Category: Cryptocurrency

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Bernstein, a brokerage firm, recommends purchasing stocks of bitcoin miners Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK) ahead of the impending halving event. They anticipate a bullish trajectory for Bitcoin post-halving, once mining hashrates adjust to reduced rewards and ETF inflows pick up.

Despite concerns over profitability following the halving, Bernstein maintains a positive outlook on bitcoin mining stocks, citing their potential for superior execution and market leadership in self-mining hashrate.

Analysts Gautam Chhugani and Mahika Sapra highlight the historical trend of Bitcoin price breakout following halving events, with recent ETF approvals driving pre-halving price appreciation. However, recent fluctuations, including a 15% drop in the last 10 days, coincide with slower ETF inflows.

Bernstein expects Bitcoin’s bullish momentum to resume post-halving as mining hashrates adapt and ETF inflows recover. The rollout of spot bitcoin ETFs by wirehouses and registered investment advisors is seen as a structural driver for bitcoin demand, with a forecasted cycle high of $150,000 by 2025.

In summary, Bernstein suggests seizing the opportunity presented by the miner fear factor preceding the halving and investing in RIOT and CLSK stocks for potential long-term gains.

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With Bitcoin’s fourth mining reward halving imminent, Goldman Sachs urges investors to exercise caution in extrapolating past halving cycles for price predictions, emphasizing the role of macroeconomic conditions and inflows into spot ETFs.

While previous halvings have historically coincided with Bitcoin price appreciation, Goldman’s Fixed Income, Currencies, and Commodities (FICC) and Equities team warns against simplistic interpretations due to varying macroeconomic landscapes.

Despite bullish sentiments surrounding previous halvings, the time taken to reach peak prices and the magnitude of price increases differed significantly across cycles.

Crucially, the macroeconomic backdrop during previous halvings contrasted with the current environment characterized by high inflation and interest rates. Previous cycles occurred amid rapid growth in M2 money supply and near-zero interest rates, fostering risk-taking behavior across financial markets.

For history to repeat itself, supportive macroeconomic conditions are deemed essential.

However, present circumstances diverge from past cycles, notably with interest rates in the U.S. surpassing 5% and market expectations discounting prospects of rate cuts amid persistent inflation and economic resilience.

Despite Bitcoin’s 50% rally this year and record highs preceding the halving, driven by inflows into U.S.-based spot ETFs, some analysts speculate that much of the post-halving surge may have already materialized.

Goldman views the halving as a “psychological reminder” of Bitcoin’s capped supply, emphasizing the significance of ETF uptake in determining medium-term price outlook.

The team suggests that whether the halving event leads to a “buy the rumor, sell the news” scenario may have a limited impact on Bitcoin’s medium-term trajectory. Instead, they highlight ongoing supply-demand dynamics and ETF demand as primary drivers of spot price action in the crypto markets.

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The resurgence of digital assets in mainstream finance brings attention to Bitcoin automated teller machines (BTMs), with experts cautioning against the financial risks inherent in these machines, particularly in areas predominantly inhabited by Black and Latino residents.

BTMs, physical kiosks facilitating crypto conversions, have proliferated, especially during the pandemic, reaching approximately 31,100 units nationwide. However, investigations into the BTM boom reveal a disproportionate presence in Black and Latino neighborhoods, coupled with exorbitant transaction fees of up to 22%.

Bitcoin Depot, the leading US operator with around 7,300 BTMs as of April 8th, boasts high fees despite promoting financial inclusion. According to a November 2023 presentation, over 80% of Bitcoin Depot’s customers earn less than $80,000 annually. However, critics liken the high fees to predatory lending practices.

Despite claims of non-discriminatory placement, a Bloomberg analysis indicates a correlation between Bitcoin Depot’s BTM locations and areas with large Black and Latino populations, particularly in states like Georgia and Texas.

While some BTMs operate in major stores like Circle K and Cumberland Farms, local businesses often host them, with operators either paying rent or providing a monthly stipend to the store owners.

Transaction fees vary, with some BTMs charging flat rates plus a percentage fee. Critics dubbed this practice “predatory inclusion,” akin to payday lending, targeting marginalized communities.

In states like Alabama and Dallas, BTM placement aligns with higher concentrations of Black and Latino residents, raising concerns about equity and accessibility.

Bitcoin Depot’s CEO, Brandon Mintz, defends the fee structure, citing operating expenses and convenience as key factors. However, competitors CoinFlip and Bitstop also impose steep fees, up to 22%.

Despite the limited utility of BTMs for selling crypto, Bitcoin Depot eyes expansion, awaiting approval for operations in New York, a potential market expected to boost the company’s size significantly.

Critics like Aaron Klein from the Brookings Institution caution against the proliferation of BTMs, highlighting their limited functionality and the risks associated with crypto investments.

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Kraken, the second-largest U.S.-based crypto exchange, has unveiled its own crypto wallet, joining the ranks of competitors such as Coinbase(NASDAQ:COIN) and MetaMask in the saturated market.

The newly launched self-custodial “Kraken Wallet,” debuting on Wednesday, offers support for eight blockchains including Bitcoin, Ethereum, Solana, and Dogecoin. Notably, it is the first wallet from a major exchange to be open-sourced, allowing developers to access and contribute to the code. Kraken also incentivizes developers to identify vulnerabilities through its open-source grant program.

Focused on user privacy, Kraken Wallet collects minimal data necessary for functionality, shielding IP addresses and protecting users’ identity and location information. This emphasis aligns with the principles of the crypto space, emphasizing self-custody and privacy.

While Coinbase’s Coinbase Wallet remains popular, other major exchanges like Binance and OKX also offer wallets integrated into their ecosystems. Kraken’s move into the wallet space reflects its commitment to providing users with access to on-chain ecosystems and maintaining a user-centric approach.

Kraken has been expanding its product offerings, including discussions with layer 2 teams to explore building its own layer 2 blockchain. The development of Kraken Wallet underscores the importance of self-custody in the crypto ecosystem, particularly in light of the risks associated with leaving assets on centralized exchanges highlighted by past incidents such as the collapse of FTX crypto exchange in 2022.

Eric Kuhn, Product Director for Kraken Wallet, emphasized the significance of the “your keys, your crypto” ethos and expressed Kraken’s commitment to building the best all-in-one crypto wallet that is open-source, secure, and private.

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Centrifuge, a decentralized finance platform, revealed its intentions in a Wednesday blog post to establish a lending protocol for real-world assets  aimed at institutions on Base, an Ethereum layer-2 network developed by crypto exchange Coinbase.

According to the post, the protocol will enable verified institutions to onboard RWAs and borrow against their RWA holdings.

Anthony Bassili, Coinbase’s head of allocators and tokenization, remarked, “We continue to see significant interest from our institutional clients for easier access to tokenization solutions on-chain.”

This development coincides with Centrifuge’s announcement of raising $15 million in venture capital investment in an “oversubscribed” fundraising round. ParaFi Capital and Greenfield spearheaded the investment, with participation from multiple firms including Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.

Following the announcement, CFG, the protocol’s native token, surged by as much as 14% before moderating gains, as per CoinGecko data. Despite a slight pullback, the token remained up by 5% over the past 24 hours, surpassing the sector benchmark CoinDesk DeFi Index’s  1% decline during the same period.

This development occurs amid intensifying competition in the RWA tokenization realm, as digital asset firms and global banks endeavor to migrate traditional financial products like bonds and credit to blockchain infrastructure to enhance efficiency, settlement speed, and transparency. Asset management firm 21.co projected the market for tokenized assets to reach $10 trillion by the end of the decade.

Centrifuge specializes in bringing structured credit products to blockchain, with rwa.xyz data indicating $270 million in active loans on the protocol.

Ben Forman from ParaFi Capital expressed confidence in institutional adoption, stating, “The Centrifuge team is a leader in real-world asset tokenization, taking a deeply thoughtful approach to design decisions around legal, regulatory, and smart contract architecture.”

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In a recent update to its terms of service, PayPal has announced significant changes to its buyer and seller protection policies for non-fungible token (NFT) transactions, effective May 20.

Under the new policy, NFT purchases will no longer be covered by PayPal’s buyer protection program. Additionally, NFT sales exceeding $10,000 will no longer be safeguarded against false claims, chargebacks, or other fraudulent activities that may result in financial losses for sellers.

A spokesperson for PayPal cited the evolving nature of the NFT industry and the uncertainty surrounding proof of order fulfillment as reasons for the policy change.

While the company published a notice about these changes on March 21, the updates went largely unnoticed until now.

According to PayPal’s policy updates page, the revisions to its Purchase Protection Program and Seller Protection Program will come into effect on May 20, 2024. The Seller Protection Program will exclude NFT transactions with a value of $10,000.01 or above unless the buyer claims an Unauthorized Transaction and meets all other eligibility requirements.

Previously, PayPal provided buyer and seller protections for NFT transactions, with the buyer protection program offering refunds for falsely advertised items, and the seller protection program reimbursing sellers affected by payment disputes and fraudulent refund requests.

Despite these changes, PayPal has demonstrated an increasing interest in blockchain-based digital assets in recent years. In 2022, the company introduced support for cryptocurrencies on its platform and filed a patent application for an NFT purchase and transfer system that includes provisions for user royalties.

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As geopolitical tensions fuel record highs in the price of gold, one might expect a surge in activity within the gold stablecoin market. However, historical trends reveal a rather subdued landscape in this niche subsector.

Tether’s XAUT and Paxos’ PAXG stand as the major players in the gold stablecoin market. Yet, compared to their dollar stablecoin counterparts, USDT and USDP, their market presence appears minimal. XAUT boasts a market cap of $580 million, while PAXG trails behind at just under $450 million.

XAUT’s supply has remained steady at around 246,500 units since March 2022, contrasting with PAXG’s declining supply from its peak of around 340,000 units in August 2022 to just 182,650 units presently.

Although trading volumes on centralized exchanges for these gold stablecoins have shown some increase, it’s important to note that the rise may be partly attributed to the escalating value of gold.

The 7-day moving average of trading volumes for both stablecoins reached relative peaks in mid-March but has since declined, despite the continued climb of gold prices. These peaks pale in comparison to previous highs, such as during the 2023 regional banking crisis.

While volumes have slowly risen since hitting a low in May, recent events have seen a slight uptick. PAXG experienced a significant jump in volume to $71 million on April 13, the highest level since May 2022, following reports of Iranian drone attacks on Israel. Similarly, XAUT volumes increased, albeit to a lesser extent.

Despite these developments, $71 million in trading volume remains relatively low for a crypto asset. In contrast, larger dollar-pegged stablecoins often transact billions of dollars a day on-chain alone. On centralized exchanges (CEXs), dollar stablecoin volumes are notably higher, given their widespread use as a primary quote asset.

In conclusion, the gold-backed stablecoin market remains a niche subsector, despite the recent surge in gold’s popularity within the broader market.

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Tether (USDT) has formed a partnership with Fuze, a digital assets infrastructure provider, to bolster education and awareness about digital assets in Turkey and the Middle East. The collaboration, detailed in an official press release, entails a Memorandum of Understanding (MoU) between the two entities, outlining mutual objectives without legal binding.

The joint efforts between Tether and Fuze aim to cover a spectrum of educational aspects within the digital asset domain, including cross-border payment solutions, compliance, regulatory framework development, and education for local financial institutions.

Initiative to Drive Cryptocurrency Adoption

At the heart of the collaboration lies a set of educational initiatives aimed at nurturing the uptake of digital assets, including Bitcoin, Blockchain, and Stablecoins like Tether (USDT), specifically for facilitating cross-border transactions. These campaigns underscore the efficiency and accessibility advantages of employing digital assets compliantly, benefiting businesses and individuals across Turkey, the Middle East, and North Africa.

Paolo Ardoino, CEO of Tether, expressed enthusiasm about the collaboration, highlighting its potential to democratize access to digital assets in the targeted regions.

Educational Programs and Workshops

Tether and Fuze will collaborate on developing programs and workshops aimed at enhancing awareness and comprehension of digital assets and blockchain technology among local financial institutions and individuals. These initiatives will conform to evolving regulatory standards, ensuring compliance amidst regulatory changes.

Focus on Practical Utility of Crypto

Additionally, the partnership seeks to enlighten merchants and enterprises about the practical usefulness of digital assets such as Bitcoin and Tether for day-to-day transactions. Raising awareness and promoting adoption aims to showcase the tangible benefits of digital assets in routine operations.

Engagement with Financial Institutions

Efforts will extend to engaging local and regional banks and financial institutions, equipping them with knowledge and tools to effectively utilize stablecoins and digital assets for their clientele.

Fuze’s Co-Founder and CEO, Mo Ali Yusuf, emphasized the importance of educating stakeholders across all levels to accelerate the digital assets landscape and maximize opportunities while maintaining security and trust.

Market Performance and Challenges

Tether’s USDT recently surpassed a market capitalization of $100 billion, marking a 9% year-to-date growth. It maintains a substantial lead over its closest competitor, USD Coin (USDC), with a market cap exceeding $71 billion.

However, concerns about the quality of assets backing USDT persist in the crypto space, with a recent United Nations report citing Tron’s popularity in cyber fraud and money laundering activities in Southeast Asia. Tether has refuted these accusations, emphasizing its collaboration with law enforcement agencies and the traceability of its token.

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The Shiba Inu (SHIB) price has significantly declined 8% today, dropping to $0.0000216, mirroring a broader 4.5% dip in the crypto market over the past 24 hours. Over the past week, SHIB has fallen by 24%, and in the last 30 days, it has experienced a 16% decline, although it still maintains an 85% gain over the past year. This downward trend coincides with the meme token segment’s first major decline in market cap since March, with tokens like SHIB and Dogecoin particularly affected by the recent loss in market confidence.

Despite this, certain meme coins are defying the trend and showing signs of growth, notably newer tokens that are holding successful presales. However, SHIB remains in a medium-term downturn, with weak indicators and no clear signs of imminent recovery. Both its relative strength index and 30-day moving average continue to decline, indicating oversold territory for the token.

Although a recovery may take a few days, SHIB’s elevated trading volume of approximately $1 billion suggests some market interest. Nevertheless, resistance and support levels continue to trend downwards, requiring patience from traders. Yet, signs of accumulating from at least one whale indicate anticipation of a near-future recovery, potentially boosted by broader market positivity.

The upcoming Bitcoin halving event could impact prices, potentially leading to short- and mid-term declines due to miners facing reduced incomes. However, with Bitcoin ETF volumes and interest rates stabilizing, steady gains are expected throughout the year, benefiting tokens like SHIB, which boasts strong fundamentals.

Shiba Inu Price Prediction

Despite short-term challenges, SHIB remains poised for growth, with potential price targets of $0.00004 in the next couple of months and $0.00006 by the year’s end.

Emerging Meme Coin: Slothana 

While SHIB remains a prominent player, Slothana (SLOTH), a Solana-based coin, has emerged as another promising meme coin in the market. With a presale that has raised over $10 million, Slothana has garnered significant attention and is set to close in under 13 days before listing on exchanges. The coin’s popularity is attributed to its team’s successful track record with previous meme coin launches, particularly the Smog (SMOG) token, which saw substantial gains post-presale.

Slothana’s choice of memes, particularly its mascot, the sloth, resonates with investors seeking financial freedom from traditional work obligations. The coin’s presale offers new investors an opportunity to get involved before its listing, which could trigger a significant rally in the coin’s value.

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