Ethereum The New Hard Money?

A debate arose about the possibility of Ethereum becoming hard money and ended up highlighting more downsides to the digital asset than anything else. The founder of a Bitcoin investments managing platform, Charles Edwards, shared a chart that showed the circulating supply activity of Ethereum and Bitcoin and argued that “Ethereum has entered the hard money game. For the past 3 months, Ethereum’s inflation rate has been lower than Bitcoin.” “Hard money is not only about low inflation of supply, it is also about immutability of inflation – oil is not suddely hard money even when OPEC decides that supply rates are throttled.” -Twitter user @alpha_authority Related Reading | Solo Ethereum Miner Hits The Jackpot With 170 ETH For Mining A Block Hard Cash Or Hard Fees? In the short history of the cryptocurrency boom, many have debated the possibility for cryptocurrencies to surpass fiat currencies at some point. It is a feasible future scenario for Bitcoin, but other digital coins can only dream of it. As Investopedia explains, “Hard money maintains a stable market value relative to real goods and services and a strong exchange rate relative to foreign currencies,” and its uses involve “lower transaction costs and risks” In the case of cryptocurrencies, hard money would mean that a certain coin could not be subject to arbitrary modification. Opposite to Bitcoin, Ethereum’s rules can be –and have been– changed. Its supply schedule has been modified more than once, which indicates it can keep changing. The burnings of ETH make it temporarily deflationary, seeking a higher market cap. But as the protocol and issuance schedule of Ethereum are malleable, the chart above does not prove that the digital coin can even get close to being hard money. Furthermore, there are the inescapable high gas fees, expected to lower significantly by 2023 with layer 2, but most likely not low enough for consumer spending, commerce, and mainstream adoption. The rates can incentivize holding ETH, but not transacting, and other centralized blockchains like Cardano are already proving to be more economical. Even though Ethereum shows a lower inflation rate than Bitcoin, the supply also sets the digital coin below Bitcoin’s standards. Bitcoin has a finite supply of 21 million BTC. 80% of all coins have already been mined, but it would take the new supply of coins over 100 years to be exhausted. This is said to create digital scarcity. On Ethereum’s end, the circulating supply is unknown, it doesn’t have an overall cap. Some users also believe that “a deflationary base asset is not good for Ethereum apps” and that it will actually become a problem for its growth in the future.   Related Reading | TA: Ethereum Topside Bias Vulnerable If It Continues To Struggle Below $3.2K Ethereum In The DeFi Space Recently, Analysts at JPMorgan, who have favored Ethereum over Bitcoin before, claimed that ETH is losing its dominance in the Decentralized Finance (DeFi) space due to emerging strong competitors like Terra, Avalanche, and Solana. Its share of total value locked in DeFi lowered from almost 100% in 2021 to 70% by the end of it and could continue to drop. The analysts from the Wall Street banking giant think the necessary scaling of the network “might arrive too late,” Bloomberg reported. “In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from given, in our opinion,” The experts think that this loss of dominance could bring a downtrend for ETH’s price. Ethereum Price Ethereum trades at $3120 at the time of writing, down 1.75% in the last 24 hours.

Bitcoin Implied Volatility Plummets To Pre-Bull Market Levels: What This Means

Bitcoin has sharply declined in the past month which has dragged it down to the $40K price point. The digital asset’s downtrend had then promptly dragged their metrics like implied volatility down with it. This decline has been even sharper as bears have gotten a tighter grip on the market. For some, this could be bad news. However, for others, it could mean a period of opportunity. Bitcoin Implied Volatility Crumbles Bitcoin’s implied volatility is a metric that is used to illustrate investor expectations of future price volatility of the digital asset going forward. This metric is not only prominent in the crypto space but is used across a number of actives to map out investor expectations over time when it comes to volatility. If this metric is high, then investors are clearly expecting price volatility to be on the high side going forward, which is why this is an important metric for investors, especially those invested for the short term. Related Reading | Bitcoin Millionaires Are Flocking To This North American Tax Haven. But What Do The Locals Think? For bitcoin, implied volatility has been on a steady downtrend since the end of 2021. This follows the price movements which have also recorded a similar downtrend in its value. The implied volatile downtrend however ramped up even more at the beginning of this year. It is important to note that low implied volatility (IV) for bitcoin is uncharacteristic, hence why it is important. BTC implied volatility declines | Source: Arcane Research With such low levels, volatility bets become a more attractive venture for bitcoin where they can buy call and put options. One thing about low IV levels for bitcoin is that they tend to extend for a Lon time. An example of this is the low IV levels recorded in June 2020 that lasted for six months into December 2020. Bitcoin’s IV is being impacted by a number of factors, including decentralized finance (DeFi) innovations that are popping up around the corner. BTC Price Movements Bitcoin has been moving more or less erratically over the past few months. After hitting its peak of $69K, the digital asset had gone a consistent descent that saw it lose over 30% of the all-time high value. Additionally, the digital asset high is known to be a market mover has dragged the market down with it, losing about $300 billion off its own market cap in the process. Related Reading | What’s In Store For MicroStrategy Going Forward? CEO Michael Saylor Reveals Bitcoin has however held strong above the $40K point. The digital asset continues to show strong support at this point, suggesting that this is the point for bulls to hold and for bears to beat. BTC at $42K | Source: BTCUSD on TradingView.com In the last 24 hours, the price of BTC has grown from the low $41,000 to above $42,000, adding about $1,000 to its value just as the markets begin to open for midweek trading. The price of the digital asset is currently trending at $42,300, with indicators pointing towards a retest of the $42,500 resistance point. Featured image from Binaryx, charts from Arcane Research and TradingView.com

Reports Show Government Intends To Imply Stricter Regulations On Cryptocurrency ATMs

In a press release yesterday, the federal agency stated that crypto kiosks, or cryptocurrency ATMs, played a major role in the increasing crimes. The United States GAO (Government Accountability Office) blames crypto kiosks for increasing drug trafficking and human trafficking. Their reason, however, was that cryptocurrency ATMs aren’t as restricted as crypto exchanges, making their transactions harder to track. The GAO projects that it can be more difficult to curtail illegal transactions as crypto kiosks are becoming more and more popular in the U.S. and worldwide. Related Reading | Altcoins Are Encroaching On Bitcoin’s Dominance On Digital Payments To salvage these impending problems arising from crypto kiosks, the GAO recommended that the Financial Crimes Enforcement Network (FinCEN) and IRS cooperate to place more effective regulations on crypto ATMs. While observing the challenges in battling crypto-related crimes, GAO explained that the lack of information about crypto kiosks restrains law enforcement’s capability to defeat crime. Several Agencies Battle Crypto Crimes In the report, GAO also observes how, globally, cryptocurrencies are used in facilitating crimes and trafficking. Also, agencies have arisen to resist the increase of crypto-associated crimes. These agencies include the Immigration and Customs Enforcement (ICE), U.S Postal Service (USPS), and even the Internal Revenue Service (IRS). The Irregularities of Crypto Crimes Although the study shows that crypto-related crimes have upsurged irregularly. Recently, a new report from the crypto research company showed the contrary. In the latter research’s findings, crypto crimes reached their lowest point in 2021-contrary to its increasing volume of the entire blockchain transactions in the year. Thus, as cryptocurrencies become more adopted, crypto-related crimes will simultaneously increase. However, the expansion of overall crypto transactions is far-outperforming some criminal activity. Crypto Kiosks And Human Trafficking The GAO’s report showed that cryptocurrency has recently been adopted as a means of payment for human trafficking. By ‘human trafficking,’ we imply sex trafficking and labor trafficking. More commonly, sex traffickers now adopt cryptocurrencies as a payment option. Crypto ATMs And Drug Trafficking The report also stated that after the shutdown of Silk Road-the online dark web market—in 2013, the entire hidden web marketplace has become more secure. Thus, making the marketplace for illicit drugs more difficult for the law to detect. Again, this is because of the growth of smaller marketplaces. Tightening Gaps Against Cryptocurrency ATMs The GAO’s problem with cryptocurrency ATMs is that, although the ATM operators must be registered with the FinCEN, they don’t usually notify law enforcement agencies about their ATMs’ locations. That action impedes the federal agencies’ access to locate ATMs in areas stated as high-risk regions for financial crimes. Related Reading | American Rapper Lil Baby On Holding Bitcoin And Ethereum Over Fiat Thus, by increasing regulations on cryptocurrency ATMs, the GAO presumes that enforcing the government will access better information. Also, they will be able to locate potentially illegal transactions. Featured image from Pixabay, chart from TradingView.com

India’s PM Calls For A Common Global Approach For Tackling Crypto

At the WEF’s 2022 Davos agenda, Narendra Modi, Indian Prime Minister, called for a united global stand to tackle the issues emerging from the cryptocurrencies’ increasing adoption. The key takeaway of the Indian PM’s talk was, “A single country cannot tackle the challenges from crypto well enough.” Call For A Standard Global Approach Talking for all intents and purposes at the World Economic Forum’s 2022 Davos Agenda on Monday, the Indian Prime Minister discussed several challenges, including a requirement for a common global practice to deal with cryptocurrencies. He said at the WEF agenda; “The kind of technology that is associated with it, the decisions taken by a single country will be insufficient to deal with its challenges. We have to have a similar mindset.” Despite not having significant industry regulations and laws for protecting investors, crypto trading in India keeps gaining traction. Due to profoundly different perspectives of crypto industry representatives and financial sector regulators, the government plans to pass a bill in this challenging situation to protect investors better. The India PM added, “Cryptocurrency is an example of the kind of challenges we are facing as a global family with a changing global order. To fight this, every nation, every global agency needs to have collective and synchronized action.” Modi Government Undecided On Crypto Bill In December 2022, during the winter session parliament discussion, the crypto bill was the top priority for the debates. Still, the government could not finalize things because it could not stand firm on a few critical issues. Related Reading | India: A Back & Forth Affair With Cryptocurrency According to some sources, the government concluded that they would look for worldwide help figuring out a common approach. Still, the authorities have not yet confirmed why they failed to produce the bill to parliament. Total market cap at $1.977 trillion | Source: Crypto Total Market Cap on TradingView.com Modi’s Recent Speeches And The Crypto In the last quarter’s time span, the Indian Prime Minister has spoken at several world forums many times, but he never talked about this issue to the local audience in India. In November 2021, at the Sydney Dialogue, Modi, in his speech, forewarned that we must protect emerging tech from any mishandling. Likewise, during the US President Joe Biden-facilitated Democracy Summit, Modi said emerging technologies ought to ensure a majority rule system, not subvert it. Emphasizing his stance on the matter at the WEF’ Davos Agenda 2022, Modi noted, “He reiterated this stance during his WEF speech yesterday. “That’s why every democratic nation has the responsibility to bring about an emphasis towards reforms in these institutions to make them capable enough to deal with modern challenges in the future.” The event in question, Davos Agenda of the WEF, is being held from 17-21 this month, January 2022. Several state heads are lined up to address the event. Related Reading | How India Sees Crypto: Large Exchange Shows 10x Growth In User Base International organizations, top industry leaders, and civil society will also participate in the summit. It aims at the deliberations on critical challenges that the world faces today and discusses how to tackle them. Chart from TradingView.com