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Is Ethereum a Better Asset Allocation for Performance Right Now?

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After weeks of dull price movement, Ethereum was finally handed over the baton. At a time when Bitcoin and other altcoins were struggling, Ethereum has gained some serious pace. The second-largest cryptocurrency was trading close to its recently established ATH near $2,600.

According to Raoul Pal, former Goldman Sachs executive, Ethereum is rapidly becoming the currency of the digital world while BTC is the “pristine collateral and base layer”. Talking about the world’s largest altcoin’s rise to prominence, Pal noted,

“When you price anything up in DeFi, NFT, community tokens, or even metaverse worlds, everything is basically priced in ETH, including designers time, etc. The ETH space is growing at 100% YoY (vs 50% YOY for BTC) and it is attracting a massive proportion of the developer talent and applications too”

While asserting that he is, in fact, a massive BTC bull, Pal stated that he believes ETH is the better asset allocation for performance right now.

Bitcoin’s Price Stagnates While Ethereum Pops

Here are some fresh stats: Bitcoin’s market cap dominance has hit levels not seen since summer 2018 and was currently found at 50.2%. Ethereum’s dominance, on the other hand, has risen to 14.2%.

Moreover, BTC/USD registered YTD gains of nearly 90%. During the same window, ETH/USD was up by almost 240%.

Historically, whenever Ethereum has outperformed Bitcoin, it catalyzed altcoins’ uptrend. Its price hit a new ATH of $2,547 a few days ago and many experts in the community speculate that the crypto might resume an altcoin rally soon. However, it is important to note that altcoins are yet to step into the spotlight as many of them have failed to recover from the recent crash.

There are eyes at ETH/BTC pair as well. Analysts believe in massive upside potential as they anticipate a potential breakout that could lead to a broader parabolic rally, especially for the altcoins. A prominent cryptocurrency trader called ‘Bluntz‘ noted that the trading pair looks “insane” after market capitulation. His tweet read,

“Eth double bottom on 4h, and eth/btc looks absolutely insane again. Wow, that was the greatest capitulation event i can remember for a long time. even I capitulated most of my lev trades.”

Bitcoin’s Dominance Slides to 14-Month Low as Altcoins Renew Strength

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Bitcoin, the largest digital asset by market cap, has lost significant dominance over the last year. More recently, it failed to retain its value over $12,000. Following the latest downside correction, the King coin dropped back to $11,740.

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At the of writing, BTC dominance was a little over 58%. The coin recently breached the dominance support level and was now in the final leg of the structure. This was stated by the crypto analytic firm Santiment’s latest data which further revealed that the next support for a weekly dominance stood at around 56%.

Besides, another support point stood at 54%. Despite the probability of a further drop, Bitcoin could potentially bounce back. Along the same line, Santiment noted

“Bitcoin will reclaim dominance, we just don’t know when. You still can enjoy 2-3x in many alts. It’s much easier to pump alts. But Bitcoin. We see more and more confirmation we could get to 15K.”

But it could be a while before Bitcoin gets some ground and climbs to $15k, something that hasn’t been witnessed in more than two years. The Altcoin pump is here to stay at least until the Bitcoin reaches the level mentioned above.

Meanwhile, the market dominance of the altcoins rose to a stunning $159 billion market cap, a level unseen in more than two years. Bitcoin entered the 5-digit values in the last week of July and brought in spectacular returns for investors. Despite a really good run by the premier cryptocurrency, the altcoins’ market cap jumped significantly high.

This was also noted in the July edition of Binance’s Trading Report which stated that in addition to the spot markets, traders in derivatives space were also bullish on altcoin contracts.

Binance

Altcoins continued to dominate the headlines. Especially in the first two weeks of July, altcoins gained traction as volume increased from 32% to 60%. According to Binance’s report, during this period, altcoin contracts such as LINK, ADA, and VET experienced high volatility and volume.

Additionally, in the derivatives market, it was the altcoins’ contracts that significantly drove most of the open interest growth. This essentially implied that the traders were “positioning long-term directional bets on altcoins”.

Meanwhile, Ethereum and the DeFi craze are two crucial factors that appeared promising to the alt market. August saw the total valued locked in DeFi soar to $6.38 billion.

The growing interest of institutional investors in DeFi is yet another plus point. Industry giants such as TD Ameritrade, CMT Digital as well as Arca Labs, have all invested in DeFi space. The expectations surrounding the much-anticipated launch of Ethereum 2.0 was also another driver of the collective altcoin pump.

Bitcoin: Altcoins are Taking a Lead Over “Stable Bitcoin”, says Binance’s CZ

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During the month of May, Bitcoin had everyone’s attention in the crypto community. Its immense recovery since the collapse in March had significantly improved its financial credentials and the largest digital asset was touted for a big rally over the next few months.

The situation has drastically changed since June as Bitcoin was hardly made any drastic gains. Over time, the asset has depleted a bit but hasn’t really entertained a bear run as well. BTC was stuck in a price range and over the past month, other altcoins have started to take away its attention.

Cardano has surged 195% in 2020, Crypto.com’s CRO token has improved by 220% but the most notable spike witnessed in the top 40 is Aave’s LEND, which has registered a staggering growth of 1882% YTD.

The buzz around altcoins is gaining significant momentum and now major proponents in the space were starting to entertain in influence.

In a recent interview with Bloomberg, Binance CEO, Changpeng Zhao was asked about Bitcoin’s price movements and the current impact of altcoins on the industry.

Zhao, or commonly known as CZ, said he was stumped as well and ‘honestly didn’t  know’ when Bitcoin could cross $10,000 again.

He added that with time , major reasons, such as quantitative easing, may have a factor in and BTC ‘s price may eventually break out, but it’s pretty stable at the moment.

Talking about altcoins, he added,

“Data also shows that it is pretty much an alt-season now, with Binance futures, more than 60 percent of the volume comes from altcoin, which is actually much higher than before.”

He also revealed that of all the altcoins that are listed on Binance in Q2 2020, only three coins registered negative returns in that period.

Twitter hack is not Bitcoin’s fault

A common topic of discussion that has been fairly evident over the past few days in the Twitter hack but CZ suggested it was BTC’s moneyness that made it amiable to the hackers, as it was a better form of currency than fiat.

Speaking about the negative impact, he said he would obviously like positive press to follow the largest digital asset in the world but citing “any publicity is good publicity”, it can be speculated that CZ did not mind the recent conundrum and attention that followed Bitcoin after the Twitter hack.

Binance Head Negative to Cryptocurrencies Pumping to Fresh Heights

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The crypto-currency community has been betting on version 2.0 of the altcoin season. Back in March, a team of researchers at Binance suggested that the crypto market might be approaching the Alt season. A situation where alternative cryptocurrencies (altcoins) pump hundreds of percentages and outperform the leading crypto, Bitcoin.

Well, it’s worth noting that the final alt season took place between 2017 and 2018 after bitcoin hit below-34%. The 6th of March Binance Research Paper hinted at renewed activity across the Altcoin industry. However, Binance CEO Changpeng Zhao recently came out claiming the anticipation that all altcoins are going to rally is too optimistic and should be dismissed by far.

Hot Anticipation of Alt Season in Third Quarter of 2020

Of course, a number of traders expect altcoins to gain by the third quarter of 2020. Looking at several altcoins, including Dogecoin, ChainLink and Cardano, reveals a frantic effort to take over the price charts.

Among the list, however, only Dogecoin has made gains in excess of a hundred percent. LINK scored at least 6.11 percent on the 24-hour price chart, while Cardano pumped at least 26 percent. Both hit a market price of $5.99 and $0.13 respectively. In addition, the market dominance of Bitcoin still stands at 63 percent.

Low Bitcoin Trading Volume in February

The basis of Binance Team Research back in March was a huge decline in the dominance of Bitcoin’s trading volume back in February. After that, it plunged from 40% to 27%. In fact, the researchers suggested that if the bearish trend were to continue, the high appetite for trade-in altcoins would definitely be rooted.

However, while the market can predict a surge across the following altcoins; Dogecoin, VeChain, Icon, Cardano, 0x and Cosmos; not all altcoins will pump. This is also according to a tweet from Binance CEO, an opinion backed by other industry followers such as Jason Calacanis-an investor in Robinhood and Uber. Who, however, claims that at least 99 percent of altcoin projects have no merit.

Meanwhile, according to CoinmarketCap the cryptocurrency market capitalization stands at $271.3 billion.

Bitcoin Price Breaks above $10,000 as it Prepares for the Next Bull Run

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The demand for the most popular cryptocurrency has pushed Bitcoin price past the critical $10,000 price level. If this price turns out to be a support, then the price of Bitcoin could be heading towards $12,500.

Bitcoin’s price is back to bullish once again as it breaks past the critical $10,000 resistance. If BTC price history can repeat itself, then the price of the largest cryptocurrency by market cap is braced for a surge towards the $12,500.

Bitcoin’s price action breaking out

Since the cryptocurrency market crash on March 12, BTC’s price action has been restricted to the mounting side-by-side channel. Every time BTC’s price action hits the top boundary of this channel, it plummets back to the bottom of the boundary and vice versa.

Nevertheless, the bulls seem to have stepped into the bottom line after the most recent rally. In the meantime, one would expect Bitcoin to progress more to the center or the top of the boundary channel.

 

Bitcoin Price

According to Into The Block’s “In/Out of the Money Around Price” (IOMAP) model, positive momentum to the uppermost part of the channel is imminent.  Based on this on-chain metric, there are not any substantial barricades that would block positive momentum above the current price levels.

Bitcoin price

On the other side, IOMAP researchers suggest that there are adequate supply walls to suck up any sliding pressure.  In particular, the one in between $9,270 and $9,580, where approximately 1.6 million addresses are holding more than 1.2 million BTC bought at the mentioned price tags.

Fear and Greed Index

Furthermore, the latest price surge has sent investors into ‘Greed’ according to data by the Fear and Greed Index. This significant indicator examines the general public sentiment based on the price and social media data and combining it into a single figure.

For the first time since early May, the Fear and Greed Index indicated 56 (Greed) when the price of Bitcoin was nearly the same levels. Greed is basically not a good signal for BTC though. “Be fearful when others are greedy and greedy when others are fearful.”

Ethereum is Significantly Undervalued , Says German Crypto Analytics Firm

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New research by a cryptocurrency research firm based in Germany, Blockfyre, suggests that Ethereum is significantly undervalued. The study shows that the price of Ethereum has yet to keep up with the development of the network.

On May 26, the German analytics firm Blockfyre published an analysis of the development of four key metrics of the Ethereum blockchain. The progress of the metric means that Ethereum is significantly undervalued at its current price. These metrics include the use of gas, the development of the ecosystem, the mean dollar of investment age, and the balance of the miners.

Gas usage indicates Ethereum is significantly undervalued

According to Blockfyre, Etherum could be heading for a bullish run. In fact, daily gas usage on the network reached a new record high on May 23, reaching 16.67 billion. Gas usage is the most powerful indicator that the use of the network is being used at a very high rate.

Every time a user makes a transaction through any Ethereum-based Dapp, the gas is burned. The higher the  gas usage, the higher the use of Dapps. For instance, interacting with NFT games or trading on Crypto Exchange Platforms. Indeed, all this activity is good at the price of Ethereum.

In addition , the development of the Ethereum ecosystem has remained consistently strong since 2018. This means that, despite the daily price of ETH, the development of power is still in progress. For example, DeFi products such as Uniswap and Balancer are popular Ethereum developers introducing new attributes, increasing the value proposition of Ethereum.

The average age of invested dollars

The average age of invested dollars on the Ethereum blockchain , and the ETH balances held by the validators are surging to record highs after bottoming during the crypto bubble two years ago. Additionally, the miner balances have multiplied twice since early 2018, as per the German analytics firm

According to Blockfyre co-founder, Simon Dedic: 

“It’s really interesting that both miners and investors have been holding ETH since 2018. It seems like a majority agree that these prices are just not worth selling ETH.” 

Furthermore, he says the price decline since the 2018 rally is contributed by ICO selling vast amounts of tokens for capital in dollars, as they continue building their products.

Bitcoin is Driving the Altcoin Prices Again but is The Narrative of an ‘alt-season’ Still Alive?

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During the start of 2020, the collective crypto industry rallied significantly but a majority of the community did not entirely focus on Bitcoin since a plethora of altcoins were outperforming the largest digital asset.

The spike in valuation for some altcoins was so high that eventually, the sentiment for another ‘altcoin season‘ started to take shape in the industry.

The correlation factor of major assets such as Ethereum and Litecoin de-coupled away from Bitcoin and users started contemplating that BTC’s dominance was slowly decreasing.

However, many did not expect the crash of 12-13th March, and any signs of an alt season were left in the dust.

Recently, the industry has started to pick up a bit of pace, and Bitcoin finally breached above $7000 for the first time since the collapse. As altcoin relied heavily on Bitcoin again, were the signs giving away towards the re-birth of another alt-season speculation? Probably not.

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As observed in the chart above, Weiss 50 Crypto rating excluding BTC, hasn’t been able to recapture the same level of performance as witnessed during the start of the year. After receiving a year high rating of 3305 on February 14th, the rating declined to 770 and at press time remained under the 1300 mark.

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A similar picture was observed on the Mid-Cap assets chart as well. Mid-cap assets were outperforming BTC for a significant part of 2020 until the collapse, as the rating dropped from 5587 to below 2000 at the time of writing.

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Although, data from Arcane suggested that small-cap assets continued to perform better than Bitcoin in the month of March. Bitcoin was down by 24.62 percent in the past month whereas, small-cap assets collectively outperformed BTC by incurring a drop of 23.19 percent throughout the period.

On the contrary to altcoins diminishing valuations, FTX’s altcoins, mid-cap, shitcoin, and Bitcoin index suggested that BTC has been the worst-performing asset since 2020. Bitcoin registered a performance index of -6.68 percent, whereas the other mentioned indices incurred better ratings.

The altcoin perpetual index was surprisingly the best performing index class with a hike of 12 percent YTD.

Analyzing both the sets of data suggested that various platforms rated the growth of Bitcoin and Altcoins with different parameters. Hence, it is not exactly clear whether altcoins are doing better or worse, but there are certainly no whiffs of an altcoin season.

Popular Crypto Trader Calls Industry ‘Immature’; Claims Bitcoin Will Be Fine

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The cryptocurrency market witnessed a tumultuous first half of March as prices crumbled and immediate support broke down. The market crash was so massive that some cryptocurrencies like Link even lost more than 99 percent of its value.

In a series of tweets, Scott Melker, a popular cryptocurrency advisor attacked the space by calling it immature. He believed that the market witnessed such a downfall because of the sheer ignorance of some projects in the space.

Mr. Melker claimed that last week’s crash was just the start as the industry needed to realize a lot more factors. According to him, the real fallout in the digital asset world had not yet started. If his words are to believed then exchanges and products were likely to disappear soon.

One of his tweets read:

“Bitcoin will be fine. Crypto as an industry is somewhat screwed for the foreseeable future in my mind. I’m not talking about the price of coins. People will continue to pump and dump them. Trading is fine. The core premise of crypto is damaged.”

While the analyst claimed that Bitcoin was fine, the world’s largest cryptocurrency was facing its own troubles. At the time of writing, Bitcoin was trading for 4644 with a total market cap of $84.8 billion. The cryptocurrency market was not the only industry hit as markets like the Dow Jones and Nasdaq also dipped.

Scott Melker reiterated that blockchain technology was the way to go for the future, as evidenced by several countries utilizing the technology. China has been at the forefront of this development with Red Dragon filing more than 80 blockchain patents recently. Blockchain technology has taken such a strong stance in China that it is even being used to solve Coronavirus related issues.

China-based Alipay is using blockchain technology to share epidemic related materials over the mobile applications. This was done to prevent the spread of misinformation and to keep China’s citizens healthy. The platform makes use of the Ant blockchain and is spearheaded by the Health Commission and the Committee of Economic and Information Technology of Zhejiang Province.

 

Stringent Capital Controls Accelerates Crypto Adoption in Lebanon

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Lebanon is currently experiencing the worst ever financial crisis in decades. Lebanon’s banking system (as reported by Aljazeera) is forcing account holders to withdraw their savings in Lebanese pounds on the official market; by imposing strict capital controls. Unfortunately, the country’s official exchange rates have dropped by a whopping 40% lower compared to the parallel market.

Foreign currency movements in the country are very minimal due to the increased number of barriers. As a result, confidence levels in Lebanon’s banks are at an all-time low among citizens. More Lebanese are now seeking help from decentralized currencies such as Bitcoin (BTC) to move their money in and out of the country.

Bitcoin is the world’s first use case of blockchain technology and also the most popular cryptocurrency. Bitcoin is not issued, nor controlled by any central authority including the government, or any financial entity. One does not require the services of a bank or a middleman to carry out a transaction. Instead, transactions made through the Bitcoin network are peer-to-peer, incognito, and authorized by a centralized global network of computers.

The adoption of Bitcoin in Lebanon was slow

Since the cryptocurrency launched about a decade ago, it has gained a lot of traction across the world. Most people use Bitcoin to almost buy everything from a cup of coffee to booking flights. Unfortunately, for Lebanon, this has not been the case. Bitcoin did not take off in the country as banks imposed restrictions on buying Bitcoin using Lebanese credit cards.

In addition, poor internet speed and low electricity supply in Lebanon have also contributed to the country’s slow adoption of crypto. Another good reason Lebanon avoided Bitcoin is to avoid the risks involved. Well, bitcoin is known to be highly volatile, while the Lebanese pound has been pegged to the dollar for quite a long time, both of which have been used accordingly. Unfortunately, confidence in the Lebanese pound has been very low in recent times.

According to Aljazeera, the withdrawal limit of foreign currencies is $50 in a month and $50,000 annually. The rising tension in the country over a failing banking system and a hugely indebted government which might collapse the country’s economy; have led to people to shift from saving in banks to investing in assets. The Lebanese have purchased cars, real estate, jewelry, gold and in abundance, Bitcoin.

Bitcoin Yet Again a Safe Haven

Indeed, the financial crisis clouding Lebanon is a proof yet again, that Bitcoin is a safe haven during times of global uncertainty. Early into the year when tensions were boiling between the United States and Iran; Tron Weekly reported on how Bitcoin presents itself as a safe haven at times of conflicts. In addition, Bitcoin has offered an alternative payment option to the mainstream financial system; to South American countries like Venezuela and also Argentina. 

Indeed, Lebanon’s financial crisis is yet another proof that Bitcoin is a safe haven in times of global uncertainty. Early in the year of tension between the United States and Iran; Tron Weekly reported how Bitcoin presents itself as a safe haven in times of conflict. In addition, Bitcoin has offered an alternative payment option to the mainstream financial system; to South American countries such as Venezuela and also to Argentina.

Despite trading, Bitcoin has presented the wealthy investors in the country a channel to transfer capital overseas. Lebanese investors are preferring LocalBitcoins to channel their capital abroad, rather than suffer the 40 percent liability at the local foreign exchange. 

In conclusion, the tense financial atmosphere in Lebanon is seeing cross-border remittance take up to ten days to complete. Meanwhile, international Bitcoin transfers take significantly less time of up to minutes, to complete a remittance. This alarming level of distrust has significantly accelerated the rate of crypto adoption in Lebanon, as Bitcoin continues to build its reputation as a safe haven asset. 

 

Visa Accords Coinbase the Power to Endow Debit Cards

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According to an announcement made on February 19, Coinbase is now a principal member of Visa. The credit card giants officially granted Coinbase that status back in December 2019. However, the status was not disclosed to the public until today.

Moreover, the new membership status eliminates quite a significant and expensive middleman off the process of issuing debit cards. The cryptocurrency firm used to work with Paysafe to issue Coinbase cards. Following the new membership status, Coinbase can now stop relying on Paysafe and control a large stake of the card payment stack; to issue debit cards that allow users to spend their own bitcoin, ether, and XRP anywhere Visa is accepted.

In particular, principal membership has given Coinbase a significant advantage as it is the first cryptocurrency firm; with the power to issue debit cards to others, including other digital currency firms and even other traditional firms. Visa confirmed Coinbase’s new membership status but reiterated the company itself won’t accept digital currencies when the project launches later in the year.

Moving forward, Coinbase says it will not issue cards to others anytime soon. Nevertheless, the principal membership status presents Coinbase with a new significant income source. The membership status simplifies the process of spending digital currencies anywhere a Visa card is accepted. In addition, the principle membership establishes a platform for the likely explosion of BTC, ETH, XRP, and many other digital currencies.  According to Zeeshan Feroz, CEO of Coinbase UK:

“Your Bitcoin holdings have never been liquid because you have to sell them, you have to go through a process, withdraw the money, and then spend it. It’s never been an instant, “Oh, I’ll buy this cup of coffee with bitcoin.” What the card is trying to change is the mindset that crypto is tucked away, takes two days to access, and can actually now be spent in real time.”

Coinbase Visa Debit Card not Available to U.S. Residents

Coinbase Visa cards will enable users to spend their cryptocurrency holdings in purchasing everyday items; regardless of whether the merchant accepts crypto. Moreover, the Coinbase card was initially launched in the U.K. but it is currently available in 29 other European nations. The Coinbase card can practically function anywhere in the world; however, it cannot be ordered by people outside the supported countries.

Nonetheless, the Coinbase Visa debit card will not be available to residents of the United States. The card that automates the conversion of cryptocurrency to the one preferred by the merchant; will go live later this year and will be managed by Coinbase’s U.K. subsidiary. It will be first issued to the 29 supported countries. The debit card will support nine cryptocurrencies which will include litecoin, bitcoin cash, Brave’s BAT, Augur’s REP, 0x’s ZRX, and Stellar’s lumen. The digital currencies will not be subject to capital gain taxes; since in Europe, users are not required to pay additional taxes; on price differences between when the crypto was purchased and sold like in the U.S.

In Conclusion

More than half the number of users who initially ordered the Coinbase card is still active. The U.K hosts the majority of the users followed by Italy, Spain, and France, according to Coinbase. Bitcoin and the digital currencies may not or are yet to replace MasterCard and Visa, leaving traditional debit cards as the only viable alternative.