The meme coin sector has exploded to a staggering billion market capitalization, reshaping the digital asset landscape and outperforming traditional crypto assets. Researchers Tanay Ved and Matías Andrade from Coinmetrics provide insights into the implications of this trend on networks like Ethereum and Solana. The Cultural Impact of Meme Coins on Crypto According to […]
Bitcoin News
$2.5 Billion In Bitcoin Flows Out Of Centralized Exchanges – Time To Buy?
Investor confidence appears to be on the rise in the crypto market lately, and Bitcoin has been a major beneficiary of this positive trend. Consequently, there has been a continuous accumulation of BTC amongst large-scale investors despite its somewhat frustrating price action.
The premier cryptocurrency’s price may have ended May beneath the psychological ,000 mark, despite having touched the level a couple of times in the last two weeks of the month. The latest on-chain data suggests that the faith in Bitcoin has only continued to grow strong.
Is BTC Primed For A Price Rally?
Prominent crypto analyst Ali Martinez shared via a post on the X platform that substantial amounts of Bitcoin have been making their way out of centralized exchanges. This on-chain observation is based on the CryptoQuant Exchange Reserve metric, which tracks the amount of a particular cryptocurrency in the wallets of all centralized exchanges.
An increase in the metric’s value indicates that investors are making more deposits than withdrawals of a crypto asset (Bitcoin, in this scenario) into centralized exchanges. Meanwhile, when the metric declines in value, it implies that more coins are moving out than into the trading platforms.
According to Martinez’s post, more than 37,000 BTC (worth roughly .53 billion) have been transferred out of crypto exchanges in the past three days. This significant exodus of funds indicates a change in sentiment and the long-term holding strategy of Bitcoin investors.
While it is difficult to tell the exact rationale behind the massive outflow from exchanges, the movement of funds from trading platforms suggests an increase in investor confidence. This indicates that many investors might be convinced by the future promise of Bitcoin, thereby opting to store their assets in self-custodial wallets in the long term.
What’s more, the downward spiral of Bitcoin’s supply on centralized exchanges could trigger a bullish rally for the premier cryptocurrency’s price. The sustained decline in BTC’s balance on exchanges could result in a supply crunch.
For context, the supply crunch refers to a scenario or period during which the supply of a particular asset is lower than the demand for it, resulting in a surge in the asset’s value.
Bitcoin Price At A Glance
As of this writing, the price of Bitcoin stands around ,489, reflecting a 1.5% decline in the past 24 hours. This sluggish performance in the past day underscores the premier cryptocurrency’s struggles in the past week. According to CoinGecko’s data, the BTC price is down by nearly 2% in the last seven days.
‘Trust in Authority’ Sustains Popularity of Centralized Exchanges in Latin America, Says Ricardo Da Ros
According to Ricardo Da Ros, CEO of the crypto platform Patex, many crypto users in Latin America (LATAM) seem to prefer using centralized exchanges (CEXs) over decentralized ones. He attributes this preference to a culture in the region that “has been built on trust in authority.” Da Ros suggests that this culture, combined with the […]
Bitcoin News
March Sees Nearly $1 Billion In Ethereum Netflow To Centralized Exchanges – What’s Happening?
The price of Ethereum has not exactly lived up to its promise as the month has gone on, despite a stellar start to the month. While this bearish pressure has been widespread in the general cryptocurrency market, regulation uncertainty has been an additional concern for ETH, igniting a negative sentiment around the “king of altcoins.”
Interestingly, the latest on-chain revelation shows a substantial amount of Ethereum has made its way to exchanges so far in March, suggesting that investors might be losing confidence in the long-term promise of the cryptocurrency.
Are Investors Losing Confidence In Ethereum?
According to data from CryptoQuant, more than 3 million has been recorded in net ETH transfers to centralized exchanges so far in March. This on-chain information was revealed via a quicktake post on the data analytics platform.
This net fund movement represents the largest volume of Ethereum transferred to centralized exchanges in a single month since June 2022. Even though March is still a week from being over, this exchange inflow appears to be a complete deviation from the pattern observed over the past few months.
As shown in the chart above, October 2023 was the last time cryptocurrency exchanges witnessed a positive net flow. It is worth noting that there was significant movement of Ethereum tokens out of the centralized platforms in subsequent months up until this month.
Meanwhile, a separate data point that supports the massive exodus of ETH to centralized exchanges has come to light. Popular crypto analyst Ali Martinez revealed on X nearly 420,000 Ethereum tokens (equivalent to .47 billion) have been transferred to cryptocurrency exchanges in the past three weeks.
The flow of large amounts of cryptocurrency to centralized exchanges is often considered a bearish sign, as it can be an indication that investors may be willing to sell their assets. Ultimately, this can put downward pressure on the cryptocurrency’s price.
Substantial fund movements to trading platforms could also represent a shift in investor sentiment. It could be a sign that investors are losing faith in a particular asset (ETH, in this case).
Moreover, the recent regulatory headwind surrounding Ethereum specifically accentuates this hypothesis. According to the latest report, the United States Securities and Exchange Commission is considering a probe to classify the ETH token as a security.
ETH Price
As of this writing, the Ethereum token is valued at ,343, reflecting a 4% price decline over the past /4 hours. According to data from CoinGecko, ETH is down by 11% in the past week.
800,000 ETH Flow Out Of Centralized Exchanges In 2024 – Bullish Sign For Ethereum Price?
The price of Ethereum has been a joy to watch since the start of 2024, climbing by more than 30% in less than two months. The latest on-chain revelation suggests that ETH investors are approaching the market with more confidence, as the cryptocurrency’s price rally seems to be far from over.
.4 Billion Worth Of ETH Leaves Exchanges: CryptoQuant
A pseudonymous analyst on CryptoQuant’s Quicktake revealed that significant amounts of the Ethereum token have been making their way out of exchanges in the last few weeks. This observation is based on the “Exchange Reserve” metric, which tracks the amount of ETH tokens in the wallets of all centralized exchanges.
When the value of this metric increases, it implies that investors are making more deposits than withdrawals of an asset (Ether, in this case) into centralized exchanges. Meanwhile, the metric’s decline means that more assets are flowing out than entering these platforms.
According to data from CryptoQuant, more than 800,000 ETH (equivalent to approximately .4 billion) has flowed out of cryptocurrency exchanges since the turn of the year. Typically, the movement of significant amounts of cryptocurrencies out of these platforms suggests a rise in investor confidence.
As the CryptoQuant Quicktake author noted, this reduction in Ether’s exchange reserve balance could be a bullish catalyst for the altcoin’s price. A sustained decline in the ETH’s supply on exchanges could trigger a supply crunch, potentially driving the Ethereum price higher.
As of this writing, the Ethereum price stands at around ,920, reflecting a 1.8% decline in the past day. Nevertheless, the “king of altcoins” is still in the green on the weekly timeframe, with an almost 5% price jump over the last week.
Ethereum Price Rise Due To Anticipation Of Dencun Upgrade: Grayscale
In a recent report, Grayscale has offered commentary on Ethereum’s positive price performance so far in 2024. The asset management firm tied ETH’s bullish trajectory to the upcoming Dencun upgrade of the Ethereum network.
William Ogden Moore, Grayscale’s research analyst, wrote in the report:
We believe that recent price performance reflects the market’s anticipation of this upgrade, as Ethereum (up 26% YTD) has outperformed the broader Smart Contract Platforms Sector (up 3% YTD) since January 1st, 2024.
The Dencun upgrade, which is less than a month away, will aim to enhance Ethereum in terms of scalability and cost-effectiveness. It is also expected to help the network compete with “faster chains in the Smart Contract Platforms Crypto Sector, such as Solana.”
Another narrative that may be propelling the price of ETH is the approval of Ethereum spot exchange-traded funds (ETFs) in the United States. Interestingly, Grayscale is amongst the asset managers looking to debut an Ether spot ETF.
Centralized Provider Problem Causes Nationwide Digital Payment Meltdown in Spain: Users Turn to Crypto and Cash
A problem with Redsys, a third-party platform used in all of Spain, caused a meltdown for almost all of the digital payment options in the country, leaving citizens without means of payment for hours. The incident left stores without the possibility of using credit and debit cards for receiving payments, and users had to turn to cash and other options like crypto.
Redsys Problems Cause Nationwide Payment Meltdown in Spain
A still undisclosed problem in one of the main payment providers in Spain has caused a nationwide disruption in the payment networks in the country, leaving stores and e-commerce without means for accepting digital payments.
The incident, referred to by the company as “last-minute payment service degradations, exclusively linked to internal communication lines,” which occurred on November 18, affected the credit and debit card networks of Visa and Mastercard, ATMs, and other online payment methods, leaving businesses unable to process payments for a few hours.
Redsys provides payment intermediation services for more than 60 banks and other institutions after its fusion with Iberpay and Cecabank in 2019, a movement directed to cut costs and improve interoperability. However, this concentrated all digital payment users under one platform, amplifying the impact of the situation.
Effects and Reactions
Spaniards affected by this problem used social networks to explain how they dealt with the situation. Some criticized the posture of progressive cash elimination in the country, with the forced reduction of cash payments to a maximum of 1,000 euros per payment, a measure that was called out explicitly by the European Central Bank as an endangerment of the concept of legal tender.
X user Luis Salvatierra said he had no cash and had to turn to crypto to pay for a meal. He stated:
The national Redsys network has gone down while I was in line to eat at IKEA without having any cash, I was able to buy a gift card with Bitrefill and Phoenix Wallet. I can eat now.
Some emphasized the need to carry cash as a failsafe in case one of these disruptions occurs again. However, others had to stop their purchases due to the impossibility of making payments with the tools available.
Cash is still one of the primary payment methods used in Spain, with 65% of people using it daily, even with a significant reduction in the ATMs available in the country.
What do you think about the reduction of cash usage in favor of digital payment alternatives? Tell us in the comments section below.
FTX Estate Initiates Second Tranche of Crypto Transfers, Shifting Millions to Centralized Exchanges
On Thursday, the analytics firm Peckshield alerted the community to another transfer of crypto assets from FTX wallets to centralized exchanges. Nearly million in digital currencies were moved after the estate transferred .6 million in cryptocurrencies to Binance earlier in the day.
FTX Mobilizes Millions in Crypto to Centralized Exchanges in Second Major Move
The estate handling FTX’s bankruptcy has been relocating coins to centralized crypto exchanges. Following an .6 million transfer on Wednesday, the estate moved nearly million during the evening hours of that day. The analytics and onchain intelligence company Peckshield detected the movement, with its alert system notifying the community at 10:56 p.m. Eastern time on Wednesday.
Peckshield disclosed that about 470,000 solana (SOL), worth million, were moved to centralized exchanges including Binance. The onchain analytics alert system further detailed that FTX transferred coins such as ETH, COMP, and RNDN. Further, an additional .5 million in ether was reportedly sent to the centralized exchange Coinbase.
“In addition, FTX-labeled address has transferred ~1,393 ETH (~.5M) to Coinbase,” the Peckshield alert added.
Observers can only speculate that the coins were sent to be sold, as their movements become opaque once held on an exchange. Besides sending crypto assets to exchanges, presumably to trade or sell them, FTX debtors have also engaged in staking assets. To date, the estate has staked millions worth of SOL and roughly million worth of ether. The estate continues to work on the final proposals in the bankruptcy case, drawing closer to completion.
What do you think about FTX moving funds to centralized crypto exchanges? Share your thoughts and opinions about this subject in the comments section below.
Centralized Mining Pools ‘Antithetical to the Ideals That Gave Rise to BTC and the Blockchain Movement’ — Tomer Afek
The apparent centralization in both proof-of-work and proof-of-stake protocols is “tragic because it’s antithetical to the cypherpunk ideals” that birthed the the bitcoin and blockchain movement, Tomer Afek, the CEO at the crypto platform Spacemesh, has argued. To back this assertion, Afek told Bitcoin.com News that only two Bitcoin mining pools control more than 50% of the network’s hashrate while the top five pools control more than 75%.
‘Centralization and Consolidation of Mining Resources’
For Afek, the concentration of the Bitcoin network’s mining power among a few players should worry decentralization proponents because it means such “centralized actors” are accountable to no one. According to the Spacemesh CEO, the situation is even worse with protocols that use the proof-of-stake consensus mechanism.
To Illustrate, Afek claims that in the vast majority of chains using this mechanism, it is “a tiny coterie of inside investors and early team members [who] control the lion’s share of coins.” This inevitably enables such individuals to exert undue influence over the network.
Turning to the often less talked about competitive nature of the race to mine the next block, Afek, former investor at venture capital firm Evergreen VC, lamented how this is potentially contributing to the “centralization and consolidation of mining resources.” When this is combined with the “single winner” for every block interval requirement, this can only result “in congested block space and high transaction fees for users.”
Meanwhile, in written answers sent to Bitcoin.com News via Telegram, the CEO also offered his views on allowing anyone with a computer and storage space to participate in a network’s consensus process. He further revealed why his organization spent five years researching and developing before emerging from the shadows. Below are Tomer Afek‘s answers to questions sent.
Bitcoin.com News (BCN): Proof-of-work mining often draws flak for its energy consumption but its competitive nature is less talked about. Can you tell our readers more about the competitive nature of this consensus mechanism?
Tomer Afek (TA): Satoshi Nakamoto solved the Byzantine Generals Problem in an ingenious way: by replacing one actor, one vote with one CPU, one vote. This allowed permissionless, public networks based on this solution, known as Nakamoto Consensus, to flourish, but in doing so they inevitably give rise to a competition to be the first miner to solve the cryptographic puzzle and successfully mine the next block.
Nakamoto consensus is secure and has served Bitcoin well, but it has some downsides. For one, the interval between wins is unbearably long for all but the very largest miners, which creates strong pressures towards centralization and consolidation of mining resources (the rule of large numbers works in favor of miners and reduces variance). For another, the network must ensure that in the vast majority of cases there’s only a single winner during the block interval. This means difficulty must remain high and throughput low. In practice this results in congested block space and high transaction fees for users.
All of this is to say nothing of the energy intensity inherent in proof of work mining, and of the cases where in fact miners are not economically incentivized to act honestly, a phenomenon known as selfish mining.
BCN: Are you in agreement with this notion that proof-of-work and proof-of-stake protocols have failed to live up to the original idea of decentralized blockchains?
TA: There’s been a worrying and frankly tragic trend towards massive centralization in both proof of work and proof of stake protocols over the years, tragic because it’s antithetical to the cypherpunk ideals that gave rise to Bitcoin and the blockchain movement. While it’s true that Bitcoin has a thriving ecosystem of users who run their own nodes and Bitcoin is therefore somewhat inoculated against certain forms of attack, in practice only two pools currently control more than 50% of Bitcoin hashrate and the top five pools control more than 75%. This trend should be worrying to anyone who cares about decentralization since these pools are centralized actors largely acting with little to no accountability and requiring the trust of their constituent miners.
The situation in proof of stake chains is even worse. In the vast majority of such projects, a tiny coterie of inside investors and early team members control the lion’s share of coins, stake, and thus influence over the network. Even Ethereum, which only recently abandoned proof of work and long claimed to stand for decentralization, is now subject to massive and growing centralization due to economies of scale related to staking, and MEV.
BCN: Can you explain to our readers the difference between competitive mining and race-free mining, maybe with an example?
TA: It’s really quite straightforward, and is down to simple statistics and probability. If you as a home miner, even one with the resources and acumen to acquire and operate a Bitcoin mining ASIC, attempt to mine solo, from home, without joining a mining pool, you can be expected to successfully mine one block every 30 years on average, due to the competitive dynamics described above. You can of course join a pool, and most do, but then you’re paying a portion of your rewards to the pool operator and you’re trusting them to honestly calculate and pay out rewards with little to no accountability.
By contrast, with Spacemesh, a home miner with even the minimum required resources (256GiB free hard drive space, a consumer-grade desktop computer, and an always-on broadband Internet connection) is guaranteed to earn a reward at least once every two weeks. So there’s no reason to join a pool and no need to outsource trust to a pool operator.
BCN: Your company Spacemesh was reportedly in the research & development phase for about five years before coming out of the shadows. What problem were you trying to solve and is the solution still relevant today as the industry has evolved considerably in the last five years?
TA: In brief, Spacemesh is doing something that no blockchain before has ever attempted to do: to make mining from home both accessible and economically sustainable for ordinary Internet citizens forever. Doing this has required developing a suite of bespoke, cutting edge protocols and technologies, a feat that turned out to be harder and take longer than any of us expected. The good news is that, as mentioned above, the Spacemesh network went live in July and we’ve now proven that these technologies are viable and secure.
Among other technologies that we’ve developed, this required creating a bespoke consensus mechanism known as proof of space time that’s a hybrid of proof of work and proof of stake. Like proof of work, it’s permissionless, such that anyone, anywhere in the world can boot up a new miner anytime without permission and without specialized hardware or expensive stake. Like proof of stake, it’s green, requiring 99% less energy than an equivalent proof of work network.
We believe that these problems—fairness and accessibility to home miners, permissionlessness, and environmental friendliness—are only more relevant today than when we started.
BCN: Could you describe blockchain topology and the difference between chain topology and the mesh topology that your platform uses?
TA: The key innovation that allowed Spacemesh to solve the competitive mining dynamic described above, and introduce a new era of cooperative mining, is the mesh topology. In a legacy blockchain such as Bitcoin, as described above, all miners compete to successfully produce the next block, an inefficient and energy intensive process. By contrast in Spacemesh many miners collaborate to produce each block: currently, 50 miners submit their opinion on the next block, and the decentralized, permissionless protocol assembles votes from honest participants into the next canonical block. These “opinions” from many miners form the mesh topology.
BCN: Do you believe that allowing anyone with a computer and storage space to participate in the network’s consensus process will lead to a resurgence in crypto mining?
TA: We don’t have to wonder! We’re seeing this play out before our eyes now among the Spacemesh community. We have an active, engaged community of tens of thousands of miners, most of them home mining enthusiasts who have dusted off old mining gear, after having previously given up GPU mining for Ethereum or hard drive space mining for Chia, and booted up new Spacemesh miners. The proof is in the pudding: 50 TiB have already been committed to the Spacemesh network and the epoch-on-epoch growth since genesis has been overwhelming.
Of course, we won’t stop here! It’s still not as easy to mine Spacemesh as we would like. The onboarding process still has a few bumps and the resource requirements are still higher than we’d like. Our vision is to enable mining across the entire range of consumer-grade hardware, down to and including a 0 Raspberry Pi and smartphones. There’s no theoretical reason the Spacemesh protocol won’t support this in the future. We’re well on our way, having already significantly reduced the required resources.
Spacemesh is the IKEA of blockchain. We know that ordinary people place a disproportionately high value on things they participated in building themselves, a well studied psychological phenomenon known as the IKEA effect. We see today that diehard Spacemesh miners wouldn’t part with their hard-earned Smesh coins even for prices far above where they currently trade on the market.
What are your thoughts about this interview? Let us know what you think in the comments section below.
Ripple CTO Addresses Bitcoin Adviser’s Claims That XRP Is Centralized
Ripple CTO David Schwartz has addressed claims made by El Salvador Advisor Max Keiser that the XRP token is a “centralized” cryptocurrency. Schwartz took to X (formerly Twitter) to clear the air, stating that the Bitcoin Adviser’s opinion of XRP was too ignorant to warrant a proper reciprocation.
Ripple CTO Criticizes Centralization Claims
On September 24, Co-founder of Volcano Energy and Bitcoin Advisor to El Salvador’s President, Max Keiser made a controversial statement about the XRP token. In an X (formerly Twitter) post, Keiser stated that Ripple’s native token, XRP was “centralized”, which was negatively received by the community and triggered a response from the Ripple CTO.
Responding to Keiser’s controversial claim about the XRP, Schwartz expressed his indignation and stated that he found the statement laughable.
“This is such an incredibly stupid argument I have no idea how I could possibly respond to it other than to laugh,” Schwartz said.
In addition to Schwartz, the Product Head of Visa Installment and former employee of Ripple, Josh Gierscha, also jumped on the bandwagon to debunk Keiser’s claims.
Initially, Giersch had believed that Keiser’s centralization claims were made from an X account impersonating the Bitcoin Advisor or from a fan account.
However, Schwartz revealed that the comment was made by the real Max Keiser. He responded by quoting the original post from Keiser’s real account.
Of course the real Max Keiser would never say anything this dumb.https://t.co/dd9JQUPvIYhttps://t.co/mOkN3v0vFU
— David “JoelKatz” Schwartz (@JoelKatz) September 27, 2023
Giersch then topped off the conversation, saying, “Keiser’s an industrial-grade crank, I shouldn’t have expected any better from him”
Keiser’s view on the XRP token was based on the cryptocurrency’s US patent created by Schwartz in 1992 which illustrated a cooperative system involving several interconnected computers.
This is not the first time that Keiser has said something to draw the ire of the XRP community. The Bitcoin advisor has had a poor view of the token for some time now and occasionally criticizes XRP while idolizing Bitcoin. Back in May, the Bitcoin advisor had come under fire following a statement labeling the XRP token a “shitcoin.”
XRP Twitter Community Reacts To Centralization Argument
The XRP community also poured out to criticize Keiser’s claims about the token. One community member attributed the statements to Bitcoin maxis being scared of the token’s abilities, saying; “Bitcoin maxis are terrified of XRP.”
Another X user jumped in to add their own two cents saying that Keiser was being intentionally misleading to his over 500,000 followers. Pointing to the patent which Keiser used as the basis for his statement, the user said “There’s no way he believes you filed a patent for the XRPL in 1988. Not a chance. Yet this is what he asserts. Seems he’s just an “ends justify the means” type of guy.”
Keiser’s remark on XRP’s decentralization contradicts the inherent nature of the token which is seen in its value as a digital payment currency and an open-source ledger blockchain.
2023 Centralized Crypto Exchange Study Highlights Winds of Change Among Top 10 Platforms
In a report by the crypto market aggregation web portal Coingecko, Binance retains its crown in the centralized cryptocurrency exchange arena, but not without facing fierce competition and challenges.
Binance Leads But Not Without Contenders, Says Coingecko’s Mid-Year Crypto Study
According to the Coingecko research report, Binance continues to dominate the centralized cryptocurrency exchange market with a 51.7% share, boasting a spot trading volume of 5.3 billion in June 2023. However, researchers noted a significant drop from its March peak of 9.8 billion, suggesting possible weaknesses.
The research spotlighted Upbit’s perseverance, holding firm as the second-largest exchange. Despite a dip to a 6% market share in May 2023, Upbit rebounded with an 8.1% share by June, backed by a .8 billion trading volume. Still, data shows the exchange experienced a 43.4% quarter-on-quarter (QoQ) volume decrease.
The report underscored the rise of Bybit and Bitget in the second quarter. Bybit, celebrating a 26.7% QoQ growth, clinched the fifth spot among centralized crypto exchanges. Meanwhile, Bitget made notable strides to secure the seventh position. Both exchanges notably dethroned industry stalwarts Crypto.com and Huobi. The analysis also highlighted Binance’s declining trajectory.
Between Q1 and Q2 2023, Binance’s trading volume plummeted by 52.4%, which translates to a 3.9 billion decrease. The report said this decline starkly contrasts with the combined 0.8 billion drop of its nine closest competitors, suggesting regulatory pressures might be denting its dominance. Beyond the big players, the Coingecko report paints a vivid picture of a fiercely contested market.
Okx, holding the third position with a 7% market share, is closely trailed by contenders like Coinbase, Bybit, and Kucoin. With each commanding less than 7% of the market, the battle among the top ten continues to be intense. The study leveraged data from the top ten exchanges by recording the centralized trading platforms’ spot trade volumes between January 1, 2023 and June 30, 2023.
What do you think about the top ten crypto exchanges’ performances during the first half of 2023? Share your thoughts and opinions about this subject in the comments section below.