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Market Wrap: Bitcoin’s Powell-Induced Price Swing; Ethereum Still High on Gas

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Bitcoin’s rally lost power after a speech by the Federal Reserve chief; Ethereum gas usage hits another record.

  • Bitcoin (BTC) trading around $11,251 as of 20:00 UTC (4 p.m. ET). Slipping 1.8% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $11,130-$11,596
  • BTC below its 10-day and 50-day moving averages, a bearish signal for market technicians.

btcaug27
Bitcoin trading on Coinbase since August 25.
Source: TradingView

Thursday featured a highly anticipated speech by Federal Reserve Chair Jerome Powell highlighting U.S. dollar inflation. During the hour Powell spoke, spot bitcoin hit as high as $11,596 on Coinbase. However, it lost steam and dropped $466 to $11,130 before New York traders were eating their lunch. 

Read More: Bitcoin Pops and Drops After Powell Introduces Average Inflation Targeting

Singapore-based QCP Capital wrote in an investor note that Thursday’s failed bitcoin rally was a result of the substance, or lack thereof, of Powell’s comments. “Powell’s backpedaling and fuzzy inflation framework has disappointed the market that was hoping for a formalization of inflation policy in this speech itself,” the firm wrote.

The Fed inflation framework, which in Powell’s words is “flexible,” is a positive sign, said Neil Van Huis, director of institutional trading at crypto liquidity provider Blockfills. “Although the market reacted to Powell’s comments, I have to believe anyone really thinking hard about it knew this was a likely response by him,” said Van Huis. “One in the digital asset space might be smiling even more now, saying ‘this thing we are building might actually be working,’” he added. 

Read More: Commentary: Fed Chair Jerome Powell Details Inflation Target Changes

The bitcoin market may see more exciting action Friday, when over 66,400 BTC in open interest options are set to expire. 

skew_btc_options_open_interest_by_expiry_k-5
Bitcoin options open interest and expiration dates.
Source: Skew

William Purdy, an options trader and founder of analysis firm PurdyAlerts, expects volatility to rise as a result. “What large open interest means is that there is more money on the line by institutions and retail with strong financial incentives to move prices to or away from certain prices as we move into that expiration,” he explained. 

“The two strikes with the greatest open interest are at $11,000 and $12,000,” said Purdy. He thinks spot prices could further gyrate because buyers of options would have gains minimized inside that $11,000-$12,000 range.

Options traders had a small scare when Deribit, the largest bitcoin options exchange, went offline during early European trading hours. At one point, Deribit warned it was possible it wouldn’t be back online in time to handle the 2,000 or so bitcoin options that were expiring Thursday. However, the problem was resolved a few hours later.   

Gas at all-time high

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Thursday, trading around $378 and slipping 2% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Buggy Code Release Knocks 13% of Ethereum Nodes Offline

Total gas, a unit of account for transactions and smart contract usage on the network, used on Ethereum per day hit 79,294,223,632 units on Sunday, an all-time high. Wednesday was the second-highest gas day, with 79,255,713,214 used.

ethereumgasalltime
Total gas used on Ethereum since the network launched.
Source: Glassnode

Marc Fleury, CEO of crypto asset brokerage Two Prime, says Ethereum-based DeFi could be a disruptive game changer for finance in uncertain times, if the network’s congestion problems can be solved by the community. “DeFi lending and yield creation in the crypto space has the potential to disrupt traditional banking,” said Fleury. “Let’s not squander this opportunity.”

Read More: DCG to Invest $100M in Bitcoin Mining Venture

Other markets

Digital assets on the CoinDesk 20 are all red Thursday. Notable losers as of 20:00 UTC (4:00 p.m. ET): 

Read More: ShapeShift Accuses Former Employee of Stealing $900K in Bitcoin

Read More: Fidelity’s Chief Strategist Starts Bitcoin Index Fund

Commodities: 

  • Oil is down 1%. Price per barrel of West Texas Intermediate crude: $42.99.
  • Gold was in the red 1.2% and at $1,929 as of press time.

Read More: More Than 95% of Crypto Futures Volume Is in Asia: Report

Treasurys:

  • U.S. Treasury bond yields all climbed Thursday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 8.7%.

Read More: Mathew D’Souza, Crypto Entrepreneur and Hedge Fund Manager, Dies

https://www.coindesk.com/coindesk20
The CoinDesk 20: The Assets That Matter Most to the Market
Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/market-watch-bitcoin-powell-ethereum-gas

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CBDC is a tool to combat Bitcoin, says Bank of Indonesia exec

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Central bank digital currencies (CBDC), digital versions of national currencies introduced in response to growing cryptocurrency adoption, would be an essential tool for combating crypto, according to the Bank of Indonesia.

The central bank of Indonesia is considering launching a digital rupiah to “fight” against cryptocurrencies like Bitcoin (BTC), Bank of Indonesia’s assistant governor Juda Agung said at a recent parliamentary meeting.

“A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions,” Agung stated, according to a Nov. 30 Bloomberg report.

The official noted that cryptocurrencies like Bitcoin are currently traded alongside commodity futures and regulated by the trade ministry despite severe impacts on the financial system.

The news comes shortly after the National Ulema Council (MUI), Indonesia’s top Islamic scholarly body, reportedly found cryptocurrencies like Bitcoin to be haram, or forbidden, by the tenets of Islam. The East Java branch of one of MUI previously issued a statement deeming the use of the cryptocurrency haram in late October.

As previously reported, the Indonesian government has taken a mixed stance on crypto regulation. Despite banning cryptocurrency payments back in 2017, local authorities have opted to keep cryptocurrency trading legal. In April 2021, Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti) of the Ministry of Trading reportedly announced plans to launch a government-backed crypto exchange in the second half of 2021.

While maintaining a mixed stance on crypto, Indonesian regulators have been increasingly looking at a potential CBDC. In May, the Bank of Indonesia Governor Perry Warjiyo announced plans to launch a digital rupiah as a legal payment instrument in Indonesia.

Related: Retail-focused Singaporean CBDC to hedge against privately issued stablecoins

CBDCs like the Chinese digital yuan are apparently designed to curb cryptocurrency adoption as one of their key features. Indonesia is not alone in thinking that CBDCs can help governments combat crypto. In mid-November, Bank of Russia’s governor Elvira Nabiullina said that CBDCs should serve as a good option for governments to replace decentralized cryptocurrencies like Bitcoin.


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Source: https://cointelegraph.com/news/cbdc-is-a-tool-to-combat-bitcoin-says-bank-of-indonesia-exec

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Binance CEO reveals one key factor for token listings

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The CEO of Binance, the world’s largest cryptocurrency exchange by volume, has disclosed some information on how to get listed on the trading platform.

The most important criteria for listing a cryptocurrency on Binance is the number of users, CEO Changpeng Zhao, also known as “CZ,” said in a Forbes interview on Monday.

CZ went on to say that there are many other factors like the number of active addresses on blockchain, social media audience and code commits. However, the number of users is “the key metric,” he said, adding:

“If a coin has a large number of users, then we will list it. That’s the overwhelming significant attribute. Consider for example meme tokens, even though I personally don’t get it, if it’s used by a large number of users we list it. We go by the community, my opinion doesn’t matter.”

According to Binance’s listing tips from its CEO, the number of users is just one of many factors for listing a token on the crypto exchange. “If you have a large number of users, your product has value. That’s the easiest to measure. Do include the user statistics in the application form. It will help significantly,” the CEO’s statement on Binance listings reads.

According to Sergei Khitrov, founder of crypto listing-focused platform Listing.Help, major crypto exchanges like Binance don’t need to list minor tokens, as they earn mainly from trading volumes rather than listings.

“This is one of the main problems that many projects do not understand. They should start with building a community. And that means not 500 or 10,000 people in a Telegram channel, but a much larger audience,” Khitrov told Cointelegraph. He added that token creators are recommended to start from smaller exchanges.

At the time of writing, Binance supports a total of 346 cryptocurrencies, including major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), as well as popular meme tokens such as Dogecoin (DOGE) and Shiba Inu (SHIB), according to data from CoinGecko. Binance’s daily trading volume is estimated at $28 billion.

In comparison, OKEx, the second-largest crypto exchange by trading volumes, has listed 312 coins and has a trading volume of roughly $7 billion. United States-based crypto exchange Coinbase supports just 123 tokens with a daily trading volume of about $6 billion.

Some major centralized exchanges (CEX) have more tokens listed than Binance does, with Bittrex listing over 450 cryptocurrencies at the time of writing.

Related: Kraken exchange defies competitors’ regulatory concerns with SHIB listing

As opposed to a CEX, decentralized exchanges (DEX) are the world’s biggest platforms in terms of the number of listed cryptocurrencies, as DEXs like PancakeSwap do not require contacting an exchange or asking permission. As such, PancakeSwap, a DEX running on the Binance Smart Chain, has over 3,200 listed tokens, while Uniswap lists over 1,800 cryptocurrencies.

Last month, PancakeSwap listed the Squid Game (SQUID) token, a cryptocurrency scam inspired by the eponymous Netflix show, which posted over 45,000% growth in a few days after launch. The token is listed on Binance-owned crypto website CoinMarketCap, while competitors such as CoinGecko retracted from listing SQUID due to being “most likely a scam.”


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Source: https://cointelegraph.com/news/binance-ceo-reveals-one-key-factor-for-token-listings

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India misinterpreted private crypto ban, says crypto bill creator

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The creator of India’s crypto bill, former Finance Secretary Subhash Garg, dismissed the notion of banning “private cryptocurrencies” as a misinterpretation while highlighting the enormous potential of cryptocurrencies and blockchain technology.

The parliamentary discussions around a controversial crypto bill sparked fears around the ban on cryptocurrencies, with no clear indication about the ban’s scope. As Cointelegraph reported, an episode of panic selling among Indian investors followed the announcement. In an interview with local news channel News 18, Garg clarified:

“[The description of the crypto bill] was perhaps a mistake. It is misleading to say that private cryptocurrencies will be banned and to intimate the government about the same.”

He believes that the Indian government should formulate a bill after discussing it with stakeholders and crypto investors. Furthermore, the bill suggests banning private cryptocurrencies without clarifying what the word “private” stands for.

As a result, the crypto community in India self-interpreted two different versions of the bill’s agenda — one that considers banning all non-government issued cryptocurrencies and the other that excludes cryptocurrencies running on public blockchains such as Bitcoin (BTC) and Ether (ETH).

Garg also pointed out a flaw in classifying cryptocurrencies as assets after underscoring the vast ecosystem powered by disruptive technology. He also said that crypto exchanges have limited interests and do not represent the entire community:

“You don’t classify the wheat that you produce, you don’t classify the clothes you produce, as assets. That is too much of oversimplification to treat this as an asset.”

On an end note, Garg added that the central bank digital currency initiatives, especially in countries such as India, are complex. According to him, the government first needs to address challenges, including the unavailability of smartphones and digital wallet issuance.

Related: Singaporean crypto exchange enters India amid regulatory uncertainty

The Indian crypto market continues to attract international firms, with the latest being Coinstore, a Singaporean crypto exchange. As Cointelegraph reported, Coinstore has allocated a $20-million fund to set up three new offices in the region.

Speaking to Cointelegraph, a Coinstore spokesperson was hopeful for the development of a positive crypto regulatory framework:

“Strict KYC process, security requirement for exchanges, as well as gradual regulation of certain cryptocurrencies naturally protect the Indian users and would clarify the legality of certain cryptocurrencies.”


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Source: https://cointelegraph.com/news/india-misinterpreted-private-crypto-ban-says-crypto-bill-creator

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