Crypto Guides, Knowledge & Insights

Pantera's ICO fund ends 2020 up more than 500%, bitcoin fund up nearly 300%

Pantera Capital ended 2020 on a high note.　　The investment firm clocked in triple-digit percentage gains across its three digital asset funds, according to an investment note shared with The Block. The firms ICO fund, which previously was up more than 300% earlier in the year, ended 2020 up more than 500%, according to the note. Its bitcoin fund, meanwhile, ended 2020 up 299%.　　To be sure, the bitcoin funds performance was slightly less than bitcoin, which ended the year with a 303% gain.　　In the note, CEO Dan Morehead argued that the ongoing rally in the digital asset market is less about hype than the previous rally in 2017, adding that focus has shifted from altcoins and initial coin offerings to bitcoin and ethereum.　　“There has been a massive shift from highly speculative, mainly non-functioning tokens having roughly half of the total market cap in 2017 – to today when the market cap is mainly in the two proven, functioning chains: bitcoin and ethereum,” Morehead wrote. “Those two chains have 86% of the value. The other 5,000 chains have 14%.”　　Pantera was an active investor amidst the ICO mania, investing in projects like Filecoin and 0x.　　Unsurprisingly, the firm is bullish on bitcoin, highlighting a

2021-01-15Deep Dive

Why institutional investors will support Bitcoin above the $30k level

Institutional buying that started when Bitcoins price was as low as $19000 has continued well into the $40000 level. Institutions like Grayscale have consistently added to their Bitcoin holdings irrespective of the price rally and the subsequent correction. Based on data from the Coinbase chart, there is a possibility that institutional investors have bought $BTC at the $30000-$32000 level. Additionally, the Coinbase outflow in the first week of January 2021 was the highest since 2017.　　Coinbase Outflow of Bitcoin || Source: Cryptoquant　　If the Bitcoin bull run was driven by these institutional investors, then there is an increased possibility that there will be support for Bitcoin above the $30000 price point. This might help sustain Bitcoins price above $30000, protecting it from further dips. Earlier in January, Raoul Pal had tweeted about the trend at the start of the year, and how it reverses. After starting the year with zero P&L, and allocating new risk buckets, and post a 2-week break, there is an increased possibility of a trend reversal or a massive correction. This takes most open positions to negative or P&L grind again.　　Institutional investors‘ support above $30000 may safeguard Bitcoin’s price rally and protect the portfolio of retail traders. Based

2021-01-15Deep Dive

Kim Dotcom Wants to Fund Bitcoin Cash Development

Kim Dotcom, founder of the infamous file sharing site Megaupload, has announced plans to fund Bitcoin Cash (BCH) development.　　Why Dotcom Favors BCH　　Dotcom endorsed Bitcoin Cash during an interview with Bitcoin.com. There, he argued that BCH is undervalued based on the fact that it handles about 10% of Bitcoin‘s transaction load but has just 1% of Bitcoin’s market cap. He also alluded to Bitcoin Cashs lower transaction fees as his reason for favoring the coin.　　The move resembles an earlier announcement made by Twitter and Square founder Jack Dorsey. In 2019, Dorsey stated that he would pay people to work on Bitcoin. That eventually led to the creation of Square Crypto, which is currently examining grant proposals.　　Dotcom, however, has a more controversial business history. His original file-sharing site, Megaupload, was seized and shut down in 2012 due to copyright infringement. He also cut ties with its replacement site, MEGA, in 2015, though the site is still operational.　　In light of Dotcom‘s controversial reputation, it will take time to see whether his soon-to-be-recruited Bitcoin Cash developers produce apps of lasting value to the cryptocurrency’s ecosystem.　　K.im Will Use BCH　　Dotcom also has a more practical reason to support the cryptocurrency. His newest app, K.im, plans to

2021-01-14Deep Dive

Bitcoin’s Wild Price Action Will Benefit PayPal and Square Even if BTC Plummets, Says Analyst – Here

Mizuho Securities analyst Dan Dolev says payment giants Square and PayPal are poised to benefit from Bitcoins wild price movements even if the leading cryptocurrency falls off a cliff.　　In a new CNBC interview, Dolev explains that Squares revenues have traditionally gone up even when Bitcoin was in bearish territory.　　“We did some work. We looked all the way back to 2017 and what we found out is that the revenue from Bitcoin for Square continues to go up even in periods where Bitcoin actually doesn‘t go up. So right now we’ve had a rally, a massive rally, since December or even November. So thats easy to think about Bitcoin going to a $100,000. But historically even in periods where it was going down, the gross profit from Bitcoin has been going up.”　　And the reason for that is two-fold. One, there is more users actually using or trading Bitcoin on the Cash App. And two, the number of transactions per user is going up. So what weve said in the note is that even if Bitcoin goes up to you know a $100,000 or stays at $30,000 or $10,000, Square will still benefit from it.　　The Mizuho analyst points out that users holding

2021-01-14Deep Dive

Rapid Profits: Bitcoin Hashrate Accelerates While Mining Difficulty Touches All-Time High

One aspect of the Bitcoin (BTC) network that people look at to measure the protocol‘s overall health and growth is the hashrate. At the time of publication, the BTC hashrate is processing at speeds of around 165.38 EH/s and the miner’s collective hashpower has been nearing all-time highs again. For instance, on December 30, 2020, the network hashrate spiked to a colossal 178.6 EH/s and 12 days later the hashrate hit 171.2 EH/s.　　What has surpassed its ATH is BTC‘s network mining difficulty or difficulty adjustment algorithm (DAA). This week the mining difficulty is the highest the difficulty has ever been in Bitcoin’s lifetime to-date. After the significant price dip on Monday and the accelerated hashrate the same day, the protocol pushed the mining difficulty to 20.61T.　　Bitcoin (BTC) mining hashrate is operating at 165,376,566,182,178,200,000 H/s on Wednesday, January 13, 2021, at 8:00 p.m. (EST).　　Because the hashrate is so high entering the second week of January 2021, the Bitcoin networks difficulty will increase +9.98% or 22.66T, another ATH in less than two weeks. This will take place in roughly nine days from now, give or take, depending on the average output of blocks per day.　　Bitcoin (BTC) mining difficulty is approximately 20,607,418,304,385 (20.61T)

2021-01-14Deep Dive

Bitcoin Is Unlike Any Other Bubble We’ve Seen So Far

While the jury is still out on whether Bitcoin is a bubble, one thing is certain: it‘s unlike any other bubble we’ve seen.　　Previous speculative asset-inflation episodes were either a one-off, like tulip mania in the 17th century, or the boom-doom cycle took many years, like gold. Bitcoin, by comparison, has survived three peak-to-trough drawdowns of over 80% in less than 10 years. The cryptocurrency surged past $40,000 last week to set an all time high. It has fallen more than 15% since then.　　Man Group, the worlds biggest publicly traded hedge fund firm, compares Bitcoin to Prometheus in Greek mythology, whose liver keeps growing back, every time a giant eagle pecked it out.　　“Every time a Bitcoin bubble bursts, another grows back to replace it,” Man Groups analysts wrote in a note dated Jan. 12. “This very frequency makes the Bitcoin narrative somewhat atypical relative to the great bubbles of the past.”　　Heres a table of some financial bubbles compiled by Man Group.　　“Instead of considering each individual spike and fall as a discrete bubble, there may be more merit in the argument that this volatility is simply part of the price discovery in a new asset class, and that these are not bubbles,

2021-01-14Deep Dive

Compute North, Foundry Team Up to Target North American Bitcoin Miners

Two cryptocurrency mining companies want to make it easier for businesses in North America to mine bitcoin.　　Minnesota-based Compute North has allocated hosting facilities and 47 megawatts (MW) of power for 14,000 Whatsminer M30S mining machines supplied by New York-based Foundry Digital as part of an agreement to provide a “turnkey” hosted mining solution. (Foundry is a subsidiary of CoinDesk parent company Digital Currency Group.)　　Foundry has hosted mining devices with Compute North for over a year, according to Foundry CEO Mike Colyer. This latest batch of miners sent to Compute North for hosting will be deployed in Q1 2021, at which point investors can purchase hosted machines through either company.　　By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.　　In the past year, mainstream interest in mining has soared along with bitcoins price, causing investors to pile into public North American mining companies and prompting shares of most of these companies to handily outperform bitcoin, as CoinDesk reported.　　But an individual investors ability to actually mine is often severely limited by a high barrier to entry thanks to hardware and power resource costs. That barrier stands even higher now as mining machine

2021-01-14Deep Dive

On-chain data: Institutional players likely bought Bitcoin’s weekend dip to $30k

Bitcoin faced a strong dip last weekend and early this week. The cryptocurrency fell from the $42,000 highs set late last week to lows at $30,000 on some spot exchanges.　　During the move lower, there was a large ejection of leveraged traders. As CryptoSlate reported previously, in excess of $2.8 billion worth of cryptocurrency market futures positions were liquidated. This was the biggest liquidation event for the Bitcoin market since the Mar. 13 “Black Thursday” blowup of 2020.　　Bitcoin has since recovered to $35,000 as of this articles writing, per CryptoSlate market data.　　The market may have bottomed, according to analysts looking at on-chain and overall exchange trends.　　Institutions bought the Bitcoin dip, says CryptoQuant CEO　　According to Ki Young Ju of CryptoQuant, a crypto analytics startup, there were many institutional players that bought the Bitcoin dip when it dropped into the $30,000 range.　　Commenting on on-chain trends that indicate that Coinbase, an exchange often used by institutional players and over-the-counter desks, has seen strong Bitcoin outflows, he wrote:　　“There are many institutional investors who bought $BTC at the 30-32k level. The Coinbase outflow on Jan 2nd was a three-year high.”　　He suggested that this means that there are institutional players ready to buy any dip into the

2021-01-14Deep Dive

These DeFi Tokens Have Double-Digit Gains as Bitcoin’s Growth Tapers

As the recent price rally in bitcoin and ether cools down, investors and traders are taking a closer look at alternative tokens (“altcoins”), particularly those from the decentralized finance (DeFi) subsector.　　Multiple DeFi tokens this week saw double-digit gains, including 0x (ZRX), aave (AAVE), and maker (MKR). Prices for 0x were at $0.52 at the time of writing, up 20.42% in the past 24 hours, according to CoinDesk 20. Makers price, at the same time, saw near-160% growth year to date.　　“I think the biggest thing is bitcoins momentum finally cooling and giving DeFi tokens some room to breathe,” Ryan Watkins, research analyst at Messari, told CoinDesk. “On top of that there are a lot of exciting new releases coming out in DeFi these next one to two weeks which is creating momentum as well.”　　0x, an Ethereum-based decentralized exchange, announced its version 4 upgrade plan on Jan. 7, which caused a sudden rally in the protocols ZRX token. The upgrade will include new customizable modules that are able to execute trades without interruption and gas efficiency optimization. The vote for the upgrade is scheduled for Jan. 16.　　Trading volumes on major decentralized exchanges also saw rapid growth in the past month, up 95%

2021-01-14Deep Dive

IHS Markit Likely to Join Race for Crypto Indexes on Wall Street

IHS Markit will likely join the cryptocurrency index game, the company‘s President of Financial Services Adam Kansler said during the financial information giant’s Wednesday earnings call.　　Kansler told analysts that IHS Markit already has “tactical partnerships” with crypto firms like Lukka to source cryptocurrency pricing and reference data. These data points could form the bedrock of a cryptocurrency index product although Kansler said IHS Markit currently uses them to help clients value portfolios.　　“So it‘s an area where we’ll continue to focus not just on the valuations side, but probably even moving into the index side in the near future as well,” he said, referring to cryptocurrencies.　　IHS Markit executives acknowledged Wednesday that bitcoin has generational momentum behind it. Chairman and CEO Lance Uggla said the younger ranks of his firm are chomping for more products in the crypto space, even if the firm has “nothing big and significant” in the pipeline.　　“Of course, we have every millennial that works for us thinks we should have a major pricing, data services, software and participation around a marketplace that is really legitimizing itself. So weve got to take it seriously,” he said.　　IHS Markit is barreling toward a stronger stance in crypto on multiple fronts. In

2021-01-14Deep Dive

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