News Updates September 14, 2022
1. Volatility expected as $490M in ETH options expire shortly after the Ethereum Merge
The outcome of the Ethereum Merge will be a primary price drive that dictates whether ETH bears profit from this week’s $490 million options expiry. Given the current state of the wider crypto market, some traders might be surprised to learn that Ether (ETH) has been trading in an ascending trend for the past 17 days. While the entire cryptocurrency market experienced a 10% decline on Sept. 13, Ether's price held firm near the $1,570 support level.
In less than 12 hours, the Ethereum network is scheduled to undergo its largest ever upgrade and the possibility of extreme volatility should not be ignored. The transition to a proof-of-stake network will be a game changer for multiple reasons, including a 98.5% cut in energy use and reduced coin inflation.
During an upgrade, there is always the risk of multiple malfunctions, especially in more complex systems like the Ethereum Virtual Machine processing. Even if the upgrade has been relatively smooth on previous testnet versions, it is impossible to predict the outcome of the decentralized applications and second-layer solutions plugged into Ethereum’s ecosystem.
That is precisely why the $490 million Ether options expiry on Aug. 16 will put a lot of price pressure on both sides, even though bulls seem slightly better positioned as Ether nears $1,600.
Most bearish bets are placed below $1,600
Ether's failure to break the $2,000 resistance on Aug. 14 and its subsequent plunge to $1,420 on Aug. 29 gave the bears the signal to expect continuation of the downtrend. That becomes evident as only 12% of the put (sell) options for Sept. 16 have been placed above $1,600. Thus, Ether bulls are better positioned for the expiry of $490 million weekly options.
2. Bitcoin may be regaining dominance over altcoins
Currently standing at 79, the altcoin cycle signal shows that the market is in Altcoin Season but the tides seem to be turning.
Breaking from the decade-long tradition of Bitcoin dominance, Ethereum has been outperforming the market in the past few months. While some saw this as the market pricing in the upcoming Merge, others argued that it showed the natural and expected decoupling of the market.
Ethereum’s outperformance was clearly visible through the altcoin cycle signal, a metric determining the strength of the altcoin market. Varying between 0 and 100, the altcoin cycle signal marks Bitcoin Season and Altcoin Season.
During Bitcoin Season, when the signal drops below 50, BTC is likely to outperform the entire altcoin market. During Altcoin Season — when the signal rises above 50 — this dynamic inverts and the basket of altcoins led by Ethereum become the dominant force in the market.
The altcoin cycle signal is based on the price data of the top 250 altcoins by market capitalization and excludes stablecoins. A reading of 0 or close to 0 shows that the market is in Bitcoin Season, and BTC is expected to outperform all altcoins. A reading of 100 or close to 100 shows a decidedly Altcoin Season, where a fall in Bitcoin dominance is expected. The top 250 altcoins are expected to outperform BTC.
When the altcoin cycle signal fluctuates between 20 and 50 or 50 and 80, the market is plagued with uncertainty. Even though a score below 50 indicates Bitcoin season and vice versa, fluctuating readings show significant potential for a trend reversal.
Currently standing at 79, the altcoin cycle signal shows that the market is currently knee-deep in Altcoin Season. However, the signal has dropped significantly in the past two months — throughout July and August — and stood at 100 during the first two weeks of September.
Dropping below 80 was usually followed by a rapid drop below 50 and the beginning of Bitcoin dominance. In the past year, the signal never spent longer than a few days fluctuating below 80 before.
However, it’s still too early to tell whether this is an onset of another trend reversal.
Returns posted by large-cap cryptocurrencies show that money has steadily flowed out of Layer-1 tokens. Large-cap tokens have performed significantly worse than BTC, a trend that correlates with the current altcoin cycle signal.
3. Crypto Exchange Bybit Halts Derivatives Trading in Brazil After Exchange Commission Ban
Bybit said it is holding talks with Brazil’s securities commission, but will discontinue trading of crypto futures and options as of Thursday.
This article is adapted from CoinDesk Brasil, a partnership between CoinDesk and InfoMoney, one of Brazil's leading financial news publications. Follow CoinDesk Brasil on Twitter.
Singapore-based cryptocurrency exchange Bybit will stop offering crypto futures and options in Brazil on Thursday after a ban was imposed on Bybit by Brazil’s Securities and Exchange Commission (CVM) last week.
In a statement, Bybit said it is talking with the CVM to resolve the issue. Meanwhile, the company added, it is “limiting derivatives trading as of this moment.”
Bybit's platform currently displays a message warning about the change and recommending users to “manage their positions and/or orders before” Thursday. The company added that the measure “will not imply any kind of blocking of derivatives assets deposited by our traders.”
Bybit did not respond when asked whether users' open derivatives positions will be automatically closed on Wednesday.
The exchange added that other crypto products offered in Brazil – such as spot market asset trading – continue to function normally, “in compliance with the appropriate local regulations.”
Last week, the CVM stated that Bybit was “seeking to raise funds from investors residing in Brazil for investments in securities,” without the company having authorization to act as a securities intermediary, as only Brazil’s stock exchange B3 is allowed to offer securities there.
4. Uk Only Major Economy To Increase Crypto Adoption
According to a new report by Chainalysis, the UK is the only world major economy to have increased crypto adoption this year.
*Chainalysis Report*
The Chainalysis report titled “The 2022 Global Crypto Adoption Index” suggested that emerging markets are receiving the most amount of grassroots crypto adoption. It also found that crypto fundamentals appear to be healthy, and that China was still very much a part of crypto despite its government ban.
*Crypto Adoption Rankings*
The Global Crypto Adoption Index in the report takes a number of factors into account such as exchange volumes and DeFi transactions within each country.
Vietnam topped the list with an Index score of 1.000, it was followed in second by Philippines (0.753), and Ukraine (0.694) in third. The USA was in 5th position with 0.653.
The UK was in 17th position, but had upped this placing by 4 from the previous ranking in 2021.
*Why The UK Has Risen In Crypto Adoption*
According to an article on 14 September in the London-based Evening Standard, reasons for the rise of crypto adoption in the UK could be due to a sharp fall in pound sterling, and also because of “London’s thriving tech scene and world-class financial institutions”.
5. You can now bring your NFTs into Grand Theft Auto V and Minecraft servers
With the ongoing development of video games and metaverse games in general, both MyMetaverse and Enjin (ENJ) have announced that they have introduced playable non-fungible tokens (NFTs) on the game servers for Grand Theft Auto V and Minecraft.
The first NFT collection to be minted on Efinity, which is an NFT parachain built on Polkadot (DOT), is the MyMetaverse “MetaHome” NFT collection, according to a report on September 14 by VentureBeat.
As per MyMetaverse, these initial in-game NFTs may be used across the board in MyMeteverse’s whole suite of games, including the Minecraft and GTA5 servers that players host for one another. Furthermore, MyMetaverse said that after the launch is complete, the NFTs would each serve a unique purpose in the three separate games.
6. BTC price clings to $20K as US stocks lose the equivalent of 4 Bitcoin market caps
$1.6 trillion U.S. stock market losses pressure crypto markets, with BTC price action coming full circle to linger near $20,000.
Bitcoin (BTC) briefly lost $20,000 support overnight into Sep. 14 after hot United States inflation sent risk assets crashing lower.
Markets lose big in bid to "fight the Fed"
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it hit lows of $19,870 on Bitstamp — its worst since Sep. 9.
The move came amid a stocks rout triggered by Consumer Price Index (CPI) inflation data for August coming in above expectations.
Despite still being lower than July, the market had hoped for a quicker cooling of inflation more broadly and hence the chance of a quicker loosening of policy by the Federal Reserve.
With that prospect now appearing slim, equities indexes hemorrhaged value, with Apple losing $154 billion — the sixth-biggest daily loss in U.S. stock market history.
7. Here Is SEC Chairman Gary Gensler Testimony About Crypto At the U.S. Senate Banking Committee Hearing.
As reported by The Crypto Basic SEC’s chair Gary Gensler was to testify in front of the U.S. Senate Banking, Housing, & Urban Affairs Committee Majority on September 15, 2022.
Here is what Gary Gensler Said about crypto Before the United States Senate Committee on Banking, Housing, and Urban Affairs:
“The core principles from the securities laws apply to all corners of the securities markets.20. Investors and issuers in crypto markets ought to benefit from the same gold standard that has made our capital markets the most liquid and innovative in the world.
Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offers and sales of these thousands of crypto security tokens are covered by the securities laws, which require that these transactions be registered or made pursuant to an available exemption. Thus, I’ve asked the SEC staff to work directly with entrepreneurs to get their tokens registered and regulated, where appropriate, as securities. Given the nature of crypto investments, I recognize that it may be appropriate to be flexible in applying existing disclosure requirements.
Stablecoins have features similar to, and potentially competing with, money market funds, other securities, and bank deposits. Currently, they are primarily used as means to participate in, or as so-called settlement tokens inside of, crypto platforms. Depending on their attributes, such as whether these instruments pay interest, directly or indirectly, through affiliates or otherwise; what mechanisms are used to maintain value; or how the tokens are offered, sold, and used within the crypto ecosystem, they may be shares of a money market fund or another kind of security. If so, they would need to register and provide important investor protections.
8. Top News Outlet Twitter Account Compromised As Hackers Announce Fake Michael Saylor Bitcoin and Ethereum Giveaway.
A fake cryptocurrency giveaway from MicroStrategy CEO Michael J. Saylor is currently being circulated on Twitter from the official Twitter account of Nigerian Business Day, with 89K followers. It seems that Nigerian Business Day has been compromised.
The hackers claim that Saylor wants to give away 5,000 Bitcoin (BTC) and 50,000 Ethereum (ETH) on a first-come-first-serve basis.
“MicroStrategy CEO Giving Away 5,000 BTC & 50,000 ETH! First come, first serve http://MicroStrategy-CEO.io. You can only apply once,” the tweet reads.
The compromised account is replying to top crypto influencers and exchanges tweets.
Details of the Scam
Looking at the website, one would think the giveaway is genuine. However, a closer look at the platform would expose the website as a scam.
The hackers noted that interested beneficiaries should send between 0.1 and 20 BTC to a Bitcoin address to receive double any amount sent. Similarly, interested participants who would prefer Ethereum are asked to send between 0.5 and 200 ETH to an address to participate in the giveaway.
In return, the scammers promised to double any amount sent to the Bitcoin and Ethereum addresses of the users who made the transaction.
“To participate you just need to send from (0.1 BTC to 20 BTC) or (0.5 ETH to 200 ETH) to the contribution address and we will immediately send you back (0.2 BTC to 40 BTC) or (1 ETH to 400 ETH) (x2) to the address you sent it from,” an excerpt of the page reads.
Despite publishing a series of transaction details to and from the Ethereum and Bitcoin wallets, a look at the blockchain data showed that the Bitcoin address had not recorded any transaction. However, the same cannot be said for the Ethereum address, as the wallet has received only 0.06ETH worth $103.98 at the current exchange rate.
9. India’s Tough Crypto Tax Rules Is Helping Binance A Lot, Here’s How
India’s crackdown on the cryptocurrency market over the last year is helping foreign exchanges at the cost of local exchanges. As per the latest reports, crypto exchange Binance is expanding its footprint in the Indian market.
This happens as Indian crypto traders flee to foreign exchanges to avoid the hefty 1% TDS on crypto transactions. This 1% tax comes atop the 30% tax made on crypto gains. During the last month of August 2022, the downloads for the Binance app jumped to 429,000, as per data from market intelligence firm Sensor Tower.
India’s steep taxes and difficulty in moving funds have pulled Indian crypto investors towards Binance. Since the 1% tax came into effect in July, the daily transaction volumes on the Indian crypto exchange tanked by 90%. On the other hand, foreign peers of Indian exchanges have been making strong expansions in India.
