Blockchain

Celsius, a popular lending platform, has made significant moves in staking Ethereum (ETH) as they stake almost $1 billion worth of the cryptocurrency. According to the Blockchain intelligence company Arkham Intel, In the past 24 hours alone, Celsius has staked over $600 million worth of ETH, with no signs of slowing down. This represents a massive on-chain flow, and the rate of deposits continues to increase.

Celsius Goes All-In On ETH

Celsiu’s address was the largest withdrawer when Lido (LDO) opened withdrawals in mid-May, withdrawing over 400,000 ETH, worth $800 million. They held this ETH in the ‘Unstaking’ wallet for two weeks, declaring their intent to stake with institutional provider Figment instead.

Around 24 hours ago, Celsius separated the ETH from the unstaking wallet into two separate deposit wallets. One wallet is marked Celsius’s ETH2 Deposit wallet, while the other wallet is labelled “Staked ETH” and deposits to Figment. Celsius’s staking wallet has seen over $400 million worth of ETH inflows over the past 24 hours, with continual deposits made every few minutes.

Figment is a staking and infrastructure provider for blockchain networks, including Ethereum. The company provides institutional-grade staking infrastructure and tools for investors and companies looking to participate in the proof-of-stake (PoS) networks.

Furthermore, the infrastructure provider offers a range of staking services, including delegated staking, which allows investors to delegate their tokens to a validator node to generate rewards without having to run their own node. The company also provides a range of developer tools, APIs, and analytics to help users better understand and manage their staking activities.

Morevoer, the wallet provided to Celsius by Figment has seen over $215 million worth of ETH. In total, Celsius has deposited over $600 million worth of ETH, with the Celsius Staking wallet still holding over $150 million worth of ETH, and around $60 million worth of ETH left in the wallet they used to unstake from Lido.

This means that Celsius still has a significant amount of ETH that they can potentially stake with another provider or use for other purposes. It also highlights the confidence that Celsius has in the staking services provided by Figment, as they have entrusted them with a large amount of their ETH holdings.

Celsius’s move to stake such a large amount of ETH is a testament to the growing trend of staking in the crypto market. With more investors looking for ways to earn passive income on their holdings, staking is becoming an increasingly popular option. As more companies like Celsius enter the market, it can be expected to see even more growth in the staking sector in the coming months and years.

Ethereum Market Poised For Major Move

On the other hand, crypto analyst Jackis has recently shared insights on the current state of the Ethereum market, stating that there is potential for things to get exciting very soon. Despite the market remaining stagnant over the past few weeks, Jackis believes that Ethereum could be gearing up for a major move.

According to Jackis, Ethereum has broken out of its downtrend and has successfully retested the breakout demand. If the cryptocurrency manages to flip the $1,887 resistance level, then there could be nothing stopping it from retesting the yearly range high at $2030.

If Ethereum manages to reach and surpass this level, it could potentially continue to climb higher, possibly even reaching new yearly highs later down the line.

At the time of writing, Ethereum, the second-largest cryptocurrency by market capitalization, is trading at $1,905, which represents a 2% surge in the last 24 hours. It is yet to be seen if Ethereum can consolidate above this key level to breach the psychological barrier of $2,000 and continue its upward trend.

Featured image from Unsplash, chart from TradingView.com 

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Bitcoin, the world’s most valuable cryptocurrency, is going green, and the pace at which the network has reduced its carbon emissions in the past three years has been noted by climate activists. Nonetheless, how this could impact BTC prices and attract technology firms like Tesla, the electric automobile manufacturer, is yet to be seen.

Carbon Emission Associated With Bitcoin Miners Rapidly Falling

As of late May, on-chain data from Woonomic shared by Daniel Batten, a climate technology investor, and activist, noted that the amount of Carbon emission associated with Bitcoin mining has fallen by nearly 50% from 601g/kWh to 299g/kWh in three short years.

It should be observed that the Bitcoin hash rate and prices have been rising steadily during this time. In the last quarter of 2021, the Bitcoin price soared to as high as $69,000 before collapsing to below $16,000 in November 2022. Although prices have since recovered, soaring to as high as $31,000 in April 2023, the hash rate has been steadily rising over the years. 

In proof-of-work networks like Bitcoin and Litecoin, the hash rate relays the computing power dedicated to the network in real time. It is a variable that makes the network secure and robust against third-party attacks, and can also be used to gauge the pace at which the Bitcoin platform consumes energy.

Miners channel computing power as “hash rate” to secure the Bitcoin network. They need this to verify transactions in exchange for network rewards. The more the hash rate, the higher the chance of earning a block and, thus, the 6.25 BTC every 10 minutes. 

However, the tough competition for the block rewards has been partly blamed for environmental degradation and carbon emissions from miners. To stay competitive, Bitcoin miners have to operate gear that is energy-intensive. Critics have always maintained that electricity powering them is from coal and other non-renewable sources.

As of June 2, the Bitcoin Energy Consumption Index shows that 105.23 TWh powers Bitcoin. It is the same amount of electricity consumed by Kazakhstan. The resulting Carbon emission, they add, stands at 58.69 Mt CO2, comparable to that emitted by Libya.

However, data from the Bitcoin Mining Counsel, a group comprised of some of the largest BTC miners in the world, provides more insight into the cryptocurrency’s energy consumption after conducting a study on its members:

(…) the members of the BMC (Bitcoin Mining Council) and participants in the survey are currently utilizing electricity with a 63.8% sustainable power mix. Based on this data, the global bitcoin mining industry’s sustainable electricity mix has improved marginally to 58.9% and remains one of the most sustainable industries globally.

Will Green Mining Support BTC Prices?

In that sense, Woonomic data coincides that emissions have fallen drastically over the last three years. It has nearly halved to 299g/kWh, suggesting miners switched to greener energy sources to power their rigs.

Technology companies would likely consider adopting BTC as payment as carbon emissions fall. Earlier, Tesla reneged on their decision to accept BTC for payment, citing the impact of Bitcoin mining on the environment. With Carbon emissions decreasing, this could positively impact BTC as major entities worldwide will embrace the coin and network.

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In his latest report titled “Crypto Outlook, June 2023,” Bloomberg’s Senior Macro Strategist, Mike McGlone, predicts more pain ahead for Bitcoin (BTC) and the broader cryptocurrency market. McGlone argues that despite a rebound in prices in 2023, the risks for the Bloomberg Galaxy Crypto Index remain tilted downward.

Is Bitcoin Doomed?

According to McGlone, cryptocurrencies face several headwinds, including the potential for a US recession, a potential stock bear market, vigilant central banks, and high interest-rate competition. These factors, combined with the speculative excesses that led to the 2021 peak, suggest that the outlook for the crypto market is bearish.

Furthermore, McGlone points out that Bitcoin weakening in May, along with copper and equities in China, is unusual compared to the stalwart Nasdaq 100 Stock Index. While the potential for the Nasdaq to lift all boats exists, it may contrast with still-rising Fed rate-hike expectations. 

Additionally, McGlone suggests that Bitcoin, which is often referred to as digital gold due to its perceived status as a store of value, may not be able to outperform the traditional safe-haven asset in a US economic contraction. This is because Bitcoin is still relatively young compared to gold, which has been used as a store of value for thousands of years. As a result, investors may be more likely to flock to gold during times of economic uncertainty, rather than newer assets like Bitcoin.

Moreover, plunging commodities, producer prices, and bank deposits may serve as deflationary omens of the lags to Federal Reserve tightening. These factors suggest that the risks for the Bloomberg Galaxy Crypto Index are tilted downward, and investors should be cautious.

As reported by NewsBTC on May 22nd, Mike McGlone highlighted the historical patterns of boom and bust in Bitcoin, which are closely tied to liquidity. According to McGlone, Bitcoin’s current price level of around $27,000 may be at risk of reversion, considering that it was only $7,000 at the end of 2019 before the massive liquidity pump in 2020.

McGlone’s analysis also indicates that Bitcoin’s downward trajectory, as demonstrated by its 52-week moving average, contrasts with the upward trend it experienced at the onset of the pandemic. This suggests that the cryptocurrency is susceptible to booms when liquidity is abundant but vulnerable to busts when liquidity is removed.

McGlone’s latest analysis aligns with his previous thesis that the outlook for Bitcoin and the broader cryptocurrency market is bearish, given the potential for a US recession, a potential stock bear market, vigilant central banks, and high interest-rate competition. 

Is BTC About To Take Off?

On the other hand, Crypto Con, a well-known crypto analyst, has recently expressed his continued bullishness on Bitcoin, citing the Pi Cycle Top indicator as evidence of the cryptocurrency’s potential for a continued uptrend.

According to Crypto Con, the Yellow 111days Moving Average (MA) has started to uptick, indicating that Bitcoin is experiencing a positive trend. Additionally, Bitcoin has been retesting the 111DMA line as support, rather than continuing on a parabolic trajectory, which is typically a sign of a market top.

 

Crypto Con acknowledges that sometimes the bounce can take some time, but he maintains that this is nothing but bullish for Bitcoin. This is because the Pi Cycle Top indicator is a reliable tool that has historically predicted major market tops and bottoms in the cryptocurrency market.

The Pi Cycle Top indicator measures the relationship between the 111DMA and the 350DMA, and when the two lines cross, it can suggest a potential market top or bottom. The fact that the Yellow 111DMA is showing an uptick suggests that Bitcoin may be headed for a market bottom, which is a bullish sign for investors.

At the time of writing, the largest cryptocurrency by market capitalization, Bitcoin, is trading at $27,000. Over the past 24 hours, BTC’s price has remained relatively stable, exhibiting sideways price action with a minor increase of 0.1%.

Featured image from iStock, chart from TradingView.com

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Here are the pricing model lines that Bitcoin might have to stay above if the bullish momentum of the cryptocurrency has to continue.

These Bitcoin Pricing Models Are Currently Near The Spot Price

In a new tweet, the on-chain analytics firm Glassnode has pointed out how the three pricing models, the adjusted realized price, the short-term holder cost basis, and the 200-week MA, are all close to the asset’s value right now.

To understand the first and second models here, the “realized price” needs to be looked at first. The realized price is a pricing model derived from the realized cap, which is a capitalization model that assumes that the “real” value of each coin in the circulating supply is not the spot price, but the price at which it was last moved.

When this cap is divided by the total number of coins in circulation, the average cost basis or acquisition price in the market is obtained. This value, which the average holder on the network bought their coins at, is known as the realized price.

Now, the first pricing model, the “adjusted realized price,” is a modification of this indicator that drops from the data all holders who haven’t moved their coins since more than seven years ago.

Such old supply usually consists mostly of the coins that have been lost (perhaps due to the wallet keys no longer being accessible), which means that this part of the supply wouldn’t be relevant to the current market, hence why the indicator cuts it out.

As for the second model of interest here, the “short-term holder (STH) cost basis,” this metric keeps track of the realized price of specifically the investors who have been holding their coins since less than 155 days.

Here is a chart that shows how these Bitcoin pricing models have compared with the spot price during the past year:

As displayed in the above graph, the Bitcoin adjusted realized price currently has a value of $25,300, while the short-term holder cost basis has a value of $26,000.

Historically, these models have acted as both resistance and support for the price, depending on the wider trend. In bullish periods, they usually act as support so it’s possible that if the price drops deep enough to hit them, a rebound may happen.

The third line on the chart, the 200-week moving average (MA), is a model that aims to find the baseline momentum of the four year Bitcoin cycle. This line has also had some similar interactions with the price as the other two models.

The 200-week MA has a value of $26,300 right now, implying that it’s currently the closest line to the spot price. It now remains to be seen how the price interacts with these lines, starting with the 200-week MA, if a drawdown extended enough happens.

A successful retest of these lines would naturally be a positive sign for the rally, but a drop under them may be a signal that a transition back towards a bearish regime has occurred.

BTC Price

At the time of writing, Bitcoin is trading around $27,000, up 1% in the last week.

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In a recent post, Ripple CTO, David Schwartz, explained Automated Market Makers (AMMs) – a vital component in the decentralized finance (DeFi) framework, and their trading strategies for profit.

Schwartz states that AMMs thrive when an asset is volatile but does not change its price direction much. Schwartz explained further that an asset whose volatility exceeds its long-term trend would have a positive average percentage movement. However, if the long-term trend is negative, it will reduce the average slightly and vice-versa. 

It’s Not Difficult to Create A Trading Strategy, Ripple CTO

According to the Ripple CTO, it is not difficult to create a trading strategy to track the average percentage movement of an asset. 

He further explained that the trading strategy of an AMM is advanced compared to a simple trading strategy and focuses on price volatility.

Schwartz, however, added a disclaimer at the end of his analysis. He stated that the AMM trading strategy only works for an AMM between an asset with a fixed price and one whose price is volatile enough to overcome its long-term trend. 

Also, he believes that although AMM works even when the assets don’t meet the stated conditions, their behavior is different. From his analysis, a notable deviation will only occur with a long-term negative price movement that exceeds the volatility.

Crypto Enthusiast Reacts To Analysis

Reacting to Schwartz’s AMM analysis, Molly Elmore asked if XRP would be the asset with a fixed price paired with every other asset on the XRP ledger (XRPL).

In response, Schwartz stated that the AMM is not exclusive to XRP and can function between any asset pair. However, the trading strategies will differ mathematically if both assets are volatile. 

Citing the BTC/XRP pair as a reference, Schwartz stated that although both assets are volatile, the pairing is still great.

Additionally, he stated that if you are bullish on XRP and BTC, investing in an XRP/USD AMM implies holding much USD that can go up.

Notably, holding shares of an XRP/BTC AMM captures more of the upward price movement of XRP and BTC if the bullish sentiment is correct.

Schwartz continued his analysis, stating that if XRP and BTC’s price doubles, an XRP/USD AMM has a worst-case (no volatility and no market making) yield of around 40%.

In comparison, an XRP/BTC AMM has a worst-case yield of 100%. On the flip side, Schwartz noted that the outcome is worse if your bullish sentiment is wrong. 

If both XRP and BTC reduce by 50%, the worst case loss is 50%, while for an XRP/USD AMM, the worst case loss is about 30%. So he believes XRP USD is safer while XRP/BTC is volatile. Schwartz noted that his analysis seemed complex and explained further in a tweet. 

He stated that AMMs charges trading fees, and volatility causes people to trade with AMMs. Therefore, AMMs turn volatility into fees.

Featured image from Pixabay and chart from Tradingview.com

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Bitcoin is recording minor profits on higher timeframes but has been unable to display significant price action. In this context, volatility is reaching a record low, but the status quo could suddenly shift in the short term.

As of this writing, Bitcoin trades at $27,100 with sideways movement in the last 24 hours. In the previous week, BTC recorded a 3% increase, while other assets in the top 10 by market capitalization show similar performance, with XRP and MATIC leading the small uptick.

The New And Old Status Quo, Bitcoin’s Path Towards New Highs

Per a recent report from the trading desk of QCP Capital, the macroeconomic landscape has become clear as political actors in the U.S. reached a compromise on the Debt ceiling. The narrative around this event was triggering uncertainty in the financial sector.

Increased uncertainty contributed to the decline in volatility and the sideways movement across risk-on assets, including Bitcoin. In that sense, QCP Capital claims that BTC is following a trajectory similar to 2020 when uncertainty in the macro scene and the crypto market emerged from a long winter.

At that time, the cryptocurrency declined to a critical level and displayed sideways movement throughout the year. As seen in the chart below, Bitcoin has not only behaved as it did in 2020 but trended upwards later that year.

QCP Capital expects BTC to perform following this fractal, with a break in the sideways price action coming soon. The trading desk noted:

This consolidation has played out perfectly so far, but we expect that we are soon coming close to the end sometime this month. As a result, we recommend positioning for an upcoming big move through long 3m and 6m strangles here, with a bias to the long call side.

BTC To Vibe With The Season

The decline in volatility has led to a decrease in the price of BTC options. Therefore, QCP Capital believes building a BTC position with a long bias using these financial products could be fruitful.

As seen in the chart below, volatility for the 3 months at the money (ATM) options are moving with historical data. Before the summer and until late June, volatility trends lower before recording an explosive move.

This year, the move is to the upside, according to QCP:

Seasonality on the implied vol market over the past 4 years also argue for a sharp June rally before the summer lull (Chart 4). This is in line with macro market seasonalities as traders rush to adjust positions in June before their summer breaks.

Cover image from Unsplash, Chart from Tradingview

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What is cryptocurrency investment?

Cryptocurrency investment in its most basic form is the process of buying digital currencies and holding them in the hope that the market falls in your favour while your portfolio increases in value.

The value of a cryptocurrency is determined by the principle of supply and demand. As demand for a cryptocurrency, coin or token rises, there becomes fewer of them in circulation — resulting in a boom in price action. If the supply of coins outpaces demand for them, their value typically falls.

There are several indicators that might draw an investor towards a particular cryptocurrency. Some investors and traders choose which cryptocurrencies to invest in by conducting a technical analysis of a range of coins.

An investor might have certain criteria that need to be met to invest. For example, cryptocurrencies that are in an overall uptrend, are showing positive signs of adoption and have a durable, scalable blockchain interface are more desirable than those that don’t.

Common types of crypto investing

There are many ways to invest in cryptocurrency, besides directly purchasing coins or tokens through an exchange.

Some of the common types of crypto investing include:

Investing in crypto-oriented or pro-crypto companies ­— As the prices of cryptocurrencies soar, so does the stock price in companies that form their business around them. Companies that are able to integrate cryptocurrency blockchain networks into their service offering can prove profitable as cryptocurrency use becomes more widespread.

Investing in crypto-heavy funds — Crypto funds typically carry less risks than committing capital to one specific cryptocurrency. As some cryptocurrencies bull and others bear (decrease or increase), fund holders can still benefit from having their losses hedged by their gains — making them attractive to more risk-averse investors.

Buy crypto EFTs on a brokerage platform — Similar to crypto funds, EFTs can also be a great way diversify a portfolio without committing large amounts of capital. The price of an EFT is determined by the price action of a group of coins or tokens rather than just one — making it a safer option for novice investors.

Incorporate cryptocurrency into your Roth IRA or 401K — More and more brokerages and investing platforms are allowing cryptocurrency allocations to be held in an IRA or 401K account. For example, Fidelity is unveiling plans to allow users to dedicate 20% of their 401k holding to cryptocurrencies — allowing investors to diversify their 401k.

What do I need to know before investing in cryptocurrency?

Before plunging into the world of cryptocurrencies, there are a few things to consider:

Cryptocurrencies are unregulated and decentralized — Despite being one of the allures that draw investors towards cryptocurrencies, their decentralization can make them potentially dangerous. The threat of scams and fraud can make it a risky asset to hold.

They’re known for huge fluctuations in price action — Bitcoin, Ethereum and many other altcoins are extremely volatile. Because their price is determined largely by hype and speculation from coin makers and blockchain developers, it’s difficult for investors to gauge the long-term profitability of cryptocurrency investments.

Exercise caution when dealing with ICOs — Similarly to how companies have an initial public offering (IPO) for their stock price when they first go public, emerging cryptocurrencies start out the same way — offering what’s known as an initial coin offering (ICO). Investors must be wary of these as they’re known for their limited transparency when it comes to development progress, user adoption and potential issues, so investors may risk buying into pump and dump schemes.

Only invest amounts you’re comfortable losing — Because of their inherent volatility — and lack of data to support consistent long-term growth potential — it’s important investors only invest small portions of their portfolio into cryptocurrency when starting out.

Protect your private key — If you’re using a cold or hot wallet to store your cryptocurrency, you’ll need a private key – an alphanumeric code that acts as a password. Protecting this key is paramount to guarding your investments as criminals can steal it and walk away with your assets.

Choose the best coin exchange, broker or wallet to suit you — Whether you’re a long-term or short-term investor — or even a day-trader – selecting a broker or exchange that works best for your needs is essential. Investors must consider the features of the site — like what currencies are available, what you can buy and sell and leverage options — as well as transactional costs that are more suited to their investment style.

What do I need to invest in cryptocurrency?

Investing in crypto is simple and easy to do. All you need is some liquid capital — in the form of a fiat currency like dollars or pound sterling — and an account with a broker or crypto exchange.

To get started, you need to:

Choose a broker or exchange that best suits you — this might mean selecting one with an easy-to-use interface if you’re just starting out.
Create your account, verify your details and link it to your bank account.
Deposit the amount of fiat currency you’re willing to invest/risk.
After having assessed the market for a cryptocurrency that has taken your interest, place an order to purchases some, select the amount you’d like to invest and confirm the order.
Store your cryptocurrency — you can do so in:
Hot wallets — Usually on portable devices like laptops and phones, hot wallets are constantly connected to the internet. Although they boast the convenience of always being connected, they’re an easier target for hackers.
Cold wallets — These wallets are disconnected storage units that hold your cryptocurrency once it’s been procured. Because they’re disconnected, they’re only at risk when they connect, giving hackers a limited window of opportunity.
The brokerage account — If you don’t mind keeping portfolios separate, you can just store your entire cryptocurrency holding within your brokerage account.

However, before committing funds to cryptocurrency investments. It’s important to study the fundamentals of investing to limit the risks.

Pros & cons of investing in cryptocurrency

There are many advantages and disadvantages to investing in and trading cryptocurrency — all of which need to be considered by new investors when opening up an account.

Pros of investing in crypto

Potential for high gains — Because of the volatile nature of cryptocurrencies — and the uncertainty surrounding their implementation — they have incredibly high growth potential, meaning a possibly stellar return potential for investors. Cryptocurrencies have been the highest performing assets of the last five years — with Bitcoin and Ethereum growing 1000% and 500% respectively in that time.
Government-resistant store of value — Unlike the Federal Reserve — which has the ability to inflate currencies in response to crisis — cryptocurrencies are governed by their own supply and demand markets, meaning they resist fluctuations in fiat currencies. Cryptocurrencies typically have a limited number of coins in circulation, whereas the Federal Reserve can simply print more money.
It’s a great way to diversify your portfolio — In addition to commodities like gold and silver that are a natural hedge against inflation, cryptocurrencies have shown extremely good profit potential that weathers the storm of financial crisis — helping you reduce risk in your long-term investment portfolio.
Accessible 24/7 — Unlike stock markets — that have investing and trading windows to make deals — cryptocurrency markets are open 24/7. This lets investors place orders, take profits and monitor trends at any time.

Cons of investing in crypto

Market is incredibly volatile — Cryptocurrencies are extremely unregulated — much of the price fluctuations in the crypto market are governed by speculation based on cryptocurrency owners’ perceptions of their own coins and future projections. With volatility comes the potential for extremely high gains but also substantial losses if they make up too much of your portfolio.
Their long-term success is yet to be proved — Despite notable coins like Bitcoin and Ethereum booming in value, many alt coins have seen a peak and have struggled to return to their five-year highs. It’s still unknown if they’re a strong investment or a bubble waiting to burst, leading to recurring economist questioning as to whether the market will survive.
It’s confusing for new investors — Navigating the world of cryptocurrency investments, CFDs, leveraged trading and misinformation can lead to substantial losses for those starting out. It’s critical for those investing to understand the markets and not throw their capital in straight away.
Targets for security breaches — It’s no secret that the high-value cryptocurrencies locked away in digital wallets are targets for criminals. Phishing attacks on wallet holders and misplaced security keys can give malicious actors instant access to your crypto portfolio, letting them transfer funds from unsuspecting users.
Investors must contend with online misinformation — “Get rich quick” schemes and inflated predictions of the success of a cryptocurrency can cloud the judgement of novice investors. With stocks, there is more information to work with including revenue, EPS ratings, price-to-earnings ratios and compound annual growth rate (CAGR) that let users make informed decisions — where cryptocurrency is more speculative due to its infancy.

Understanding crypto market volatility and risk management

Because there is little in the way of regulation and oversight in the crypto market, prices are governed solely by speculation.

While significant movements — like technical advancements in a cryptocurrency’s blockchain infrastructure — can cause buzz and rallies of a particular cryptocurrency, its popularity is largely dictated by cryptocurrency owners inflating the strength of their own coins.

To hedge against volatility, investors and traders can make use of certain features on coin exchanges and brokerage sites to limit risk.

For example, experienced investors will look to:

Use crypto as a diversifier — Rather than betting their entire portfolio on cryptocurrencies booming in price, they’ll only allocate a small portion of their assets to cryptocurrency. With their money in many types of investments — like stocks, commodities and indices as well as cryptocurrency — they’re able to benefit from micro gains in each sector and limit losses.

Limit the use of CFDs and leverage — CFDs and Leverage lets investors take up much larger positions on the stock market than their capital might allow. This can mean higher gains but also substantial losses should they crash. A controlled, cautious approach to leveraged investing can help limit those losses.

Manage emotion — If you’re new to crypto investing, it can be easy to get swept up in the emotional side of investing — especially if a bear market hits your portfolio particularly hard. Experienced investors understand that the market moves only in response to supply and demand, making It easier for them to cash out and change tactics in response to market changes with a cool head.

Work to a timeline — Experienced investors stick to a long-term plan — they don’t just throw money at cryptocurrencies in response to trends. Their investments are based on data-driven predictions, price graphs and technical and fundamental analysis. This lets them buy, hold or sell at more optimal times than people that panic buy.

Tips for investing in cryptocurrency

Investing in cryptocurrencies can be daunting — especially for those with limited understanding of market fundamentals.

Here’s a few tips to bear in mind as a novice investor.

Make use of “stop losses” and “take profit” levels

“Stop loss” and “take profit” are price ranges determined by the investor. Once these levels are set in place, the broker or exchange will automatically sell their investments to help an investor limit their losses and cash out on profits when they aren’t able to manage their assets themselves — say when they’re at work.

If you’re starting out, or have limited disposable capital to play with, these limits are an integral part of preserving it — especially in volatile markets.

Use an exchange rather than a broker

Cryptocurrency exchanges typically have lower transaction and holding fees than brokers. This makes them better options for long-term investors.

Remember that the markets are constant

Cryptocurrency markets never sleep — they operate 24 hours a day, seven days a week.

As well as your stop losses and take profit levels, it may be worth using tools to automate [DS1] your investments, so you don’t lose money on a sudden downturn.

Consider using a paper account

If you’re new to investing and want to get to grips with the market and understand how to navigate an exchange’s interface, you can open a paper account.

This lets prospective users trade and invest in cryptocurrencies and stocks with fake money and safely test out strategies and monitor markets risk-free.

You can make money when the market bears

As the old adage goes — buy low and sell high. However, with modern exchanges and brokers, you can make money as a cryptocurrency depreciates.

Often known as “shorting”, you can take up positions on the market that bet against a cryptocurrency. However, this is typically used by more experienced investors.

Frequently Asked Questions (FAQs)

Is crypto a good investment?

There is much debate about the long-term growth potential of established cryptocurrencies, tokens and altcoins.

While there is potential for high gains, investors also risk substantial losses, so they’re better suited to less risk-averse individuals. However, they have proven to be a great hedge against inflation, making them a viable addition to a diverse investment portfolio.

How much should I invest in crypto?

As a general rule, no more than 20% of your portfolio should be invested in any one market sector.

For beginners, it’s advised to invest slightly less of your portfolio in cryptocurrency given the volatile nature of the markets.

How much should I put into cryptocurrency to make money?

You don’t need a lot of starting capital to invest in cryptocurrencies and make money.

Although established coins — like Bitcoin and Ethereum — are priced in the thousands, brokers and exchanges let users invest in coins to the value of their capital.

This means if you only have $100 to invest, you can still invest in Bitcoin and you’ll receive the equivalent value for your portfolio.

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Justin Sun, the founder of the Tron blockchain, has announced that the Tron network’s native asset, TRX, can now be fully accessed on Ethereum (ETH), the largest altcoin network in the cryptocurrency industry. This has been made possible through the BitTorrent Bridge, which allows for seamless interoperability between the two blockchains.

 BitTorrent Bridge Paves The Way To Ethereum Integration

Interoperability in the context of blockchain refers to the ability of different blockchains to communicate and exchange information with each other seamlessly. In this case, the BitTorrent Bridge enables Tron’s native asset, TRX, to be transferred and accessed on the Ethereum network, and vice versa.

Related Reading: Litecoin Breaks $95 As Whale Transactions Spike

This means that TRX holders can now access the larger Decentralized Finance (DeFi) market and decentralized applications (dapps) available on Ethereum, while Ethereum users can now access TRX and its associated dApps on the Tron network. The BitTorrent Bridge acts as an intermediary between the two blockchains, facilitating the transfer of assets and data in a secure and decentralized manner.

The move is a significant development for the Tron ecosystem, which is currently the second-largest DeFi ecosystem with over $5.6 billion in total value locked and more than 2.9 million active users, according to DeFiLlama data.

Justin Sun’s tweet regarding the Ethereum expansion via BitTorrent Bridge has already had a positive impact on TRX’s price, with the asset jumping by 2% following the announcement. This further demonstrates the potential for Tron to expand its reach and appeal to a wider audience in the cryptocurrency industry.

With Tron’s expansion to Ethereum, the cryptocurrency industry continues to see the growing importance of interoperability between different blockchains. As more projects explore the potential of cross-chain functionality, the industry is likely to see further development and innovation in the coming years.

TRON Sets New Daily Transaction Record

Despite the challenges faced by the cryptocurrency industry in recent months, TRON has continued to perform strongly, defying expectations and posting impressive growth. According to a Twitter thread by Justin Sun, the network hit a new record high in daily transactions, processing over 10 million transactions in a single day.

Furthermore, Sun notes that the robust performance of the TRON network is a result of its quality and efficiency, as well as its ability to continuously improve and deliver concrete results.

Looking ahead, TRON has set an ambitious target for the year, aiming to double its transaction volume. Sun emphasizes that this increase is not just a measure of quantity, but also a reflection of the network’s ability to maintain its strong fundamentals and generate revenue even in a challenging market.

Moreover, the growth in TRON’s transaction volume is expected to further bolster protocol revenue and demonstrate the strength of the TRON ecosystem. As the cryptocurrency industry continues to evolve and face new challenges, TRON is positioning itself as a leader in the space by focusing on innovation, efficiency, and delivering results.

Featured image from Unsplash, chart from TradingView.com 

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Litecoin has recently managed to break past the $95 mark as on-chain data shows the whales have become active on the network.

Litecoin Has Surged After Spike In Whale Activity

According to data from the on-chain analytics firm Santiment, the current whale activity is the highest it has been since January. The relevant indicator here is the “whale transaction count,” which measures the total number of transfers taking place on the Litecoin network that involve the movement of coins worth at least $100,000.

Since such transactions are quite large in scale, generally only the whale entities are capable of making them. Thus, this indicator can provide us with an idea about the number of transfers that these humongous holders are making on the blockchain.

Due to the sheer number of coins involved in each of these transfers, if a large amount of them take place at once, the market can register noticeable fluctuations. So, whenever the whale transaction count has a high value, the price of LTC becomes more probable to display volatility.

On the other hand, when this metric has low values, the price may stay relatively calm, as it suggests that the whales aren’t making too many moves on the market right now.

Now, here is a chart that shows the trend in the Litecoin whale transaction counts over the last six months or so:

As shown in the above graph, the Litecoin whale transaction count has observed a large spike recently. This means that whales have ramped up their transfer activity in the last couple of days.

At the peak of this spike, the indicator had reached its highest level since January 26, 2023. These high values have come as the price has been going up, and since they have taken place, the uptrend has only continued further, with LTC managing to break past $95.

Generally, when whales become active, the price volatility can go either way as the transaction count metric only tells us about the pure number of transfers happening on the chain and not about whether they are buying or selling moves.

However, as the price has seemingly continued to rise following this latest spike, it may appear that the Litecoin whales could be supportive of the current uptrend.

The chart also includes the data for the transaction volume, which is a measure of the daily total amount of LTC that is registering some movement on the blockchain.

This indicator has also seen a rapid increase recently, suggesting that users are moving around large amounts on the network currently. Such a trend is generally a sign of activity being high throughout the network and is often constructive for the price.

This new surge in the price of Litecoin has come as the halving, an event where the coin’s block rewards will be permanently cut in half, is just a couple of months away now.

LTC Price

At the time of writing, Litecoin is trading around $95, up 9% in the last week.

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Bitcoin and the broader cryptocurrency market have been trending sideways for the last month with no indication of an upside at this point. However, not everyone is bearish on the market as Galaxy Digital CEO Mike Novogratz expects the market to turn bullish soon, and he gives reasons for why he believes this will happen.

Reasons Why Bitcoin Will Begin A Bull Rally

Novogratz was interviewed on CNBC’s Squawk Box on Thursday, June 1, where he gave his opinions on the Bitcoin and crypto market and where he expects the market to go. Contrary to the current market trend, the CEO remains very bullish on the digital asset and expects a bull trend going off some developments in the market right now.

He pointed toward the rising adoption from Asia as countries such as Hong Kong begin opening up new ways for retail investors to participate in the market. Not only this but the largest social messaging platform in China, WeChat, began offering Bitcoin price data to users, allowing them to check the current price of BTC in yuan.

Both of these, Novogratz says, will be a catalyst for the bitcoin bull market. “Crypto’s lackadaisical right now. There’s a constant bid from retail. We’re seeing it through all the platforms,” the Galaxy Digital CEO told CNBC.

Expecting A Turn From The Federal Reserve

In his interview, Novogratz also points to the fact that he expects that the Federal Reserve will change direction later this year, which he believes would be good for Bitcoin. As the Fed maintains its hawkish stance to tackle inflation, risk assets such as stocks and BTC continue to suffer but this could quickly change if the Fed becomes dovish.

The CEO expects this to happen sometime in October 2023 and this, he says, will trigger a bull run for digital assets in the space. As the Fed drops interest rates, so will interest in Bitcoin rise, leading to a rapid surge in price. Given this, Novogratz expects investing in Bitcoin to be a better decision than buying a one-year T-bill.

As for institutions, he points to the fact that they have reduced their participation in the market but this does not mean they’re gone. Novogratz believes the institutions will return to the second when “one of two things happens. You either need settled and sensible rules in place for crypto. Or you need the Republicans to win next year’s U.S. elections.” He further added that “Crypto has almost overnight become a crazily partisan issue, which is exactly what the industry didn’t want or need.”

At the time of writing, Bitcoin is still struggling in the market, trading at $27,087 with meager gains of 0.77% in the last day.

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