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Stablecoins Hype? $133M Basis Project Shuts Down with No Warning

TL;DR

  • The promising Basis stablecoin had recently announced on its shutting down.
  • The reason for the shutdown is unknown, although it is speculated that it has something to do with regulatory uncertainty.
  • Experts warn that this can happen to other projects as well, for a variety of reasons, and that such events should be expected in the following months.

Basis stablecoin was one of the most popular and promising stablecoins over the past months. The project drove much attention and raised a total of $133 Million.

However, the project declared that it would be shutting down. Reports claim that the project will return most of the raised money to its investors. Among the project’s backers are Pantera VC, Google Ventures, DCG, MetaStable, a16z, and others.

The reason for the project shutting down seems to be regulatory issues after an initial attempt to launch its algorithmic stablecoin. The problems appear to be too complicated for the project’s team to solve, which is why Basis had to decide on shutting down the operation. It is currently not clear which regulatory agency has is the reason for this decision, or even what problems does the agency have with the token.

Basis also gave no previous hint of a project’s shutdown, and the announcement came with no prior notice. Basis itself is a non-collateralized algorithmic stablecoin, with its protocol implementing a second token known as ‘bond.’ This secondary coin needs to be purchased so that the primary one would have a stable value.

“Under the US laws, these secondary tokens are often classified as securities.”, as the situation was recently explained by Reserve CEO, Nevin Freeman.

Stablecoins – The ICOs Of 2018

It is interesting to note that stablecoins had received a lot of attention in 2018, due to the bearish market, maybe in anticipation for them to take the create crypto hype after the ICOs era of 2017.

The most famous stablecoin, Tether, has been a center of serious controversy, as it couldn’t prove that it holds enough money to back its circulating supply. Many took a liking to the idea of a stablecoin, including the Winklevoss twins, which is why many other stable projects emerged quickly.

Now that Basis is shutting down, experts warn that the situation is fragile and we could see more projects following Basis. Regulatory uncertainty, as big of a reason that it is, can often be only one of the reasons behind such outcomes.

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Source: Crypto Potato

Ethereum Price Analysis Dec.12: Where Do You Go, Ether?

Since our previous analysis, the crypto market hasn’t done much and is still trading sideways. The Bitcoin chart is currently attempting to break above the descending trend-line resistance level that has been keeping the price below it for the past 14 days.

If BTC price breaks up the trend-line and the price holds above with an enormous amount of volume, it could be a positive sign for the bulls, at least for the short-term.

On the other hand, if BTC fails by the resistance level (looking for signs of shooting star candle or large red volume candle), it could be a sign that the bears are still in control and we could expect a continuation of the downward.

It is not clear at the moment where the market is heading to (in the short-term), and this attempt to break the resistance level will most likely point the next days’ direction.

In our last analysis, we presented two continuation estimations on the ETH hourly chart. We can see that ETH chose the bear estimation, and broke below the trend-line support level. Since then ETH has been moving sideways.

Looking at the ETH chart

  • ETH is currently trading at the $90 price mark, on top the 21 EMA.
  • In case that Bitcoin breaches the above resistance level and continues higher, then we would expect the coin to move accordingly, with a potential target of around $97- $100. At that area lays the next resistance level.
  • If BTC fails to break up the descending trend-line, then ETH will most likely down towards its last lows around the $85 price level. Below is the $80 support, before discovering a new yearly low (the next support would be around $66).
  • Looking at the daily chart, we can notice the RSI indicator is still holding at the positive diversions. I would expect to see another leg down in price action, creating a lower low, while the RSI is building the third higher low, it might be a very positive signal ahead of an upcoming bullish move (as can be seen on the following chart).

ETH/USD BitStamp 1-Hour Chart

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ETH/USD BitStamp 4-Hour Chart

eth_dec12_4h-min

ETH/USD BitStamp 1-Day Chart

eth_dec12_1d-min

Cryptocurrency charts by TradingView. Technical analysis tools by Coinigy.

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Source: Crypto Potato

What’s The Real Reason Behind Coinbase Not Listing Ripple XRP?

Coinbase, the dominant US-based crypto exchange that was once known for only offering Bitcoin, Litecoin and Ethereum, has been on a coin listing spree.

After listing Ethereum classic, Steller, Cardano, Basic Attention Token, Zcash and 0x earlier in the year, the company recently announced that they would be ‘exploring’ whether or not to list 30 more tokens on their exchange.

coinbase_coins
Will Coinbase list all of the coins above? Source: Coinbase Blog

Among the 30+ tokens being explored is none other than XRP, the token that many in the crypto space have suspected Coinbase or curving for months for unknown reasons.

Almost every announcement of a new token to be added on Coinbase would create an uproar amongst members of the XRP community who feel that their favorite coin is unfairly omitted.

There are several reasons why Coinbase may be hesitant to list XRP. For most of 2018, Ripple has been involved in a class action lawsuit filed by investors who feel that they were sold unregistered securities when they bought XRP. They claim this led to significant financial losses, and are also accusing Ripple of manipulating the markets. The plaintiffs are seeking a settlement of $5 million.

The case has now been taken to Federal Court, with Ripple arguing that XRP is not a security and that the company and the cryptocurrency are separate entities. Ripple lawyers believe moving the case the federal court will give them an advantage because Federal Court has been known to favor corporate defendants.

Regardless of how the case turns out, such a high profile lawsuit is unlikely to have been ignored by Coinbase, which would make sense to be the primary reason why they have been hesitant to list XRP.

US Regulations First

Unlike Binance, Kucoin or other major exchange, Coinbase is aiming to position itself as one of the most regulatory compliant exchanges. This is likely because it is the only way they can tap into the American institutional investor base, and hopefully one day launch their own Bitcoin ETF. Prematurely listing a token that is currently involved in a legal case which could determine if it is, in fact, an unregistered security would be too risky for Coinbase and its users. The fact that XRP is now the second largest cryptocurrency by market cap only magnifies that risk.

“The court case may take years.”, Says CZ – Binance CEO,  “But if XRP is ruled as a security, it would seriously hurt a lot of US users, and to a certain extent, other users around the world too.  It certainly doesn’t look like a security to me, but that’s just one person’s opinion.”

Therefore, we are likely to see many other smaller, less significant tokens may their way onto Coinbase before XRP gets approved if it ever does.

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Source: Crypto Potato

Time for DEX: Decentralized Exchanges Gain Prominence in 2018

The emergence of Decentralized exchanges (DEX) was a significant story in the early part of 2018 but has since taken a backseat to other major innovations like security tokens and stable coins. Now it seems like decentralized exchanges are showing the market that they’re more than just a temporary hype.

We finally see an increase in adoption of the largest decentralized exchanges. This past November, Bancor, Kyber and 0x reached over 100,000 monthly trades combined.

dex_2018

Each of these exchanges offers their distinct approaches to decentralization in cryptocurrency exchanges:

Bancor creates smart tokens that hold several coins and use algorithmic price discovery mechanisms. Kyber Network focuses on pooling liquidity with smart-contract based trade mechanisms, and open protocols like 0x allow decentralized applications to run the order books and allow for liquidity aggregation.

Bancor is ranked #109 on the Coinmarketcap top exchanges list with a 24-hour trading volume of $919,617.

Kyber Network is ranked #153 with a 24-hour trading volume of $131,611.

0x token (ZRX) is ranked #29 amongst all cryptocurrencies on Coinmarketcap, with a 24-hour trading volume of $8,832,950.

DEX User growth leads to more liquidity

One of the significant benefits of decentralized exchanges growing in popularity is that they provide liquidity, something that has been a major problem for DEX’s because they cannot merely take initial capital and create money markets immediately like centralized exchanges, but have to rely on user growth for success. It seems that an increase in user growth bring in more liquidity, which further accelerates user growth as larger investors are now able to trade on DEXs.

It’s not clear why decentralized exchanges are taking off at this time. It may have to do with the growing awareness of the inherent security flaws in centralized exchanges, or the increasing resistance from traders against KYC and other invasive measures to confirm their identity.

Embracing Decentralization

“Many decentralized crypto exchanges have not been successful because they’re a hybrid.”, As stated by Joseph Young,” The exchange has to be completely decentralized/uncensorable or centralized, in between doesn’t have many merits. A decentralized exchange doing KYC kind of destroys the point”.

The choice to fully embrace decentralization without KYC requirements is most likely what has lead Bancor, Kyber Network, and 0X to dominate the decentralized exchange market, and may ultimately become a more substantial factor as investors contemplate where they wish to deposit their funds and make trades.

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Source: Crypto Potato

Bitcoin Price Analysis Dec.12: Range is tightening, a major move is nearby

Following yesterday’s analysis, whereas Bitcoin was consolidating in a tight range, the current situation is pretty much the same: For the past two days or so, Bitcoin is consolidating between $3330 and $3430.

As we know from the recent weeks (since breaking down the $6000 support), Bitcoin doesn’t like to consolidate for a long term. Hence, I do expect a significant move soon.

Bollinger Bands support this as well: By looking on the hourly chart, the bands are at their tiniest spread since December 1. As a reminder, this led to a significant move from $3900 to $4270.

Is the move we are expecting going to be positive again? Let’s see.

Looking at the 1-day & 1-hour charts

  • On both the hourly and the daily chart we could see that Bitcoin is encountering a major descending trend-line that was initialized around $4270 two weeks ago. This is a decision point.
  • The RSI of the daily chart is reaching support on the ascending trend-line, a decision point number 2.
  • For the short term, The Stochastic RSI of the hourly is reaching the overbought area. The market will need some air before a possible continue upward.
  • Bitcoin is now facing the 50 days MA support-turned resistance line (the pink line), along with the descending trend-line mentioned above.
  • For the bulls, behind the 50 MA, lies the 100 MA resistance (the white line, both around $3400), the next resistance is at $3500 level (along with the 200 days MA – the purple line) before reaching the $3600 – 3630 resistance area.
  • From the bear side – the closest support is nearby: $3350 – $3370. Below is the $3300 and $3200 level, which is also the annual low.
  • The trading volume is low compared to the past two weeks, in anticipation of a big move.
  • BitFinex’s open short positions had a slight increase to 37,000 BTC of open positions.

BTC/USD BitStamp 1-Hour chart

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BTC/USD BitStamp 1-Day chart

btc_dec12d-min

Cryptocurrency charts by TradingView. Technical analysis tools by Coinigy.

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Source: Crypto Potato

CFTC Seeks Public Comments on Ethereum and Crypto-asset Mechanics

The CFTC (Commodity Futures Trading Commission) just announced that they are seeking public comments and feedback to inform better decisions made by the commission regarding the technology, mechanics, and markets for virtual currencies beyond Bitcoin. The primary focus of the commission is to understand the Ether token and its use in the Ethereum network.

The commission filed an official RFI (request for information) to get answers from the public on questions relating to the underlying technology, opportunities, risks, mechanics, use cases, and markets of the Ethereum network. The CFTC is requesting that all comments be received within 60 days of the RFI being published in the Federal Registrar.

The stated purpose of this information sourcing is to benefit Lab-CFTC, CFTC’s Fintech initiative, which is dedicated to facilitating market-enhancing financial technology (Fintech) innovation, informing policy, and ensuring the agency has the regulatory and technological tools and understanding to keep pace with changing markets.

A Step Towards Regulation

This announcement represents an important step on behalf of the US regulators, as they try to advance their understanding of the crypto space beyond Bitcoin, which has been the primary focus of Government for the majority of the crypto markets existence. The increasing efforts to understand the critical differences between Ethereum and Bitcoin should help regulators become better informed about how to determine what kinds of tokens are, securities vs. utilities, as well as understand how the underlying technology behind cryptocurrencies can be used to enhance transparency within the government itself.

The full RFI document can be found here. It lists 25 questions posed by the commission, which are organized into categories such as Purpose and Functionality, technology, Markets, Oversight and Regulation, and cybersecurity and custody

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Source: Crypto Potato

Crypto Market Update Dec.11: Capitulation On The Go Following Another Red Week

Another red week for the crypto market, that already looks like an unfinished avalanche. Every time the market seems settled, we experience another drop in prices.  Bitcoin lost another 15% of its price, and most of the alternative coins lost even more.

We’ve been in this bear market almost a year, and even the Bitcoin miners have turned off their mining rigs or are trying their luck with mining various Altcoins. Traders, investors, and companies have lost their influence and the decline in prices causes panic all around.

However, there are companies that have kept enough funds on the side and experienced traders who use leverage trading skills while enjoy shorting Bitcoin, Ether, and others. It seems that shorting has become the new trend. However, it must be remembered that for every short there could be a short squeeze.

The market went down 25% on average of trading against the dollar. Against Bitcoin, it seems that the majority of the coins are looking to base on the previous floor of support, although some have changed their trend as we have recently seen in Ripple and Factom. In addition, Smartcash price went up by 25% due to its upcoming airdrop.

The market is having hard time, when the media keeps bashing Bitcoin and the tax authorities have frozen trading activity by collecting taxes for every transaction. But it’s not likely to stop the crypto market and we do expect another bullish wave in the future, after the regulation will be clear.

Bitcoin dominance at 55% | Market cap at 108 billion dollars.

Crypto News & Headlines

market update

Who wants Ethereum for $13? A Sudden Flash Crash on Coinbase Pro (GDAX) Sank ETH Price. Ether’s price may be sinking, but not as low as the $13 value for which it traded on the Coinbase Pro platform for a few hours on Dec 6 as traders garnered huge profits.

SEC Again Delays Decision on VanEck-SolidX Bitcoin ETF. For the third and obviously the final time, the U.S SEC has chosen not to approve or disapprove the Bitcoin ETF proposal and instead, stamped a  February 27 deadline for a final decision.

Bill Gates: Digital Currency Will Help the Poor. In a recent video, the Microsoft Billionaire was talking about crypto and expressed his belief that it can encourage equal wealth sharing and reduce the status-quo of many individuals.

BTCC Co-Founder Lee Hints At $333,000 Bitcoin (BTC) Prediction For 2021. While BTC is still fairly defending a four-digit value, Bobby Lee is predicting a six-digit value for the top cryptocurrency within the next three years.

ERC20 tokens Civic (CVC), district0x (DNT), Loom Network (LOOM), and Decentraland (MANA) are launching on Coinbase Pro. In the past week, Coinbase Pro users were thrilled by the announcement that CVC, DNT, Loom and Decntraland’s  MANA coin will launch and trade on the platform by DEC 9.

Coinbase continues to explore support for new digital assets. After recently announcing support for Zcash and several altcoins, the top U.S exchange has set its sights on making more cryptocurrencies and tokens tradable on their various platforms. Which will be next?

Researcher Warns Investors of Possible Bitcoin Cash (SV) Double Spending Attack. The Bitcoin Cash hardfork may have been completed, but a blockchain researcher took to Vimeo to explain a loophole that can make traders lose money on the chain belonging to Craig Wright.

Chart Analysis

This week we have chart analysis of Bitcoin, Ethereum, Bitcoin Cash and Ripple – Read more here.

btc_dec11d-min

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Weekly Price Analysis Dec.11: Bitcoin, Ethereum, Bitcoin Cash and Ripple

Bitcoin

Support around $3,800 has been broken very quickly and currently around $3,300 resistance currently around $3,630 the situation does not look good in the trending down. Traders are shorting, and the floor is yet to be seen at this stage. Traded around $3336



BTC/USD by Stompy1942 on TradingView.com

Ethereum

Against the dollar, it is traded around $87 support around $100 has become the resistance. The price has slightly stabilized, but the downward trend continues, and the floor is not yet approved, at least technically.



ETH/USD by Stompy1942 on TradingView.com

Against Bitcoin, the downward trend continues. Support arrived at 0.023 BTC, where a jump up was followed by a downhill trend. Traded around 0.025 BTC resistance around 0.028 BTC.



ETH/BTC by Stompy1942 on TradingView.com

Bitcoin cash

ABC

Against the dollar it is trading at around $93, these areas are currently unsupported. The graph is broken down from $120 by Fibonacci levels and the floor is further down around $60 resistance in this range in $110.



BCH(ABC)/USD by Stompy1942 on TradingView.com

Against Bitcoin traded around 0.028 BTC, can be said around the ATL. Resistance to this range around 0.032 BTC and seems to be looking for a floor for the coming period.


BCH(ABC)/BTC by Stompy1942 on TradingView.com

BSV

Against the dollar it is trading around $86 in the support areas that we have marked, looks like a healthy correction. Resistance in this range in $100.



BCH(SV)/USD by Stompy1942 on TradingView.com

Against Bitcoin weekly record at 0.034 BTC was flipping for a moment, but the rumors around the 51% attack on the network did their thing, and the correction came. Traded around 0.025 BTC resistance at 0.028 BTC support in this range 0.024 BTC.



BCH(SV)/BTC by Stompy1942 on TradingView.com

Ripple

Against the dollar it is trading around $0.29 support can also be found in this range, not far from the September floor at around $0.26. Resistance in this range around $0.33.


XRP/USD by Stompy1942 on TradingView.com

Against Bitcoin we went back to the analysis we had done before, and it seems that the trend and Fibonacci levels have been quite accurate. Traded around 8,859SAT support around 8,000SAT looks strong in the meantime. Resistance in 10,000SAT. It seems that since October a change in trend has started but there is still not enough trading volume.



XRP/BTC by Stompy1942 on TradingView.com

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US Congress Discussion to Introduce Two Crypto Bills on Thursday

  • On Thursday, December 13th, the US Congress is expected to address the issue of crypto legislation and at the same time, introduce two new bills.
  • The bills will address fraud and price manipulation, as well as possible consequences for the US, but also methods for the US to remain relevant on a global crypto and blockchain scene.
  • Experts expect that the two bills will be only the first ones in a long line that will go through the Congress in following months.

In two days, on Thursday, December 13th, the US Congress is expected to address a critical issue, one that might affect the entire crypto world. The issue in question revolves around crypto legislation, as two bills are supposed to be introduced. The bills are intended to increase user protection against fraud, and at the same time ensure that the US remains relevant in the crypto and blockchain space on a global scale.

In the US, Bitcoin (BTC) and Ethereum (ETH) are overseen by a single agency called the CFTC (Commodity Futures Trading Commission). As for every other cryptocurrency or platform, the US SEC is responsible for overseeing them.

Growing awareness of crypto calls for better protection

Cryptocurrencies have been in circulation for a decade now, but they only caught the attention of the US lawmakers in 2017. This was also during the period when Initial Coin Offerings (ICOs) became popular amongst cryptocurrency-based startups. The problem with ICOs was that they became recognized as security futures. However, as part of new technology, they were completely unregulated.

In 1929, after the stock market crash, lawmakers realized that securities markets in the US are in dire need of regulations. As a result, in 1934, a Securities and Exchange Act was enforced, to protect the US from experiencing another catastrophic event like the one in 1929. The SEC was also established to ensure that the Act would remain enforced adequately at all times. Also, this served as a way of regaining the confidence and trust of the public, and it even helped speed up the recovery of the US economy.

The difference between ICOs and IPOs

In traditional finance, the SEC is mostly in charge of regulating IPOs (Initial Public Offerings). When it comes to ICOs, they are very similar in concept, the only real difference being the fact that they are performed on top of a blockchain.

However, this small difference is of great importance, as it meant that there are no proper regulations to cover ICOs. In the meanwhile, the ICO popularity grew. While numerous ICOs were real and ended up being successful, a lot of them also failed, and some were even discovered to be scams. Unfortunately, investors had already lost millions by the time they realized their mistake.

The new bills which are to be introduced on Thursday, December 13th, are expected to address these issues. One of the bills is called “Virtual Currency Consumer Protection Act”, and it will establish a report regarding attempts at crypto price manipulation. The report will also cover possible consequences of price manipulation on the economy of the US as a whole.

As for the second bill, it was named “U.S. Virtual Currency Market and Regulatory Competitiveness Act,” and it will provide CFTC with directions regarding their study of crypto and blockchain regulatory laws introduced by other countries. After that, the CFTC will be tasked with recommending proper regulatory standards for the US itself.

Experts believe that the bills will likely be only the first ones in a long line of legislation that will attempt to regulate the crypto space. Numerous others are expected to follow in the coming months, and those in the crypto community are interested to see what will happen.

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The Big Whale Moving Nearly $3 Billion Worth Of BTC Is Exposed

TL;DR

  • Between December 1 and 6, 2018, a whale moved a total of nearly $3 billion of BTC between wallets.
  • It was discovered that Coinbase was this whale due to an announcement they made on their blog.
  • The possible reason for the movement could be a re-organization of financial assets, taking advantage of the bear market’s low fees.

Coinbase was the one who was moving almost $3 billion worth of Bitcoins (totaling 856,000 BTC) from the exchange’s wallets.

Huge money transfers

It appears that on December 3, 2018, the whale was moving 66,223 BTC (worth $257 million at the time) from an inactive address that hadn’t been used since 2014. The transaction was transferred directly to another address, then evenly distributed among 100 addresses.

Later on, it has become clear that the whale was even bigger as the transaction was only a small part of a vast money movement. The Chinese crypto news outlet 8btc.com discovered another transaction (totaling 66,379 BTC), which was split among 101 addresses.

Furthermore, a few days later, the media outlet found 107 addresses containing 8,000 BTC each, totaling 856,000 BTC, which is worth nearly $3 billion. Just for comparison, the infamous cryptocurrency exchange Mt.Gox lost 850,000 BTC in the hack (from which 200,000 was “found”).

The reasons for the whale movement

There were speculations that the whale is moving funds to or out of the OTC market. Other claims are stating that the BTC belongs to the fee.org website. However, it was uncovered that fee.org’s donation address contains a little over 2.2 Bitcoins, so this guess is highly unlikely.

But checking out a Coinbase announcement, which was made on November 29, 2018, it is highly likely that the cryptocurrency exchange was the one behind the huge money movement. Coinbase stated that the exchange would be running scheduled maintenance across its platform in seven days after the announcement. According to Coinbase, the maintenance could cause “movements” on all Coinbase-supported blockchains.

“These are controlled, closely monitored movements that are being performed to provide enhanced security and protection for our customers,” the exchange added in the blog post.

Checking out the dates, the money transfers occurred just in the time Coinbase was referring to; between December 1 and 6. It has become clear that the exchange was distributing user funds between different addresses, which is a common financial network security strategy to spread the risk of a single point of failure.

Furthermore, since we are in a bear market and the Bitcoin network is not congested at the moment, the fees are relatively low for transactions in the BTC network. Coinbase could have taken advantage of all this to reorganize its addresses and transactions – moving BTC from legacy to SegWit addresses.

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Source: Crypto Potato