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Bitcoin special! New 2020 high, election fallout, DeFi suffers: Hodler’s Digest, Nov. 2–8
Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
It’s been another extraordinary week in the crypto markets. Over the course of Thursday, BTC surged by more than 10%. As well as breaching $15,000 for the first time since January 2018, the world’s biggest cryptocurrency romped to highs of $15,950.
To understand how significant this is, data from Messari shows that BTC has only been above this price point for 0.4% of its existence. A rare event indeed.
“People will never again say Bitcoin is dead,” Grayscale CEO Barry Silbert approvingly noted.
Cointelegraph analyst Michaël van de Poppe said Bitcoin was nearing the final hurdle before a new all-time high can be reached, with one last resistance zone between $15,800 and $16,800 standing in its way.
However, he cautioned: “The probability of a breakthrough in one go is not high, given that the price of Bitcoin has already surged by more than 50% in recent weeks.”
Not all analysts agree. Some believe BTC’s dazzling rally may not stop at $16,000, with the number of Bitcoin held on exchanges continuing to drop.
Bitcoin has cultivated a reputation of being a “safe haven asset,” meaning that investors tend to flock to it during times of uncertainty.
We saw uncertainty by the bucketload this week. BTC appreciated steadily when the U.S. election result wasn’t clear on Wednesday and as ballots continued to be counted. Donald Trump also claimed, without evidence, that many votes were fraudulent.
But look what happened on Saturday when major news outlets officially projected that Joe Biden would be the next president of the United States. Bitcoin fell by 5.67% in the hours that followed.
So does this mean the crypto markets fear a Biden presidency, or are we just seeing heat leave the market now that the results are clearer? And what’s next for BTC?
Well, Biden’s election brightens the prospect of a stimulus package by the end of the year — and this could positively affect Bitcoin, boosting investor appetite for high-risk assets. Analysts also anticipate the U.S. stock market to recover now that the results have been confirmed.
There’s still something we don’t know: the president-elect’s views on Bitcoin. “For now, it really isn’t a big enough issue to warrant his attention,” Compound Finance’s Jake Chervinsky said.
Early September seems like a lifetime ago now, doesn’t it? Back then, Bitcoin was hovering at about $10,000, with a market cap of approximately $190 billion.
Fast forward to now, and BTC appears to have found support at $15,000. This has also helped Bitcoin’s market cap rise by 50% to $280 billion — and it means the world’s biggest cryptocurrency is now more valuable than most major companies.
Data suggests that, if BTC’s valuation is compared with publicly listed firms in the U.S., it would be the 18th largest. This dwarfs the likes of Verizon, PayPal, Disney, Netflix and Bank of America.
Bitcoin could now end up setting its sights on overtaking Home Depot, which is in 17th place with a market cap of $306 billion. If BTC rises further and grabs 16th place, it would also demote Mastercard — sending a powerful signal about where the future of money lies.
That said, BTC has a long way to go before it can catch up with Apple’s $2 trillion market cap, which makes it the most valuable company in the world. For Bitcoin to eclipse this, we’d need to see a price per coin of $120,000.
Bitcoin’s time in the spotlight has been bad news for altcoins… and it appears to have taken the shine off DeFi, too.
Binance’s DeFi Composite Index is now trading under $400 — a 60% decline from all-time highs. To make matters worse, most DeFi tokens have erased 70%–90% of their gains since early September.
The exchange also said that it’s been an “underwhelming month” for large-cap cryptos such as ETH, XRP, BCH and LTC, all of which only eked out “modest gains” in October.
That said, it isn’t all doom and gloom for DeFi. Although the value of governance tokens has taken a beating (perhaps unsurprising given how some of them, such as YFI, were designed to be worthless), the total value locked in protocols hasn’t crashed. It currently stands at $12.16 billion — not far off the record highs seen in late October.
Bitcoin’s surge could tempt traders to take some profit, and all of this could result in a pullback.
But the bigger danger is this: With Bitcoin prices touching their highest levels in 33 months, we’re beginning to see greed seep into the crypto market once again.
The latest Fear and Greed Index rating is flashing a score of 82, placing it firmly into the “Extreme Greed” category. Earlier this week, the score hit 90. The last time it was this high was last June, when it reached 92 as BTC powered to 2019 highs of $14,000.
As billionaire and former hedge fund manager Mike Novogratz noted: “The hardest thing to do in a bull market is to sit. My pal Paul Jones calls it the ‘pain of the gain.’ This is a $BTC bull market. Your job is to sit on your hands and lock away your phone.”
At the end of the week, Bitcoin is at $15,336.80, Ether at $452.55 and XRP at $0.25. The total market cap is at $443,512,630,806.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Aave (76.51%), HedgeTrade (56.00%) and Synthetix (49.09). The top three altcoin losers of the week are ABBC Coin (-16.15%), CyberVein (-13.61%) and Crypto.com Coin (-13.13%).
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
“All eyes may be on Bitcoin and the surge past the $15,000 level. However, the recent development update related to Ethereum may result in some capital rotating back into Ethereum and its broader ecosystem.”
Denis Vinokourov, Bequant head of research
“Regulation is certainly going to be an area of focus in the crypto space going into this next year. It’s only a matter of time before an increasing number of jurisdictions adhere to regulations.”
Sasha Ivanov, Waves CEO
“All in all, the sentiment is heavily bullish at this point, with the price at multi-year highs and only one major resistance level remaining at $16,000 before a new all-time high comes into play.”
Michaël van de Poppe, Cointelegraph analyst
“Thanks for flying with us today ladies and gentlemen. Off to the left you’ll see we’ve just passed $15K #Bitcoin and coming up on the right you’ll see $16K bitcoin. Please make sure to fasten your seatbelts as we begin our ascent to the moon.”
Cameron Winklevoss, Gemini co-founder
“Rising prices during an uptrend while open interest is also on the rise could mean that new money is coming into the market.”
If all of this excitement wasn’t enough, Bitcoin has also officially broken a new record after trading above $10,000 for 100 consecutive days.
Now, a well-known analyst believes BTC could go “parabolic” in 2021 if it follows its behavior after previous halvings.
Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, says it’s a simple matter of supply and demand. The number of new Bitcoin being mined fell yet again in May, yet appetite for the crypto among institutional investors is soaring.
“New highs are a next potential iteration and may be only a matter of time unless something we don’t foresee trips up the trend of greater adoption and demand vs. limited supply,” he predicted.
Away from Bitcoin, let’s have a look at some FUD stories. And we begin with a clumsy trader who says they have “destroyed” their life after inadvertently paying $9,500 in fees for a $120 transaction on Uniswap. Whoops.
On Reddit, “ProudBitcoiner” revealed that they accidentally stumped up 23.5172 ETH in fees after getting the Gas Limit and Gas Price input boxes confused in the MetaMask wallet.
Uniswap is a non-custodial exchange for ERC-20 tokens, meaning that trades are executed directly from a user’s wallet, allowing them to manually set the gas prices they are willing to pay for a transaction.
Other Reddit users are now calling for MetaMask to introduce safeguards that would force users to confirm a transaction when the inputted gas price significantly exceeds the estimated price calculated by the wallet.
Ernst & Young has received $171 million worth of claims from customers who lost their funds when the doomed crypto exchange QuadrigaCX collapsed. There’s just one problem: The trustee only has $29.8 million in funds to distribute.
More than 17,000 users filed claims — with $90.2 million in Canadian dollars, 24,427 BTC, 65,457 ETH and 87,031 LTC among the assets that are missing.
Gerald Cotten, the founder of QuadrigaCX, died in India of complications linked to Crohn’s disease. He was the only person who had keys to the exchange’s wallets — and in recent months, speculation has grown that he may not be dead at all.
Ernst & Young also noted that Cotten traded using customer funds, which has likely contributed to the discrepancy between assets and liabilities.
An anonymous crypto user has just moved 69,370 BTC from an address associated with the Silk Road darknet market.
According to CipherTrace, the transfer was made in two transactions. The crypto user first sent 1 BTC, likely as a test transaction, before moving the bulk of the coins.
The blockchain intelligence firm speculated the anonymous user made the transactions “to stay up to date with the Bitcoin network” by switching between address formats.
It’s possible that hackers may have been responsible for moving the funds.
After Bitcoin’s strong breakout above $15,000, analysts are looking toward Ether as the market sentiment around Ethereum strengthens.
Leading exchanges are tracing suspicious crypto transactions to combat human trafficking.
Blockchain technology is just a tool that solves a problem, it cannot be the goal of the entire project.
Author: by admin
3 Factors That Suggest Yearn.finance’s YFI is About to Explode Higher
Yearn.finance’s YFI token has been subjected to immense volatility throughout the past few days, with its price plunging to lows of $7,500 before seeing one of the most intense short squeezes ever.
Within hours of tapping these lows, a sudden influx of buy-side pressure sent it rocketing to highs of $18,000, marking a well-over 100% rally from its daily lows.
This move revitalized the aggregated DeFi sector, causing DEX trading volumes to rocket while investors began rushing back into the embattled sector.
Because the DeFi blue chips have seen sustainable momentum throughout the past few days, there’s a strong possibility that this is just the start of what could be a bull-favoring trend reversal.
The macro climate within the crypto market favors this possibility, as Bitcoin and Ethereum’s immense strength could spark a capital rotation event into higher beta assets like Yearn.finance’s YFI.
So long as BTC remains stable, investors will undoubtedly move to higher risk assets to increase their profitability.
One crypto-focused economist is now pointing to three trends working in Yearn.finance’s favor, noting that they all indicate upside is imminent.
At the time of writing, Yearn.finance’s YFI token is trading up 10% at its current price of $15,300. This marks a notable rebound from daily lows of under $13,000.
These lows were set shortly after it rallied to highs of $18,000, with this decline coming about due to aggressive profit-taking.
A sign that this recent move is more than just a dead cat bounce or a short squeeze is that it has not been followed by a sustained decline.
One crypto-focused economist is looking towards 3 trends that indicate altcoins like Yearn.finance’s YFI will be able to push higher in the week ahead.
He calls this week a “risk-on week,” adding that BTC will be trading with risk while altcoins trader like high betas compared to the benchmark cryptocurrency.
“Logic is simple. #1 risk-on week. #2 btc to trade with risk. #3 alts to trade like high betas vs btc. If that holds true we go up strong next week. YFI is spot and has no stops. Size accordingly. Chart is for the bitcoin futures basis.”
The confluence of these trends will undoubtedly favor blue-chip DeFi altcoins like YFI and others.
As US election dust settles, crypto traders and analysts eye new administration
While some in the community continue to question the outcome of the US Presidential election, mainstream media outlets and the Associated Press have definitively called the race for former Vice President and current President-Elect Joe Biden.
But with uncertainty out of the way, traders and analysts are now looking to determine what a Biden administration will mean for cryptocurrencies — and they appear to have come to a loose consensus that a President who says nothing about crypto is preferable to a president who actively disparages it.
Qiao Wang, the lead at decentralized finance accelerator DeFi Alliance, cheered Trump’s loss, noting that the President had tweeted negatively about Bitcoin and Libra in the past:
The fact that Trump and Mnuchin are hostile towards BTC makes a Trump a far inferior candidate. Full stop. However the senate part is debatable. You could argue that democrats are more likely to create inflation which is good for BTC.
— Qiao Wang (@QwQiao) November 8, 2020
Meanwhile, investor Mike Novogratz concurred that a Democratic administration would be good for crypto, saying that an ongoing stimulus program would bolster Bitcoin’s anti-inflationary narrative:
Wore my lucky hat for Biden. Go $BTC. Go Biden. https://t.co/AwVxCsUAJm
— Mike Novogratz (@novogratz) November 4, 2020
At a macro level, Cointelegraph has previously reported that an incoming Biden administration may bolster markets as uncertainty settles and hopes for additional stimulus run high, but likewise these efforts could cripple cryptocurrencies via a stronger dollar.
There has also been widespread speculation concerning the crypto inclinations of key appointees in the forthcoming administration. Compound general counsel Jake Chervinsky noted that whoever President-Elect Biden nominates to posts will be more important than incoming President’s personal opinions:
President-elect Biden hasn’t said anything publicly about his views on crypto. For now, it really isn’t a big enough issue to warrant his attention.
The next four years of US crypto policy depends on who he appoints to key positions; we’ll know more as the transition gets going.
— Jake Chervinsky (@jchervinsky) November 7, 2020
To that end, Politico first reported that former CFTC chairman and Obama appointee Gary Gensler, best known for his hardline enforcement of Wall Street regulations in the wake of the 2008 financial crisis, would be a part of Biden’s transition team. Gensler has spoken positively about Bitcoin in the past.
Major outlets also reported two weeks ago that economist Lael Brainard, the former Federal Reserve governor who led a MIT joint effort to research CBDCs, is a frontrunner for Treasury secretary.
For all the guesswork, however, US stock market open come Monday will ultimately paint a clearer picture for speculators. Said one popular Twitter trader:
monday is coming
— starbust (@inversebrah) November 8, 2020