo Ardoino, Bitfinex CTO

 

The economic situation of Wirecard AG was and is extremely difficult in light of the lack of liquidity and the well-known scandalous circumstances.

Michael Jaff, representative for Wirecards administrator

 

I have not abandoned the Ghost privacy ecosystem, only the GHOST privacy coin.

John McAfee, crypto advocate and tech pioneer

 

I have never, and would never, invest one cent in Bitcoin, which I believe is equivalent to a Ponzi scheme. […] I would strongly advise everyone with any shred of common sense to ignore this false story and avoid Bitcoin like a plague.

Michael OLeary, Ryanair CEO

 

Prediction of the Week

 

Bitcoin price to $500,000: Winklevoss lays out ultimate bullish case

Bitcoin billionaire Tyler Winklevoss believes the ultimate bull case for Bitcoin means reaching a target of $500,000.

The 39-year-olds theory appears to be straightforward. He believes BTC could overtake gold as the global markets leading safe-haven asset.

Since the market capitalization of gold is estimated to be $9 trillion while Bitcoin is valued at around $200 billion, this could leave a 45-fold upside.

Winklevoss provided an infographic that showed BTC has multiple advantages over gold. This cryptocurrencys supply is fixed at 21 million and while gold is scarce, its true supply is unknown. Bitcoin is also divisible, difficult to counterfeit and relatively inexpensive to store, all things that the precious metal cant compete with.

He finished off his post with a warning: Inflation is coming. Money stored in a bank will get run over. Money invested in assets like real estate or the stock market will keep pace. Money stored in gold or Bitcoin will outrun the scourge. And money stored in Bitcoin will run the fastest, overtaking gold.

 

FUD of the Week

 

FBI and Tesla thwart $4 million Bitcoin ransomware plot

A young Russian citizen and his co-conspirators came within an inch of carrying out a major ransomware attack against Tesla unaware that their target had already turned them in.

Pavel Kriuchkov allegedly spent weeks in the U.S. attempting to recruit a Tesla staffer at the firms Gigafactory in Nevada for a special project.

The employee was told they would receive $1 million if they helped install targeted malware that would pave the way for a distributed denial-of-service attack, followed by the exfiltration of sensitive company data.

The plan was to hold Tesla to ransom under threat of dumping the information publicly. Kriuchkovs conspirators had their eye on a $4-million ransom.

Thankfully, the employee had already tipped off the FBI and a series of meetings ended up being physically surveilled and wiretapped by federal agents. Kriuchkov is now in detention pending trial, with Elon Musk tweeting: This was a serious attack.

 

A major dark web marketplace has been offline for days, and no one knows why

Empire Market suddenly went offline this week prompting customers to raise concerns about whether a distributed denial-of-service attack was to blame or something more sinister was afoot.

Rumors began circulating on Reddit that the major dark web marketplace could be preparing for an exit scam a scenario where a company disappears with customers funds with little to no warning.

If it is an exit scam, it could damage trust in darknet marketplaces. According to the cyber risk protection firm Digital Shadows, Empire had 55,000 listings and processed about $6.5 million a week.

The company wrote: In this tumultuous environment, with English-language marketplaces disappearing left, right, and center, Empire had become a bastion of steadfastness a beacon of credibility to which all other dark web marketplaces were compared.

 

Ministers used influence to pilfer millions in alleged Ponzi scheme

The SEC has alleged that three people used their influence in churches to raise $27 million from approximately 1,200 investors.

Legal filings claim John Frimpong, Dennis Jali and Arley Johnson had described themselves as experts in crypto and forex advertising gains of between 6% and 42% per month or financial quarter.

Although earlier investors were paid back at times to ward off suspicion, its alleged that the defendants ended up spending the money on themselves.

Johnson claimed to be a minister, while Jali reportedly pastored at seven church locations. Many of their victims were African immigrants.

 

Best Cointelegraph Features

 

Crypto mass adoption will be here when [fill in the blank]

There have been endless predictions about when crypto and blockchain will achieve widespread adoption, so Cointelegraph Magazine has reached out to industry thought leaders to complete this sentence: We will know blockchain has gone mainstream when _______. Andrew Singer looks at their responses.

 

Journeys in blockchain: Dan Held of Kraken

Darren Kleine talks to Dan Held, Krakens director of business development. As this article reveals as a Texan who doesnt drive a truck, drink beer, love Trump or watch sports Held doesnt match the usual stereotypes.

 

From dream to nightmare: Belarus crackdown has tech firms restless

Will the political turmoil in Belarus put an end to the development of digital technologies and the financial freedom of its citizens? Heres Julia Magas.

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