Blockchain

With the Bitcoin halving event drawing near, Data from crypto industry research and analytics platform, CryptoRank.io, has recently revealed that a significant majority of its users – 79% – are bullish about the upcoming halving, while 21% have bearish skepticism.

This sentiment echoes the historical trend where previous halvings have catalyzed bullish rallies in Bitcoin’s price.

Bitcoin Halving Countdown And Price Trajectory

The Bitcoin halving, less than 100 days away, is a pivotal event in the crypto world. This process happens approximately every four years, and the reward for mining Bitcoin blocks will be halved.

This reduction in supply has historically led to price increases, with the previous halving in 2020 resulting in a 401.1% rise in Bitcoin’s price, according to CryptoRank.io. The anticipation of a similar price boom is palpable as the crypto community closely watches the countdown to this significant event.

Less Than 100 Days Left Until Bitcoin Halving

In just 14,117 blocks, #Bitcoin will reach the next milestone: the block reward will be cut by 50%. This event could be another catalyst for $BTC price growth.

Almost 79% of CryptoRank users are bullish on #BTC halving! What do… pic.twitter.com/R9442lfDEF

— CryptoRank.io (@CryptoRank_io) January 15, 2024

Despite the optimistic sentiment towards the halving, Bitcoin’s recent price action tells a different story. Following the initial excitement around the launch of spot Bitcoin ETFs, Bitcoin has been experiencing bearish price action.

In the past week alone, the cryptocurrency has seen a nearly 10% decline, eroding its gains after spot ETF approvals. This price behavior suggests a cooling off of the spot ETF hype and a period of consolidation in the absence of significant news or developments.

However, Bitcoin is currently hovering above the $43,000 mark, showing a minor recovery in the last 24 hours with a 1.8% increase.

BTC Price Prediction

This current price movement has not dampened the long-term bullish outlook of many analysts. Figures like Ash Crypto, a notable voice in the crypto trading community, advise a long-term perspective.

Ash Crypto’s has recently shared an analysis drawing parallels between Bitcoin and gold, suggesting that if Bitcoin emulates gold’s post-ETF market cap surge, it could potentially reach or even surpass half of gold’s market cap. Such a scenario could propel Bitcoin’s price to an estimated $500,000 in the coming years.

Moreover, Ash Crypto highlights Bitcoin’s potential impact on traditional financial markets, pointing out the immense global stock and bond market caps.

As BTC continues to gain legitimacy as a financial asset, it could capture a substantial share of these traditional market caps. This shift aligns with a new generation of investors who view Bitcoin as a novel investment opportunity.

Bitcoin is going to $500k after the
Spot ETF is approval. Here is the
evidence –

When Gold ETF was approved, it’s
mcap was around $2 Trillion. After
ETF gold saw huge inflows of liquidity
and reached $16 Trillion in few years.
( Don’t forget gold supply is not fixed,
we… pic.twitter.com/uE6XKkHWtU

— Ash Crypto (@Ashcryptoreal) January 14, 2024

Featured image from Unsplash, Chart from TradingView

Amidst a volatile crypto market, Ethereum (ETH) is gaining momentum, outperforming its long-time rival Bitcoin (BTC). According to Kaiko data, the ETH/BTC ratio has steadily risen, rebounding from multi-year lows. 

ETH/BTC Ratio Rising, ETH Momentum Building

The ETH/BTC ratio technically gauges market sentiment towards these two leading crypto. The recent rebound indicates investors are increasingly bullish on Ethereum’s potential relative to Bitcoin. 

This upward trajectory is fueled by growing optimism surrounding the potential approval of spot Ethereum ETFs and the general confidence that markets will trend higher in 2024. The prospect of this product entering the market has also injected fresh energy into the ETH ecosystem, lifting the second most valuable coin by market cap.

Related Reading: Institutional Inflows Into XRP Surges 244% Amid ETF Speculation

After protracted lower lows, the ETH/BTC ratio began rising immediately after the United States Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs last week. This unexpected shift, analysts observe, is primarily because of increasing confidence in the SEC approving a similar product for ETH.

Spot Ethereum ETFs, which would provide direct exposure to the Ethereum market, would make it easier for institutional investors to benefit from the volatility of ETH. So far, the SEC has approved an Ethereum Futures ETF, which, unlike the spot ETF, tracks an index, not the direct price of this asset.

Blackrock is among the leading Wall Street giants interested in issuing a spot Ethereum ETF. Considering its history of success, the decision by one of the world’s leading asset managers to apply for this product is an endorsement of its prospects. Earlier, Larry Fink, the CEO of BlackRock, said Ethereum, despite its scaling challenge, might spearhead the tokenization drive in the years ahead.

US SEC Yet To Clarify Whether Ethereum Is A Commodity Or Security

Even so, the SEC has yet to clarify whether ETH, a coin pre-mined with some assets distributed to the Ethereum Foundation, is a commodity like Bitcoin. Earlier, Gary Gensler, the chairperson of the SEC, was cornered by the United States policymakers to give the agency’s stand on the coin but didn’t.

Nonetheless, with the prospect of spotting Ethereum ETFs and the dominance of Ethereum in decentralized finance (DeFi) and non-fungible tokens (NFTs), ETH will likely continue outperforming BTC in the coming months. Price action data shows that ETH is already up 20% versus BTC in the past trading week.

XRP has reacted positively since the launch of spot Bitcoin ETFs in the US, both in its price and general market sentiment. At the same time, recent data from CoinShares on the weekly inflow into digital asset funds reveal that the positive sentiment flowed into XRP-based investment products, with institutional investors increasing interest amid speculations of whether a spot XRP ETF might soon hit the market. As a result, weekly net inflows into XRP jumped 244% last week, registering a total of $2.2 million.  

Institutional Investors Look To XRP Amid Crypto ETF Hopes

According to various reports, particularly one from on-chain analytics platform Santiment, social media mentions and popularity of XRP increased alongside Ethereum in the days after the SEC gave the green light on spot Bitcoin ETFs. 

This isn’t surprising, as the approval of these ETFs signalled a change in the crypto investment landscape, leaving investors wondering whether we might see the US regulator approving an XRP spot ETF soon. For instance, Valkyrie’s Chief Investment Officer, Steve McClurg, noted that an XRP ETF could also be approved in the near future.

According to CoinShares data, the speculation led to the crypto receiving a net inflow of $2.2 million last week, a dramatic 244% jump from $0.9 million recorded in the week before. Notably, this inflow is significantly more than the one recorded in the days following Ripple’s partial victory against the SEC in court.

Consequently, this year’s total inflow into XRP-based products now sits behind only Cardano and Ethereum among altcoins.  

Inflow Into Asset Funds Post Bitcoin ETF Fail To Break Record

 Digital asset funds recorded an enormous inflow of $1.18 billion last week. While this number represented a spike of 680% from the $151 million registered in the week before, it failed to break the $1.5 billion record set at the launch of the futures-based Bitcoin ETFs in October 2021. On the other hand, trading volume was $17.5 billion last week, the highest weekly volume on record. 

As expected, the majority of last week’s inflow went to Bitcoin-based funds, with $1.14 billion. However, Bitcoin’s price has failed to meet expectations after spot Bitcoin ETFs hit the market. At the time of writing, the crypto is trading at $42,847 and is posting an 8% decline in a 7-day timeframe. 

Ethereum came in second place with $25.47 million in inflows last week. In terms of geographical location, the United States dominated, seeing $1.24 billion of inflows last week, while Switzerland followed with a $21 million inflow. 

Data shows the sentiment around XRP has taken a plunge following the failed attempt at a Bitfinex attack using the “partial payments exploit.”

XRP Weighted Sentiment Has Plunged To Negative Levels Recently

As explained by the on-chain analytics firm Santiment in a new post on X, the sentiment around XRP has turned negative. The indicator of interest here is the “Weighted Sentiment,” which itself is based on two other metrics: the “Sentiment Balance” and “Social Volume.”

The former of these basically keeps track of the sentiment currently present among social media users around any topic. The indicator calculates this score by going through social media posts and using a machine-learning model to separate between negative and positive sentiments.

The other relevant metric here, the Social Volume, measures the amount of discussion related to any given topic that’s happening on the major social media platforms right now. The indicator measures this by counting the total number of unique posts or threads making at least one mention of the topic.

Now, what the “Weighted Sentiment” does is that it takes the Sentiment Balance and weighs it against the Social Volume. What this means is that the Weighted Sentiment’s value would only register a spike when not only is the sentiment leaning towards one side, but the sample size of these posts is also large.

The below chart shows the trend in this indicator for XRP over the last few months:

When the Weighted Sentiment has a highly positive value, it means that there is a high amount of positive discussion happening related to the asset. From the graph, it’s visible that XRP saw such a bullish sentiment earlier in the month when its price made a recovery attempt.

Since then, however, the indicator’s value has plummeted for the cryptocurrency and is now floating deep inside the negative zone. Naturally, this implies that social media users are now bearish about the coin.

Santiment has noted that this sentiment, which is the most negative in years, has come for XRP as a failed Bitfinex hack attempt has taken place. During this attack, someone tried to make use of the “partial payments” system of the cryptocurrency to trick the exchange into thinking the transfer amount was greater than it actually was (equal to half the asset’s circulating supply, in fact).

Bitfinex, however, had the correct configuration in place to read transactions of this type, so the platform never fell for the exploit. Even though nothing ended up happening, the initial confusion naturally worsened the sentiment around the asset.

This negative sentiment, though, can actually be a boon in disguise for XRP, as historically, the price has tended to move against the expectations of the majority.

This might also be the reason that the recovery attempt earlier in the year failed, as traders got too hyped too quickly. Since the sentiment is completely opposite now, perhaps a price surge might have an easier time growing up.

XRP Price

Since the asset’s failed recovery attempt, XRP has been moving mostly sideways, as it currently trades around the $0.576 level.

Following last week’s launch of 11 spot Bitcoin exchange Traded-Funds (ETFs) in the United States, Matt Hougan, Chief Investment Officer (CIO) at Bitwise, has offered a compelling perspective on the potential impact of these ETFs on the Bitcoin market. His remarks come at a critical juncture, with the next Bitcoin halving event anticipated in mid-April 2024.

Spot ETFs Could Have Impact Like 1.4 Bitcoin Halvings

Hougan draws a parallel between the impact of Bitcoin ETFs and the Bitcoin halving events. He states, “Crypto natives have a good mental model for the impact of Bitcoin ETFs on the market: The halving.” He further explains the historical context, “Roughly every four years, the amount of new bitcoin being created falls in half. Bitcoin’s price has historically risen in the year +/- surrounding the halving.”

In April, when the block number hits 740,000, the reward will fall from 6.25 to 3.125 BTC. Highlighting the supply-demand dynamics of Bitcoin, Hougan remarks, “Bitcoin’s price is set by supply and demand. If you reduce new supply, that should be (and historically has been) good for prices.” He then quantifies the impact of the next halving, “At current prices, it will remove approximately $7 billion in new supply from the market each year.”

Moving to the core of his analysis, Hougan compares the expected inflows from ETFs to the halving effect. He notes that estimates for ETF inflows vary, but many people think that these products will pull in somewhere around $10 billion per year for the foreseeable future.

“If that happens, that means the direct impact of the ETF on Bitcoin’s supply/demand balance is something like 1.4 halvings,” Hougan claims.

However, he cautions about the timing of these impacts, saying:

Note that ‘halvings’ don’t impact prices overnight. If the next halving takes place on April 22, we don’t expect prices to increase sharply on April 23. Historically, prices have risen in +/- the year surrounding each halving. The same will be true for ETFs.

An Even Greater Scope?

Hougan also highlights the indirect benefits of ETFs. According to him, these products could have indirect benefits that aren’t captured in his analogy. “IMHO, the ETF is a significant positive for regulation, long-term education, etc. It will substantially increase the number of people interested in crypto, and therefore have a multiplier effect.”

Concluding his thoughts, Hougan says, “Still, the halving is a pretty good mental model for the direct impact of ETFs: ~1.4 halvings, plus the significant ancillary benefits. We’ll take it.”

Hougan’s estimate of $10 billion per year of net inflows for the spot Bitcoin ETFs is quite conservative. Analysts from Standard Chartered predicted a few days ago that there will be inflows of $50 billion to $100 billion this year. If $100 billion does indeed flow into the ETFs, the products could even have an impact as strong as 14 BTC halvings.

At press time, BTC traded 42,964.

There may finally be light at the end of the tunnel for the Bitcoin price as selling has begun to subside for the cryptocurrency. So far, it seems that the large holders have been the main driving force behind the price decline, which could explain why the rally has been suppressed for so long. However, as these large investors start to scale back their selling, the Bitcoin price could be looking at another recovery.

Bitcoin Whales Stop Selling Old BTC

According to a report posted by Santiment, the reason for the suppressed Bitcoin price over the last week could be traced back to large Bitcoin holders. These holders who have a massive stash of old coins, which means coins that have not moved in a long time, had begun to move their coins after the price of BTC found its legs due to anticipation around the Spot ETF approvals.

Once these whales began to move these coins, there was a definite drop in the asset’s price that can be linked back to this move. As these whales moved these coins out of their wallets, the age of their BTC holdings went down, suggesting that they were selling these older coins.

On average, the age of their holdings went from around 640 days to around 624 days in the days following the Spot ETF approvals by the SEC. The on-chain tracker suggests that this was a sign that the market was back in the bull market.

However, after around a week of doing this, these whales seem to have come to a point where they are no longer moving coins. “There are mild signs that this continued movement of older coins is finally done for the time being,” Santiment said.

Now, while Santiment interprets this as a sign that the bull cycle may be over, there is also the possibility that these whales have stopped moving their coins in a bid to wait for the price to recover. In this case, selling pressure will recede, allowing Bitcoin the space to regain its footing once more.

BTC Struggles With $43,000 Resistance

The Bitcoin price is currently struggling with the resistance mounting at $43,000. Since the crash last week, bulls have continued to lag behind as bears have chosen this level to pitch their tents. The sell pressure also seems to be localized at this point, so it has become the next important level to beat.

If Bitcoin is able to surmount the $43,000 resistance, it could signal a return of the rally. At this point, $45,000 becomes the next major resistance as investors flock back in. However, failure to turn $43,000 into support could result in a further decline in the price.

The price of Bitcoin appears to be experiencing a bearish moment in the past few days now despite the approval of multiple Bitcoin Spot Exchange-Traded Funds (ETFs), which has raised speculations about the token’s future.

Bitcoin Could See Further Collapse

Bitcoinhyper, a cryptocurrency analyst, has offered his insights on the current state of Bitcoin. The analyst unveiled his predictions to the community during one of his YouTube videos.

According to him, BTC is currently undergoing a decline, which could potentially lead to a further collapse in price. In the beginning, Bitcoinhyper noted an upswing in the price of Bitcoin to $49,000 following the approval of BTC spot ETFs by the SEC. 

However, the market did not react as anticipated, and there was a notable decline from the $49,000 price mark.  “Unfortunately, we got a significant dump, and in rejection, from $49,000,” he stated.

The analyst highlighted that BTC was up for several days before the ETF approval, with experts anticipating the crypto would hit $50,000. Thus, in a surprising turn of events, the asset’s price witnessed a drop of about 16%.

In spite of the Bitcoin spot ETF approval, the market’s perception swiftly took an unpleasant shift. The correction took retail investors by surprise as they were unprepared since they had assumed that the price would rise.

With the crypto asset experiencing such a collapse in price, it is believed that the market will see a massive liquidation. Remarkably, during this decline, liquidations were not as large as anticipated.

Bitcoinhyper noted that during the decline, around $18.8 million in short positions were liquidated, which is less than expected. The news caused traders to become overconfident while ignoring the possibility of a correction.

No Positive Impact On BTC Price Despite Substantial Inflow

Reportedly, Bitcoin saw a whopping $1.18 billion inflow in digital assets funds worldwide following ETF approval. Despite the significant inflow of capital, the anticipated impact of boosting the price of BTC has not yet been realized.

On Monday, January 15, the price of BTC dropped below the support level of $42,000 as traders turned to Ethereum and other tokens. The approval of ETFs might be a “sell the news” moment, as BTC had dropped by 16% since the announcement.

As of now, it is crucial to observe that the market is becoming less enthusiastic about Bitcoin ETFs. A lot of people are now discussing the potential for an Ethereum ETF.

Currently, Bitcoin is trading at $42,951, indicating a decline of over 7% in the past seven days. Its trading volume is up by 3.86% in the last 24 hours, while its market cap is up by 0.75%, according to CoinMarketCap.

Tether, the issuer of the ubiquitous USDT stablecoin, cemented its dominance in 2023, ballooning its market share to a staggering 71%. This explosive growth, however, comes with a chilling undercurrent: a United Nations report linking USDT to a surge in cybercrime and money laundering in Southeast Asia.

Glassnode data paints a stark picture of Tether’s ascent. Its market capitalization reached a record $95 billion in January 2024, fueled by a 40% increase in USDT supply over the past year. Meanwhile, competitors like Circle’s USDC saw their market share shrink, with USDT now commanding over 7 times the circulation of its nearest rival.

Tether Market Dominance Soars 

Paolo Ardoino, Tether’s new CEO, has prioritized cooperation with U.S. law enforcement. The company boasts of freezing wallets linked to sanctions lists and recovering over $435 million in illicit funds.

However, the UN report casts a shadow on these efforts, detailing how USDT facilitates “sextortion,” “pig butchering” scams, and underground banking across Asia.

While Tether has proactively banned over 1,260 addresses linked to criminal activity, the sheer volume of illicit transactions raises concerns about the effectiveness of these measures.

Critics point to Tether’s opaque reserve backing as a breeding ground for misuse, calling for greater transparency to combat money laundering.

Tether’s Reign At Risk: Regulatory Challenges

The stablecoin market, once touted as a bridge between traditional finance and the crypto world, now faces a reckoning. Tether’s dominance is undeniable, but its association with criminal activity threatens to erode trust and trigger stricter regulations.

Meanwhile, Circle’s recent IPO filing hints at a potential shift in the landscape. With regulatory scrutiny intensifying, Tether’s future hinges on its ability to address concerns about transparency and combat illicit activity.

Can it clean up its act and maintain its crown, or will the tide turn towards its more transparent rivals? Only time will tell if Tether’s reign as the king of stablecoins will weather the storm of controversy.

With its historic 71% market share, Tether’s reign over the stablecoin realm is undeniable. Yet, the shadow of illicit activity threatens to eclipse its success.

As regulators sharpen their focus and competitors like Circle step into the ring, the question looms: will Tether clean house and retain its crown, or will this be the tipping point for a stablecoin revolution, reshaping the future of crypto itself?

Only time will tell if Tether’s dominance signals a bright new era for digital currencies or serves as a cautionary tale, paving the way for a more transparent and accountable crypto landscape. The gloves are off, and the fight for the future of stablecoins is just beginning.

Featured image from Shutterstock

K33 Research, a prominent entity in the cryptocurrency research sector, has released a scathing report on Cardano (ADA), sparking widespread discussion in the crypto community. The report bluntly advises investors to divest from Cardano, citing a lack of meaningful use for its native token, ADA.

Sell All ADA Now?

In a detailed examination, K33 Research asserts that the Cardano network suffers from a significant lack of practical application, which is essential for the inherent value of its native token. The report states, “A smart contract network needs meaningful use for its native token to have any value. The Cardano network, however, has no meaningful use or any credible track to get it.”

Addressing the counterargument often presented by Cardano supporters regarding the network’s daily transactions averaging around 90,000, the report argues that these do not equate to meaningful blockchain activity. The report further elaborates, “There’s nothing else going on in the Cardano Network than exchange transfers and a group of bagholders fabricating blockchain activity.”

K33 Research highlights the absence of external evidence supporting any significant activity on the Cardano network, contrasting it with other protocols where real activity is corroborated by external proofs. This lack of external validation is termed as ‘proof by contradiction’ by the research firm.

One of the most telling indicators of inactivity, according to the report, is the situation of stablecoins on the Cardano network. K33 Research points out that the absence of major stablecoins like USDT and USDC on Cardano is a clear indicator that no meaningful decentralized finance (DeFi) activities are taking place. The only stablecoins present are reportedly Cardano-collateralized and valued at 76 cents to the dollar, which it refers to as “another word for nothing.”

Future Outlook For Cardano

K33 Research is pessimistic about Cardano’s future, drawing parallels with other blockchain projects that started with no traction and later faded into irrelevance. The report notes that successful blockchains evolve over time, whereas “creationistic, grand idea, subsidized bootstrapping, and no real use-blockchains” eventually lose their luster. It cites examples like IOTA, NEO, and EOS to illustrate this pattern.

Despite Cardano’s current market valuation of $19 billion, K33 Research attributes this to its availability on various exchanges and its appeal to new crypto investors. The report critiques the narrative surrounding Cardano, describing it as “scientific mumbo-jumbo” that might mislead newcomers.

“Ada is a well-established coin that is tradeable ‘everywhere’, also on smaller local exchanges, making it one of the coins that are ‘pushed’ to aspiring crypto investors. Cardano also has an enticing story for newcomers, with Cardano being branded as ‘the peer-reviewed research-driven blockchain network’,” the report mentions.

However, K33 Research foresees a decline in this allure, predicting that the number of new investors attracted to Cardano will dwindle. Moreover, K33 Research casts doubt on the long-term viability of ADA, citing a lack of rally in its price compared to other strong smart contract tokens during recent market rallies.

“Ada has not rallied in line with other ‘stronger’ smart contract tokens when markets have improved,” the report states, suggesting a gradual fade from relevance rather than an abrupt disappearance.

According to K33 Research, the market doesn’t rapidly eliminate such coins but instead “bleeds them out” over time. The report concludes, “Things never happen overnight, and these processes often take years to play out fully. Still, all price signals also point to Ada gradually disappearing from the crypto map.”

At press time, ADA traded at $0.531.

The recent approval of the first Bitcoin spot exchange-traded fund (ETF) in the United States by the Securities and Exchange Commission (SEC) has reverberated across the cryptocurrency landscape, triggering a significant surge in various altcoins, with Ethereum Classic (ETC) taking the spotlight.

Often overshadowed by its more well-known sibling, Ethereum, ETC has emerged as the clear winner in the aftermath of the groundbreaking news, experiencing an impressive surge of over 31% in the past seven days.

Ethereum Classic Trading Volume Up

Since the SEC’s approval of the Grayscale Bitcoin ETF on January 10th, Ethereum Classic has skyrocketed by a staggering 30%, currently maintaining a trading value around $26. This meteoric rise has been accompanied by a remarkable 270% increase in trading volume, soaring to a substantial $1.8 billion.

Such robust figures underscore a palpable surge in investor confidence, suggesting the potential for further gains in the near future.

While Bitcoin itself witnessed a modest price increase, briefly touching $47,000, Ethereum stole the limelight by breaking a 20-month barrier and surpassing $2,600.

This remarkable 10% surge within a mere 24 hours has positioned Ethereum at its highest value since May 2022. Analysts attribute this impressive performance to Ethereum’s robust underlying technology and recent network upgrades, cementing its status as a favorable option for investors after Bitcoin.

The approval of the Bitcoin spot ETF is not the sole catalyst for this altcoin rally; the much-anticipated Bitcoin halving event, scheduled for later in the year, is also playing a pivotal role in bolstering bullish sentiment.

This event, occurring approximately every four years, involves a reduction in the number of newly minted Bitcoins and has historically coincided with price appreciation in the cryptocurrency market.

The confluence of these factors has created a perfect storm for Ethereum Classic, propelling it towards the coveted $30 mark.

ETC Strong Performance

Industry experts anticipate that this milestone may be achieved soon, fueled by Ethereum Classic’s impressive trading volume and market capitalization, which has surged by 34% to cross the $4 billion mark since the ETF news broke.

However, amidst the euphoria surrounding this surge, it remains crucial to acknowledge the inherent volatility of the cryptocurrency market. While the approval of the Bitcoin spot ETF and the impending halving event offer promising prospects, unforeseen factors can swiftly alter market dynamics.

The recent ascent of Ethereum Classic serves as a compelling testament to the interconnectedness of the cryptocurrency market and the substantial impact of major regulatory decisions.

As the industry continues to evolve, it will be intriguing to observe how other altcoins respond to these developments and whether Ethereum Classic can sustain its lead in this post-ETF era.

Featured image from Shutterstock