Monday, November 30th, 2020
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Your Weekly Update On All Things Crypto |
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China Confiscates $4B in Cryptocurrency from PlusToken |
Last week, the People's Court of China released a breakdown of all the cryptocurrency seized from the PlusToken Ponzi Scheme.
PlusToken was launched in May 2018 and advertised a non-existent crypto arbitrage trading platform. It promised users an attractive daily payout but required them to deposit at least $500 worth of crypto assets in order to participate. From May 2018 to June 2019, the pyramid scheme lured in over 2.6 million members and swindled users of over $7.2B.
During this period, the scheme absorbed more than:
314,000 BTC
117,450 BCH
96,023 DASH
11 Billion DOGE
1.84 Million LTC
9 Million ETH
51 Million EOS, and
928 Million XRP
At today's prices, these coins would be worth more than $11B, however, some of the proceeds were already successfully laundered into Chinese yuan. On November 19th the Jiangsu Yancheng Intermediate People's Court released a breakdown of the total of the seized funds, which total over $4.2B in value. It is not yet known exactly what the Chinese government will do with these funds, but part of the court ruling mentioned, "the seized digital currencies will be processed pursuant to laws and the proceeds and gains will be forfeited to the national treasury."
What this means for crypto:
If these funds are sold on the open market, the added sell pressure could drive down the price fo the affected currencies, so it will be important to investigate how exactly this seizure will be managed. From a macro perspective, it is refreshing to see some of the scams that cast shadows on the industry in years past getting what they deserved. This highlights a maturation of the industry as bad actors continue to get flushed out. Chinese police have ramped up efforts in recent years to crack down on internet-based criminal activity. This will lead cryptocurrency to become a safer, more investable asset class in the years to come.
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ETH 2.0 Confirmed For Take-Off |
Last week we reported on the developments around ETH 2.0 a monumental upgrade for Ethereum moving the algorithm from Proof-of-Work to Proof-of-Stake. The upgrade required over 520,000 ETH to be locked in a staking contract by November 24th in order for the launch to remain on schedule for its date of December 1st.
Well, last week was full of nail-biting and debate in the Ethereum community, as the contract remained only 50% full only 3 days before the deadline. But in a last-ditch fury, the Ethereum community managed to come together and stake over 250,000 ETH (valued at over $135M) in the days before the launch. In fact, the contract reached its threshold with only 9 hours remaining in the staking window.
What this means for Crypto:
While the actual implementation of ETH 2.0 is likely still over a year away, the approval of this project has undoubtedly kickstarted the excitement around alt-coins and decentralized finance. ETH 2.0 will bring security scalability, and sustainability to the ecosystem which will allow the use case of decentralized applications to skyrocket. It is a strong vote of confidence for all decentralized applications that the "Granddaddy of Smart Contracts" was able to make such a giant leap forward. The future looks bright for the adoption of a decentralized world, and one of the first steps on that journey is building ETH 2.0.
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Medable Raises $91M For Decentralized Trial Platform |
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Medable is focused on pioneering patient-centric research technologies that provides a seamless experience connecting patients, sites, and trial teams. The funding comes at a pivotal time as the firm has been working to enable clinical trials for the Covid-19 vaccine. "The pandemic has made the world aware of the importance of clinical drug development" says Dr. Michell Longmire, CEO and Co-Founder of Medable. "We need transformative technologies that break down critical barriers to improve patient access, experience and outcomes." Longmire states that with this funding, Medable will be able to continue their aggressive pursuit of new technologies that improve clinical trials to benefit all patients.
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Bitcoin Finally Has Its Correction |
We all know Bitcoin is a volatile asset, yet it never gets easier to see the King Crypto plunge down 17% in only 3 days. But these stark corrections are common in crypto, and if it is truly over, we should be thankful that it was only 17%. The chart above shows the number of times Bitcoin had a more than 30% correction in the last bull-run. These things happen, and they can seem like the end of the world while you're in them, but this market can climb just as quickly as it can fall, so instead of panic selling, try buying the dip and you will have much more success.
So why was this correction smaller than the ones in the previous cycle? This is likely due to the amount of institutional money that has flooded the space. These are strong hands that plan to hold Bitcoin for years. They most likely snapped up the dip faster than it could be sold, and are likely not to panic in times like these. The possibility of a 30% correction is still not out of the question, but it does happen, we expect it to come shortly after the prices pass its all-time highs at $20K
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Alt-Coins Wait For Bitcoin's Next Move |
After the stark sell of in September and October, Alt-Coins have rallied back and recouped roughly 50% of their losses vs. Bitcoin. Now they are waiting on directions from the big dog to see where the next move will go. Alt-coins tend to follow the lead of Bitcoin, when Bitcoin grows, they usually grow a bit faster, and when Bitcoin sells off, they sell off even harder. Traders will trade the alt-coin market to attempt to outpace Bitcoin (the market).
If Bitcoin is finished its correction and on route back to all-time highs, it is likely that we will see another rally for alt-coins, If Bitcoin turns around and corrects down to $14K, we will likely see another alt-coin sell-off before they skyrocket back upwards.
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Band Protocol is a multi-chain oracle protocol designed to aggregate and connect real-world data into smart contracts. BAND is the second-largest oracle solution, behind Chainlink, and critical technology in the development of decentralized finance applications.
BAND saw an 83% correction from its recent high's in August, and looks to be setting higher highs and higher lows as it comes out of consolidation. It looks like it may bounce off the bottom bound of the ascending parallel channel and see another spike to the upside. Check out the trading view here.
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Compound Finance is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications. Users stake their currency in smart contacts and can earn interest on their funds. The Compound protocol is currently the second-largest lending solution in the De-Fi space, with over $3 Billion in assets locked into the protocol earning interest.
When decentralized finance mania kicks in, Compound will surely be a strong performer as one of the leaders in the industry. Coming off an 81% correction vs Bitcoin, Compound looks undervalued as it consolidates before its next move. Click here to see the trading view.
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