Daily crypto news alerts for 18th December, 2020.
🗞Experts predicted the growth of the bitcoin rate to $31,000 in 2021
The bitcoin rate in 2021 will continue to grow and can reach values of up to $31,000, said experts interviewed by Izvestia.
On December 17, the cryptocurrency hit the maximum again. Its value for the first time in history reached $23,000. The previous record was recorded a day earlier - almost $21,000. Since the beginning of the year, the price of bitcoin has increased by more than 300%. The cryptocurrency has not soared so high since 2017 - then at the peak for bitcoin they gave more than $19,000. The values of other cryptocurrencies are also growing.
According to experts, bitcoin quotes will continue to grow at least until the end of the l quarter of 2021. Some experts predict an increase in the price of this asset with a slowdown or even short-term recessions throughout the first half of the year, along with other cryptocurrencies.
In turn, the head of the data analysis department of CEX.IO Broker Yuri Mazur believes that Bitcoin in 2021 may rise in price to $31,000, and then its rate will stabilize.
Experts believe that the rate of cryptocurrencies will change under the influence of fluctuations in the global economy. Among the factors that may have an impact on quotes, economists name investments of large companies, the effectiveness of vaccines against COVID-19 and the economic consequences of the pandemic, as well as activity in the stock markets.
🗞Chicago Mercantile Exchange to add Ethereum futures
CME announced the launch of a new cryptocurrency derivative from February 2021. Against the background of this news, the bitcoin rate began to grow rapidly and reached $20.8 thousand.
The Chicago Mercantile Exchange (CME) will add Ethereum futures, as announced in a press release. The new product will be launched on February 8, 2021, and is now awaiting an assessment from the financial regulator. The company cited the growing demand for crypto derivatives as the reason for adding the instrument.
“Based on the increasing client demand and steady growth in our Bitcoin futures and options markets, we believe that the addition of Ether futures will provide our clients with a valuable tool for trading and hedging cryptocurrency,” said Tim McCourt, CME.
Against the background of the CME's announcement of the addition of Ethereum futures, the cryptocurrency market began to surge. The bitcoin rate confidently rose above $20 thousand.At the moment, the BTC price reached $20.8 thousand, now it has dropped to $20.5 thousand.
For the first time, cryptocurrency futures appeared on CME on December 18, 2017. The exchange added contracts for bitcoin the next day after its rate set a previous all-time high near $20,000. Immediately after that, the price of BTC and other coins began to fall and entered a phase of long-term decline that lasted more than a year.
🗞Bitcoin has risen in price by $3620 per day
On December 17, on the Binance crypto exchange, the bitcoin rate for the first time in history reached $23.114 thousand. The cost of the first cryptocurrency began to rise sharply on December 11 from a local minimum of $17.5 thousand. Over the past 6 days, it increased by 30%, over the past day - by 3620%, or by 18%, according to RBC.
Growth accelerated after breaking the all-time high of $20,000. This may be due to the multimillion-dollar liquidation of short positions of traders on crypto exchanges. According to the bybt.com service, over the past 24 hours, positions of 78.9 thousand traders were forcibly closed for over $1.11 billion. Almost $967 million of them fell on transactions with bitcoin.
With a sharp rise in the exchange rate, the exchanges begin to forcibly close the contracts of those who were short. This is a standard mechanism - in order not to lose money, exchanges liquidate short positions of clients and take the funds left on security for themselves. This drastically changes the ratio of buy / sell transactions in favor of the former, which causes a sharp rise in the value of the asset.
Two days ago, December 16, the price of bitcoin exceeded $20 thousand amid several positive news at once. It became known that in 2021 the Chicago Board Options Exchange (CBOE) will launch an index for cryptocurrencies. The tool will show the dynamics of the price of digital assets and historical data.
Important news came from another exchange in Chicago - CME. She announced the addition of Ethereum futures from February 8, 2021. The instrument is now awaiting the assessment of the financial regulator. Cryptocurrency futures first appeared on CME on December 18, 2017. The exchange added contracts for bitcoin the next day after its rate set a previous all-time high near $20,000.
Also yesterday, the investment fund Ruffer Investment Company announced the purchase of bitcoin. Initially, information appeared that the company allocated funds from its separate fund for investing in cryptocurrency about $15 million. Later, a representative of Ruffer clarified that the company became the owner of bitcoins in the amount of over $740 million.
Earlier, Scott Minerd, investment director of Guggenheim Investments, with $20 billion in assets, called bitcoin “grossly undervalued” at current price levels. According to Minerd, bitcoin should cost about $400 thousand. This conclusion was made based on the limited emission of cryptocurrency and its value relative to gold.
🗞Compound developers will launch a new protocol for the interaction of various blockchains
The development team of the popular decentralized finance project Compound is working on a new Compound Chain tool that will allow the protocol to attract assets from other blockchains.
The Compound Chain is a blockchain that "enables the movement of assets and liquidity between members of other blockchains." In other words, users of different networks will have access to lending on other blockchains. Likewise, they will be able to lend their funds on one network to users of other networks. For example, a user of an application on the Tezos blockchain will be able to receive a loan in tokens stored on the Polkadot network.
“Our team is actively working on a limited-feature Compound Chain testnet. The launch is scheduled for next quarter, with developer and validator documentation coming in the coming weeks. Together we will reinvent finance! ”- write the developers on the social network Twitter.
The blockchain will receive its own token called CASH, with which it will be possible to pay transaction fees. The network will be managed by the already existing Compound Governance structure using COMP tokens on Ethereum. According to the DeFi Pulse portal, the Compound protocol is ranked third in terms of the volume of blocked assets - at the moment, assets in the amount of $1.82 billion are blocked in the project.
As a reminder, at the end of November, $89 million in positions in the Compound protocol were liquidated due to the failure of the Coinbase price oracle for the DAI token.
🗞DappRadar: "DeFi Industry Transaction Volume Exceeded $270 Billion In 2020"
DappRadar has released an annual report, according to which the volume of transactions in DeFi applications has grown more than 12 times in 2020.
The DApp Industry Report states that the total transaction volume in the decentralized finance industry for 2020 exceeded $270 billion, with 95% of the volume accounted for by the Ethereum network.
"The pandemic appears to have drawn increased attention to decentralized applications amid talk about the distribution of basic universal income," analysts write.
Also, DappRadar specialists noticed that throughout the year funds flowed from bitcoin to ether. If at the beginning of the year the ETH rate in relation to BTC was 0.018 BTC, then by the end of the year it increased to 0.028 BTC.
The catalyst for this is the popularity of “profitable farming,” where users block funds in DeFi applications and are rewarded for this.
87% of the volume of transactions in the industry were made by users of just ten projects. The number of users of these applications exceeded 1 million people, while the audience of the three most popular platforms amounted to 930,000 people.
Analysts noted that Ethereum's limitations became apparent in 2020, which hinder the development of the industry. Lack of scalability and network bandwidth has led to significant increases in transaction fees.
Equally important, in 2020, DeFi app hacks, scams and loss of funds have been frequent. In total, 12 major hacks were committed this year, as a result of which $120 million of funds were stolen.
Often, smart contracts of projects do not undergo a proper security audit, and some projects, for example Compounder Finance, are created specifically to raise funds and perform an “exit scam”.
DappRadar analysts expect the DeFi industry to play "an even bigger role" in 2021 and "form the foundation for the cryptocurrency economy" for any decentralized application.
Recall that earlier on Bits.media came out a large-scale material about trends in the development of the DeFi industry.
🗞Ethereum 2.0 staking uses $1 billion ETH
The deposit contract of the second version of the Ethereum protocol raised 1.54 million ETH ($1.02 billion).
ETH involved in staking make up 1.35% of the market supply of the second largest cryptocurrency.
The current staking rate of return is 13.38%, according to StakingRewards. At the start, the indicator was about 25% per annum.
According to beaconcha.in, there are 36,101 validators in the Ethereum 2.0 ecosystem.
1.54 million coins blocked in staking ETH2 are 4.5 times less than the number used in decentralized finance protocols. According to DeFi Pulse, this figure is 7.06 million coins (~ $4.07 billion).
The following chart shows the decline in the number of locked coins since the launch of the deposit contract in early November.
A decrease in the active supply of Ethereum may have a beneficial effect on the price of the second largest cryptocurrency by capitalization, especially given the growing demand against the background of the general revival of the market. ETH is up 18% in the past week, according to CoinGecko.