President Nayib Bukele of El Salvador has indicated that his country’s bitcoin holdings may exceed public estimates. He revealed that El Salvador has been generating bitcoin-related revenue from various sources in addition to the capital gains from bitcoin purchased since its legalization as a legal tender in the country. ‘El Salvador Is Bitcoin Country’ El […]
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Rep. French Hill Estimates Crypto Legislation to Pass in Early 2024
Representative French Hill, vice-chairman of the House Financial Services Committee, stated intent to bring two crypto regulation bills to the floor and pass them in early 2024. Hill told CNBC that Congress wants to give the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) the tools to regulate crypto using a “fit-for-purpose” approach.
French Hill: House Financial Services Committee Intends to Pass Crypto Regulation in Early 2024
Representative French Hill, vice-chairman of the House Financial Services Committee and chair of the Digital Assets Subcommittee, outlined the committee’s plans regarding crypto regulation for next year. Hill told CNBC they intend to pass a stablecoin bill and a crypto oversight bill by early 2024.
Hill stated these bills aim to give the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) the necessary tools to exert oversight over the cryptocurrency market.
He declared:
We want a fit-for-purpose regulatory framework, and I think that the failure is the CFTC and the SEC actually don’t have the tools to look at this new form of ownership and individual action, whether on the investment side or the innovation side, and so we’re giving them those tools.
The SEC Has Been ‘Asleep at the Switch’
Hill blasted the lack of action from the SEC on the FTX case, criticizing SEC Chair Gary Gensler for not working with Congress in issuing a regulatory framework with a legislative background as was recommended in a Biden Administration executive order signed last year.
He stated:
The SEC has been asleep on the switch. I don’t think you can solve this by trying to cram the crypto and digital assets infrastructure and ecosystem into existing laws and that’s what Gary Gensler has tried to do. I think he has failed at it.
Furthermore, Hill explained that passing these bills gives the CTFC oversight over the spot Bitcoin market from a regulatory standpoint, an element commonly mentioned as an impediment to getting an ETF approved. “I think it’s something that will benefit institutional and individual investors,” he concluded.
According to Politico, House Financial Services Committee Chair Patrick McHenry is in conversations for these two crypto bills to be included as part of the National Defense Authorization Act (NDAA). However, if this is not achieved, the committee intends to bring them to the floor before the end of this year.
What do you think about the House Financial Services Committee’s plans to pass crypto regulation in early 2024? Tell us in the comments section below.
Treasury Secretary Yellen Insists US Could Default on June 1 — Goldman Sachs Estimates ‘Real Deadline’ Is a Week Later
U.S. Treasury Secretary Janet Yellen has insisted that the U.S. could default on its debt obligations on June 1. “I think that’s a hard deadline,” she stressed. Meanwhile, global investment bank Goldman Sachs has estimated that the “real deadline” for a possible U.S. default is “more like” June 8-9.
Yellen and Goldman Sachs on U.S. Default, Debt Ceiling
U.S. Treasury Secretary Janet Yellen reiterated her concerns about a possible U.S. default on NBC’s “Meet the Press” Sunday. Responding to a question about the June 1 deadline for a possible U.S. default, she said:
I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven’t changed my assessment. So I think that’s a hard deadline.
However, the U.S. government is expecting some tax payments on June 15 which would provide some revenue. When asked about the likelihood the U.S. could get to June 15 “to avoid breaching the debt ceiling,” Yellen said: “There’s always uncertainty about tax receipts and spending. And so it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.”
Commenting on “extraordinary measures” that President Joe Biden could take to resolve the debt ceiling issue in Congress, Yellen said: “There has been much discussion of the 14th Amendment. And, as President Biden said … it doesn’t seem like something that could be appropriately used in these circumstances, given the legal uncertainty around it, and given the tight timeframe we’re on. So my devout hope is that Congress will raise the debt ceiling.”
Yellen noted:
My assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid.
Global investment bank Goldman Sachs, however, predicts that the U.S. could default on its debt obligations approximately one week after June 1. Alec Phillips, Goldman Sachs’ chief political economist, told Bloomberg TV on Friday: “The reality is that Congress has to do this at some point very soon, and they should just go ahead and do it … So waiting for the last minute isn’t necessarily the right move, even though we think that maybe they could go a little bit longer.”
The Goldman Sachs economist shared:
Our guess right now is that the real deadline is probably more like June 8th, 9th, that’s when they’re at sort of greatest risk.
The Congressional Budget Office (CBO) recently said that there is a significant risk of the U.S. defaulting in the first two weeks of June.
Many people have warned that the U.S. defaulting on its debt obligations will have catastrophic consequences, including a global financial crisis. Top executives of 146 major companies in the U.S. have urged Biden and congressional leaders to act swiftly to prevent a U.S. default, warning of “disastrous consequences.” Moreover, some believe that a U.S. default would risk the dollar’s reserve currency status.
Do you think the U.S. will default on its debt obligations in June? Let us know in the comments section below.
JPMorgan Estimates Ethereum Shanghai Upgrade Might Bring More Investors to Stake in the Protocol
JPMorgan, one of the biggest financial institutions in the world, estimates that the arrival of the next Ethereum upgrade, codenamed Shanghai, will bring more investors to stake their funds in the protocol. The firm believes that this number might reach 60% of the ether issued, a number already staked in other blockchain networks.
JPMorgan Expects Ethereum Shanghai Upgrade to Bring More Funds to the Network
A recent report by JPMorgan has revealed that the upcoming Shanghai upgrade, slated to be applied in March, might bring more capital to the network. The investment bank estimates that Shanghai will bring Ethereum’s stake percentage to the number of other popular proof of stake networks have, more than four times the ether currently staked.
The report explained:
Assuming the staking rate converges over time to the 60% average of other large networks, the number of validators could increase from .5 million to$ 2.2 million and the annual yield in ETH would fall from 7.4% today to around 5%.
14% of the issuance of ether is currently staked, and cannot be withdrawn until the Shanghai update is finally applied. Other protocols, like Solana and Cardano, have approximately 70% of their issuance staked, according to data from Staking rewards.
New Staking Trends
JPMorgan also elaborated on the destiny of these new funds that they estimate new investors will be staking. The firm believes that most of these funds will go toward platforms such as Lido, which present several benefits when compared to maintaining hardware infrastructure.
The report states these platforms “give liquidity to staking assets that would otherwise be locked into staking contracts by providing an equal amount of derivative token in exchange for ETH, which can be traded.”
As the report suggests, these derivative tokens can be also positioned in different decentralized finance platforms to compound earnings by also staking them. Also, they facilitate bypassing the requirement of staking at least 32 ether, allowing small investors to also participate in protocol validation tasks in staking pools.
Exchanges like Coinbase and Kraken also offer staking services for Ethereum, but regulatory headwinds might thwart these services in the U.S. Kraken recently stopped its staking programs in the U.S. and was fined million by the SEC to settle on charges of offering unregistered staking services. However, users in foreign countries will also be able to stake their ethereum tokens using these services.
This new configuration of the staking panorama, could result in an even higher concentration of funds in fewer hands, bringing concerns about the resilience of these platforms against attacks in the future.
What do you think about JPMrogan’s predictions on Ethereum staking? Tell us in the commenters section below.
Polygon Beats Estimates As MATIC Registers 26% Weekly Gain
Polygon (MATIC) surpassed expectations with regards to its trading price as it ended up being the top gainer in a seven-day period right now among the top 15 cryptocurrencies in terms of market capitalization.
Trading at .11 according to latest tracking from Coingecko at press time, the altcoin managed to climb by 26% for the past week. Its biweekly and monthly performances are also impressive, increasing by 23% and 35%, respectively.
Here’s a quick glance at how MATIC is ushering the new month.
- Polygon continues to hold the crucial territory to preserve hopes of another bullish run
- A decline below could mean a revisit to .8 support region for MATIC
- The altcoin is up by 26% over the last seven days, surpassing Bitcoin and Ethereum in this department
Those numbers could have been higher if MATIC was able to sustain its surge today that allowed it to peak at .28. It has declined by 8.6% since then.
Now, the crypto’s focus must be on maintaining the marker as doing so will boost its chances of hitting higher prices such as the coveted .5 region.
Polygon Shrugs Off Shaky Start For Crypto Space This Week
Altcoins had a remarkable run last week with many of them tallying significant price pumps. Ethereum was able to surpass the ,600 marker and the maiden crypto, Bitcoin, was able to reclaim the K territory.
However, the crypto space if off to a rocky and shaky start this week as its frontrunners started to enter their respective price correction phases.
Bitcoin, for instance, is trading at ,701 at the time of writing while Ethereum fell below the ,500 marker to change hands at ,475.
Polygon, on the other hand, remains steady for now as it is still above the marker. This is crucial as this could mean the crypto is priming itself for another bullish breakout soon.
If MATIC is successful on this end, it could hit the .5 resistance region and even test the territory. Should that happen, the altcoin will be within striking distance of its all-time high (ATH) of .92 which it achieved in December last year.
However, if the cryptocurrency crumbles and fall below , its most likely destination is the .8 support level.
Source: TradingView
Partnership With Large Businesses Paying Off For Polygon
Perhaps one of the reasons why MATIC is able to turn back the creeping bearish momentum that is looking to take over the crypto marker once again is its network’s efforts to partner with well-established companies.
Just last week, on Thursday, the Polygon chain announced its partnership with Meta-owned Instagram, giving its users the ability to mint and eventually sell non-fungible tokens (NFTs) through the its platform.
Moreover, on that same day, global financial institution JPMorgan Chase used the Polygon blockchain network to execute its first transaction in a decentralized finance (DeFi) environment.
These positive stimuli continue to keep MATIC’s head above waters as the larger crypto market is once again sailing on a sea of red.
MATIC market cap at .19 billion on the daily chart | Featured image from The Economic Times, Chart: TradingView.com
NewsBTC
Why “Rosy” Earnings Estimates Might Hurt Bitcoin As Price Struggles At $20,000
Bitcoin continues to lose momentum on low timeframes, as bulls were unable to follow through on yesterday’s upside impulse. The cryptocurrency was rejected around the mid-area of its current levels and might be bound for a fresh re-test of local support.
At the time of writing, Bitcoin price trades at ,000 with a 1% loss and a 3% profit in the last 24 hours and 7 days, respectively. Despite its negative price performance, BTC remains relatively strong when compared with other cryptocurrencies in the top 10 by market cap.
BTC’s price moving sideways on the 4-hour chart. Source: BTCUSDT Tradingview
Bitcoin At Record Correlation With Gold And Equities In 2022
Data from Kraken Intelligence shows that Bitcoin has been increasing its correlation with risk-on assets, and with other traditional assets in the legacy financial market. This phenomenon has been common across 2022, as global markets move in tandem reacting to the U.S. Federal Reserve (Fed).
The financial institution has been trying to slow down inflation in the U.S. dollar by hiking interest rates. This has brought negative consequences across all assets class.
As seen in the charts below, the price of Bitcoin saw a decline in its correlation with major equities indexes, the Nasdaq 100 and S&P 500. In the past months, this correlation stood at its low below 0.5 but is re-approaching high correlation levels at around 0.8 and 0.74, respectively.
Something similar is happening with Gold and U.S. Treasuries. Unlike stocks, Bitcoin has been less correlated to the precious metal and U.S. Treasuries, but that appears to be changing in light of the increase in economic uncertainty.
Source: Kraken Intelligence
Earnings Seasons Might Cap Bitcoin Bullish Momentum
This data suggest that Bitcoin might be more and more susceptible to events related to stock and major indices. Jurrien Timmer, Director of Macro for Investment firm Fidelity, believes the upcoming earnings season might bring hurdles for traditional assets.
Timmer supports his theory on the recent rally in the U.S. Dollar, as measured by the DXY Index. This tool allows market participants to get a sense of the strength of the dollar compared mostly to the Japanese Yen, the British pound, and the Euro.
We see the same disconnect in the chart below, when comparing the dollar’s rate of change to the expected EPS growth rate (NTM divided by LTM). Estimates should be coming down faster, it seems. /4 pic.twitter.com/G49jAMu0Y0
— Jurrien Timmer (@TimmerFidelity) October 6, 2022
The higher the DXY Index, the weaker these other currencies, and other risk-on assets by extension, such as Bitcoin. Timmer claims that 40% of the S&P revenue comes from abroad which could lead to a noticeable negative impact on profit margins and U.S. companies’ earnings. The expert wrote:
Expectations are for revenue growth to fall to 4% and stay there. Given that the DXY’s rate of change is +19%, that seems too high. So, based on the dollar and market breadth, we might get some negative earnings surprises.
GMI Model Estimates Bitcoin Fair Value At $300K By October 2021
Bitcoin price has held on tightly to support at ,000, and according to Raoul Pal’s Global Macro Investor Report, the leading cryptocurrency by market cap could 10x from there by October 2021.
GMI’s model uses Metcalfe Value to make the prediction, and currently suggests the cryptocurrency is severally undervalued. Could that lofty target be only nine months away? Here’s what past market cycles say about the estimate.
Raoul Pal’s GMI Report Calls For 0K BTC Before The End of 2021
Raoul Pal has decades of global macro investing experience. He’s regularly been outspoke about Bitcoin and its long term value proposition. The GMI founder was particularly vocal about the cryptocurrency prior to the breakout in Q4 2020.
Valuations have only increased from there, and significantly so. However, according to a recent model from a GMI Report focusing on Metcalfe Value, things are only warming up.
Related Reading | Bitcoin Trend Strength Suggests No End In Sight, Second Most Powerful Historically
The chart includes the GMI Model Metcalfe Value and its proximity to Bitcoin price. The “value” has acted as a sort of middle-point for the cryptocurrency’s valuation.
A chart created by Global Macro Investor shows the path to 0K per BTC | Source: GMI Report
Currently, Bitcoin is tracing significantly below its Metcalfe Value, according to the report. Past instances of Bitcoin bull markets have always risen beyond the Metcalfe Value, but simply catching up in this case would take the cryptocurrency to a 0,000 per BTC by October 2021.
Trajectory Matches Target, But Metcalfe’s Value Could Suggest More Is Possible
The project does indeed line up with predictions from other analysts, firms, and more. Even taking the exact trajectory of the last cycle, and super imposing it over the current cycle would indicate a peak of around 5,000 per BTC.
Related Reading | Robinhood Reminder: Not Your Keys, Not Your Bitcoin
However, if the Metcalfe Value truly is accurate, and the cryptocurrency is this accurate, 0,000 as the ceiling is an extremely cautious estimate. Again, past instances of the bull market peaks have always risen beyond the Metcalfe Value according to the GMI Report chart.
The trajectory from the last cycle matches GMI's estimate | Source: BTCUSD on TradingView.com
Prices around where previous peaks reached beyond the value, would put the price of each Bitcoin somewhere near million apiece.
If that’s the case, buying at any point over the next nine months could be the greatest opportunity of our lifetimes. However, other attempts to assign a fair market value to the crypto asset using Metcalfe’s Law, have much lower estimates.
Featured image from Deposit Photos, Charts from TradingView.com
Hoskinson Estimates March 2021 For Full Decentralization of the Cardano Network
IOHK CEO Charles Hoskinson hosted a surprise AMA recently in which he announced a reduction in Cardano’s “D” (decentralization) parameter to 0.5.
“That means we’re just about to cross a threshold here in a little bit for “D” to fall below five, which means more than half of all the blocks will be made by the community, not the OBFT [Ouroboros Byzantine Fault Tolerance] nodes. That’s a major milestone.”
What’s more, at the current rate of progress, Hoskinson states the network will be fully decentralized in March 2021. At this point, “D” would equal 0, meaning independent stake pool operators produce 100% of the blocks.
The “D” parameter refers to a scale of decentralization, a reading of 1 = fully centralized, while 0 = fully decentralized. Over time, the “D” parameter reduces bit by bit from 1 until it reaches 0.
Cardano’s D Parameter
Crucial to Cardano’s end goal is the fulfillment of a fully decentralization network. But talk is cheap, especially when considering the complexity of building a secure blockchain that works as intended.
With that, Cardano decided on a phased approach to decentralization. At the Byron to Shelley hard fork, all of the block producing nodes were federated. In other words, at this stage, “D” = 1. However, over time, subject to network stability, independent stake pool operators would start to produce more of the blocks.
Each subsequent epoch since the Shelley hard fork has seen a handover rate, to stake pool operators, at 0.02 per epoch. This will continue until “D” equals 0.
There are other factors to consider when it comes to decentralization, namely the geographical distribution of the network and governance. The former takes care of itself via the randomness of stake pool operators joining the network. At the same time, the Voltaire phase will handle the latter by way of implementing a treasury function and community voting.
The purpose of the “D” parameter is to gauge Cardano’s block production distribution from centralized to decentralized sources.
As much as users want full decentralization now, IOHK Software Engineer Kevin Hammond explained that taking a steady approach allows for a more stable network in the end.
“This gradual process will allow us to collect performance data and to monitor the state of the network as it progresses towards this all-important point. A parameter-driven approach will help provide the community with transparency and a level of predictability.”
IOHK Updates Daedalus Wallet For Better Staking Experience
Yesterday saw the release of the new 2.4.0 Daedalus wallet from IOHK.
It features several changes geared towards improving the staking experience for users. This includes a saturation indicator, so users know when switch to a less crowded pool, therefore maintaining optimal staking rewards.
As well as that, IOHK has also added a table view for easier comparison of stake pools. While a new calculator helps with estimating potential rewards.
OUT NOW: New Daedalus 2.4.0 for continues to improve the #Cardano delegation user experience. It brings a number of new features, including a saturation indicator for stake pools, to show how close to saturation a pool is getting @Cardano 1/4 pic.twitter.com/c7SEhrm3Tx
— Input Output (@InputOutputHK) October 28, 2020
Like most alts, Cardano has been hit hard by Bitcoin’s rising dominance. The past week has seen an 8% drop in price, pushing it out of the top ten.
Source: ADAUSDT on Tradingview.com
South Korea Estimates 2-Year Losses From Crypto Crimes at $2.3 Billion
Nearly2.7 trillion won US.3 billion have been lost to cryptocurrency crimes in the last two years, not including exchange hacks.
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Tobacco Giant Philip Morris Estimates It Could Save Up to $20 Million by Using Blockchain
n International tobacco company Philip Morris is considering applying blockchain to reduce tax stamps paperwork and fraudn
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