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The End of the Ethereum Bear Market

For those who view ERC-20 tokens as potential investment opportunities, now may be a time to pay slightly closer attention. In the 20 day period from September 7 to September 27 of 2018, a sample of 574 ERC-20 tokens from the Ethereum One dataset was observed. The average price of those tokens in US dollars, weighted by their market cap, was calculated for each day. Below is a visualization of that data; the labels on the chart reflect the percent change since September 7.

Ethereum Bear Market

We see that a weighted average portfolio would be up 28% since September 7, and would have experienced a maximum drawdown of just under 38% since then. Since September 17, the ERC-20 market has fared well for bulls. Moreover, of the 574 tokens observed here, 198 of them — or about 34.5% — are above their 20-day moving average, suggesting a solid cohort of tokens that have some momentum behind them.

Now for the obvious question: why are these tokens rising?

First, it does not appear to be momentum or trend on a per-token basis — as there is essentially no correlation between the percentage change for a given token and its market capitalization, suggesting both small and large tokens are rising. In other words, the collective rise in the sample of 574 ERC-20 tokens is not a case of a few large tokens lifting up the whole portfolio; returns are not correlated with market capitalization. The chart below illustrates.

Ethereum Bear Market

Second, there does not appear to be a discernible relationship between growth in transfers logged on the Ethereum blockchain and change in price. The chart below illustrates.

Ethereum Bear Market

However, for those who do believe in the utility hypothesis — namely that tokens that are used more will rise in value — it may be worthwhile to explore tokens that are seeing greater utility in the form of transactions that are logged on the Ethereum blockchain. Perhaps the hypothesis is true, and the lack of a correlation between utility growth and returns growth is indicative of mispricing in the market and thus an investment opportunity. For crypto investors of such a persuasion, the chart below may be of interest: it shows the 198 tokens that have momentum in the sense that their price is above the moving average, and their transfer growth rate percentile ranked (after adjusting for market cap so that higher market capitalizations were penalized; mathematically, we took the transfer growth rate and divided it by the natural logarithm of the market capitalization).

Ethereum Bear Market

From this perspective, tokens in the bottom right of the chart — those that have shown a high growth in market cap adjusted transfers relative to other tokens but have not seen a commensurate increase in price may be an opportunity consistent with the outlook of those who embrace the utility hypothesis.  

Featured Image: DepositPhotos/ Limbi007

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Cryptocurrency Regulation | Is this what We Need to See Market Growth?

We’ve all heard the saying that “ignorance is bliss” at some point in our lives, but this term most certainly does not apply to the financial world.

In the financial sphere, ignorance is risk, not bliss.

It’s for this very reason that traditional financial markets are regulated. The US markets are more than happy to see reasonable regulation, as it ensures a suitable level of transparency and fairness.

When it comes to stocks, we see regulation by the Commodity Futures Trading Commission (CFTC), and government-issued currency is overseen by the Department of the Treasury and the Federal Reserve.

A Lack of Trust

However, we’ve recently seen the emergence of another asset class, known as cryptocurrencies, and for the time being there is no single cryptocurrency regulator overseeing matters.

This had lead to uncertainty and a lack of trust from the more established financial players.

While we’ve seen the Securities and Exchange Commission (SEC) announce the appointment of a “crypto czar” in Valerie Szczepanik in June, with the task of working out how to apply the application of US financial regulations and laws to cryptocurrencies, it’s fair to say that this is still very much a work in progress.

Until such a point is reached where the various governments can step in and get a handle on matters, we just have to accept that the cryptocurrencies world is a modern equivalent of the Wild West, right?

Well, maybe not.

Ensuring Full Compliance

As mentioned, the lack of cryptocurrency regulation isn’t something that reputable players in the industry are happy about, and with that in mind, we’ve seen some platforms and exchanges take matters into their own hands and look to bring a level of self-regulation into their business.

One such company is London-based Archax, who has only recently announced a partnership with Aquis technologies, which is the financial and regulatory technologies service arm of Aquis Exchange.

Archax has unveiled their new trading platform targeted at institutional investors.

The type of investors who are used to operating in a “regulated manner” and who have perhaps previously viewed digital assets as being volatile and unreliable.

We’ve seen a similar approach taken by Liechtenstein-based exchange ETERBASE, which has headed up a leadership team that boasts many years of experience at the highest level of the traditional finance world.

Only recently ETERBASE obtained regulatory assessment in Liechtenstein and was quick to comply with the EU General Data Protection Regulations (GDPR) to ensure full compliance.

So, while there’s no official government stance on crypto regulation at this time, it is comforting to know that there are exchanges out there who are holding themselves accountable rather than taking advantage of a lack of rules and regulations.

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Gemini Stablecoin Launches as World First

A bit of an understatement, but it’s a massive day for the crypto industry. On Monday, the Winklevoss twins announced the launch of the Gemini stablecoin, a regulated cryptocurrency backed by USD.

Here’s why this is significant crypto news.

Introducing the Gemini Stablecoin

There are multiple reasons to be optimistic about the Gemini dollar, aside from it being the world’s first regulated stablecoin.

For starters, the Gemini stablecoin will be pegged to the United States dollar at 1:1. Second, the Gemini dollar will allow individuals to both send and receive USDs on the Ethereum network. To do so, users will be using ERC20 tokens.

To simplify, users can convert USD into Gemini dollars, and vice-versa.

Third, the launch of the Gemini dollar indicates that the Winklevoss twins have not been scared away from the crypto industry. Last month Tyler Winklevoss said that the Gemini Trust Co had been considering launching a stablecoin for a while. However, when factoring in things like SEC rejections and the downturn in the Bitcoin price, you could foresee the possibility of this not happening.

That’s not the case though. And we’re glad to see the Gemini dollar hitting the market. After all, stablecoins are starting to become more and more popular, and, according to Gemini Trust Co., the Gemini dollar “combines the creditworthiness and price stability of the U.S dollar with blockchain technology” as well as the “oversight of U.S. regulators.”

The Crypto Market Reacts

Everyone seems pretty excited. Various mediums are covering the stories, the Winklevoss twins are active on social media, and numerous well-known crypto players have joined the conversation.

One crypto player even said this is a sign that the crypto industry is maturing, which seems accurate. Thanks to the Gemini dollar, the gap between conventional banking and the crypto market will close.

>> The US SEC Ceases Trading on Two Exchange-Traded Notes

The Takeaway

What do you think about the launch of the Gemini stablecoin? Let us know in the comments below!

Featured Image: wikipedia

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Crypto World Cup Day 19

Day 19 of the Crypto World Cup is over, and so is the fourth day of the round of 16. 

The games today were definitely something else. While the score count remained low, the matches saw other things occur that made up for that. However, those things weren’t necessarily all good. 

Let’s dive in. If you missed it, here’s who is playing in the round of 16. 

Check Out the Results and Highlights of Today’s Games 

Match 1: Willy Woo 1-0 David Schwartz 

This match was a tough one. For the most part, the game was working in favor of David Schwartz. He dominated possession and had more shots on goal than Willy Woo. The exact difference was 18 to 12. 

Despite all of this, David Schwartz was not able to break through the defense of Willy Woo. 

Still, Willy Woo wasn’t able to kick-start its own offense until the 66th minute. And even then, the goal boiled down to the fact that the ball deflected off David Schwartz and went in. 

>>> Day 18 of the Crypto World Cup 

At the end of the day, David Schwartz could be considered the real winner. He dominated the game, and the deciding goal went in under unfortunate circumstances. That said, even though Willy Woo didn’t create chances or dominate possession – like David – he got the job done. At this stage of the tournament, that’s all you want, really. 

Match 2: Justin Sun 1 (4) – 1 (3) Warren Buffet 

Well, that was an aggressive game. And an intense game. Basically, it hit us all in the feels. 

The first half was dominated by Justin Sun, but the game was scoreless when the halftime whistle blew. In the half, Warren Buffet was all over Justin Sun, throwing shoulders, and, at one point, a headbutt. He was handed yellow card after yellow card.

In the second half, Warren Buffet did not shy away from the tackles, which ultimately led to his downfall. In the 57th minute, Buffet pulled down Justin Sun in the box, rewarding the latter with a penalty. Justin Sun curled the ball into the net, making the game 1-0. 

And then it happened. Justin Sun fans around the world collapsed to their knees (literally and figuratively) when, in the 93rd minute, Warren Buffet scored on a corner, making the score 1-1. The game was forced to go into overtime. 

Overtime did nothing. The game moved onto shootouts, and that’s where it ended. Justin Sun won the shootouts 4-3. 

God Save the Queen, Justin Sun prevails!

The Crypto World Cup Takeaway: 

Check back tomorrow for more World Cup match results. Who do you think is going to go all the way? 

Featured Image: Mirror 

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What is it? – Crypto Currency News

The rise of cryptocurrency was so sudden and widespread that before the world could realize what was happening, it was knee-deep in it.

Cryptocurrency gained extreme popularity due to its new-found status as an investment option, away from exchange-rate risks which come with all the other investment options. With such risks involved in cryptocurrency, the upcoming gold-backed cryptocurrencies are attempting to stabilize it to some extent and provide some security to cryptocurrency owners.

How does Cryptocurrency Work?

Cryptocurrency is not present in a tangible form since it is a product of blockchain technology. This might make one not take it seriously, but the unbeatable growth of cryptocurrencies, such as Bitcoin, is proof of why one should take it seriously.

Cryptocurrency functions are very different from those of fiat money. It is a digital currency, free of regulations created by governments and banks.

Knowing that cryptocurrency is completely decentralized encourages many to use it; but often times, that also becomes the reason behind the downfall of the currency as well as an increase in the risk involved.

There is no tangible structure of how cryptocurrency is made and as its creation depends on demand and supply.

The Uncertainty and Volatility of Cryptocurrency

Cryptocurrency is hard to understand and requires extensive research on the part of the buyer to safely purchase any form of it.

Apart from issues like losing one’s cryptocurrency wallet, being the victim of a hack, lack of proper legal assistance for retrieval, etc., there is an issue with the uncertainty and volatility of the cryptocurrency market.

The precise factor that drives the rate of cryptocurrencies is not always possible to point out. However, like most commodities in the market, its rate depends on demand and supply.

However, since the size of a crypto-market is much smaller than an actual stock market, a small movement of a given cryptocurrency can have a huge impact on its price.

The issue of the legality of cryptocurrencies is also concerning. Some governments deem it illegal because an alternate currency against the nationalized currency would mean huge problems for the government, not to mention the lack of income in the form of taxes.

Once cryptocurrencies started being perceived as safe havens for investments, it was only a matter of time until gold and cryptocurrency formed a relationship.

Furthermore, the gold market’s value or, simply, gold price is fixed at any given time and this is comforting considering cryptocurrency rates fluctuate without any explanation or set pace.

Gold is considered to be one of the most precious metals and a safe way to invest money and get results in the long run. Since gold is present in a physical form, it is much more reliable for the most of the population.

Several gold-backed cryptocurrencies are coming up and have started offering ICO’s (Initial Coin Offerings) to raise money for their startups. The ICO can be bought with fiat money easily.

This way, gold-backed cryptocurrencies aim at providing some sense of security to the owners for their digital money also has some value in the form of fiat money.

This is truly revolutionary as it bridges the gap between digital currencies and fiat money. However, this does not indicate any market relation between the two and neither is it going to affect gold prices.

How Gold-Based Cryptocurrency Works

In order to issue such a currency, a token or coin representing the value of gold is issued. The value of gold per coin/token can depend on the cryptocurrency itself.

For instance, OneGram- a new cryptocurrency based on gold, is setting up a floor price for all of its coins as the gold price of 1 gram of gold.

This gold is safely stored with a third party or can be traded with other coin-dealers/holders.

This ensures a minimum value of the token/coin as the value of this gold is based on the gold price of the day; so, even at a minimum, the coin will be equal to the current gold price.

Certain countries, too, are looking to issue their own gold-backed forms of cryptocurrency, since it offers a tangible reality earlier missing from cryptocurrencies.

In an attempt to move away from cash, China is developing its own cryptocurrencies. Since China is the world’s top buyer of gold and has been storing up gold in its bank reserves, it wouldn’t be surprising if this new cryptocurrency is also backed by gold.

Gold-Backed Cryptocurrencies You Can Invest In

Already, there are several companies offering gold-based cryptocurrencies to buyers.

Physical gold ensures that the value of these cryptocurrencies is stored in vaults in various countries across the world, depending on the token involved and the cryptocurrency itself.

These are some of the gold-backed cryptocurrencies being offered on the market right now:

  1. Lionsgold
  2. OneGram
  3. Goldmint
  4. Xaurum
  5. Gold Coin

Other crypto-currencies are in the process of being started off and are offering pre-ICOs (a token sale offered before the official ICO campaign or crowd sale), which can help investors and buyers make quite some money.

However, it is crucial to do proper research before one makes an investment in these cryptocurrencies.

  1. Golden Currency
  2. GoldVein
  3. GoldMineCoin

How to Buy Gold-Backed Cryptocurrency

Bitcoin and Ethereum are two major cryptocurrencies that are being used to buy alternate cryptocurrencies.

To buy any gold-backed cryptocurrency, it is essential to have a stash of Bitcoin or Ethereum first.

Different platforms and cryptocurrencies have their own requirements of what is needed to make a purchase, depending upon the token and what it runs on. Usually, Ethereum is used for this purpose.

In order to buy Bitcoin or Ethereum, fiat money can be deposited at crypto-exchanges. It is important to use only trusted and approved crypto-exchanges for this purpose.

>> Check out these 10 Crypto Exchanges

What to Take Away

Cryptocurrencies have been popular and feared at the same ever since they came into being, but using gold to back cryptocurrency is sure to make them a much more reliable form of currency.

The development and success or failures of the many upcoming ventures of gold-based cryptocurrencies are much-awaited in order to see the fate of this new form of cryptocurrency.

It is important to be well-informed before investing in a cryptocurrency, since most people lose money without understanding what exactly happened.

An understanding and proper knowledge of the crypto market is necessary to venture into the world of cryptocurrency; once done, it can yield unbeatable results and have many other advantages as well.

Featured Image: depositphotos/ maximsamos

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