Category: Cryptocurrency

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SINGAPORE, Sept. 12, 2024 /PRNewswire/ — HTX Ventures, the global investment division of HTX, today released its latest research analysing Bitcoin’s potential and challenges in the field of Bitcoin decentralized finance (BTCFI). The report, titled Exploring the BTCFI Rabbit Hole from the Perspective of Bitcoin’s Programmability, aims to help readers understand the BTCFI sector better, by exploring the evolutionary path of Bitcoin programming, delving into how Bitcoin programming can support various BTCFI applications, showcasing the current real-world BTCFI implementation scenarios, and explaining the underlying logic of BTCFI’s future growth and adoption.

HTX Ventures has been contributing to BTCFI for a long time. As stated in its 2024 Half-Year Investment Report, BTCFI is highlighted as one of HTX Ventures’ six key investment directions in 2024. Some of HTX Ventures’ portfolio companies in the BTCFI sector include Babylon, BounceBit, COREx, and more.

The new report once again shows HTX Ventures’ interest in BTCFI. It begins with the foundations of the Bitcoin contracts, which were laid fourteen years ago by Satoshi. Understanding the basics of Bitcoin programming involves several concepts, including Transaction Outputs (TXO), Unspent Transaction Output (UTXO), scriptSig, and Opcodes. “Bitcoin script programming is about programming money and enabling a specific amount of money to respond to particular input data. By designing the scriptPubKey, opcodes, and the interaction process between users, we can offer cryptographic guarantees for the key state transitions of Bitcoin contracts, ensuring the contracts’ proper execution,” the report points out.

There are some mechanisms to be used to enable the implementation of different types of transactions, including MultiSig, Timelocks, Hashlocks, Flow Control, and SIGHASH. The report explains, “the basic model of Bitcoin programming is where UTXO locking scripts specify verification conditions, unlocking scripts provide data, and opcodes in locking scripts indicate the verification program. The funds can be spent once the verification program is passed.”

There are some core limitations, however, such as only a few verification programs being available, Bitcoin scripts having no computational power, and UTXO unlocking conditions being completely independent.

Unlike the computation-based Ethereum contracts, Bitcoin contracts are verification-based, which has brought many challenges in developing BTCFI products. Despite the difficulties,  “over the ten years of developing Bitcoin contracts, the ingenious use of cryptographic algorithms and signatures has significantly enhanced privacy, efficiency, and decentralization, making BTCFI products possible,” the report states, and starts introducing Bitcoin programming milestones. Innovative tools, such as the Discreet Log Contract (DLC), Partially Signed Bitcoin Transactions (PSBT), and MuSig2 bring new solutions to the problems in Bitcoin programming, driving the development of BTCFI.

The Taproot upgrade activated in November 2021 was revolutionary for the Bitcoin ecosystem, allowing Bitcoin to hold in custody large-scale smart contracts with tens of thousands of signatories while concealing all participants and maintaining the size of a single-signature transaction. This makes more complex on-chain BTCFI operations possible and significantly improves privacy and transaction efficiency.

Such technological innovations pave the way for BTCFI’s further development. Then in January 2023, Ordinals were proposed, which aimed to assign each sat a unique identifier and attribute, so as to transform it into a unique NFT. The creation and trading of Bitcoin NFTs were realized, not only expanding the uses of Bitcoin but also allowing users to directly create and trade digital assets on the Bitcoin blockchain. This led to the introduction of BRC-20, a token system for on-chain recording and off-chain processing that uses JSON data’s ordinal inscriptions to deploy token contracts, mint tokens, and transfer them.

The naissance of Ordinals and BRC-20 created trading demand and blue-chip assets for BTCFI. More importantly, they offered many BTCFI projects new ideas based on indexer programming that enhanced Bitcoin’s contract capabilities.

Bitcoin’s programmability has come a long way and made great progress, forming a thriving BTCFI ecosystem with more and more application scenarios of BTCFI arising. The report lastly lists some notable BTCFI implementations, including BTC staking provider Babylon, asset issuance platforms Unisat and Magic Eden, lending protocol Liquidium, BTCFI scaling solution Fractal Bitcoin, and more.

The emergence of BTCFI applications indicates that its market potential is becoming evident. With Bitcoin becoming more and more mainstream, the market demand for BTCFI use cases will also increase, fostering a new financial ecosystem centered around Bitcoin. “The formation of this ecosystem will propel Bitcoin further beyond the ‘digital gold’ narrative, establishing it as an indispensable decentralized financial infrastructure in the global economic system,” the report concludes.

To read the full report, please visit: https://square.htx.com/htx-ventures-exploring-the-btcfi-rabbit-hole-from-the-perspective-of-bitcoins-programmability/

About HTX Ventures

HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide. With more than a decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.

HTX Ventures currently backs over 300 projects spanning multiple blockchain sectors, with select high-quality initiatives already trading on the HTX exchange. Furthermore, as one of the most active FOF (Fund of Funds) funds, HTX Ventures invests in 30 top global funds and collaborates with leading blockchain funds such as Polychain, Dragonfly, Bankless, Gitcoin, Figment, Nomad, Animoca, and Hack VC to jointly build a blockchain ecosystem. Visit us here.

Feel free to contact us for investment and collaboration at VC@htx-inc.com

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Bitcoin experienced a significant drop, falling to $56,000 amid a broader sell-off in the stock market led by Nvidia. The decline in Bitcoin’s value came as Nvidia (NASDAQ:NVDA) saw its shares plummet due to concerns over its future growth prospects and supply chain issues.

The sell-off in Nvidia stocks created a ripple effect across the market, impacting various sectors and leading to a decline in investor confidence. As a result, many investors turned to liquidating their cryptocurrency holdings, including Bitcoin, to cover losses or shift their portfolios to less volatile assets.

Nvidia’s recent quarterly earnings report highlighted several challenges, including supply chain disruptions and increased competition. These factors contributed to the company’s inability to meet market expectations, causing its stock price to drop significantly. Investors, already jittery from inflation concerns and potential interest rate hikes, reacted swiftly, leading to a broader market sell-off.

Bitcoin, often seen as a hedge against traditional market fluctuations, was not immune to the effects of the stock sell-off. The cryptocurrency’s value dropped as investors sought liquidity and stability. Despite this downturn, some market analysts believe that Bitcoin’s long-term prospects remain positive, citing its growing acceptance and integration into mainstream financial systems.

The drop in Bitcoin’s value also reignited debates about the cryptocurrency’s volatility and its role in a diversified investment portfolio. While some investors view Bitcoin as a digital gold, offering protection against economic instability, others are wary of its unpredictable price swings.

Moreover, the correlation between Bitcoin and stock market movements has been a topic of interest among financial experts. The recent sell-off suggests that Bitcoin’s price may be more closely tied to traditional financial markets than previously thought, challenging the notion of its independence as an asset class.

In the wake of the sell-off, several cryptocurrency exchanges reported increased trading volumes as investors scrambled to adjust their positions. This heightened activity underscores the growing influence of cryptocurrencies in the broader financial landscape and the need for robust trading platforms to handle market volatility.

Looking ahead, the market will be closely watching Nvidia’s next moves and any potential recovery in its stock price. Additionally, investors will be monitoring the broader economic indicators, such as inflation rates and central bank policies, which could further impact both traditional and cryptocurrency markets.

In conclusion, the recent drop in Bitcoin to $56,000 amid the Nvidia-driven stock sell-off highlights the interconnectedness of financial markets and the ongoing challenges faced by both traditional and digital assets. While volatility remains a key concern, the evolving dynamics of cryptocurrencies continue to attract attention and interest from a diverse range of investors.

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Bitcoin ATM scams have become a significant concern for both regulators and investors, with losses skyrocketing by 10 times in just three years. This alarming trend underscores the increasing sophistication of scammers and the vulnerabilities within the cryptocurrency ecosystem.

A recent report from the Federal Trade Commission (FTC) revealed that Bitcoin ATM scam losses surged from $3 million in 2019 to over $30 million in 2022¹. This dramatic increase in losses is attributed to the growing popularity of Bitcoin ATMs and the lack of robust security measures in place to protect users.

Bitcoin ATMs, which allow users to buy and sell Bitcoin using cash or debit cards, have proliferated across the United States and other countries. However, their convenience comes with significant risks. Scammers have exploited these machines to defraud unsuspecting users, often by posing as legitimate businesses or government agencies.

One common scam involves fraudsters instructing victims to withdraw cash from their bank accounts and deposit it into a Bitcoin ATM. The scammers then provide a QR code for the victim to scan, which transfers the Bitcoin to the scammer’s wallet. Once the transaction is complete, it is nearly impossible to recover the funds.

The FTC has identified several red flags that can help users avoid falling victim to Bitcoin ATM scams. These include unsolicited calls or messages from individuals claiming to be from a government agency or a well-known company, requests for payment in Bitcoin or other cryptocurrencies, and high-pressure tactics to make immediate payments.

To combat the rise in Bitcoin ATM scams, regulators and industry stakeholders are calling for stricter security measures and better consumer education. This includes implementing Know Your Customer (KYC) protocols, which require users to verify their identity before using a Bitcoin ATM, and enhancing the monitoring and reporting of suspicious transactions.

Moreover, partnerships between law enforcement agencies and cryptocurrency companies are crucial in tracking down and prosecuting scammers. The collaboration between these entities can help in the swift identification and dismantling of fraudulent operations.

Despite the risks, the popularity of Bitcoin ATMs continues to grow. According to Coin ATM Radar, there are over 30,000 Bitcoin ATMs worldwide, with the majority located in the United States. The convenience and accessibility of these machines make them an attractive option for both novice and experienced cryptocurrency users.

However, as the number of Bitcoin ATMs increases, so do the opportunities for scammers. It is essential for users to stay informed about the latest scam tactics and take necessary precautions to protect their investments. This includes being skeptical of unsolicited requests for payment, verifying the identity of individuals or entities before making transactions, and using secure and reputable Bitcoin ATMs.

In conclusion, the surge in Bitcoin ATM scam losses highlights the need for greater vigilance and security in the cryptocurrency market. By implementing stronger safeguards and raising awareness about potential scams, regulators and industry stakeholders can help protect users and maintain the integrity of the Bitcoin ecosystem.

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As the financial world braces for the next U.S. jobs report and the Federal Reserve’s interest rate decision, Bitcoin (BTC) traders are keenly watching several critical price levels. These events are expected to significantly influence Bitcoin’s trajectory, potentially leading to heightened volatility in the cryptocurrency market.

The jobs report, scheduled for release shortly, will provide insight into the health of the U.S. labor market. A strong report could bolster the U.S. dollar, putting downward pressure on Bitcoin prices. Conversely, a weaker-than-expected report might weaken the dollar, potentially pushing Bitcoin higher.

Meanwhile, the Federal Reserve’s upcoming decision on interest rates is another pivotal factor. If the Fed signals a more hawkish stance, it could strengthen the dollar and weigh on Bitcoin. Conversely, a dovish tone could support Bitcoin by weakening the dollar and boosting risk assets.

Bitcoin’s current technical setup suggests that traders are eyeing several key levels. On the downside, the $20,000 mark remains a crucial support level. If Bitcoin falls below this level, it could trigger a wave of selling pressure, pushing prices lower. On the upside, the $25,000 level is seen as a significant resistance point. A break above this level could signal a new bullish phase for Bitcoin.

Market sentiment also plays a crucial role. Recent data indicates that institutional investors are increasingly showing interest in Bitcoin. This growing institutional involvement is seen as a positive signal, potentially providing a floor for Bitcoin prices during periods of market turbulence.

Additionally, the broader macroeconomic environment continues to influence Bitcoin. Inflationary pressures, geopolitical tensions, and regulatory developments are all factors that could impact Bitcoin’s price trajectory. Investors are closely monitoring these dynamics as they navigate the uncertain landscape.

In conclusion, the upcoming jobs report and the Federal Reserve’s interest rate decision are poised to be key drivers for Bitcoin in the near term. Traders should keep a close eye on the critical support and resistance levels, as well as broader market sentiment and macroeconomic factors, to make informed decisions in this volatile market.

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In recent trading sessions, various crypto stocks have shown signs of recovery as Bitcoin manages to trim some of its earlier losses. This follows a tumultuous period where the leading cryptocurrency had seen significant declines in value.

Key players in the crypto industry, such as Marathon Digital Holdings (NASDAQ:MARA) and Riot Blockchain (NASDAQ:RIOT), have experienced notable rebounds. These companies, heavily invested in Bitcoin mining, are often seen as barometers for the sector’s health.

Marathon Digital Holdings reported a surge in its stock price, echoing the partial recovery seen in Bitcoin. Analysts suggest that renewed interest in the digital asset space and strategic moves by these companies to optimize their mining operations could be contributing factors.

Similarly, Riot Blockchain has also seen its stock price climb. The company has been making strides in expanding its mining capacity, which might be paying off as the market starts to stabilize.

It’s not just the miners that are benefiting. Coinbase Global, Inc. (NASDAQ:COIN), a major cryptocurrency exchange, has also seen an uptick in its stock price. This could be attributed to the increased trading volumes on its platform as investors take advantage of the lower prices to buy into the market.

However, despite the positive momentum, experts warn that the volatility in the crypto market is far from over. Factors such as regulatory developments, technological advancements, and macroeconomic trends continue to play significant roles in the overall market dynamics.

In addition, companies like MicroStrategy (NASDAQ:MSTR), which has substantial Bitcoin holdings, are also feeling the effects of the crypto market’s movements. The enterprise analytics firm’s stock has mirrored Bitcoin’s price trends, underscoring the interconnectedness of their value propositions.

Looking ahead, industry watchers will be keeping a close eye on upcoming regulatory announcements and market trends that could influence the crypto landscape. The resilience of crypto stocks in the face of Bitcoin’s fluctuations will be a critical indicator of the sector’s long-term viability.

Investors are advised to stay informed and consider the inherent risks associated with the volatile nature of cryptocurrencies and related stocks. Diversification and a clear understanding of market dynamics remain essential components of a robust investment strategy.

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The latest consumer price index (CPI) data released for August shows a continued slowdown in inflation growth, and this could signal more upside for the cryptocurrency market. As inflation nears the Federal Reserve’s 2% target, traders are becoming increasingly optimistic about future rate cuts, which could lead to long-term rallies in risk assets like Bitcoin and Ethereum. In this article, we explore the inflation impact on crypto markets and why slowing inflation could drive prices higher.

Inflation Continues to Cool in August

The U.S. Bureau of Labor Statistics (BLS) reported that headline inflation growth in August dropped to 2.5% from July’s 2.9%, marking the lowest level since March 2021. This decrease suggests that the Federal Reserve is making progress toward its inflation target of 2%, and it comes at a crucial time, just ahead of the Fed’s September 17-18 policy meeting. With other economic indicators, such as the Beige Book survey and weak employment growth numbers, pointing toward slower growth, the case for Federal Reserve rate cuts is strengthening.

If inflation continues to cool, it could encourage a more dovish stance from the central bank. A potential rate cut could be as much as 50 basis points, and that would support an accommodative economic environment. Lower interest rates reduce the cost of borrowing, weaken the dollar, and make risk-on assets like crypto more appealing. This positions the crypto market for growth as the economic conditions become more favorable for investment in riskier assets.

Impact of Inflation on Crypto Prices

Bitcoin and Ethereum are among the most closely watched cryptocurrencies, and their prices are often influenced by macroeconomic factors such as inflation and interest rates. When inflation is high, central banks tend to raise interest rates, which makes risk assets like crypto less attractive. However, as inflation falls and the possibility of rate cuts increases, traders are anticipating a rally in digital assets.

As Scott Garliss pointed out, “Slowing inflation could be good news for crypto,” particularly as rate cuts drive demand for assets like Bitcoin and Ethereum. The decline in inflation growth for August further strengthens the case for long-term rallies in the crypto market.

Regional Manufacturing Data and CPI Forecast

Another important indicator of inflation trends is the regional manufacturing data compiled by various Federal Reserve Banks, such as Dallas, Kansas City, New York, and Philadelphia. These surveys track key economic activities like new orders, backlog, inventories, and prices received. The “prices received” reading is crucial because it provides an early look at what manufacturers are charging for their goods, offering a glimpse of where inflation might be heading before the official CPI numbers are released.

In August, the prices received data suggested that inflation growth would continue to slow, which was confirmed by the CPI report. As prices ease across various sectors, this signals that inflation is likely to stabilize or decline further in the coming months. This trend supports the argument that inflation is no longer a significant threat to economic growth, clearing the path for rate cuts and, in turn, a potential rise in crypto prices.

Gas Prices and Their Effect on Inflation

One of the most telling factors in the August inflation data was the drop in gas prices. According to the U.S. Energy Information Administration (EIA), the average price for a gallon of gasoline fell to $3.51 in August, down from $3.60 in July, and significantly lower than the $3.95 average from August 2023. This 11% year-over-year drop in gas prices is an important signal for inflation because energy costs make up a considerable portion of the CPI.

As gas prices fall, so does the headline CPI, which further supports the case for a reduction in interest rates. This could lead to a weaker dollar, which tends to benefit assets priced in dollars, such as Bitcoin and Ethereum. The correlation between gas prices and inflation suggests that as fuel costs continue to drop, inflation will ease even further, creating a favorable environment for crypto-based investments.

Crypto Market Outlook

As inflation slows and the likelihood of rate cuts grows, the crypto market is positioned to benefit from increased investor interest in riskier assets. With Bitcoin currently trading at $56,954, the potential for further upside is strong. Ethereum, while slightly down 0.1% over the past 24 hours, is trading at $2,335 and remains well-positioned to benefit from any positive economic developments.

Experts are also bullish on the fourth quarter for Bitcoin, which has historically been one of its best-performing periods. With inflation declining and rate cuts on the horizon, traders are looking for Bitcoin and Ethereum to rally as economic conditions turn in favor of risk assets.

Conclusion: The Inflation Impact on Crypto Markets

The latest CPI data showing slowing inflation growth provides a strong signal that rate cuts are on the way, which could drive a long-term rally in the crypto market. As the Federal Reserve moves toward a more accommodative policy, Bitcoin and Ethereum stand to benefit from increased demand for risk assets. With gas prices falling and inflation nearing the Fed’s target, the future looks bright for crypto investors.

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As Bitcoin enters the final quarter of 2024, traders are becoming increasingly optimistic about the cryptocurrency’s future, despite a historically challenging September. Although Bitcoin has experienced a tough month—down 4.3% so far—many market watchers believe that several factors, including anticipated Federal Reserve rate cuts and the U.S. presidential election, could help Bitcoin pull out of its slump. This article will explore the key reasons behind traders’ bullish sentiment and the factors driving the Bitcoin market outlook.

Bitcoin’s Seasonal Struggles in September

Historically, September has been one of the worst-performing months for Bitcoin. Since the cryptocurrency began trading in 2010, it has fallen by an average of 4.5% in September. This year has been no exception, with Bitcoin down 4.3% so far this month. As Matt Hougan, Chief Investment Officer at Bitwise, explained, “Bitcoin’s average September performance is negative, and it’s often a month traders dread.”

Despite this pattern, many traders are looking ahead to more favorable conditions. Historically, Bitcoin tends to rebound in the fourth quarter, with October being nicknamed “Uptober” for its average 30% rise during the month. Traders are hopeful that this trend will continue in 2024.

The Federal Reserve’s Role in Bitcoin’s Market Outlook

One of the most significant factors shaping Bitcoin’s market outlook is the Federal Reserve’s upcoming decision on interest rates. The Fed is expected to announce its first rate cut in four years this September, signaling a return to a more accommodative monetary policy. Lower interest rates tend to boost interest in riskier assets, including cryptocurrencies like Bitcoin, as they reduce the appeal of safer, low-yield investments.

CME Group’s FedWatch tool shows that there is a high likelihood of a 0.25% rate cut, with an 83% probability. However, the chance of a more aggressive 0.5% cut has dropped to 17%, down from 31% just last week. “While there’s broad consensus that easier money is coming, investors are feverishly recalibrating their bets,” Hougan noted.

Traders expect that a rate cut will help stabilize consumer prices and manage inflation, creating a more favorable environment for Bitcoin. Lower interest rates typically increase demand for risk-on assets, which could provide a tailwind for Bitcoin’s price as the year progresses.

The U.S. Presidential Election and Its Impact on Bitcoin

Beyond the Federal Reserve, the upcoming U.S. presidential election is another factor driving optimism in the Bitcoin market outlook. Political events, especially major elections, often introduce volatility into financial markets, and Bitcoin is no exception. Both the Republican and Democratic candidates are likely to influence the cryptocurrency’s price based on their stances toward crypto regulations.

Former President Donald Trump, a Republican contender, has embraced the cryptocurrency industry in his current campaign, promising to make the U.S. a global leader in crypto if he is elected. He has also pledged to remove Securities and Exchange Commission Chair Gary Gensler, a well-known critic of the crypto sector. In contrast, Democratic Vice President Kamala Harris has not publicly outlined her views on cryptocurrency, though her campaign has indicated a desire to “reset” the relationship between the government and the crypto industry.

Traders are keeping a close eye on how the election will unfold, as the winner’s approach to cryptocurrency regulation could have a significant impact on the market. The uncertainty surrounding the election is also contributing to Bitcoin’s volatility this month, as the cryptocurrency has seen increased market participation amid political developments.

Bitcoin’s Volatility and Fourth Quarter Prospects

Although Bitcoin has experienced high levels of volatility in September, this could be a positive indicator for future price movement. According to Kaiko, a crypto analytics provider, Bitcoin’s 30-day volatility has surged to 70%, nearly double last year’s levels. “While volatility is challenging, it often signals increased market participation,” Kaiko noted in a recent research report.

Traders are looking forward to October, which has historically been one of Bitcoin’s best-performing months. “Bitcoin investors love October,” said Hougan. “It’s nicknamed ‘Uptober’ for a reason. Historically, Bitcoin has risen by an average of 30% during the month.”

With Federal Reserve rate cuts on the horizon and a pivotal U.S. election ahead, traders are optimistic that Bitcoin could experience a strong fourth-quarter rally, reversing the downturn it has seen in September.

Conclusion: A Bullish Market Outlook for Bitcoin

Despite Bitcoin’s current struggles in September, traders remain optimistic about the cryptocurrency’s prospects for the remainder of 2024. With the Federal Reserve set to cut interest rates and the U.S. presidential election introducing new dynamics into the market, Bitcoin’s market outlook is looking increasingly bullish. As the fourth quarter approaches, the combination of historical trends and key economic factors suggests that Bitcoin could be poised for a significant rebound in the coming months.

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