Crypto Daily Digest with Ares_Diego Edition #1

10th February, 2021.

Will Ethereum be able to break through the $2,000 mark this week?

In the past few months, the trends of the top two encrypted digital assets in the market have been very similar. After Tesla announced that it would invest 7.7% of its capital reserves in Bitcoin, Bitcoin investors have increased their bullish momentum in the market in the past 24 hours. In fact, a few hours later, Bitcoin climbed to a new high of more than $48,000, and Ethereum also broke the long-awaited $1,800 mark.

Because these two digital assets are undergoing minor adjustments at the time of the press release. The related question is, is it possible that Ethereum Ethereum will perform better than Bitcoin?

It can be noted that, Bitcoin since breaking through $20,000, the value of Bitcoin has doubled and increased by 133%.

Ethereum has grown by 28% after breaking through the 2018 high of $1,440 in 2018. Based on this, we believe that Ethereum still has a big gap in price discovery compared to Bitcoin. And the face of the Ethereum ecosystem has also changed in the past 3 years .

Ethereum is currently transferring its network to the proof-of-stake system, in which more than $5 billion of Ethereum has been locked by Ethereum.

Like Bitcoin, Ethereum has also seen a large amount of foreign exchange outflows from exchanges in the past 12 months, which shows that users have considered long-term development when holding Ethereum. The growth of ETH2.0 is also a sign that large-scale encrypted digital currency projects in the world have gained widespread trust.

With the launch of ETH futures on the Chicago Mercantile Exchange (CME), institutional risk exposure has been opened. However, the latest data from CoinShares shows that there has been a large inflow of funds in this asset class.

In the past week (before the launch of Chicago Mercantile Exchange futures) nearly $195 million worth of investment has flowed into encrypted digital currencies, of which capital flows are highly concentrated in Ethereum . In fact, GrayScale, 3 iQ, 21 Shares and other institutions report that ETH accounts for nearly 80% of the total market capital inflows.

The CoinShares report stated, “We believe that investors are seeking diversified investments and are increasingly satisfied with the fundamentals of Ethereum.”

Price appreciation is not a game, but the overall bullish momentum may allow ETH to break the $2,000 mark this weekend. Currently, market sentiment is very positive for both crypto assets , but Ethereum has a better ROI probability overall.

Therefore, it is not surprising that the value of Ethereum exceeds 2,000 yuan. In fact, i think it is likely to exceed the above expectations.

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European Central Bank President sets the threshold for digital euro holdings at 3000 euros

European Central Bank (ECB) executive committee Fabio Panetta said in an interview that the ECB may only allow digital euro holdings to “reach a certain threshold”, but he added that the introduction of central bank digital currencies is unlikely to cause banks to lose deposits. Panetta said that, specifically, this threshold "may be around 3,000 euros", which is roughly equivalent to 3,600 US dollars, which he said will still meet the cash needs of most people.

He added that these figures are "still under discussion" and the ECB has not yet decided on the upper limit of digital euro payments. Panetta emphasized that ECB will not compete with commercial banks, but will only provide financial services with "one more digital option".

"The digital euro will not destroy the financial system and banks," Panetta said. "If people decide to turn part of their cash into digital euros, banks will not lose any deposits. As I said, we will not encourage large holdings of digital euros. If banks really lose deposits, we can provide them with more Liquidity."

Panetta added that the results of the ECB’s October consultation on the digital euro showed that many people’s first concern is privacy:

"During the consultation phase, we received 8,000 responses. People are most concerned about data protection. What they think is important is that their personal data will not be improperly used, which is guaranteed by ECB."

The timetable proposed by ECB President Christine Lagarde on when to issue a digital euro has been postponed. According to its website, ECB will make a decision "mid 2021". Panetta said that from then on, ECB may launch a digital euro "within four to five years" and consult with legislators to determine technical solutions.

A member of the ECB executive committee stated that the bank will try to prevent people from holding large amounts of digital euros after issuing digital euros in the next five years.

Relevant Chinese authorities have begun to pilot digital renminbi in some cities across the country, and thousands of residents have received free digital currency through a lottery. Panetta said that piloting CBDC in different European cities as part of its launch also "may be a wise move."

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Wall Street Journal: Cost of use, price fluctuations, and tax policies make Bitcoin payments impractical

As Elon Musk’s Tesla announced the purchase of $1.5 billion in Bitcoin, the price of the largest cryptocurrency by market value has risen all the way, which has also attracted the attention of mainstream media.

The Wall Street Journal stated in an article on Tuesday that although Bitcoin has attracted the attention of the public, due to its use cost, price volatility and tax restrictions, it is not practical as a daily payment method, and it is not. Will change as Tesla buys Bitcoin.

For users who may want to purchase some low-value items, such as buying a $4 cup of coffee at Starbucks, Bitcoin is an unattractive payment option due to related costs.

According to data from the website BitInfoCharts, the current median transaction fee is about US$5.4, but the average fee is more than US$11, and fees vary greatly depending on network traffic. In the past three months, the average daily expenses ranged from US$2.18 to US$17.20.

Relatively speaking, using Bitcoin to buy Tesla cars or luxury goods does not have this problem. CheapAir.com has been accepting Bitcoin payments since 2013. The company’s CEO Jeff Klee told The Wall Street Journal that Bitcoin buyers tend to be more loyal and spend more.

The article believes that another factor that affects Bitcoin as the main payment method is its inherent price volatility. Bitcoin has almost quadrupled since September last year, and the price fluctuates, often rising or falling 20% ​​in a day.

This week Tesla also revealed that it may support Bitcoin payments. Industry insiders believe that Tesla is likely to use a third-party processor to reduce the risk of price fluctuations on both sides of the transaction.

Companies such as BitPay can automate the processing of digital currency payments. Unlike cash transfers, which can take several days to process, Bitcoin transactions are completed very quickly, usually within a few minutes. BitPay will charge a 1% processing fee.

The Wall Street Journal also believes that another major obstacle to bitcoin transactions comes from taxes. Since the US Internal Revenue Service classifies Bitcoin as property rather than currency, users selling Bitcoin for whatever reason are required to pay capital gains tax on the transaction.

Therefore, although Tesla has triggered a new round of Bitcoin mania, it is unlikely to change the dilemma of Bitcoin as a means of payment.

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Tesla CEO pushes Bitcoin social sentiment on Twitter to new highs

With the strong support of Tesla CEO Elon Musk, Bitcoin's social media activities have reached an all-time high.

In an interview with Cointelegraph, Joshua Frank, co-founder and CEO of encrypted data provider TIE, pointed out that in the past 24 hours, "non-robot accounts" had posted 143,000 tweets.

This new record broke the record of 140,000 set on January 3, 2021.

On February 8th, the news that electric car manufacturer Tesla added Bitcoin to its balance sheet brought Bitcoin's price and market sentiment to a record high. In early Asian trading on February 9, the price of Bitcoin hit a record high of $47,500.

Frank believes that the surge in social engagement proves the bullish sentiment of retail traders:

"I think it is obvious that retail accounts have already appeared. We have seen an absolute and substantial increase in Twitter activity, trading activities and altcoin price fluctuations that are not in contact with institutions. Today's trend can definitely be attributed to Elon Musk. , But Bitcoin’s social activities have been developing rapidly throughout the year."

Musk's tweet seems to divert the attention of cryptocurrency Twitter from the highly anticipated launch of the Ether futures contract on the Chicago Mercantile Exchange (CME) on February 8. Frank pointed out that Ethereum's tweets fell by half after hitting a new high recently:

He said:

"The activity of Ethereum Twitter recently broke the highest point in history, but today is not that big, it is down about 50% compared to yesterday,"

The Ethereum futures launched by the Chicago Mercantile Exchange have attracted the imagination of institutional and retail traders. 80% of the institutional cryptocurrency inflows last week were Ethereum products. As of this writing, the total market value of cryptocurrencies has reached $1.4 trillion.

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Observation | DeFi series hits record highs repeatedly

DeFi is taking the cryptocurrency world by storm. DeFi, which is in the lead, once again attracted the attention of the market.

In 2020, DeFi emerged suddenly, making liquid mining a trend. In 2021, this trend will intensify.

According to CoinGecko data, as of 17:30 on February 8, the market value of DeFi exceeded $65.6 billion. According to data from DeBank, the total amount of DeFi locked up is US$49.78 billion, and the actual amount of locked up is US$36.34 billion. And this figure was 3.3 billion US dollars, 1.152 billion US dollars, and 9.47 US dollars a year ago.

In the top 20 crypto markets by market capitalization, the DeFi system occupies 5 seats, namely chainlink (8th), Aave (14th), Uniswap (15th), Wbtc (16th), SNX ( No. 20), including BCH, BSV and other established projects have fallen out of the top ten in market value.

Driven by the DeFi ecosystem, ETH Qingyun went straight up and broke through $1,700 on February 5; Huobi ecological chain Heco has gained momentum day by day, and HT has exceeded $9, reaching a maximum of $9.3070.

These people are calling for the DeFi line

The outbreak of DeFi makes the industry optimistic about the future prospects of DeFi, and actively deploy DeFi as the mainstream voice.

On February 2, Jesse Powell, CEO of the cryptocurrency exchange Kraken, said in an interview that Ethereum allows people to enter the fields of decentralized smart contracts, decentralized exchanges, and lending agreements. Whether people know it or not, DeFi is really devouring the entire financial world.

On February 3, Mike Dudas, the founder of The Block, tweeted: "Buy DeFi, thank me when you come back." Then he listed a series of DeFi token assets, including AAVE, UNI, SUSHI, COMP, MKR, YFI, SNX, SOL and SRM.

On February 6, the former director of Messari, tweeted: “I don’t know how far we are from the top in the current DeFi mini cycle, but things are not as crazy as in late August 2020. If the current DeFi This is the end of the mini cycle, then this is the perfect peak. I do think we are at the peak, but the actual peak is likely to be twice as much as it is now. Based on the Internet bubble, I would not be surprised. In the current cryptocurrency At the peak of the cycle, the value of top DeFi assets will exceed $100B."

On February 8, Mike Novogratz, the founder of the crypto investment company Galaxy Capital and a former well-known investment manager on Wall Street, expressed his opinion on Dogecoin: “The hype of Dogecoin has no purpose, so you need to focus on BTC, ETH and DeFi tokens. There are actually many smart ways to participate in this cryptocurrency rally.” On the same day, EthHub co-founder Anthony Sassano tweeted that he believed that one day the best DeFi protocol on Ethereum would be worth trillions of dollars. And emphasize not to be affected by short-term market trends, this is a long-term game, we are still in a very early state.