News Updates January 11, 2023
1. Bitcoin price taps $17.5K as traders in ‘disbelief’ doubt crypto rally
BTC price action returns to the $17,500 mark for the first time in almost a month, but traders refuse to flip bullish.
Bitcoin staged a brief but promising return to $17,500 overnight on Jan. 11 as newfound strength lingered.
Bitcoin fails to win over skeptical traders
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting new local highs of $17,504 on Bitstamp.
Almost tying with the peak from Dec. 16, the pair displayed rare upside momentum against a backdrop of some of the lowest volatility ever seen over the holiday season.
Traders and analysts anticipate an erratic reaction to upcoming macroeconomic data from the United States. Due on Jan. 12, the Consumer Price Index (CPI) print is expected to bolster the narrative that inflation is waning, offering a potential window of opportunity for risk assets.
Comments from Jerome Powell, Chair of the Federal Reserve, had disappointed markets the day prior, avoiding mention of future policy or the state of the economy itself.
“The real break out or dump will come on Thursday when CPI data is released,” popular trader Johnny summarized on Twitter.
A subsequent post cautioned on “bull tweeting as $BTC sits under higher time frame resistance at $17,600,” with Johnny previously urging followers not to “feel the urge to FOMO especially this week.”
“CPI this week could whip saw the prices back to the where they were last week,” he argued.
The conservative approach appeared symptomatic of the broader sense of apathy among market participants on the day, with little belief that BTC could put in a sustained rally.
The past weeks have seen continued low price predictions, with some of the best-known traders focusing on $12,000, $10,000 or even lower.
“Are we heading into 'disbelief'?”, queried Philip Swift, co-founder of trading platform Decentrader.
A bearish take stayed firmly in place when it came to Il Capo of Crypto, who ignored the recent recovery across crypto to insist that there was “not a single bullish confirmation yet.”
“Just look. It's there, right before your eyes. Bearish trend is intact,” he commented alongside the three-day BTC/USD chart.
“Bitcoin and most of the market are testing broken supports as resistances. We have seen this over and over.”
Altcoin volume “very concerning"
Equally doubtful was the prognosis for altcoins, with Ether (ETH) outperforming BTC as the rally set in.
Looking at trading volume dominance, Maartunn, a contributor at on-chain analytics platform CryptoQuant, feared the worst.
“In the 6-years crypto experience, I noticed something important. Healthy and sustainable price movements start with Bitcoin going up, with Ethereum/altcoins to follow,” he wrote in a blog post.
“Usually when traders getting bored on BTC, they start trading altcoins which are, in general, further on the risk curve. This makes them very fragile and easy to squeeze.”
An accompanying chart showed altcoin volume dominance above 50% of the total, potentially functioning as the writing on the wall for bulls.
“Today, altcoin dominance is again above 50%. Obviously, it doesn't have to be as heavy as these examples. But be aware: when altcoins continue to dominate, there is a potential risk for further downside,” he added.
2. Twitter Developing ‘Coins’ Feature With Stripe Payments
Twitter is continuing to develop a new feature that will allow users to give each other “Awards” using “Coins” that can be purchased with fiat currency.
According to security researcher and data miner Jane Manchun Wong, Twitter is currently developing a purchase interface and menu item button for Coins, and will use Stripe to process payments in fiat.
Twitter is working on Coins purchasing screen
On the web, Twitter Coins purchase will be done through Stripe https://t.co/RFpWswnZfG pic.twitter.com/eAzPWjfoye
— Jane Manchun Wong (@wongmjane) January 10, 2023
The news suggests that Twitter’s monetization strategy is continuing to develop, despite losing much of its staff just a few months ago following new CEO Elon Musk’s takeover.
Twitter is also working on a “Coins” menu item that takes you to the purchase screen pic.twitter.com/tSG8msWBGe
— Jane Manchun Wong (@wongmjane) January 10, 2023
While it’s unlikely that these Coins will exist on the blockchain, it’s possible crypto could be added as a payment method through Stripe, allowing users to buy Twitter Coins with crypto in the future. Stripe leaned into supporting crypto payments last year, and Twitter tested USDC payouts through Stripe for creators monetizing their content through its social media site last year as well.
For now, it appears that those who receive Twitter Awards will have to wait until they’ve earned at least $50 worth to redeem, which is the same as the minimum payout amount for those monetizing Twitter’s existing “Super Follows” feature.
Looks like Twitter Awards payout will be done in fiat, with the minimum payout threshold of $50 https://t.co/PpgHebBWD6 pic.twitter.com/pNcvPXxNsc
— Jane Manchun Wong (@wongmjane) January 5, 2023
Could Twitter’s Coins or Awards go crypto in the future? Don’t count on it—for now.
“Not seeing any explicit indications that Twitter’s Coins is crypto,” Wong told Decrypt via direct message.
Twitter’s Crypto Engineering Lead Resigns as Staff Numbers Dwindle
Developer and app researcher Nima Owji, who previously shared leaks of Twitter Coins in December, told Decrypt that he also hadn’t found any signs that crypto will be involved with Coins or Awards. But Owji said that if Twitter was planning to implement crypto, it may be keeping those plans under tighter wraps.
“They usually don't push the sensitive information about such things when it's not ready,” Owji told Decrypt in a message. “I guess even if it's going to be related to crypto, they'll add it to the code when they want to release it.”
Here’s the list of Twitter Awards: https://t.co/PpgHebBWD6 pic.twitter.com/BePDVAkzhy
— Jane Manchun Wong (@wongmjane) January 5, 2023
Last week, Wong said that Twitter’s Awards will include reactions such as “Mind Blown,” “Bravo,” “Bullseye,” “Gem,” and “Crown,” to name a few. Such reactions—which will require Coins to give to a user’s tweet—are similar to Reddit Gold, a feature where Redditors pay to buy “Gold” with fiat to recognize threads or posts they believe are moving or helpful.
3. Binance Revenue Grows 10X; But Can It Sustain Growing Asset Outflows?
Binance's revenue grew by 10X in last two years but with the recent $12 bn in asset outflows, it might be witnessing turbulent times ahead.
The year 2022 marked the beginning of a new “crypto winter” which was distinguished by the failure of important organizations across the board as well as the precipitous decrease in the value of digital currencies. Many investors were taken off guard by the events that unfolded throughout the year, which made it substantially more difficult to understand the crypto market. However, the world’s largest crypto exchange Binance managed to survive along with a few others, although facing quite a few hiccups along the way.
Binance Records 10X Growth
The on-chain data and analytics platform CryptoQuant recently published a chart that demonstrated the annual growth of Binance over the past two years. The annual revenue of the CZ-led platform is said to have experienced an increase of 10 times, as stated in the report. In 2021, Binance’s quarterly revenue began to increase dramatically, and the trend continued throughout the year. In 2022, the crypto exchange’s yearly revenue hit over $12 billion.
Binance Revenue Grows 10X; But Can It Sustain Growing Asset Outflows?
Binance's revenue grew by 10X in last two years but with the recent $12 bn in asset outflows, it might be witnessing turbulent times ahead.
Binance’s Massive Outflows
In spite of this, the trading volumes on the centralized exchange began to decrease toward the end of 2022, which resulted in a reduction in the expected quarterly revenue. In the month of December 2022, Binance had a one-week loss of 90,000 Bitcoin (BTC) from its reserves. And, as reported earlier on CoinGape, data from the 9th of January showed nearly $12 Billion vanished from Binance’s asset holdings in just 60 days. On December 23, the trading volume of the exchange reached $9.39 billion, which was its lowest level in the past few months.
4. Crypto exchanges need to start giving customers their keys
Exchanges should introduce decentralized finance to their centralized models to protect their customers and restore confidence in cryptocurrency.
The business model that cryptocurrency exchanges currently use relies on ignorance and fear.
It relies on their customers not knowing much about decentralized finance (DeFi) and their fear of what could happen if they get things wrong with their crypto investments.
Cryptocurrencies seem like an obscure and risky investment to most, and unsurprisingly, concerns about losing assets in market crashes, losing wallets or security keys through carelessness, or being scammed by unscrupulous operators are prevalent. These concerns are reasonable considering the volatility of the market and the prevalence of sharks, crooks, bluffers and shysters who operate in the industry.
In theory, exchanges exist to assuage these concerns. They exist to mitigate that risk for your average retail investors, who are given a safety mechanism to hedge against losing their savings. This model has enabled exchanges to grow at an exponential rate in recent years and to create vast fortunes in the process.
However, it would be remiss of those who run crypto exchanges to assume that the current level of ignorance and the fear it engenders will remain in perpetuity. Customers are learning more all the time; they are becoming far savvier. The next generation is learning about crypto in a number of different ways, such as through market trends such as GameFi and nonfungible tokens (NFTs). As adoption spreads, the knowledge of the average customer increases accordingly. This, in turn, makes them less reliant on exchanges.
Many customers will also have been spooked by stories about disgraced crypto entrepreneur Sam Bankman-Fried, who masterminded the implosion of FTX. In light of this, exchanges do not seem like such a safe and secure option after all. It is likely that a combination of these factors will accelerate a trend toward customers wanting more control over their crypto assets, and if exchanges want to avoid risking being cut out completely, they need to embrace this.
That is why exchanges — if they want to survive, if they want to avoid their own downfall — should lean into this trend, instead of fighting against it. To do this, they must empower their customers and trust them with their own money and security keys.
5. FOX’s Charles Gasparino Says an SEC Win Against Ripple “Could Force Other Coins to Register”.
Gasparino expects an unfavorable outcome for the entire crypto industry if Ripple loses its case against the SEC.
FOX Business senior correspondent Charles Gasparino forecasts unfavorable events that could befall the cryptocurrency sector if Ripple loses its case against the Securities and Exchange Commission (SEC).
According to Gasparino, an outright SEC win in the lawsuit could force other crypto projects aside from Bitcoin to register with the securities regulator.
“SEC win could force coins aside from BTC to register,” Gasparino said in a recent tweet.
Coinbase Reveals How It Plans to Bypass SEC’s Crackdown
Gasparino’s predictions come as San Francisco-based exchange Coinbase revealed that it is already preparing to survive an SEC regulatory crackdown on crypto assets registered as securities.
Coinbase told FOX Business that it intends to use a broker-dealer method to offer cryptocurrencies registered with the SEC.
“coinbase tells Fox Business it’s developing a plan to survive a SEC regulatory crackdown on digital assets using broker-dealers to trade coins registered as securities, “Gasparino noted.
Coinbase expects other crypto projects to register with the SEC if Ripple loses its case against the SEC.
Ripple v. SEC Case
Recall that on December 20, 2020, the SEC gifted Ripple and XRP community members with an early Christmas present by charging the Silicon Valley tech company and two of its executives for offering unregistered security.
The case has lingered for more than two years. Interestingly, pro-Ripple lawyer James K. Filan predicted that a resolution could occur on or before March 31, 2023. The lawsuit between the SEC and Ripple is one of the significant events that could determine the nature of the United States cryptocurrency regulation.
Forbes describes the lawsuit as “the cryptocurrency trial of the century.” A win for the SEC could prompt the agency to continue its regulation by enforcement approach in the crypto industry. However, if Ripple wins the lawsuit, the SEC would be forced to establish clearer rules for the nascent industry.
In November 2022, the SEC recorded a significant victory in its case against the peer-to-peer content distribution network LBRY. Since LBRY was also charged with offering unregistered securities in the U.S., many expect that Ripple would be slammed with the same judgment as LBRY.
Attorney John Deaton, who is representing XRP holders in the lawsuit, is confident that Ripple will win the case. According to Deaton, LBRY lost its case against the SEC because the peer-to-peer content distribution company did not challenge the second prong of Howey (Common Enterprise). He added that LBRY did not differentiate between secondary market sales of its token and the company’s direct sales.
The SEC's case was weak and ill-conceived from the start. Ripple put up the BEST defense money can buy. Ripple is literally the crypto communities' Jet Li.
If Ripple's kung-fu is not good enough, no one's is.
