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Analyst Predicts DeFi Growth May Push Chainlink (LINK) Price to $32

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Timothy Peterson, a chartered alternative investment analyst, says Chainlink (LINK) token could be valued at $32 by the end of 2020. Peterson’s comments come just days after LINK rallied by 88% over the course of two weeks.

The explosive growth of the Decentralized Finance (DeFi) market is thought to be one of the primary factors that spurred the demand for oracles, like Chainlink and Band Protocol (BAND) and data from Defi Pulse shows that since June, the total value locked in DeFi protocols surged by four-fold.

Chainlink has upside potential, but its growth is priced in

In the long-term, Peterson said Chainlink’s network growth and historical deviations hint at a more significant LINK rally but he cautioned that prices above $32 might not be sustainable. Peterson said:

“Did some quick analysis of Chainlink’s network growth rate and historical deviations in price put LINK at $32 by the end of the year, but that price would not be sustainable. Investors who buy at high levels risk losing 50% of their investment or more. Most growth priced in already.”

The DeFi market has expanded rapidly in recent months, causing most DeFi-related projects to rally. Despite this, there is a significant valuation gap between major and smaller networks.

As an example, Chainlink is currently valued at $4.475 billion. In contrast, Band Protocol, the second largest oracle project in the market, has a valuation of $257 million.

Venture capital investors, like Spartan Black’s co-founder Kelvin Koh, also have reflected on the valuation gap. Koh said that over time, competing platforms such as Band Protocol could begin to catch up.

Consequently, if the price of LINK rose above $30, it would place the network’s market capitalization over $10 billion. Whether Chainlink has sufficiently strong fundamentals, user activity, and other metrics to support a $10 billion market cap by the year’s end remains uncertain.

Sentiment remains positive

According to market data from Santiment, Chainlink and Band Protocol saw the highest level of social activity in the last several days. The researchers said:

“BAND and LINK have been mainstays atop our Emerging Trends platform the past couple days, which measures the highest percentage increase in social discourse related to crypto-assets and topics.”

The growing interest toward Chainlink and other oracle projects was also evident on Google Trends. But in comparison to major cryptocurrencies, like Bitcoin, there is less mainstream interest. 

Google Trends data comparison for Bitcoin and Chainlink. Source: Google

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, suggested that LINK price could recover in the short term. Van de Poppe said:

“Level holds, great. Breaking $13-13.25, and I’ll think we’ll test the highs again.”

In the short-term, most major cryptocurrencies face the risk of a pullback following the abrupt decline in gold and silver price. 

As an example, Bitcoin price (BTC) dropped by more than 4% within 18 hours as its momentum declined and today many altcoins are also registering double-digit losses.





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Can You Buy Crypto on One Exchange and Sell on Another?

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Question: Can you buy cryptocurrency on one exchange and sell it on a different exchange?

Answer: Yes.

Question: Why would you want to do this, and what is it called?

Answer: It’s call Arbitrage, and cryptocurrency investors do it to make money.

Just like any other asset, cryptocurrencies are worth what someone else is willing to pay for them. And as it happens, Bitcoin is worth more in certain areas of the world, as well as between different exchanges. This means there is a profit margin that savvy traders can exploit -and it is perfectly legal.

This is a practice known as arbitrage, where you buy Bitcoin (or another cryptocurrency) on one exchange and then sell in on a different exchange where it has a higher value. Arbitrage is a common market practice; cryptocurrency investors did not invent the practice. It is simply buying from one exchange and selling the same asset on another exchange so the owner can turn a profit.

Why Is Arbitrage Work Done?

The reason why you might buy Bitcoins in Canada and turn around to sell them immediately elsewhere is that there will always be variations of the cost of Bitcoin, from one exchange to another. And sometimes there is a large enough variation that you can make a substantial profit.

Exchanges price cryptocurrencies at what they can sell them for. That means that larger exchanges can move larger amounts of Bitcoin faster than smaller ones can. This also means that they can sell Bitcoin at a lower price.

On the other hand, smaller exchanges move smaller amounts of Bitcoin, so they have to charge more for Bitcoin. It is almost like shopping at a convenience store versus shopping at Costco -volume discounts apply.

The Math and Profit Margins

The potential profit from arbitrage varies greatly, of course. It also has a lot to do with how advanced you are as a cryptocurrency trader. That’s because if you are going to make this work, you need to know which exchanges are selling Bitcoin for more and which for less.

But if done correctly, arbitrage can be very profitable.

Here is a little bit of hypothetical math to show you how the profit is earned through arbitrage.

Bitcoin is selling for $1000 on exchange A

Bitcoin is selling for $1050 on exchange B

You buy 100 Bitcoin at $1000 on A for a total of $100 000

You then sell them on B for $105 000

That is a profit of $5000 in a matter of hours ($50 x 100 = $5000)

When to Try Arbitrage



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Japanese E-commerce Rakuten Incorporates Bitcoin, Ethereum and Bitcoin Cash to Its Platform

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Rakuten users will be able to shop using Bitcoin, Ethereum, and Bitcoin Cash.

Japanese e-commerce and online retailing company Rakuten Inc (TOKYO: 4755) has added crypto services to its payment platform. According to an announcement through its official webpage, Rakuten users will be able to shop using Bitcoin, Ethereum, and Bitcoin Cash.

The move by Rakuten to adopt cryptocurrencies in its platform is a major plus for the entire crypto market. The firm is reported to have over 95 million registered users according to a report by JPMorgan.

According to the press release, users of Rakuten’s crypto wallet can now exchange the selected digital assets for the firm’s e-money, Rakuten Cash, to charge its Pay app and Point credit card. Moreover, Rakuten has noted that the service will be done at zero fees. Whereby the minimum charge amount is set at 1000 yen and the charge upper limit of up to 100,000 yen per month.

Notably, the firm indicated that one must be a Rakuten registered member to use the service. Besides, one must have a physical trading account for Rakuten wallet. As a result of the new Rakuten crypto services, Rakuten customers can now purchase with crypto from thousands of merchants across Japan that accept Rakuten Pay and Rakuten Point Card.

In a bid to lure more customers into the new crypto services, Rakuten introduced a campaign to promote the services. According to the campaign, “up to 1,000 points will be given by charging Rakuten Cash from crypto-assets.”

Rakuten and Its Bitcoin Adoption

The Rakuten Payment Co. Ltd. was established back in 2019 to develop payment systems for the entire parent company. Some of the notable developments include Rakuten Pay, which is a real store payment, Rakuten Pay that is an app payment, Rakuten Point Card, Rakuten Edy, and Rakuten Check.

Notably, the Rakuten Wallet was conceived around three years ago during the 2017/2018 crypto bull rally. On the other hand, the Rakuten Cash is the online electronic money used by the Rakuten Group.

Although Rakuten has only adopted three crypto assets, most customers are not likely to use Ethereum due to the high fees involved. Bitcoin and Bitcoin Cash are going to be the winners of the deal as they offer cheaper transaction fees. However, Bitcoin Cash with its fast processing speed and low fees is going to be the favorite among most Rakuten customers.

The Rakuten crypto involvement is set to put it at a better vantage point in competitive aspects. Remember digital payments, particularly crypto assets, have gained traction during the ongoing coronavirus pandemic.

The huge exposure of the selected crypto assets by Rakuten to its customers will further fuel the ongoing bull rally. Notably, institutional investors have been largely attributed to the ongoing bull rally that has seen Bitcoin trade at its all-time high almost $60k last week.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
Mythology is my mystery!
“You cannot enslave a mind that knows itself. That values itself. That understands itself.”



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How Lightening Network Is Using Binance Smart Chain to Secure Privacy for DeFi Users

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Lightening Cash is a project that uses zero-knowledge proofs to provide users with an assurance of privacy in their blockchain-based transactions.

Even by the standards of the fast-moving cryptocurrency markets, the rise of decentralized finance has been remarkable. Only one year after hitting the $1 billion milestone, the total value locked in DeFi exceeded $40 million in February this year.

While other platforms are now making headway in propagating their own DeFi ecosystems, the vast majority of that growth has taken place on the Ethereum blockchain. Ethereum often comes under fire for its lack of scalability and high transaction fees, and rightly so.

However, there’s another issue with Ethereum-based DeFi that’s less frequently discussed – privacy. Every single transaction that takes place on Ethereum is recorded publicly. If you give someone your public wallet address, they can find out how much crypto you’re holding.

In the context of DeFi, the issue comes with even bigger problems. Ethereum’s transparency promotes front-running in DeFi. Front-running generally occurs in arbitrage transactions where traders attempt to profit from price differentials across exchanges.

The problem is that once a DEX transaction is broadcast to the network, even before it’s included in a block, it’s possible that another user, or more commonly, a bot, will see the same opportunity. They swoop in, bid a higher gas price so that a miner will include their transaction in a block first, and take the profit away from the trader. The practice is rife, as demonstrated in an August 2020 blog post from programmer Dan Robinson, who told of how his team ended up losing out on $12k worth of profit to a front-running bot.

Therefore, it’s evident that the privacy issue on Ethereum isn’t a trivial problem. Thankfully, at this point in DeFi, crypto innovators are beginning to emerge with solutions, and one such example is Lightening Cash, developed on the fast-growing Binance Smart Chain.

What Is Lightening Cash?

Lightening Cash is a project that uses zero-knowledge proofs to provide users with an assurance of privacy in their blockchain-based transactions. Zero-knowledge proofs, or ZKPs, protect user privacy with a layer of encryption that allows data to be shared between parties without disclosing the actual data itself. This means that the validating nodes on a network can verify a transaction but without having to see or publicly record all of the details of the transaction. It’s the same technology that Zcash uses to ensure privacy.

Lightening Cash is based on the same protocol as Zcash but operates on the Binance Smart Chain (BSC). BSC launched in September 2020 as a means of overcoming the lack of smart contract capabilities on the original Binance Chain. It offers several benefits for applications, including low fees, fast throughput, and compatibility with the Ethereum Virtual Machine.

Lightening Cash operates as a layer through which users can funnel transactions into DeFi protocols running on the BSC via the Lightening Cash user interface. Users pay a small fee in the native LIC token, which is forwarded into the project’s Treasury. The Treasury fund is used as a mechanism to help manage the price of LIC tokens, which is designed with long-term sustainability in mind.

LIC Token

A core challenge with many farmed tokens is that they end up being highly inflationary, which is ultimately not a sustainable source of value. Holders will simply dump the tokens once they reach a high enough value, forcing prices down. Lightening Cash aims to overcome this with a buy-back program.

Fees accrued in the Treasury will be used to buy LIC tokens from Pancake Swap, helping to provide a deflationary effect. This will offset the inflationary pressure that comes with offering LIC as rewards for farming and staking. The project aims for LIC tokens to provide a high APY but ensuring a price level that doesn’t incentivize dumping.

The LIC token will be issued under a fair launch model. Fifty million tokens will be released, with 35% allocated for farming, 33% going towards operations, development, team, and advisers, 12% to a community program, 15% held in reserve, and 5% to providing liquidity on PancakeSwap. Much of the token supply is also subject to an unlocking period, with the reserve supply subject to community governance for release.

The LIC token will be set at an initial listing price of $0.038 on PancakeSwap, meaning the initial market cap is $203,300.

Conclusion

As the first privacy protocol on the Binance Smart Chain, Lightening Cash stands a good chance of gaining adoption by BSC-based applications. However, the project aims to become a blockchain-agnostic protocol, which will provide significant scope for further growth. Given the privacy challenges faced by DeFi users, it seems likely that we can expect to see more from Lightening Cash and other privacy-preserving technologies in the future.

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Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.



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