As Bitcoin (BTC) and altcoins took a break from reaching new all-time highs, the market sentiment seems gloomy since the start of 2022. However, while the market seems to be sleeping, its trajectory shows that there’s more to look forward to in the coming months.
Multinational professional services network KMPG published its biannual Pulse of Fintech report, where the firm tracks and analyzes developments and investments within the financial technology sector. The report highlighted the most notable developments in major regions like the Americas, Asia Pacific and EMEA, and pointed out the “surging interest” in crypto and blockchain in the past year.
While the scope of the report covers a broader context, crypto and blockchain remained as one of the key topics. Here are the main takeaways from the Pulse of Fintech report by KPMG.
Over $30 billion in investments entered crypto and blockchain
From the $5.5 billion amassed in 2020, investments in the crypto and blockchain space rose to more than $30.2 billion in 2021. This shows that more companies have recognized that crypto and its technologies have potential roles to play in modern financial systems.
Brian Heaver, KPMG US Managing Director thinks that 2021 is very significant for crypto when it comes to adoption.
“There’s an incredible number of companies trying to do a lot of things in the crypto and blockchain space right now — and while we don’t know where all their efforts are going to land, there’s a ton of curiosity and interest in the possibilities.”
Regtech focused on crypto despite the shift in Asia-Pacific
Despite the outright crypto ban in China, technologies that help regulate crypto have been “a relatively hot area of investment” according to KPMG. The firm predicts that there may be more investments to come in regulation technology (regtech) solutions focusing on cryptocurrencies in the future.
This may also make its way to Europe according to KPMG International’s Global Head of Regtech, Fabiano Gobbo.
“While the US continued to attract the vast majority of investments in regtech, Europe is well-positioned to see growth heading into 2022.”
Related: Global crypto adoption could ‘soon hit a hyper-inflection point’: Wells Fargo report
Blockchain use cases are growing
In 2021, as investors started to become more familiar with blockchain, interest in its various use cases has also grown. According to KPMG, the “universe of blockchain applicability” has expanded in 2021. The year spurred more interest in a wide range of blockchain applications, including multi-jurisdictional blockchain uses cases for data, research and analysis.
Because of this, the firm also predicts that crypto will attract “investors of all types” including retail investors as well as corporate and institutional investors because of the increase in use cases.
Singapore-based crypto investments grew more than tenfold
As previously reported by Cointelegraph, crypto investments in Singapore grew very significantly in 2021. The global crypto hub recorded a whopping $1.48 billion in crypto-focused investments last year. This wildly surpasses its previous record in 2020 which was $110 million. The region’s crypto investments accounted for 5 percent of the total global investments in crypto in 2021. It also makes up a third of all investments in the fintech sector throughout the country.
KPMG Singapore’s Head of Financial Services Advisory Anton Ruddenklau thinks that Singapore attracted investors that were previously looking into China, but are pushed away because of the crypto bans.
“Singapore and India could be big winners on the investment front as investors and companies that might have gone to China look for opportunities elsewhere in the region.”
It’s been a rough start to 2022 for crypto investors. Bitcoin (CCC:BTC-USD) has witnessed meaningful correction and altcoin have followed.
Unrest in Kazakhstan has resulted in Bitcoin network power slumps and that’s one reason for the correction. Further, the Federal Reserve has signaled tapering and rate hikes are coming in 2022. Relative tightening of liquidity is another reason for some weakness in the crypto world.
However, volatility is nothing new in the crypto space. In the past, Bitcoin has witnessed sharp correction. It has been followed by a strong reversal rally. I also believe that we are at a point where Bitcoin dominance is likely to decline on a relative basis.
Altcoin dominance will increase and the out-performers will be coins that have a strong use case. In uncertain times, meme coins or low utility coins are likely to be the worst hit.
Overall, real interest rates are likely to remain negative in most parts of the world. Even if contractionary monetary policies are pursued. This will continue to encourage investment and speculation in risky asset classes.
I therefore believe that the recent correction is a good opportunity to accumulate some quality altcoins.
Let’s discuss seven cryptos that are positioned for a strong rally in the near-term. These altcoins are also likely to remain in an uptrend in the coming quarters.
Binance Coin (CCC:BNB-USD)
Zignaly (CCC:ZIG-USD)
MarketMove (CCC:MOVE-USD)
MarhabaDeFi (CCC:MRHB-USD)
Torum (CCC:XTM-USD)
Fetch.ai (CCC:FET-USD)
Rari Governance Token (CCC:RGT-USD)
Source: Robert Paternoster / Shutterstock.com
In October 2017, BNB coin was trading at three cents. The coin touched all-time highs of $686 in May 2021. This serves as a good example of the value creation that’s likely to come by holding fundamentally strong projects.
After being a star performer in 2021, BNB coin has been in a downtrend in the recent past. At current levels of $487, it’s worth buying for short-term and long-term gains.
As an overview, Binance is the top centralized cryptocurrency exchange in the world. The exchange currently has 355 listed coins as compared to 139 coins listed on Coinbase (NASDAQ:COIN). For investors who are bullish on continued adoption growth of cryptocurrencies, BNB coin is a core portfolio hold.
Last month, Binance partnered with Dubai World Trade Centre. The partnership will set up an international virtual asset ecosystem. In December 2021, Binance also acquired 18% stake in Singapore based regulated private exchange, Hg Exchange.
It seems that Binance has ample financial flexibility to pursue acquisition driven growth. Further, Binance Labs has been investing in attractive projects in the crypto world. Once bullish sentiments are back, it would not take long for BNB coin to surge.
Source: Shutterstock
I had talked about Zignaly in October 2021 as a project that has a strong use case. From November 2021 lows of two cents, ZIG coin is already higher by over 280%. As a matter of fact, the coin had touched highs of 18 cents in the recent rally. I believe that ZIG coin is worth accumulation with the market sentiment driving the coin lower.
The recent market volatility and downside has further underscored the importance of Zignaly project in the cryptocurrency ecosystem. The idea of Zignaly is to follow trading experts for profits. The platform has already gained significant traction with 350,000 users and $120 million in assets under management.
It’s worth mentioning here that Zignaly profit-sharing and trading has an edge over copy trading. In the latter, the user is always one-step behind the trader. However, in profit-sharing, the user is a co-investor with the trader. Zignaly claims that the top 20 traders on the platform delivered 270% annual profits. Therefore, just by profit sharing with these traders, investors can make meaningful gains.
I particularly like the project as there are thousands of new investors taking a plunge into cryptocurrencies on a daily basis. It makes sense to test the waters with an expert before pursuing individual trading.
Source: Shutterstock
In the last two-weeks, Bitcoin has trended lower. However, during the same period, MOVE token has been in an uptrend.
MarketMove is another project that I have talked about in the past. However, the project is undergoing a complete revamp with Move X slated to be launched in the second week of January 2022. This is a key reason for MOVE token to trend higher.
MarketMove project started with a focus on artificial intelligence (AI)-driven Safety Audit of projects. Further, the project aimed at bringing features like stop-loss and limit orders in decentralized finance.
However, with the coming launch of Move X, the project vision seems to have widened. While the whitepaper is still to be unveiled, Move X swap will be cross-chain and allow investors the best swap rates, which will be powered by artificial intelligence. Therefore, the idea is not just to provide a platform to exchange assets (across chains), but to exchange at the best possible rates.
Additionally, Move X intends to differentiate itself from other DeFi projects by being a complete suite of high-end tools. As an example, the project aims to provide investors with suggestions on how to earn using staking and farming across blockchains.
Overall, MarketMove project is just two quarters old. It seems that the team has a vision of making the project a one-stop shop for all DeFi needs. In my view, some exposure to the project can be considered for potential multi-fold returns.
Source: Shutterstock
MRHB is another token in the crypto space that has survived the recent carnage. On Dec. 27, the token was trading at four cents. It’s already higher by over 200% at 13 cents.
So, what’s the differentiating factor?
MarhabaDeFi claims to be the first project in the decentralized world that builds a shariah-compliant suite of crypto financial solutions. According to CoinGecko, the project is focused on “Islamic Finance liquidity pool which is currently over $3 trillion in size, growing, and serves over 1,000,000 people globally”
Liquidity Harvester is one feature of MarhabaDeFi. It’s for income generation across a vast range of sharia compliant pools that will deliver APY in the range of 5% to 25%. The project also has a cross-chain DEX Aggregator that splits large orders across various decentralized exchanges to reduce the slippage. The launch of interest-free crypto financing is also on the cards in 2022.
With a lot happening in the NFT space, MarhabaDeFi has introduced Souq NFT. This is a NFT collection and creation platform. It also includes listing and auction marketplace.
Overall, MRHB token looks attractive with a diversified offering in an unexplored area of Islamic finance merging with the crypto world. It’s not surprising that the coin has been trending higher even as broad markets decline.
Source: Shutterstock
XTM coin has been in a correction mode in the recent past. However, it’s worth noting that XTM is still higher by 700% from lows of October 2021. The coin has therefore witnessed a meaningful rally. I believe that the correction provides a good entry point for long-term investors.
As an overview, Torum is the first social media platform that’s specifically designed for cryptocurrency users. According to the website, the social media platform already has 203,361 users. With a global reach, it’s likely that Torum users will continue to increase.
Further, there are few factors that are likely to support user growth as the project visibility increases.
First and foremost, the platform rewards users for activities that include posting, liking posts and for creating threads on specific topics. Users are rewarded XTM coins. This provides an incentive to remain active on the social media platform.
Furthermore, Torum is expanding beyond just social media. The project already serves as a news aggregator in the crypto space. Additionally, NFT Marketplace and NFT Launchpad are catalysts for sustained user growth in the social media platform. Besides the launchpad, the Torum DeFi also provides investors with liquidity farming and cross-chain swapping.
Another interesting upcoming feature of the project is Torumgram. This will connect Telegram with Torum, “essentially allowing the community to use Telegram directly on Torum.”
Source: Shutterstock
Fetch.ai project is another name that comes with a strong use case. The project aims to bring the application of machine learning and artificial intelligence to the decentralized world.
FET token has been an out-performer in the last 12-months. Even after the recent decline, the token is higher by 550% over this period.
In terms of the use case, Fetch.ai has applications in areas that include smart city, decentralized delivery agents and autonomous AI travel agents, among others. Last year, the project developed a decentralized marketplace for global manufacturer, Festo.
In particular, the smart city project promises significant reduction in carbon footprint. With rising environmental concerns, this can be a game-changer. Fetch.ai estimates that the “implementation of smart-city infrastructure will result in 34,000 tonnes Co2 emission reduction annually.”
In March 2021, Fetch.ai also received institutional investment of $5 million. This will help in building and accelerating the company’s AI application. Among the project partners, there are big names like Bosch and Blockchain for Europe.
Overall, FET token looks attractive below 50 cents and is worth considering for the medium to long-term.
Source: Shutterstock
As the world of decentralized finance swells, RGT token is worth holding for the long-term.
The token had touched all-time highs of $64.6 in November 2021. After a meaningful correction, the token currently trades at $26.88. With a limited supply of 12.5 million tokens, I am bullish on RGT touching new highs once the sentiments reverse for cryptocurrencies.
As an overview, Rari Capital is involved in lending, borrowing and yield generation in the DeFi space. For Rari, growth has been stellar in the last 12-months.
Currently, the community has more than 10,000 members with a total value locked of $1.1 billion. Rari Capital provides more than 100 DeFi opportunities.
It’s worth noting that even with a potential rate hike in 2022, real interest rates will remain negative. Rari allows investors to deposit crypto-assets and earn a robust yield. It’s therefore very likely that the total value locked in DeFi opportunities in the project will continue to swell.
This will translate into upside for the governance token that looks undervalued. To put things into perspective, the project currently has fully diluted valuation to total value locked ratio of 0.33.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
The post 7 Killer Cryptos to Buy for January appeared first on InvestorPlace.
The Federal Financial Supervisory Authority in Germany (BaFin) issued a warning on crypto trading advice on social media. Although there was no direct reference to social media channels, Telegram is one of these sources.
BaFin did provide its principals for any investor that wishes to use social media for investment tips.
BaFin’s Advice on Social Media Tips
The number of followers, likes or positive feedback are not valid indicators. They do not reflect the performance of the investment tips. It is very easy to manipulate results in social media. Positive feedback or references related to investment success stories can be fictionized and produced at the author’s request.
Investment tips are often marketed aggressively on social media. The goal is to make investors have ‘fear of missing out’ (FOMO) and push them into making poor decisions. Always check the investment advice to ensure the risks and opportunities are fully understood.
Investment advice on social networks is mostly free. This means that the author is compensated through other sources. Most of the time they earn a commission from the broker that its products are advertised on social media. For regular users, it is difficult to detect. Bear in mind that with such commission models there can be an ulterior motive for the individual providing the advice.
There is no ‘fast money’ that is ‘100% safe.’ If you are promised high profits rest assured that the risk is extremely high. The financial products that may offer such returns are highly speculative on most occasions. This can result in significant loss including losing the entirety of invested capital.
Caution is advised if only success stories are highlighted without the risk involved.
‘Pump and Dump’
There are dedicated Telegram groups that ‘pump and dump’
cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term. These groups coordinate their trades, targeting low-volume cryptocurrencies. When the price jumps higher, investors that are unaware of the scheme buy the cryptocurrency. The groups’ members then sell their cryptos for a hefty profit.
The Australian Securities and Investments Commission (
ASIC
ASIC
The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading
The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading Read this Term) has been cracking down on these groups.
The Federal Financial Supervisory Authority in Germany (BaFin) issued a warning on crypto trading advice on social media. Although there was no direct reference to social media channels, Telegram is one of these sources.
BaFin did provide its principals for any investor that wishes to use social media for investment tips.
BaFin’s Advice on Social Media Tips
The number of followers, likes or positive feedback are not valid indicators. They do not reflect the performance of the investment tips. It is very easy to manipulate results in social media. Positive feedback or references related to investment success stories can be fictionized and produced at the author’s request.
Investment tips are often marketed aggressively on social media. The goal is to make investors have ‘fear of missing out’ (FOMO) and push them into making poor decisions. Always check the investment advice to ensure the risks and opportunities are fully understood.
Investment advice on social networks is mostly free. This means that the author is compensated through other sources. Most of the time they earn a commission from the broker that its products are advertised on social media. For regular users, it is difficult to detect. Bear in mind that with such commission models there can be an ulterior motive for the individual providing the advice.
There is no ‘fast money’ that is ‘100% safe.’ If you are promised high profits rest assured that the risk is extremely high. The financial products that may offer such returns are highly speculative on most occasions. This can result in significant loss including losing the entirety of invested capital.
Caution is advised if only success stories are highlighted without the risk involved.
‘Pump and Dump’
There are dedicated Telegram groups that ‘pump and dump’
cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term. These groups coordinate their trades, targeting low-volume cryptocurrencies. When the price jumps higher, investors that are unaware of the scheme buy the cryptocurrency. The groups’ members then sell their cryptos for a hefty profit.
The Australian Securities and Investments Commission (
ASIC
ASIC
The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading
The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading Read this Term) has been cracking down on these groups.
Cryptocurrencies are seeing a significant recovery as investors take advantage of the recent stock market rally and increased risk appetite. Bitcoin hits its highest in two weeks, extending gains from earlier this week that had seen it climb to $41,938 per coin on Saturday morning (Jan 24th).
Related Reading | Bitcoin mimics stocks rally, hits two-week high
Bitcoin, the largest digital currency globally, has hit $41,938. It is 16% high from Thursday’s low and 27% from the current year’s low of $32,950.
Bitcoin price hits two weeks high of $41,938. Source: Tradingview.com
Ether, the second-largest digital currency, has scaled new heights, reaching $3K for the first time since January 21.
Bitcoin recorded its biggest single-day gain since mid-June as fears of faster than expected Fed rate hikes led to an increase in inflation, with the cryptocurrency also being roiled by technological innovation. However, Friday’s 11% rise was enough to consider haven against this trend and get some positive press at least until Monday when everything will likely go back down again.
Bitcoin Price Recovery: Thanks to Amazon
Despite a long week of volatility from earnings, US stocks ended the week strong. The tech-heavy NASDAQ secured gains thanks to Amazon’s robust growth and Facebook owner Meta Platforms’ disappointing results that evening gave them more confidence in their business models moving forward.
Related Reading | Amazon Strong Growth Attributed to the Cloud Despite Retail Headwinds
Bitcoin has moved seamlessly into the mainstream. That resulted in investors looking to get in on the action when risk appetite is low. Ed Hindi, Chief Investment Officer of Tyr Capital, said;
“The current panic and volatility surrounding bitcoin are based on a fundamental misunderstanding of it as an asset class. When valuations on the Nasdaq fall, misguided institutional investors start liquidating bitcoin positions en masse as if it were a tech stock.”
The recent rise in the stock market has given other listed crypto assets a boost. As a result, some currencies even reached new highs.
BTC Price Prediction
Though prices for Bitcoin have seen a significant drop in the last week of January and were sitting at 47% of their all-time high, the cryptocurrency recovered slightly after reaching a low of $33K on Jan 24, 2022, and is worth about $42k.
Buy, sell and hold? Analysts are split on whether or when to buy cryptocurrency. But more than half believe this is a good time for buyers, with only 45% disagreeing.
The experts from the top fintech companies predict that by the end of 2022, bitcoin will reach an all-time high of $93,717 – more than 24K dollars higher than its current all-time high price.
This is a great time to invest in cryptocurrency. Experts predict that by the end of 2025, bitcoin will trade at $192k and mount up over 300% from its November 2021 peak and reach nearly half a million dollars by 2030. While these predictions may seem lofty goals at first glance, they’re significantly less than what experts predicted back in July 2021 when their last forecast said bitcoins prices could reach 265k or 706K, respectively.
Featured image from Pixabay, chart from TradingView.com
Harmony is getting a lot of traction because it addresses core blockchain concerns, is energy-efficient, has cross-chain capabilities, offers lower gas fees and has a huge potential for nonfungible tokens (NFTs).
Maintain decentralization and security
Harmony thinks its network can scale while maintaining decentralization and security because it uses sharding, which divides validators into multiple groups and allows them to approve transactions and new blocks simultaneously. Harmony can now process 2,000 transactions per second (TPS), which is comparable to Visa, ONE of the world’s largest payment networks. Harmony believes it will process 10 million TPS in the long run.
On the other hand, Harmony does not compromise security or decentralization even as it scales. For example, the network assigns nodes or computers that join the network and validate transactions, to distinct shards via a distributed randomness generation mechanism. Harmony also keeps the minimum number of ONE tokens required for nodes to join the network as validators and preserve decentralization at a low level.
Energy-efficient
Many blockchain networks are now adopting the proof-of-stake model, which Harmony has employed since its inception. As a result, nodes put up existing tokens as collateral in this procedure to have a chance to be chosen at random to validate transactions. For a block to be approved, several validators must check transactions. Harmony stands out from other networks because its architecture and proof-of-stake consensus method allow it to complete blocks in under two seconds.
Cross-chain capabilities
Additionally, Harmony introduced Horizon, a cross-chain interoperability bridge with Ethereum, allowing assets to be exchanged between the two networks. This innovation can revolutionize cross-border payments and make cryptocurrency exchanges more convenient. Harmony has also established connections with other blockchains, such as Binance.
By allowing nodes on other blockchain networks to validate transactions, Harmony’s platform can transfer data across various blockchain networks, regardless of whether they use proof-of-stake or proof-of-work governance.
Lower gas fees
Harmony’s network seldom becomes clogged, thanks to its high TPS and usage of proof-of-stake validation. As a result, it does not have high gas fees, which are now a fraction of a penny per transaction on Harmony.
On the other hand, a network like Ethereum sees far more overall demand and transactions than Harmony. Still, Harmony claims that it can alleviate congestion issues by simply adding additional shards, even if the network is fully utilized and witnessing exceptionally high demand.
Huge potential for NFTs
The network’s cross-chain capabilities open up some exciting possibilities for NFTs, which are secure digital art, video and audio assets that may be transmitted on a blockchain network. Moreover, cheaper gas expenses may make the network appealing to developers interested in minting NFTs.
According to Harmony, bridging NFTs from ONE network to another may be costly at first, but subsequent transactions will be inexpensive. Harmony also announced on Twitter that it is working on NFT lending, NFT verification and fractionalization, among other features.
Despite price challenges and a surge in regulations around Bitcoin mining, the BTC hash rate is making new records every week. In January 2022, the mean hash rate breached the level of 183 Exahash, the highest level on record. BTC network witnessed a sooner-than-expected recovery in the mining sector after China announced a crackdown on the mining of digital assets in the region.
Overall, the hash rate plummeted as much as 54% in May 2021. However, leading Bitcoin mining companies shifted to other global locations due to the mining-friendly approach by the relevant governments and cheap electricity. With mining rewards getting less amid Bitcoin halving events, rising competition, and energy issues, there is one key question that comes into the mind of every individual interested in this sector, is BTC mining still profitable?
Well, analysts believe it is, and they have some strong numbers to back their claims. According to Paolo Ardoino, CTO of Bitfinex, large institutions will take more interest in Bitcoin mining in the coming months. “I expect the bitcoin hash rate to continue to rise as competition in the bitcoin mining space increases. In fact, bitcoin mining is demonstrating a strong degree of anti-fragility. Notably, the China ban in the summer of 2021 demonstrated the resilience of the sector. Businesses will continue to be attracted to the space and this in itself is a testament to the profitability of the space as a whole,” Ardoino said.
Cost of Electricity
According to Maria Stankevich, Chief Business Development Officer at EXMO UK, the cost of energy plays an important role in the profitability of Bitcoin mining and the reason behind leading mining players moving to locations like the US and Europe is that the price of electricity for mining is very low in the mentioned regions.
“Bitcoin mining is still profitable in 2022. If we are going into the details, then let’s look at the different aspects of mining that we should take into consideration when we talk about its profitability. Cost of electricity, the electricity prices are very different from country to country. Russia, for example, has very low prices for electricity compared to some areas (like Siberia), so it charges a lower price for industrial electricity in order to encourage economic growth. This means that a mining farm in Siberia will pay 50% as much for the electricity you would mine at home in Germany or the USA,” Maria said.
“Secondly, the mining hardware. There are plenty of different mining machines today, but according to different studies, the majority of the most modern machines could remain profitable at a bitcoin price between $5000 and $6000. Thirdly, reliable mining pool and fees while selling BTC. Today, there are a few very big mining pools that provide certain security to the miners. Sometimes, they have referral partnerships with some exchanges that lower commissions. But even without this mechanism, fees on the exchanges dropped significantly over the past few years, so from this point of view mining also looks profitable,” she added.
Current Bitcoin Mining Ecosystem
Ilman Shazhaev, Executive Chairman of OneBoost, believes that the current dynamics of the crypto market facilitate Bitcoin mining, even at a low BTC price.
“As for BTC mining profitability, I can confidently say that it is still profitable. Bitcoin mining is especially profitable because, despite the current situation with the all-time-high hash rate (around 200 exahashes) and the price fluctuations below $40,000 (which are the least favorable conditions), the top-end devices are so energy-efficient that just around 40% of the mined Bitcoin covers the company’s expenditure, the rest is pure profit. If you compare it with a similar situation in 2018 and 2019, the expenditure back then constituted 70–80 percent with 14 nm chips,” Shazhaev noted.
“So, without a shadow of a doubt, Bitcoin mining is profitable at the moment, and despite all the price swings during 2021, analytical reports from our data centers alone show the average statistics of an 80% profitability rate. Respectively, even taking into account all the complications for mining due to the low price and the high Bitcoin mining difficulty, mining of the first cryptocurrency clearly remains profitable,” the Executive Chairman of OneBoost, highlighted.
Recovery
The BTC mining sector has recovered quickly from the recent setbacks like China’s ban, Russia’s crypto rumors, Kazakhstan’s shutdown, and energy consumption-related problems. Farah Mourad, the Senior Market Analyst at XTB MENA, outlined that the recovery indicates strong Bitcoin mining fundamentals.
“Since its crash back in June, Bitcoin mining difficulty indicator recovered from China’s crackdowns effect reaching a new all-time high. Since then, the markets expected the mining hash rate to remain in an uptrend, until the potential Russian crackdown on bitcoin mining. Would this change the expectations? It is important to note that a potential Russian crackdown on bitcoin mining, would result in a lower hash rate, which doesn’t necessarily mean more profit for miners,” Farah said.
“The direct effect would be seen over bitcoin value and revenue. As we’ve seen post-China crackdown, miners managed to recover fast. Any potential profit for individual mining might be short-lived with the challenge of having access to extremely low-cost electricity. We continue to see a significant accumulation trend since 2021. Putin backing crypto mining might be supporting the trend for the short term as well. A potential migration is still on the table which would lead to changes in trends. Mining spreading over different jurisdictions might potentially bring more stability to hash rates,” she added.
Despite price challenges and a surge in regulations around Bitcoin mining, the BTC hash rate is making new records every week. In January 2022, the mean hash rate breached the level of 183 Exahash, the highest level on record. BTC network witnessed a sooner-than-expected recovery in the mining sector after China announced a crackdown on the mining of digital assets in the region.
Overall, the hash rate plummeted as much as 54% in May 2021. However, leading Bitcoin mining companies shifted to other global locations due to the mining-friendly approach by the relevant governments and cheap electricity. With mining rewards getting less amid Bitcoin halving events, rising competition, and energy issues, there is one key question that comes into the mind of every individual interested in this sector, is BTC mining still profitable?
Well, analysts believe it is, and they have some strong numbers to back their claims. According to Paolo Ardoino, CTO of Bitfinex, large institutions will take more interest in Bitcoin mining in the coming months. “I expect the bitcoin hash rate to continue to rise as competition in the bitcoin mining space increases. In fact, bitcoin mining is demonstrating a strong degree of anti-fragility. Notably, the China ban in the summer of 2021 demonstrated the resilience of the sector. Businesses will continue to be attracted to the space and this in itself is a testament to the profitability of the space as a whole,” Ardoino said.
Cost of Electricity
According to Maria Stankevich, Chief Business Development Officer at EXMO UK, the cost of energy plays an important role in the profitability of Bitcoin mining and the reason behind leading mining players moving to locations like the US and Europe is that the price of electricity for mining is very low in the mentioned regions.
“Bitcoin mining is still profitable in 2022. If we are going into the details, then let’s look at the different aspects of mining that we should take into consideration when we talk about its profitability. Cost of electricity, the electricity prices are very different from country to country. Russia, for example, has very low prices for electricity compared to some areas (like Siberia), so it charges a lower price for industrial electricity in order to encourage economic growth. This means that a mining farm in Siberia will pay 50% as much for the electricity you would mine at home in Germany or the USA,” Maria said.
“Secondly, the mining hardware. There are plenty of different mining machines today, but according to different studies, the majority of the most modern machines could remain profitable at a bitcoin price between $5000 and $6000. Thirdly, reliable mining pool and fees while selling BTC. Today, there are a few very big mining pools that provide certain security to the miners. Sometimes, they have referral partnerships with some exchanges that lower commissions. But even without this mechanism, fees on the exchanges dropped significantly over the past few years, so from this point of view mining also looks profitable,” she added.
Current Bitcoin Mining Ecosystem
Ilman Shazhaev, Executive Chairman of OneBoost, believes that the current dynamics of the crypto market facilitate Bitcoin mining, even at a low BTC price.
“As for BTC mining profitability, I can confidently say that it is still profitable. Bitcoin mining is especially profitable because, despite the current situation with the all-time-high hash rate (around 200 exahashes) and the price fluctuations below $40,000 (which are the least favorable conditions), the top-end devices are so energy-efficient that just around 40% of the mined Bitcoin covers the company’s expenditure, the rest is pure profit. If you compare it with a similar situation in 2018 and 2019, the expenditure back then constituted 70–80 percent with 14 nm chips,” Shazhaev noted.
“So, without a shadow of a doubt, Bitcoin mining is profitable at the moment, and despite all the price swings during 2021, analytical reports from our data centers alone show the average statistics of an 80% profitability rate. Respectively, even taking into account all the complications for mining due to the low price and the high Bitcoin mining difficulty, mining of the first cryptocurrency clearly remains profitable,” the Executive Chairman of OneBoost, highlighted.
Recovery
The BTC mining sector has recovered quickly from the recent setbacks like China’s ban, Russia’s crypto rumors, Kazakhstan’s shutdown, and energy consumption-related problems. Farah Mourad, the Senior Market Analyst at XTB MENA, outlined that the recovery indicates strong Bitcoin mining fundamentals.
“Since its crash back in June, Bitcoin mining difficulty indicator recovered from China’s crackdowns effect reaching a new all-time high. Since then, the markets expected the mining hash rate to remain in an uptrend, until the potential Russian crackdown on bitcoin mining. Would this change the expectations? It is important to note that a potential Russian crackdown on bitcoin mining, would result in a lower hash rate, which doesn’t necessarily mean more profit for miners,” Farah said.
“The direct effect would be seen over bitcoin value and revenue. As we’ve seen post-China crackdown, miners managed to recover fast. Any potential profit for individual mining might be short-lived with the challenge of having access to extremely low-cost electricity. We continue to see a significant accumulation trend since 2021. Putin backing crypto mining might be supporting the trend for the short term as well. A potential migration is still on the table which would lead to changes in trends. Mining spreading over different jurisdictions might potentially bring more stability to hash rates,” she added.
Twitter co-founder and Block (previously Square) CEO Jack Dorsey discussed the implications of a Bitcoin (BTC)-powered universal basic income (UBI) strategy with US congressional candidate and a full-time elementary school teacher, Aarika Rhodes.
“Obscurity of information forces and incentivizes people to negative (financial) behaviors that don’t work for them, their community or family,” said Dorsey while pointing out the lack of transparency within the existing centralized financial system.
“If there’s one thing to focus on in Bitcoin — the operations are transparent, the code is transparent, the policy is transparent.”
This base foundation of BTC is what Dorsey believes has the potential to solve numerous use cases and problems as a direct result of using fiat currency. Through business initiatives including Start Small, the entrepreneur has invested over $55 million across the United States and overseas to experiment on UBI.
“We’re about to do a test of the UBI-like concept with Bitcoin as well.”
Dorsey’s BTC-powered UBI experiment will involve creating a small-scale closed-loop community of sellers and merchants that adhere to the Bitcoin standards. Based on the happiness quotient and willingness to participate, he intends to identify use cases for wide-scale implementation.
Rhodes strongly believes that involving Bitcoin will reduce the costs related to banking fees:
“When you have something like Lightning (network), where you can transact at very low fees is a benefit for everyone. It doesn’t matter where are economically.”
In terms of financial literacy, Dorsey said that adopting the Bitcoin standard inculcates long-term thinking, however, his skepticism toward a BTC-powered universal basic income will reduce based on the results portrayed by the ongoing experiments:
“Just that action of owning it (BTC) will change people’s mindsets in fundamental ways that are net positive and compounds throughout their communities, and encourages other actions like sellers and merchants around them doing similar things.”
Along with the benefits that come with the Bitcoin standard, Dorsey is also vigilant about its negative impacts. On an end note, he highlighted the inefficiencies within the government policies and how UBI helps address some of the challenges:
“If you intend to help people by giving them money directly is far better than the money that the governments (federal and local) spends on these existing support structures. It’s not helping people.”
Related: Jack Dorsey: Diem was a waste of time, Meta should’ve focused on BTC
In a recent interview with MicroStrategy CEO Michael Saylor, Dorsey opined that Facebook (later rebranded as Meta) should’ve used an open-ended protocol like Bitcoin rather than attempting to create its own currency, Diem.
As Cointelegraph reported, Dorsey added that making BTC more accessible would also benefit many of Meta’s instant messaging and voice-over-IP services such as Facebook Messenger, Instagram and WhatsApp.
In the last few years, it’s become increasingly common for tech companies to censor customers or close their accounts for a range of reasons (e.g., misinformation). Luckily, as a crypto business we don’t face this issue as frequently as a social network does, but we still need to set clear policies around acceptable use of our products. As our product suite grows, it will even include products that host user generated content like NFTs.
Our high level philosophy is that, in a democratic society, the people and their elected officials should decide what behavior is allowed and not allowed by setting laws. We think it sets a dangerous precedent when tech companies, such as Coinbase, or their executives start making judgment calls on difficult societal issues, acting as judge and jury. This approach sounds simple in theory, but in practice it is anything but.
First, it can be very complex to determine whether an activity is legal or illegal. Laws vary greatly across different countries, states, and regions. Some activities are legal only if you have a license. Some activity is in a gray area. Some unjust laws go unenforced. Like most companies, we refer suspected illegal activity to the relevant authorities, but we can’t expect to receive a timely response or opinion back from them given the many demands on their resources. Unfortunately, this puts us, along with most companies, in the unfortunate position of having to make our own determinations about what activity is legal or illegal.
Second, even if some activity is legal, it may be something that is deeply troubling to have on the platform. The world is littered with polarizing, uncomfortable, or obscene content that may still be legal. This is where companies start to exercise even more judgment on what they allow. But there is great danger of falling down a slippery slope, having to render decisions on every difficult societal issue, where you are sure to upset someone no matter where you land. Without some strong principled based approach, these decisions become arbitrary and capricious, opening the company to attack.
Finally, every company works with other companies that have their own set of moderation and deplatforming policies. For instance, for any app to be listed in the Apple and Google App Stores, it needs to play by the rules of those two companies. In the financial services world, we also work with banks and payment processors who have their own acceptable use policies. Very few companies are completely vertically integrated, with the luxury of making their own decisions in a vacuum.
So how should a company implement a reasonable approach based on the above constraints? We’ve come up with our own answer, and I want to share it here so our customers can understand it, and in case it helps other companies.
First, it’s important to differentiate our approach based on the type of product. Coinbase has a broad product suite, but for moderation purposes we group our products as either infrastructure products or public-facing products when thinking about how to moderate them. Infrastructure products enable access to basic financial services and are typically used privately by a single customer, while public-facing products often host user generated content and have social features visible to large numbers of users. Ben Thompson’s article on moderation in infrastructure illustrates how companies typically take a different approach for each of these products.
For our infrastructure products, we use rule of law as the foundation of our approach, because we believe that governments, not companies, should be deciding what is allowed in society. We also believe that everyone deserves access to financial services, and a test of legality should be sufficient for these products.
For our public-facing products, we again start with rule of law as the foundation. But assuming something is legal in a certain jurisdiction, we also go beyond this and moderate content that is not protected speech under the First Amendment. We’re not legally held to the First Amendment as a company, and the First Amendment is a U.S. focused concept only, but we’ve chosen to use it as the guiding principle of our content moderation approach because it is in line with our values and helps ensure we don’t fall down a slippery slope over time. The First Amendment has hundreds of years of case law built up, and provides a reasonable framework to moderate content such as incitement, fighting words, libel, fraud, defamation etc. David Sacks does a great job describing this approach in this blog post.
Finally, there are cases where we want to work with external partners, such as the App Stores, and need to follow their moderation policies to do so. Sometimes third party payment providers have their own policies. For payment providers, we can simply disable functionality related to that partner if there is a problem with a specific user, while continuing to offer Coinbase services. But getting kicked out of the app stores wouldn’t help anyone. So when working with partners, our approach is to be free speech supporters, but not free speech martyrs, and to make accommodations if it is essential for us to function as a business.
This is obviously a complex issue, and hopefully the above approach starts to show a path through it that doesn’t devolve into arbitrary and capricious decision making. To boil down the above approach, we ask the following questions for our public-facing products:
1. Is the content illegal in a jurisdiction in which we operate?
A. If yes, then remove in that specific jurisdiction
2. Is the content a free speech exception under the First Amendment?
A. If yes, then remove globally
3. Has a critical partner required us to remove the content?
A. If yes, then remove the content or disable the functionality of that partner for the affected user
If the answer to any of these 3 questions is “Yes” we will take some moderation action, such as taking down content and in severe cases terminating the account.
Most of this post has been about how we can create a reasonable moderation policy that doesn’t get co-opted over time, succumb to pressure, or descend into us playing judge and jury. This is important so that Coinbase is able to stand up to pressure. Of course, the decentralized nature of cryptocurrency offers its own important protections here, and those protections get stronger the more our products decentralize.
If our policy above fails, and Coinbase starts making bad judgment calls or turns evil, customers can withdraw their crypto to any other competing exchange, wallet, or custodian. Compare this to social networks today, where you can’t take your followers with you. Your data is owned by one company, in a proprietary format. The open nature of crypto protocols provides lower switching costs, which is an important customer protection, even for relatively centralized crypto products. But decentralized, or self-custodial, crypto products have an even greater protection because the company is simply providing access to something running on-chain. For instance, no one can deplatform your ENS name without taking every ENS name offline. Decentralization moves you from the slippery slope to the crypto cliff, where the would-be censor must compromise an entire blockchain to censor just one person.
Decentralization is a spectrum, and Coinbase is moving farther down this path over time, embracing self-custody with Coinbase Wallet, stepping up user education around private keys, and by investing in Bitcoin core development and web3 protocols. The more decentralization we can support, the better protection customers will have.
We believe everyone deserves access to financial services, and that companies should put appropriate controls in place to prevent censorship or unjust account closures from taking place. For centralized financial infrastructure products, we believe rule of law is a sufficient standard for moderation, while for decentralized products even greater protections can be provided by the blockchain. We also acknowledge that public-facing products deserve some additional consideration, and that the First Amendment can be used as a reasonable test or boundary. We believe this approach is consistent with our mission of creating more economic freedom in the world and with the ethos of crypto.
Companies are in a difficult position when they choose to censor or terminate a customer account. What often seems like an easy decision, especially under public pressure, turns out to have larger unintended consequences and sets a dangerous precedent for the role of private companies in society. I’m sure we won’t get it perfect with our policy above, but my hope is that we’ve laid out some principles we can fall back on when difficult decisions arise, and that investors, customers, and employees can have a better understanding of our process.
Cryptocurrency prices move both up and down, but one set of companies always profits: crypto exchanges. These trading platforms have also attracted the attention of big pocket investors and venture capitals and are receiving astronomical sums from them at insane valuations.
FTX.com, which became one of the leading crypto trading venues in terms of volume, recently hit the valuation of $32 billion, jumping from $25 billion in just three months. The US subsidiary of this global exchange touched the $8 billion valuation mark separate last month.
While FTX and its investors were vocal about the exchange’s valuation, Binance, which leads the pack of global crypto exchanges, never disclosed its value. A former Binance executive, however, said that the exchange could be worth $300 billion.
So what is driving this astronomical valuation of cryptocurrency exchanges? And is it even fair to put such a high valuation on these young exchanges?
“When it comes to the valuation, we should in the first place think in terms of the fundamentals which are pertinent to any commercial vehicle, such as its ability to generate cash flow, its long-term prospects, and the return at which the company can produce value for its investors,” Sergey Zhdanov, COO of crypto exchange EXMO, explained to Finance Magnates.
However, these metrics alone cannot be predicted with some level of certainty are not sufficient to evaluate the fair valuation of crypto exchanges as so many other factors also need to be considered.
“With that in mind, looking from the present-day perspective, I believe that nobody can be sure about how realistic the valuations of the exchanges are to their true market value,” Zhdanov added.
Exchange Always Make Money
The valuation of crypto exchanges does not directly depend on market trends: buyers will jump in during a bull run, while holders will liquidate their cryptos in a bear market. In other words, crypto exchanges always make money as they charge fees and spreads for executing orders.
“Valuation of crypto and digital asset exchanges will continue to grow as the
clearing
Clearing
Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. This gives credit to the bank where funds are deposited and a corresponding debit to the account of the paying institution. The Federal Reserve operates a nationwide check-clearing system. Clearing also is used to signify matching buyers and sellers in stock, futures, and options transactions. Understanding ClearingToday, any type of payment can be cleared. A credit card payment is cleared through the payment merchant. It can be said that clearing is the settlement of balances and transactions. There is also an act of cleaning contracts and risk through A clearinghouse, like CME Clearing, which is an intermediary between buyers and sellers in the derivatives market. As the intermediary or counterparty, to every trade, CME Clearing acts as the buyer for every seller and the seller for every buyer for every transaction on an exchange. Stocks are cleared through global stock exchanges similar to the New York Stock Exchange (NYSE). The clearing is the process of updating the accounts of the trading parties and arranging for the transfer of money and securities.
Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. This gives credit to the bank where funds are deposited and a corresponding debit to the account of the paying institution. The Federal Reserve operates a nationwide check-clearing system. Clearing also is used to signify matching buyers and sellers in stock, futures, and options transactions. Understanding ClearingToday, any type of payment can be cleared. A credit card payment is cleared through the payment merchant. It can be said that clearing is the settlement of balances and transactions. There is also an act of cleaning contracts and risk through A clearinghouse, like CME Clearing, which is an intermediary between buyers and sellers in the derivatives market. As the intermediary or counterparty, to every trade, CME Clearing acts as the buyer for every seller and the seller for every buyer for every transaction on an exchange. Stocks are cleared through global stock exchanges similar to the New York Stock Exchange (NYSE). The clearing is the process of updating the accounts of the trading parties and arranging for the transfer of money and securities. Read this Term requirements of the burgeoning asset class continues to increase,” said Sang Lee, CEO VegaX Holdings.
Coinbase is the only public crypto exchange listed on a US stock market and thus discloses financials every quarter. The company, however, reported mixed numbers for the quarters after it become public.
The ultimate goal of most of the big private companies is to become public. But, how is Coinbase, being the only public crypto exchange, performing in the open market? Well, shares of the company significantly shed their value from the initial levels of the direct listing.
However, the case is different for private crypto exchanges.
The valuation of these companies mostly co-relate with tech startups. They are highly scalable, and their offerings and geographical reach can be easily expanded, with the minimum capital requirement. Also, in the case of the crypto exchanges, this
scalability
Scalability
Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain points in transaction processing, relative to other cryptos or traditional payments options. Inherent Scalability Issues with BitcoinBitcoin’s block size limit represents a true bottleneck in its design. This reflects the potential downside of a Proof-of-Work (PoW) system with Bitcoin’s consensus protocol.Lags in transaction processing capacity can result in increasing transaction fees and delayed processing of transactions that cannot be fit into a block.This is perhaps one of Bitcoin’s most pressing issues long term, an issue that has since head to the creation of other altcoins or networks to remedy this concern.There have also been many attempts to solve Bitcoin’s scalability problem through software upgrades.Increasing the network’s transaction processing limit requires making changes to the technical workings of bitcoin. This is where forks in the network can come into play, be it soft or hard forks.However, forks have resulted in the creation of entirely new cryptocurrency networks such as Bitcoin Cash, among others. Technical optimizations have also been floated to decrease the amount of computing resources required to process and record Bitcoin transactions. Presently there is no consensus on what the best solution to Bitcoin’s scalability is.
Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain points in transaction processing, relative to other cryptos or traditional payments options. Inherent Scalability Issues with BitcoinBitcoin’s block size limit represents a true bottleneck in its design. This reflects the potential downside of a Proof-of-Work (PoW) system with Bitcoin’s consensus protocol.Lags in transaction processing capacity can result in increasing transaction fees and delayed processing of transactions that cannot be fit into a block.This is perhaps one of Bitcoin’s most pressing issues long term, an issue that has since head to the creation of other altcoins or networks to remedy this concern.There have also been many attempts to solve Bitcoin’s scalability problem through software upgrades.Increasing the network’s transaction processing limit requires making changes to the technical workings of bitcoin. This is where forks in the network can come into play, be it soft or hard forks.However, forks have resulted in the creation of entirely new cryptocurrency networks such as Bitcoin Cash, among others. Technical optimizations have also been floated to decrease the amount of computing resources required to process and record Bitcoin transactions. Presently there is no consensus on what the best solution to Bitcoin’s scalability is. Read this Term can be accelerated further because of the borderless nature of cryptocurrency trading.
While FTX.com is based in the Bahamas, Binance does not even have any physical presence. Most of the offerings are not based on fiat, so they can circumvent local regulations to onboard traders from any jurisdictions, well, mostly.
Eric Chen, CEO and co-founder of Injective Labs, said: “These platforms have the potential to be highly scalable with minimal marginal cost. I can understand the justifications behind these valuations. While these private valuations may appear high, the short-term premium certainly pales in comparison with the long-term growth should their theses play out.”
Decentralization Is a Threat
Though regulators are now tightening the noose of these unregulated platforms, the only major threat of these crypto-to-crypto trading platforms is the rise of decentralized exchanges.
The popularity of decentralized finance (DeFi) platforms are skyrocketing day by day with the increase in the lockin crypto on them. The offered staking rewards also lure crypto holders to provide liquidity to these platforms and earn interest. But, they are still far behind their centralized counterparts.
Too Many Exchanges?
The crypto market grew aggressively over the past few years with the growing interest from both retail and crypto space. Though this should have encouraged new crypto exchanges to enter the market, in reality, the existing ones are only getting bigger. Exchanges like Binance and FTX are even acquiring small local exchanges to further grow their global footprints.
“In the short history of crypto, we have seen multiple paradigm shifts in crypto exchanges. While I do think that a few major crypto exchanges will achieve close to 50% market share, the roster of top players may shift. Decentralized finance and decentralized exchanges are what Coinbase categorized as a threat to its business model, I certainly agree with that,” Chen added.
Cryptocurrency prices move both up and down, but one set of companies always profits: crypto exchanges. These trading platforms have also attracted the attention of big pocket investors and venture capitals and are receiving astronomical sums from them at insane valuations.
FTX.com, which became one of the leading crypto trading venues in terms of volume, recently hit the valuation of $32 billion, jumping from $25 billion in just three months. The US subsidiary of this global exchange touched the $8 billion valuation mark separate last month.
While FTX and its investors were vocal about the exchange’s valuation, Binance, which leads the pack of global crypto exchanges, never disclosed its value. A former Binance executive, however, said that the exchange could be worth $300 billion.
So what is driving this astronomical valuation of cryptocurrency exchanges? And is it even fair to put such a high valuation on these young exchanges?
“When it comes to the valuation, we should in the first place think in terms of the fundamentals which are pertinent to any commercial vehicle, such as its ability to generate cash flow, its long-term prospects, and the return at which the company can produce value for its investors,” Sergey Zhdanov, COO of crypto exchange EXMO, explained to Finance Magnates.
However, these metrics alone cannot be predicted with some level of certainty are not sufficient to evaluate the fair valuation of crypto exchanges as so many other factors also need to be considered.
“With that in mind, looking from the present-day perspective, I believe that nobody can be sure about how realistic the valuations of the exchanges are to their true market value,” Zhdanov added.
Exchange Always Make Money
The valuation of crypto exchanges does not directly depend on market trends: buyers will jump in during a bull run, while holders will liquidate their cryptos in a bear market. In other words, crypto exchanges always make money as they charge fees and spreads for executing orders.
“Valuation of crypto and digital asset exchanges will continue to grow as the
clearing
Clearing
Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. This gives credit to the bank where funds are deposited and a corresponding debit to the account of the paying institution. The Federal Reserve operates a nationwide check-clearing system. Clearing also is used to signify matching buyers and sellers in stock, futures, and options transactions. Understanding ClearingToday, any type of payment can be cleared. A credit card payment is cleared through the payment merchant. It can be said that clearing is the settlement of balances and transactions. There is also an act of cleaning contracts and risk through A clearinghouse, like CME Clearing, which is an intermediary between buyers and sellers in the derivatives market. As the intermediary or counterparty, to every trade, CME Clearing acts as the buyer for every seller and the seller for every buyer for every transaction on an exchange. Stocks are cleared through global stock exchanges similar to the New York Stock Exchange (NYSE). The clearing is the process of updating the accounts of the trading parties and arranging for the transfer of money and securities.
Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. This gives credit to the bank where funds are deposited and a corresponding debit to the account of the paying institution. The Federal Reserve operates a nationwide check-clearing system. Clearing also is used to signify matching buyers and sellers in stock, futures, and options transactions. Understanding ClearingToday, any type of payment can be cleared. A credit card payment is cleared through the payment merchant. It can be said that clearing is the settlement of balances and transactions. There is also an act of cleaning contracts and risk through A clearinghouse, like CME Clearing, which is an intermediary between buyers and sellers in the derivatives market. As the intermediary or counterparty, to every trade, CME Clearing acts as the buyer for every seller and the seller for every buyer for every transaction on an exchange. Stocks are cleared through global stock exchanges similar to the New York Stock Exchange (NYSE). The clearing is the process of updating the accounts of the trading parties and arranging for the transfer of money and securities. Read this Term requirements of the burgeoning asset class continues to increase,” said Sang Lee, CEO VegaX Holdings.
Coinbase is the only public crypto exchange listed on a US stock market and thus discloses financials every quarter. The company, however, reported mixed numbers for the quarters after it become public.
The ultimate goal of most of the big private companies is to become public. But, how is Coinbase, being the only public crypto exchange, performing in the open market? Well, shares of the company significantly shed their value from the initial levels of the direct listing.
However, the case is different for private crypto exchanges.
The valuation of these companies mostly co-relate with tech startups. They are highly scalable, and their offerings and geographical reach can be easily expanded, with the minimum capital requirement. Also, in the case of the crypto exchanges, this
scalability
Scalability
Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain points in transaction processing, relative to other cryptos or traditional payments options. Inherent Scalability Issues with BitcoinBitcoin’s block size limit represents a true bottleneck in its design. This reflects the potential downside of a Proof-of-Work (PoW) system with Bitcoin’s consensus protocol.Lags in transaction processing capacity can result in increasing transaction fees and delayed processing of transactions that cannot be fit into a block.This is perhaps one of Bitcoin’s most pressing issues long term, an issue that has since head to the creation of other altcoins or networks to remedy this concern.There have also been many attempts to solve Bitcoin’s scalability problem through software upgrades.Increasing the network’s transaction processing limit requires making changes to the technical workings of bitcoin. This is where forks in the network can come into play, be it soft or hard forks.However, forks have resulted in the creation of entirely new cryptocurrency networks such as Bitcoin Cash, among others. Technical optimizations have also been floated to decrease the amount of computing resources required to process and record Bitcoin transactions. Presently there is no consensus on what the best solution to Bitcoin’s scalability is.
Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain points in transaction processing, relative to other cryptos or traditional payments options. Inherent Scalability Issues with BitcoinBitcoin’s block size limit represents a true bottleneck in its design. This reflects the potential downside of a Proof-of-Work (PoW) system with Bitcoin’s consensus protocol.Lags in transaction processing capacity can result in increasing transaction fees and delayed processing of transactions that cannot be fit into a block.This is perhaps one of Bitcoin’s most pressing issues long term, an issue that has since head to the creation of other altcoins or networks to remedy this concern.There have also been many attempts to solve Bitcoin’s scalability problem through software upgrades.Increasing the network’s transaction processing limit requires making changes to the technical workings of bitcoin. This is where forks in the network can come into play, be it soft or hard forks.However, forks have resulted in the creation of entirely new cryptocurrency networks such as Bitcoin Cash, among others. Technical optimizations have also been floated to decrease the amount of computing resources required to process and record Bitcoin transactions. Presently there is no consensus on what the best solution to Bitcoin’s scalability is. Read this Term can be accelerated further because of the borderless nature of cryptocurrency trading.
While FTX.com is based in the Bahamas, Binance does not even have any physical presence. Most of the offerings are not based on fiat, so they can circumvent local regulations to onboard traders from any jurisdictions, well, mostly.
Eric Chen, CEO and co-founder of Injective Labs, said: “These platforms have the potential to be highly scalable with minimal marginal cost. I can understand the justifications behind these valuations. While these private valuations may appear high, the short-term premium certainly pales in comparison with the long-term growth should their theses play out.”
Decentralization Is a Threat
Though regulators are now tightening the noose of these unregulated platforms, the only major threat of these crypto-to-crypto trading platforms is the rise of decentralized exchanges.
The popularity of decentralized finance (DeFi) platforms are skyrocketing day by day with the increase in the lockin crypto on them. The offered staking rewards also lure crypto holders to provide liquidity to these platforms and earn interest. But, they are still far behind their centralized counterparts.
Too Many Exchanges?
The crypto market grew aggressively over the past few years with the growing interest from both retail and crypto space. Though this should have encouraged new crypto exchanges to enter the market, in reality, the existing ones are only getting bigger. Exchanges like Binance and FTX are even acquiring small local exchanges to further grow their global footprints.
“In the short history of crypto, we have seen multiple paradigm shifts in crypto exchanges. While I do think that a few major crypto exchanges will achieve close to 50% market share, the roster of top players may shift. Decentralized finance and decentralized exchanges are what Coinbase categorized as a threat to its business model, I certainly agree with that,” Chen added.
Bitcoin on-chain analysis can be a good way to try to guess where the market is headed. The market tends to repeat itself with metrics looking the same before a bull or a bear rally, thus making this data a pretty good indicator of what’s to come. Analyst Willy Woo uses this same data to demonstrate a pattern that occurs before the bull rally, the criteria which are being met once again.
Start Of A Bull Run?
In a recent string of tweets, analyst Willy Woo presents data from on-chain analysis that points to the bitcoin dump having reached its bottom. According to him, “Price in relation to on-chain demand from both speculative and hodl category of investors are now both at peak oversold levels.” Woo points out that the last time that something like this had happened was when bitcoin reached its bottom following the COVID crash.
Price in relation to on-chain demand from both speculative and hodl category of investors are now both at peak oversold levels.
The last time this happened was October 2020. The time before that was at the bottom of the COVID crash.
The analyst further outlines the times where this has happened in the past. Going as far back as 2012, he points out the same had been the case in February of that year. What followed had been the memorable 2021-2013 bull run that saw bitcoin gain more popularity among investors.
Related Reading | Bitcoin Halving To Bring The Subsequent Crypto Frenzy
Fast forward to 2015 and the same had been the case in January of that year. This time, the on-chain metric spelled the bottom of the bear market that had begun previously in 2014, putting an end to the onslaught.
If Woo is right and the on-chain metric continues the way it has historically, then bitcoin may very well have reached the bottom, suggesting that this is the end of the downtrend. However, there is no telling if this is actually the case given that bitcoin had recorded back-to-back bull rallies in 2021.
Bitcoin On The Charts
Bitcoin has lost almost 50% from its all-time high of $69k which it hit in November of last year. This has however not affected the profits of the majority of holders. The digital asset remains one with the highest volume of holders that remain in profit after the market crash.
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According to data from IntoTheBlock, 60% of all bitcoin holders are still in profit at current prices. It is important to note that the cryptocurrency was subject to massive sell-offs when investors panicked that the downtrend will continue. Most however have still kept their highly profitable status, with only 35% of all holders currently losing at market prices.
Bulls struggle to pull BTC up as bears take hold | Source: BTCUSD on TradingView.com
The majority are long-term holders and indicators point to investors still being very bullish on the digital asset despite the downtrend. With its current growth curve, it is expected that the cryptocurrency will see 1 billion holders in the next four years, making it a highly sought-after asset.
Featured image from Bitcoin News, chart from TradingView.com
