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BTC record in sight, ETH rallies, Uniswap disaster: Hodler’s Digest, Nov. 15–21

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Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

 

Top Stories This Week

Ray Dalio might be wrong

Path to $20,000 Bitcoin price now wide open after previous resistance breaks

Is… is this happening?! After encountering resistance at $18,420 (a price that was unthinkable even a few days ago), Bitcoin surged to new highs of $18,817.

The latest boost put BTC within touching distance of $20,089 — the all-time high set back in December 2017.

“It’s killing it this year,” Fundstrat Global Advisors co-founder Tom Lee enthused. He added that 2021 could be a year of “fireworks” for the world’s biggest cryptocurrency.

A corporate frenzy has meant that companies now hold over $15 billion in BTC. But this surge isn’t just being driven by institutions. Data suggests that searches for Bitcoin in November 2020 now far outpace what was seen in December 2017.

FOMO is growing. Glassnode reported that there was a major spike in the number of new Bitcoin addresses on Nov. 18 — 25,000 an hour, to be exact. The co-founder of Morgan Creek Digital sold his Chevy to get his hands on more crypto. And the chief information officer of BlackRock says BTC is here to stay… and will eventually take gold’s place.

By all accounts, it looks like Bitcoin has arrived. It’s no wonder 73% of millionaires want to own digital assets before 2022.

 

Ether hits $500 for the first time since June 2018, outperforming Bitcoin YTD

It isn’t just Bitcoin that’s starting to return to historic highs.

ETH hit $500 for the first time since June 2018 on Friday, with other altcoins also slowly staging a comeback.

Reaching this psychologically important barrier delighted traders — not least because ETH has outperformed BTC so far this year.

While Ether’s year-to-date returns stand at 284%, Bitcoin trails behind at 155%. It’s a different story when it comes to how these two assets have appreciated since March, though. ETH/USD is up 327% from its low point of $117, while BTC/USD has ballooned 411% from $3,600 to $18,420.

Cointelegraph Markets analyst Michaël van de Poppe has argued that a realistic top for ETH’s next bull run could be as high as $20,000, while Nugget News CEO Alex Saunders has forecast that Ether could beat its all-time high of $1,400 by the end of 2021.

It’s also been a good week for Litecoin, which has gained more in percentage terms than BTC and ETH combined over the past seven days.

 

Attack of the vampires: Uniswap loses 57% TVL as rivals up rewards

The celebratory atmosphere isn’t extending across the whole of the crypto sector. The total value locked in Uniswap crashed 57.5% after its yield farming incentive program ended — plummeting by more than $1 billion in less than 24 hours.

SushiSwap saw an opportunity to pounce, with the cloned, automated market maker announcing a new scheme covering the same four pairings previously incentivized by Uniswap. Its TVL has rocketed by almost 160% in two days, from $407 million to $1.05 billion.

Several other DEXs have also launched “vampire” campaigns targeting Uniswap’s liquidity providers… including Bancor and 1inch.

As Uniswap liquidity vanished before their very eyes, token holders pounced on a new governance proposal that sought to reinstate rewards in the form of UNI tokens for liquidity providers. The platform is unlikely to go down without a fight.

 

OKEx to resume withdrawals next week with promises of 100% reserves

After weeks and weeks of waiting, OKEx is finally resuming withdrawals of customer assets.

The shock suspension came on Oct. 16, rocking crypto markets, with reports circulating that the exchange’s founder Mingxing Xu was under investigation by Chinese authorities.

OKEx has now revealed more details about what happened and stressed that the company has been cleared of any wrongdoing.

However, the exchange admitted that existing contingency plans hadn’t covered what would have happened if a private key holder became unreachable due to unforeseen circumstances.

OKEx says withdrawals will be back in full by Nov. 27, and users will be able to claim back their funds in full if they wish. Acknowledging that trust will need to be rebuilt, the exchange is planning to launch a new loyalty reward program to apologize.

 

Celebrities are catching the Bitcoin bug

Former Game of Thrones actress Maisie Williams certainly caused a scene this week when she asked her 2.7 million Twitter followers whether she should go long on Bitcoin. (46.6% said yes, 53.4% said no.)

Major investor Mike Novogratz was one of those who weighed into the debate, telling the A-lister: “I bought more BTC last night at 15,800. It’s going to 20K and (then) To 65K. The network effect has taken over. I see tons of new buyers and there is very little supply. It’s an easier trade here (than) at 11K. So YES, buy it.

Later in the week, the rapper Logic revealed that he, too, had dived into Bitcoin.

In a video posted to his Instagram story, the star — whose real name is Sir Robert Bryson Hall II — bragged that he “bought 6 million in Bitcoin last month.”

Despite his posturing, Logic’s investment could turn out to be a particularly canny financial move. Depending on when in October he snapped up the BTC, he’ll be sitting on a profit of between $2 million and $4.4 million.

 

Winners and Losers

Winners and Losers of the week

At the end of the week, Bitcoin is at $18,675.88, Ether at $525.95 and XRP at $0.41. The total market cap is at $533,641,480,617.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Helium, SushiSwap and Reserve Rights. The top three altcoin losers of the week are The Midas Touch Gold, ABBC Coin and Blockstack.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

 

Most Memorable Quotations

 

“I think we will start seeing lots of traditional players like banks and major payment providers partner with crypto custodians. PayPal will be the first and then more banks and financial institutions will follow.”

Bob Reid, Everest co-founder and CEO

 

“We are extremely pleased to be able to announce the return of a full service for our users and would like to thank them for their continuous support during this difficult time. We apologize for the inconvenience caused and know that we must continue to work diligently to restore their confidence.”

Jay Hao, OKEx CEO

 

“It’s either going to keep going like right now in the next few weeks and get to $20,000 very quickly, or it’s going to have its bit of a range now and then hopefully positive into next year.”

Alex Saunders, Nugget’s News CEO

 

“I honestly think that Bitcoin will hit $100,000 in the next five years, and then it’s going to become about, ‘Well do they actually try and shut it down, or how do they regulate it and trade it?’”

Alex Saunders, Nugget’s News CEO

 

“If it’s allowed to just continue on its mission and absorb all the money from around the world and become a global reserve currency… I think we can get to $1 million per coin in the next, whatever that is, 15 years.”

Alex Saunders, Nugget’s News CEO 

 

“Right now we’re seeing a lot of other projects launching incentives after Uniswap’s ended.”

Sergej Kunz, 1inch CEO and co-founder

 

“You have the hardcore ‘I’m a cryptocurrency investor’ group but it hasn’t really expanded because it’s been so volatile, there have been so many questions around security and what regulations might do. The number of questions I get on it now is a fraction of what I got a couple of years ago when it was really hot.”

Kathy Jones, Charles Schwab chief fixed income strategist

 

“I think DeFi is here to stay. Even now, with Bitcoin’s popularity rising again, DeFi is still popular. We think there is a lot of growth potential in DeFi.”

Changpeng Zhao, Binance CEO

 

“Should I go long on Bitcoin?”

Maisie Williams, actress

 

“I bought more BTC last night at 15,800. It’s going to 20K and (then) To 65K. The network effect has taken over. I see tons of new buyers and there is very little supply. It’s an easier trade here (than) at 11K.”

Mike Novogratz, investor

 

“Grayscale Bitcoin Trust now holds more than 500,000 $BTC. Yes, you read that right.”

Grayscale Investments

 

“$20,000 #Bitcoin Is Primary Hurdle Toward $1 Trillion Market Cap — The digital version of #gold but with more-limited supply and a history of adding zeros, appears to be in an early price-discovery stage and may simply continue its ascent in 2021. Mainstream adoption is rising.”

Mike McGlone, Bloomberg analyst

Vitalik likes to move fast

Prediction of the Week

Bloomberg’s McGlone thinks Bitcoin could hit $170,000 over the next two years

It’s been a huge week for predictions. Bloomberg Intelligence analyst Mike McGlone suggested that the next year or two “could add a zero” to the end of Bitcoin’s price — taking it to $180,000 at current levels.

Earlier this week, McGlone also said that a $1-trillion market cap (about $47,000 a coin) was “the next big resistance” for Bitcoin… as long as it could surmount the “primary hurdle” of reaching $20,000 first. “Mainstream adoption is rising,” he tweeted.

Elsewhere, Nugget News CEO Alex Saunders — who we mentioned earlier — told Cointelegraph that BTC can hit $100,000 in five years and $1 million by 2035. He described current market conditions as the “perfect backdrop” for new highs.

Last but not least, a Citibank analyst said BTC has seen “unthinkable rallies followed by painful corrections” — and suggested that highs of $318,000 could be seen some time in December 2021.

 

FUD of the Week 

 

Bitcoin price drop in 3, 2… 1? Fear & Greed Index nears dangerous record high

As the markets surged, there’s one thing that’s worth keeping an eye on: the Fear & Greed Index.

This metric has been firmly in the “extreme greed” category for some time. It was flashing a score of 86 on Friday and an eye-watering 94 on Thursday. That’s close to the all-time high of 95 points out of 100 seen on June 26, 2019.

Compiled using multiple estimates of investor sentiment, the Crypto Fear & Greed Index delivers a normalized score out of 100 to gauge how overbought or oversold cryptocurrency markets really are. The closer the number is to 100, the greater the chance that the market is due for a pullback.

Heavily tied to price action, the index has succeeded in calling price tops with considerable accuracy since its launch in early 2018.

 

“Coordinated media FUD” about Bitcoin from Financial Times to Fox Business

Mainstream media outlets are finally reporting on the recent rally that saw Bitcoin creep close to its all-time high, but some commentators appear to be determined to spread FUD.

The Financial Times published an editorial that warned Bitcoin’s “status as a safe haven is more theoretical than anything else.”

Fox Business also noted Bitcoin’s price rise with apparent alarm and set about warning its readers away from investing in the cryptocurrency. It rounded up Bitcoin haters including gold bug Peter Schiff, Roubini Macro Associates CEO Nouriel Roubini and Bridgewater Associates founder Ray Dalio.

However, there was some support for Bitcoin in the media from an unexpected party — China, a country well-known for its tight stance restricting the digital asset. The recent price rally even hit the national news, on state-run CCTV.

 

Binance files U.S. lawsuit against Forbes and two cryptocurrency journalists

Binance has filed a lawsuit against Forbes Media and two of its journalists, Michael del Castillo and Jason Brett.

The exchange alleges that an article published under the title “Leaked ‘Tai Chi’ Document Reveals Binance’s Elaborate Scheme To Evade Bitcoin Regulators” was defamatory, false and misleading — and caused millions of dollars in losses.

The article in question reported that the “Tai Chi” document contained details of a scheme designed to “intentionally deceive regulators” in the United States.

While Forbes says it stands by its reporting, Binance is now demanding compensatory and punitive damages, and there’s no doubt that the company is getting serious.

The exchange has retained the services of Charles Harder, the attorney best known for representing Hulk Hogan in a suit against Gawker Media. He procured a reward of $140 million, and this directly led to the downfall of the media group.

Bitcoin climbs higher

Best Cointelegraph Features

 

Bitcoin price breaks past $18,800 as bears and bulls map out its path

The price of Bitcoin has stabilized above $18,000 and broken out of the critical $18,500 level. Analysts discuss short-term bull and bear cases.

Uniswap fights back as competitors drain value from the DEX

Even as incentives continue to dry up on Uniswap, TVL across the board seems to have remained steady.

Who watches the watchmen? Crypto may not be as trustless as it seems

Crypto is often seen as trustless and failproof. But as more regulation, venues and developers come aboard, just how trustless is it really?



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US intelligence is looking at Chinese CBDC as a national security threat

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The U.S. national security apparatus is warning other agencies about China’s coming digital currency. 

On Wednesday, news outlet the Washington Examiner reported on a letter that National Intelligence Director John Ratcliffe had send Securities and Exchange Commission Chairman Jay Clayton earlier in the month.

According to the report, Ratcliffe offered to have staff brief Clayton on the security issues that derive from China’s dominance in crypto mining as well as the country’s progress in digitizing the yuan. Ratcliffe’s letter also apparently pushed Clayton to ensure that U.S. crypto firms remain competitive.

Cointelegraph has reported extensively on the race for a central bank digital currency, or CBDC. Among major economies, China seems to be closest to launch. 

Since Bretton Woods in 1944, the U.S. has enjoyed a privileged status as the issuer of the world’s reserve currency, the U.S. dollar. To this day, almost all international trade is settled in dollars, though that is changing for countries like Russia and China, which are subject to extensive U.S. sanctions.

The dollar’s special status affords the Federal Reserve extra flexibility in printing more dollars without running into hyperinflation, as there is huge demand beyond U.S. shores. It is also this special status that allows U.S. sanctions to be such useful instruments of international influence.

A successful digital yuan could challenge the status of the dollar in international trade. The flip side, however, is that many see a digital yuan as a tool of surveillance for the Chinese Communist Party. While that might reduce demand, that upgraded access to information may be another factor that Ratcliffe is worried about. 



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South Korean government to delay crypto tax rules by three months

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The South Korean National Assembly is planning to delay the implementation of new income tax laws on cryptocurrency gains following appeals from industry bodies.

According to a Nov. 25 report on Korean-language news site DongA, the 20% tax, originally due to be imposed from October 2021, will now not come into force until Jan. 1, 2022.

The delay is intended to give digital currency exchanges time to implement the changes required to incorporate the new tax infrastructure.

As Cointelegraph reported, the new tax structure for cryptocurrencies was announced in July this year and amounts to a 20% tax on any gains over a threshold level of 2.5 million won ($2,260) per year.

The rules were originally planned to come into force on Oct. 1, 2021, which led to complaints from the Korean Blockchain Association.

The KBA claimed that the short window between the existing tax regulations ceasing to apply on Sept. 30, 2021 and the new regime coming into force the very next day would be difficult for exchanges to comply with, initially requesting a delay until Jan. 1, 2023.

The government seems to have acquiesced to some degree, although it only agreed to an extension of three months rather than the 15 months requested.

Prior to the introduction of the new legislation, digital assets have been treated as currencies and so have not attracted taxation.



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Economic justice doesn’t need the blockchain, say advisors to ‘The Squad’

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American progressives, particularly the high-profile group of Congresswomen known as “the Squad,” have been highly vocal on questions of economic equity, the corrosive social impact of Big Tech and the need to reimagine fiscal and monetary policy in the post-2008 and post-COVID-19 political moment.

How do they view blockchain technologies and the subsequent debates that have surrounded the digital dollar, given the potential for some overlap when it comes to certain concerns like financial inclusion, efficient distribution and citizens’ privacy? 

In a recent interview for Forbes, the economic policy advisors to several members of the Squad — Alexia Ocasio-Cortez (D-NY), Rashida Tlaib (D-MI) and Ayanna Pressley (D-MA) — strongly marked out their position as against that of many in the blockchain space.

Chastity Murphy, Rep. Tlaib’s economic policy advisor, engaged with the digital dollar question as it was raised in the recent “Automatic Boost to Communities Act,” which proposed digitizing the currency by 2021as one means to make public stimulus payments more efficient. Murphy said:

“There is a lot of hype around blockchain technology, mostly from people who are thinking about its private sector uses. When it comes to publicly administered digital payments, the more important question is not how to create a distributed ledger managed by multiple actors, but how to create digital cash, which you can hold in your pocket, that doesn’t require a ledger at all. That’s the bigger priority, in our opinion.”

Murphy and other advisors to the Squad have underscored the importance of enabling recurring payments to citizens throughout the COVID-19 public health and economic crisis. 

For progressives like Murphy, engagement with new technologies in the field of finance and public policy centers less on short-circuiting state and other intermediary actors, and more on the biases baked into many so-called “disruptive” or innovative solutions. 

Murphy noted the systemic, damaging impact of automation and algorithmic governance on marginalized communities and people of color. To illustrate this point, she highlighted facial recognition technology and its potential to reinforce racial discrimination in areas such as law enforcement and surveillance. This technology is, for her, “an example of what happens when you separate questions of efficiency and design from questions of exclusion, access, and privacy.”    

Another response from Aya Ibrahim, economic policy advisor for Rep. Pressley, revealed a similar difference in priorities when it comes to private actors that aspire to pitch in their own “solutions” to financial exclusion. She told Forbes:

“Facebook Libra’s selling point initially was that this was going to be a way to bank the unbanked and better serve the underbanked, but that wouldn’t necessarily exist had we provided the services we should had provided.”

In their emphasis on the need for coordinated, state-led and publicly accountable measures to tackle financial marginalization, soaring inequality and secular stagnation, the Squad’s priorities — especially when it comes to fiscal and monetary policy — place them at some distance from the proponents of decentralized, private-sector digital currencies. 

Progressives have been influenced by heterodox economic thinkers such as Stephanie Kelton and other advocates of Modern Monetary Policy, as well as economists that advocate the possibilities of an “entrepreneurial state,” such as Mariana Mazzucato. 

Such thinkers share a critical stance with many crypto advocates when it comes to policies such as quantitive easing and loose monetary policy; yet their criticism is motivated by the regressive impact that these policies have on economic distribution due to the excessive inflation of asset prices. 

Relatedly, progressives’ advocacy of deficit spending and the macroeconomic flexibility that many states, as monetary sovereigns, enjoy, is a world away from the proponents of “hard money” and capped currency supply in the crypto sphere.

Critics of Big Tech across the political spectrum will, nonetheless, no doubt remember Ocasio-Cortez’s stark characterization of Facebook’s proposals for Libra back in 2019:

“In the history of this country, there is a term for being paid in a corporate-controlled currency […] It’s called ‘scrip.”

“The idea that your pay could be controlled by a corporation instead of a sovereign government,” Ocasio-Cortez continued, risks destabilizing what should be a public good.



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