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Bitcoin options markets do not point to a bullish period after the cryptocurrency’s halving event later this month, but instead suggest traders are worried about a potential price drop in the near future.
Top venture capital firm Andreessen Horowitz has raised $515 million for its second cryptocurrency fund. The money will be used to invest in crypto and blockchain startups focusing on payments, decentralized finance (DeFi), web 3.0, and more.
The price of bitcoin surged past $9,000 this week. The rise saw old mining machines become profitable again ahead of the halving, which could lead to an increase in its hashrate.
Top stories in the Crypto Roundup today:
- Bitcoin Options Markets Do Not Point to a Bullish Period After the Halving
- Andreessen Horowitz Raises $515 Million For Its Second Crypto Fund
- Bitcoin’s Price Rise Made Old Mining Machines Profitable Again
At the time of writing, bitcoin (BTC) is trading at $8,739.15 (-4.81%) with a daily Top Tier volume of $6.31 bn. As for ether (ETH), it is trading at $211.16 (-4.27%) with a daily Top Tier volume of $1.88 bn. The MVIS CryptoCompare Digital Assets 10 Index is currently tracking at 3,066.34 (1.60%).
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Bitcoin Options Markets Do Not Point to a Bullish Period After the Halving
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CryptoCompare data suggests that this halving may be different from previous cycles.
Options market makers are often considered the most knowledgeable market participants, and many look at their pricing for indicators of where prices are heading. The bitcoin options market is relatively mature now, enough to give us insights into what the market believes will happen after the halving this year.
Using implied volatility, a derived metric which measures the expected volatility of an asset that’s used by traders to gauge forward-looking market sentiment, it’s possible to see bitcoin options traders are more concerned about a downside to BTC’s price than a potential upside.
Higher implied volatility is associated with higher premiums for options, which means there’s greater demand for the options. In the following chart, it’s possible to see the curve to the left is far steeper than the curve to the right as at these prices sellers are commanding higher premiums believing there’s more downside risk to BTC, while buyers are willing to pay a premium to enter the market.
Taking this into account, the options market doesn’t expect the price of bitcoin to rise exponentially after the halving, and is instead concerned about maintaining current levels. It’s possible, however, the chart points to a risk-averse options market.
It’s also worth mentioning the impact of the COVID-19 outbreak and the effects of volatility in equities markets could be a bigger determinant in BTC’s price movement than the halving itself. While simple economics tells us a drop in supply should see the price go up if there are no changes in the demand, there are more factors worth considering.
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Andreessen Horowitz Raises $515 Million For Its Second Crypto Fund
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Top venture capital firm Andreessen Horowitz (a16z) has raised $515 million for its cryptocurrency fund. In a post announcing the fund, a16z noted the money will be used to invest in crypto and blockchain startups focusing on payments, decentralized finance (DeFi), web 3.0, and more.
Chris Dixon and Katie Haun, co-leaders of the fund, were quoted as saying:
“Payment blockchains could end up doing to banks what email did to the post office and what VoIP [Voice over Internet Protocol] services did to long-distance carriers.”
Commenting on the potential of decentralized finance, the fund’s co-leaders said protocols in the space could transform trading, lending, insurance, and more using blockchain technology. Dixon and Haun added they think “the next wave of internet business models will come from crypto.”
The VC firm already has a cryptocurrency-dedicated fund that attracted $350 million in capital in mid-2018. In November 2019, the firm launched a free course meant to help would-be entrepreneurs build a cryptocurrency startup.
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Bitcoin’s Price Rise Made Old Mining Machines Profitable Again
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Bitcoin’s recent price rise to a two-month high above the $9,000 mark has seen old mining equipment become profitable again. The miner profitability index, tracked by mining pools PoolIn and F2Pool, shows mining rigs such as Bitmain’s AntMiner S9 and Canaan’s Avalon A851 can generate a gross margin of 10% to 20%.
The margin takes into account an average electricity cost of $0.05 per kilowatt-hour (kWh). Miners who adopt efficiency improvement methods, such as lowering voltage or merging to S9s into one, could see the margin grow to 30% or even 40%.
If bitcoin’s mining difficulty doesn’t increase until the block reward halving and the price remains stable, S9 ASIC miners could be marginally profitable even as blocks come with a 6.25 BTC reward in them.
Dmitrii Ushakov, chief commercial officer of Russia-based miner hosting firm BitRiver, said:
”Today's price movement would bring back even those miners that were recently disconnected due to profitability concerns. After halving, we believe that the price range of 3 to 4 cents [USD] is sufficient to continue mining profitably with S9 miners if the current price movement continues."
Bitcoin’s hashrate has surged from 48 million TH/s to a high of over 120 million TH/s over the last 12 months. The cryptocurrency’s hashrate dropped during the March 12 market crash, but soon recovered as miners are betting on BTC ahead of the halving.
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The Flipside Crypto Disparity Ratio is a tool helping you find out which cryptoassets are under and overvalued. The crypto disparity ratio scores cryptoassets based on market capitalization and FCAS ratings, with a score over 1 showing it’s undervalued, and under 1 showing it’s overvalued.
POA Network (POA), a public sidechain based on the Ethereum protocol that will use Proof-of-Authority and allow organizations to build their own networks in their own validators and allow developers to deploy decentralized applications, tops the undervalued list with a score of 1.58.
XYO, an ERC-20 token used for a decentralized network of devices that anonymously collects geospatial data, comes next with a score of 1.50. It’s followed by the Raiden Network (RDN), an off-chain scaling payment solution to perform ERC20 compliant token transactions, at 1.42.
Next comes SingularityNET (AGI), a protocol for coordinating, discovering, and transacting AI algorithms at scale.
On the overvalued side we have Digitex Futures (DGTX), an ERC20 token that allows its users to trade prices of cryptocurrencies (speculate) instead of effectively purchasing them, with a score of 0.31.
It’s followed by THETA, a decentralized video delivery network powered by users, at 0.33. Next to it comes Qubitica, a Blockchain and AI infrastructure, funded by the token, at 0.35. This is followed by Monacoin, the once-popular cat meme cryptocurrency which has even been used to buy land in 2014, at 0.36.
DxChain (DX), the world’s first decentralized big data and machine learning network powered by a computing-centric blockchain also comes in at 0.36.
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Make your bitcoin compatible with Ethereum and EOS with pBTC by pTokens!
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Following the successful launch of pBTC on the Ethereum network, the pTokens project has just launched their industry-first solution for EOS. pTokens make every cryptocurrency compatible with every blockchain. pBTC makes Bitcoin compatible with the Ethereum and EOS DeFi ecosystems for the first time.
pBTC is pegged 1:1 Bitcoin. Users simply mint their own pBTC using a custom dApp and can instantly interact with every Ethereum or EOS DeFi platform and DApp. There’s no need to sell or trade your Bitcoin, and you can redeem your originally deposited BTC any time you like.
pBTC for Ethereum is also available via both Bancor Network and Kyber Network, two industry-leading on-chain liquidity protocols.
EOSDT by Equilibrium, often referred to as the MakerDAO of EOS, is a leading DeFi project integrating the pTokens solution. EOSDT is upgrading their single collateral token model to a multi-collateral version additionally backed by pBTC. This brings more liquidity and makes a collateral position far more stable, being backed by both EOS and BTC.
The pTokens system offers an extra feature which makes it possible for pBTC to be moved between the Ethereum and EOS blockchains, making the connection between these DeFi ecosystems even stronger.
pBTC will soon be integrated with the Bitfinex platform, the world-leading cryptocurrency exchange. Users can deposit pBTC on the platform and automatically receive BTC in their Bitfinex accounts. This connects the decentralized and centralized worlds, making the switch between different blockchain assets smooth for users and creating new opportunities for market makers.
Paolo Ardoino, CTO of Bitfinex, believes that these kinds of fluid cross-chain swaps are “one of the missing key features to improve user experience and contribute to mass adoption for our space.”
Mint your own pBTC using the DApp and join us on Twitter or Telegram.
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State of the Crypto by Top Tier Exchange Volume
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