September 7th, 2024

Bitcoin Slips Back Below $57,000 as Short-Term Holders Threaten Volatility

Bitcoin failed to hold levels above $58,000 Thursday morning, slipping to $56,700 and trading flat on the day.

Per data from CoinGecko, the price of Bitcoin is currently $56,794, up 0.6% in the past 24 hours and down 4.7% on the week.

Even as Bitcoin dropped to a little below 20% under its all time high, a new analysis has revealed a growing growing risk factor in the crypto market—short-term holders who are currently underwater on their investments could potentially trigger significant market volatility if they decide to cut their losses.

Despite the average Bitcoin investor remaining in a profitable position, those who have recently entered the market or acquired Bitcoin in the last six months are facing substantial unrealized losses. This dynamic creates a potentially volatile situation that could impact the broader crypto market.

“The Short-Term Holder cohort remains heavily underwater on their holdings, making them a source of risk for the time being,” a report by blockchain intelligence firm Glassnode states. This group’s financial stress is evident in key metrics, with their unrealized losses dominating the overall market picture.

The report cautions that this overall stability could be disrupted if short-term holders decide to exit their positions en masse. The $51,000 price level is identified as a critical support that must be maintained to preserve the current market structure.

The average cost basis for these investors ranges from $59,000 to $65,200, significantly above the current market price.

This situation is reminiscent of the choppy market conditions seen in 2019, rather than a full-scale bear market, the report’s authors noted. However, it still presents a considerable risk.

“Until the spot price reclaims the STH [Short-Term Holder] cost basis of $62.4k, there is an expectation for further market weakness,” the report stated.

The implications of this stress on short-term holders extend beyond their individual positions. Their potential selling pressure could trigger broader market volatility, especially given the current low levels of overall profit and loss-taking activities.

Interestingly, while short-term holders grapple with losses, long-term investors appear to be in a more stable position.

The report indicates that long-term holders have slowed their profit-taking activities, and coins accumulated during the recent all-time high run-up are gradually maturing into long-term holdings.

Source: https://decrypt.co/248179/bitcoin-price-flirts-with-55000-as-etfs-see-seventh-day-of-outflows

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

September 6th, 2022

XRP to USD forecast: Can Ripple price finally reverse long-term downward trend?

Ripple is one of the most talked about coin.

– What has been affecting the Ripple coin price recently?

The on-going, never ending and changing lawsuit is one of the key uncertainties. SEC has a different angled strategy against Ripple through Wahi complaint. This added insider trading allegations against 2 other Coinbase employees and putting 9 other cryptocurrencies as securities. If the SEC wins the case, this would set a precedent and would cause more problems for the crypto industry as a whole.

This outcome for Ripple might affect their On-Demand Liquidity (ODL) service. And if U.S. banks are not going with the ODL plans, this will then weaken Ripple’s CBDC setup and investors will not be very happy.

– Where could the token be headed in the future

According to CoinMarketCap price prediction function, 1222 users voted and predicted that the price of XRP will be around $0.4905 by 30 September 2022. This is a 47.86% increase in the current price. I must say that the supporters are still considerably bullish on the coin and hope they can get out of the lawsuit quickly.

I am more realistic at this point. I hope to see more signed partnerships that are actually useful, not for PR purposes and see more real implementations in a larger manner, not purely news on how they help streamline Japan-Thailand money transfers. I hope to see more details. I am sure the investors at large want to see more too.

XRP to USD forecast: Can Ripple price finally reverse long-term downward trend?

Ripple (XRP/USD) is among the top 10 largest cryptocurrencies by market capitalisation. Dubbed a “better alternative to bitcoin”, Ripple aims to futurise global payments.

However, in recent years the company has been caught in the midst of a US Securities and Exchange Commission (SEC) filing, with its native cryptocurrency, XRP, struggling to reach past highs…for over four years.

Down by 90.3 % since its 2018 all-time high of $3.3778, at the time of writing (5 September) the XRP to USD exchange rate stood at $0.3275. Can the token repeat the record levels, and what is the latest news on the SEC case?

What is XRP/USD and Ripple?

Ripple was created in 2011 by engineers David Schwartz, Jed McCaleb and Arthur Britto. They began developing the XRP Ledger (XRPL), a decentralised, permissionless, open-source, public blockchain.

The Ripple platform is a payment settlement system and currency exchange network using XRP Ledger Consensus Protocol. The network prides itself in its transaction speed, which according to its website, can take between three and five seconds and has low transaction fees that are “typically” under $0.01.

Ripple’s distributed consensus mechanism uses designated servers called validators, who have to agree on the order and outcome of transactions on the platform to enable them. Transactions are made in XRP coins, the platform’s native cryptocurrency.

The token can be sent to other users directly without the need of a central intermediary. XRP coins are freely exchanged on the open market and used in the real world for enabling cross-border payments and microtransactions.

Upon the token’s launch, XRPL’s founders gifted 80 billion XRP to the company. Ripple has since put the majority in escrow. As of August 2022, 44bn tokens remain in escrow.

What is your sentiment on XRP/USD?

XRP/USD price analysis

Unlike many of its rival cryptocurrencies that gained popularity in late 2021, XRP achieved its first success in the early months of 2018 as it was teaming up with a number of legacy financial institutions, like American Express and Santander. The token spiked to the all-time high of $3.3778 in January 2018, yet the rally was short-lived as XRP fell below $1 in late February.

After two years of fluctuating between $0.60 and $0.10, the XRP coin price rebounded to $1.8391 on 14 April 2021 amid wider cryptocurrency bull run.

Throughout the remainder of 2021, the XRP to USD chart suffered fluctuations, rising as high as $1.3894 at the start of September 2021 and dropping as low as $0.7993 by mid-December.

At the start of 2022, XRP was holding steady at $0.80. It dropped to $0.30 as Russia’s invasion of Ukraine and surging inflation started to affect broader cryptocurrency sentiment. As of 5 September, the current exchange rate of XRP to USD stood at $0.3275.

SEC’s case against Ripple

In December 2020, Ripple found itself in the midst of a SEC filing, which accused the company’s top executives, co-founder Christian Larsen and CEO Bradley Garlinghouse, of misleading XRP investors by selling $1.3bn worth of coins without reporting to the commission. The SEC had also accused the executives of profiting from the trade by around $600m.

In March 2022, the court denied the SEC’s request to strike Ripple’s fair notice defence, which argued that contrary to the case, the company did not receive a fair warning that its sales of XRP coins could be in violation of security laws.

In July 2022, Ripple won a ruling that will allow the company to access emails from the SEC about a 2018 speech where a former official declared that Ethereum was not a security. The evidence could help Ripple in arguing that XRP cannot be labelled as such. The SEC, however, continued to battle this ruling and filed a brief arguing that the speech drafts “are not relevant to any claim or defense in this case”.

The judge granted the SEC’s request to file a 90-page long reply to its motion that seeks to exclude the testimony of Ripple Labs’ witnesses.

The outcome of the court proceedings could remain the key factor affecting the movements on the XRP chart. As of 5 September, analysts and investors await 9 September, when both parties are expected to seal any portion of the filings together with proposed redaction.

Responses to the motion must be submitted by 16 September. Motions for summary judgement are expected by 15 September, and any opposition to that must be received by 18 October and answered by 15 November. The coming months will be of great importance for Ripple enthusiasts.

“The ongoing, never ending and changing lawsuit is one of the key uncertainties. SEC has a different angled strategy against Ripple through Wahi complaint. This added insider trading allegations against two other Coinbase employees and put nine other cryptocurrencies as securities,” said Anndy Lian, chief digital advisor of the Mongolian Productivity Organisation.

“If the SEC wins the case, this would set a precedent and would cause more problems for the crypto industry as a whole,” he told Capital.com.

On 21 July, the SEC filed a complaint against Ishan Wahi, Coinbase’s manager in its assets and investing products division, and two other employees, accusing them of insider trading and securities fraud. In the filing, the commission noted that the nine coins Wahi and other defendants traded were “crypto asset securities”.

XRP to USD forecast for 2022 and beyond

Despite the latest downward price action, algorithm-based forecasting service Wallet Investor gave a bullish XRP to USD crypto exchange rate prediction as of 5 September. The site noted that XRP is “an outstanding long-term investment”, adding that it has a long-term earning potential amounting to 284.71%.

Based on its analysis of past price performance, Wallet Investor predicted that the token could trade at $0.517 in 2023 and reach $1.258 by 2027.

DigitalCoinPrice supported the positive XRP to USD future exchange rate forecast at the time of writing, expecting the token to grow to $0.48 by the end of 2022 and reach $1.50 by the end of 2025.

By the end of 2027, the site predicted that the exchange rate of XPR to USD could reach $1.63. The website’s long-term forecast for the token showed that the cryptocurrency could surge to $4.63 by 2030.

Mark Fidelman, founder of SmartBlocks, was bullish on XRP to USD exchange rate, yet noted that the outcome of the SEC case will play a crucial role in shaping Ripple’s future.

“If [Ripple wins] the lawsuit, it should be heading back up to over a buck by the end of year, maybe more…It’s more effective and more efficient than anything that the banks are doing, so it should scare the banks and should help crypto,” he told Capital.com.

Note that predictions about the future of XRP can be wrong. Forecasts and analyst expectations shouldn’t be used as a substitute for your own research. Always conduct your own due diligence looking at the latest news, price charts. technical and fundamental analysis.

Remember that past performance does not guarantee future returns. And never trade money that you cannot afford to lose.

Source: https://capital.com/xrp-usd-forecast-dollar-ripple-price

Anndy Lian

www.anndy.com

j j j

June 24th, 2022

Do Crypto Airdrops Benefit the Community in the Long Term?

Airdrops became mainstream in the ICO boom years starting around 2016 as a means to incentivize users to promote a new token on social media for example. More recently, in 2020, decentralized exchange Uniswap changed the outlook on incentives and rewards when the ecosystem gave away tokens for free to anyone who had utilized the Uniswap platform before a specific date. The 400 UNI tokens distributed provided many investors with their first big break. Putting aside the popularity of airdrops, it’s a good time to consider how effective they are for users and for startups, and to look at both the upsides and downsides for this sometimes controversial mechanism for driving crypto growth, especially in a bear market.

A good way to start this analysis on the ‘state of airdrops’ is to begin with a little academic rigor! Late last year a quartet of academics took a close look at the rise of DEXs, including the role of airdrops and governance tokens, using data from CoinGecko. They found that DEXs typically use airdrops to reward their early supporters, serve as marketing tools to reach potential users on other DEXs. But they also found that, “airdrops can backfire, because they put governance tokens in the hand of individuals who do not believe in the long-term viability of the exchange and want to maximize their short-run returns. Moreover, airdrops may unintentionally signal that the tokens are lower quality, influencing expectations about the exchange’s longevity.”

Despite those risks, overwhelmingly from the same of 51 exchanges they analyzed, they did find a positive relationship between airdrops and growth in DEXs market cap and volume, but with the important caveat that such benefits were concentrated on exchanges offering a governance token. Specifically, that DEXs which airdrop manifest an average 16.1% rise in their growth rate. “We also find some evidence, although the estimates are not statistically significant at conventional levels, that DEXs who airdrop governance tokens experience higher volume growth than those who do not,” the paper’s authors added.

The successful Optimism airdrop at the start of June was a rare example of good news in the crypto sphere following the collapse of Terra. Back in April Optimism, the layer-2 scaling solution for Ethereum, said it planned to launch a decentralized autonomous organization (DAO) along with the OP token which enables users to vote with. In turn the DAO will use money raised from Optimism fees to fund grants for the community. While this tends to point to the value of airdrops to build crypto communities, how safe is this assumption? Indeed, there was criticism from within the Optimism community that users who sold their tokens straight after receiving them should be ineligible for further airdrops.

Following the Optimism airdrop, and a sharp drop of 40% in price, “a member of the governance community named OxJohn submitted a proposal to the Optimism Governance forum to exclude addresses that dumped 100% of their tokens. The post, titled ‘Users who sold the initial OP airdrop should become ineligible for all future airdrops’ attracted considerable attention from the community with 11,200 views, 305 replies and 595 likes,” it was reported. His contention was that wallet accounts that simply collected the OP airdrop and swapped straight to Uniswap were “not playing a constructive role in Optimism governance. Instead of contributing to governance, they are maximising for profit..Hence, this proposal is to discuss excluding such accounts in all the future distribution of Optimism’s airdrop. Also, we can make a public list of accounts that engage in this behaviour, so that other projects and DAOs can also choose to borrow from our work – I believe many projects will be interested in rewarding those who actually contribute to governance, rather than those who just see ownership given into a protocol as a short term liquidity bonus.” While it provoked quite a negative reaction Bankless host, Ryan Sean Adams said it came down to deciding who you were trying to incentivize, whether for the settlers of the community, those that will stick around, rather than the people who are just dumping. “But I’m probably more in favor of let’s try to incent the network towards governors and towards settlers and away from the traders and that sort of thing. So, I can definitely understand this governance post,” Adams added.

Airdrops and community-building

Without a doubt, many established crypto communities owe their longevity to the proper distribution of airdrops. It appears to be one of the finest strategies to attract new users to a new crypto project. What makes it even more unique is that these airdropped tokens also function as governance tokens for some of these projects, thereby increasing their value and utility. Clearly, the issue for projects that distribute airdrops has always been: how do you avoid giving your airdrop to people who would simply dump and devalue your tokens without contributing anything? There is a fine line between an airdrop negatively impacting ecosystem growth and being a useful tool for developing a sustainable community. As Michael J. Casey, chairman of CoinDesk’s advisory board wrote on the subject, “I think the debate could be better served by, first, viewing airdrops as a marketing expense in the service of promoting community adoption and, second, recognizing that, one way or another, adoption requires some level of marketing. A currency is nothing if it is not widely used. And that can’t be achieved unless people make some cost-incurring effort to encourage widespread usage.”

Airdrops should be utilized carefully as a reward for dedicated and loyal members of a crypto community and should work for the benefit of the community. Unfortunately, one of the issues that always affects the value and usability of an airdrop is that the mechanics occasionally favor users who are not long-term believers in a certain project and regard it as easy money.

The Terra (CRYPTO: LUNA) ecosystem also faced the downside of airdrops when Luna V2 tokens were distributed to investors to compensate them for their losses. However, the airdrop did not go as planned, as some investors complained on social media about the uneven distribution of new Luna tokens. Many investors received a relative handful of Luna tokens compared to what the Terra ecosystem promised. The Terra ecosystem admitted that token distribution was uneven and vowed to rectify the issue. The uneven distribution of airdrop was undoubtedly one of the factors that caused Luna to drop from an all-time high of $19.2 to an all-time low of $4.08.

Chairman of BigONE Exchange Anndy Lian said: “Airdrop mechanisms should be improved and strategically implemented to ensure that committed community members who understand the long-term goals of a crypto project benefit more than short-term holders who are only interested in profits. Accepting tokens from a project without a plan and a clear value proposition is, at most, a short-term play, not a long-term wealth development approach. I do believe that airdrops can help build the necessary momentum and buzz for a crypto project but that if they are poorly executed, they may negatively impact the community’s growth. Therefore, it is critical airdrops get the balance right for the long-term, and target long-term holders who are true community builders rather than simply short-term holders.”

Original source: https://uk.investing.com/news/cryptocurrency-news/do-crypto-airdrops-benefit-the-community-in-the-long-term-2674845