Thanks for joining us, I’m Sage and you are watching The Crypto Buzz by Kalkine TV Our weekly report which brings to you all the trending news from the world of cryptocurrencies
What a week it’s been for the cryptocurrencies! At a glance, the crypto market cap has tipped the $2 trillion level With Bitcoin’s price having risen above the USD$50k levels it has broken out of the consolidation seen last week which could make an opportunity for it to be more bullish It’s currently sitting at around USD$49, 400 But we are all waiting to see what the price of Bitcoin will be at the end of this week Being the end of the month the CFD contracts are due to expire which should give more indication as to which way the price of Bitcoin will go
The Alt-coins are snapping up some of the investors attentions as well, with Cardano, Ripple and Polkadot all showing price increases in the double digits over the weekend But the crypto space is extremely volatile and any uptrends could easily switch to a downward slump, any financial decisions should be made after careful consideration of your own financial objectives and position and only after dedicated technical and fundamental analysis However, we do live in a free-market world and this gives people a chance to do what they like with their money and if buying tokens for investment is what they want to do, my job now is to offer a snapshot of the week with information that could be used in navigating the crypto space moving forward In today’s show we will take a closer look at Stablecoins and giving new meaning to the term “whale watching” we’ll take a glimpse at how the Bitcoin “whales” effect the price of Bitcoin We’ll also fill you in on the controversy surrounding Tether and it wouldn’t be the crypto buzz if we didn’t feature Cardano this week, now, would it? Stick around till the end because we’ll take a look at Bitcoin Halving and how it’s impacted the price of Bitcoin over the last 10 years as well as some of the crypto market indexes that can be used to help with your analysis
As the regulators are honing in on the cryptocurrency space, Stablecoins, which have claim to 377% of the total crypto market cap reaching close to US$753 billion This asset class has moved under the eye of scrutiny as popular belief from the economists show stablecoins have the ability to shake up the financial markets causing more instability than the existing highly-volatile cryptocurrencies, yet more directly due to them being intrinsically linked to the value of the dollar There are basically four types of Stablecoins, those that are fiat-collarteralized being the popular Tether, TrustToken and the Vinklevoss Brothers Gemini
The Crypto-collateralized coins such as Maker DAO’s offering, the commodity backed coins such XBullion GOLD and the non-collateralized or algo-based coins known as Basis and Carbon, which rely on smart contracts Stablecoins seem to have their advantages in the “cryptoconomy”, with low fees, ease of use for cross-border transactions which offer security, liquidity and in some cases the ability to transact anonymously Being asset-backed, they seem to offer the benefits of an economic “safe-haven” such as gold, but how stable are stablecoins? Let’s take the price of Tether as an example Now the 5th most popular crypto by market capitalisation, having reached a milestone of $64 billion in market cap just this August – has stayed around the $1 mark and even rose a little above $1 reaching $121 May 27, 2017 and $1
09 reported 3 years ago To help put this into perspective Bitcoin the most popular crypto has a market cap of $8564 billion current as of Aug 11, 2021 Although most price fluctuation of a stablecoin is around 1 or 2 cents or under, this varies from coin to coin Although, still a defi, Stablecoins which first came into existence in 2014, couldn’t function without centralized management systems related to the inherent underlying asset
Volatility should be considered when investing in stablecoins and the other issue is how policy and governance surrounds this synthetic asset Stablecoins came into being to harness the benefits of cryptocurrency along with the allusive price stability However, out of the 24 stablecoins that have failed, 16 of those were pegged against gold as the underlying asset Tether has seen some controversy over the years and we will discuss that in more detail The probes and lack of evidence to prove that Tether was flouting investors expectations of what it offered caused the price of Tether to take a temporary tumble under the $1 level down to about $0
86 in mid-2018 However, market trends show Stablecoins are where investors park their funds to escape volatility, but how that effects the prices of cryptocurrencies such as Bitcoin should be considered This is especially so when the investors with large crypto holdings known as “whales” cause price fluctuations, through the movement of their assets, causing price dips in the cryptos by moving across to the Stablecoins For whale watching of the crypto flavour head to Twitter pages @whale_alert and @glassnodealerts to track what the crypto whales are doing After the break we’ll take a closer look at the controversy surrounding Tether and the UK’s regulators probing into Binance
So stay tuned @@@@@@@@ @@@@@@@@ Welcome back, this is Sage and you are watching the Crypto Buzz by Kalkine TV So Tether has been appearing in the news this year and it wasn’t all good, let’s take a closer look at the stir surrounding the most popular stablecoin Tether now ranked the 5th most popular crypto by market cap Earlier this year the USDT issuer, Tether, provided the public with an attestation report, a novel offering from the blockchain company This has itemized the balance sheet with lists of assets and liabilities as well as the total reserves for May 2021, which outlined that 50% of which was held in commercial paper (CP)
Prior to the release of its first report, Tether Holdings was required to disclose its reserves and liabilities as part of its settlement deal with the New York Attorney General’s (NYAG) office earlier this year Earlier this year, the New York Attorney General, (NYAG) alleged that Tether and Bitfinex were not being honest, in a cover up of roughly $850 million in customer funds Since June it is now, illegal for Tether to perform business in New York, due to the mismanagement of a financial enterprise The blockchain company’s were charged $185 million in fines
So let’s go back in time to get some clarity on what has eventuated In 2014, Tether was founded and named “Realcoin”, based on the idea was that Tether as would be backed on a one-to-one basis by the US dollar This was confirmed by their website advertising, “Every tether is always backed 1-to-1, by traditional currency held in our reserves” In an interesting twist, 2017 saw the leak of documents called the Paradise Papers which showed the two blockchain corporations Tether and Bitfinex were working together However, it had been outlined by a spokesperson from Tether that the companies were separate in operations, having original objectives
What is interesting to note is that in February 2019 the website text had been updated on the Tether website, detailing that Tether tokens were backed by cash reserves as well as equivalents including loans Even more disturbing is the news that Tether Limited advised that investors who hold tethers do not have contractual right, guarantee or other legal claims, that tethers will be redeemed or exchanged for dollars If this doesn’t make you want to read the fine print on all your instruments, I don’t know what else will? But the plot thickens, after further investigation a legal representative of the stablecoin Tether put out On 30 April 2019 that each tether was only supported intrinsically by $074 in cash and cash equivalents Only after the investigation by the NYAG did Tether provide further information to the public in May 2021
The published report showed that only 29% of Tether was backed by cash and that approximately 65% was backed by commercial paper – secured loans, corporate bonds and precious metals Now, more from the trending world of the crypto regulators In London, the British financial watchdog has prevented major crypto exchange Binance from operations after a slew of probes into the company from across the globe We’ll have more on this scenario as it develops
With a rise of institutional investors into the cryptocurrency space, there is a clear indication that it is a growing sector However a stern warning was offered from the Chairman of the US, Securities and Exchange Commission (SEC) that defi projects were not immune from governance Although operating without a centralized authority, projects that provide investors with digital tokens and incentives could enter the regulatory territory It seems all that glitters is not gold for the crypto world as it emerges into the mainstream After the break we’ll focus our lens on this week’s crypto champagne supernova as it shoots up into the stratosphere, how high will Cardano go? @@@@@@@@ @@@@@@@ Thanks for your time joining us for Crypto Buzz by Kalkine, I’m Sage and as promised we are shining the spotlight on the MVP or the latest rebound in the crypto market – Cardano – now the third most popular crypto by market cap
The start of last week saw Cardano’s price surge approximately 75% in the last 30 days from $141 up to around $272-280 per token on Monday 23 Aug 2021, today it has increased again to sit around the $285 mark
Which has completely eclipsed the previous high of $230 during the May 2021 rally Widely known as a more eco-friendly option to Bitcoin, it uses a proof-of-stake protocol like Bitcoin, which still makes Ethereum more energy efficient in the mining of coins However, Cardano is said to outdo Bitcoin in it’s ability to be energy efficient, reportedly being 4 million times more green conscious than Bitcoin Greater functionality on the smart contract networks and upgrades to the Cardano technology is said to be what has caused the price surge
Similar to what catapulted Ethereum price after the London Hard Fork upgrade to ETH Cardano does have similarities with ETH as it will be working to provide smart contract modality in the future The Cardano ADA token has risen over the last year by 1500% approximately Although analysts have mixed views on whether this coin is bullish, as the alt-coin has gained the interest of the retail investors and not the institutional investors unlike it’s peer Bitcoin Speaking of which, after the break we’ll investigate into the phenomenon of Bitcoin Halving
So please keep watching @@@@@@@@@ @@@@@@@@@ Welcome back and thanks for joining us in our last segment on today’s edition of Crypto Buzz by Kalkine TV I’m your host Sage Sad but true but Satoshi Nakamoto the elusive inventor of Bitcoin has fixed it’s supply at 21 million In the aim to map out what creates value for Bitcoin the genius inventor, who has not been found to this day, has included this in the “white paper” origination document – Bitcoin Halving
This is where Bitcoin halving lessens the amount of bitcoin that can be mined, through each block, making bitcoin highly scarce which in turn translates into high value So how does this functionality create incentives for Bitcoin mining I hear you ask? Bitcoin halvings have been seen as the pre-cursor to massive surges in the price of bitcoin This is the incentive the miners need, although the rewards are halved to the miners, the price surge still is the motivation behind mining the digital currency Which involves solving complex mathematical puzzles, which every fortnight approximately or 2016 blocks, the algorithm of the cryptographic puzzles are either made more difficult or easier to solve This change in hashrate can also be seen to co-relate with the price of Bitcoin, especially on a large scale
For example, when large networks of Bitcoin miners are shutdown, like what recently happened in China Let’s take a walk down Bitcoin’s memory lane to see how Bitcoin halving has historically altered it’s price But halving is not the only factor that should be considered when attempting to analyse the price of Bitcoin 2012 was the event of the First halving this saw the price rise from $11 to $12, yet in the following 12 months the price jumped to $1,100 In 2016, after the completion of 420,000 blocks
Bitcoin’s price bounced between $500-$1,000 for some time before December 2107 when it surged to $20,000 Only recently in May 2020, occurred the Third halving, again this marked a bull run for bitcoin Which saw the price move from $9000 in May to reach $20000 in December 2020 Bitcoin mining indexes have been used to give investors some indicators to help forge correlations and patterns in the price movement of cryptocurrencies The common Bitcoin Mining Indexes are Miners’ Position Index (MPI) and the Total Miner Halving Capitulation Index as well as the Bitcoin Price Index
To add to the fray, Luxor Technologies has launched a new index product, which appears on Luxor’s “Hashrate Index,” inclusive of 50 publicly traded companies who are stakeholders in the mining of cryptocurrencies This is in the aim to provide the public with a ledger on the sentiment of mining The Hashrate Index newly created by Luxor will be a medley of purely crypto mining companies and those that have a stake in them, including chip manufacturers and foundries As we continue down the rabbit hole of cryptocurrencies, we find more clues along the treasure hunt, that add to our knowledge in how to navigate the investment of cryptocurrency in order to hopefully make a profit and add to the bounty Although cryptocurrency investment is becoming more accepted even by financial advisors with public pensions and superfunds including them for the investment of their clients
The energy intensiveness of the process is still a deterrent for some Good news is that Viridi Funds has unveiled a sparkling new ETF, on the ticker as RIGZ the Viridi Cleaner Energy Crypto-Mining and Semiconductor ETF is an actively managed fund with a 090% expense ratio The financial vehicle will contain a basket of stocks that is 80% green miners and 20% semiconductor companies Thanks for joining us on another episode of The Crypto Buzz by Kalkine TV
I hope you enjoyed our presentation and look forward to your company next week, as always on the Tuesday afternoon Stay watching Kalkine TV for more live market updates bringing you news on the economy and diverse themes and sectors This is Sage signing off
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