Welcome to the 38th edition of ‘The Digital Asset Digest’. Today we’re celebrating new highs for Ethereum and introducing a new DeFi protocol you will find interesting.
Source: Fintech Zoom
“A Russian firm is leveraging the Siberian metropolis of Norilsk positioned above the Arctic Circle with the intention to mine bitcoins. Bitcluster, the proprietor of the crypto mining operation, plans to develop the agency’s actions after launching the power in late 2020. Based on the corporate’s web site, the datacenter is getting electrical energy charges as little as $0.03 per kilowatt-hour (kWh).”
Source: BNN Bloomberg
“Peter Wall, whose Argo Blockchain Plc is up 1,400 per cent in the past year, said he sees Bitcoin “moving in one direction” as interest in the sector increases and institutional investors come on board. That’s naturally going to come with more regulatory attention, he said.”
“ ‘Our firm has been building our balance sheet and offerings over the last 3 years. We have worked in every vertical of the digital asset market, and we understand the cyclical nature of crypto and the importance of timing, liquidity, and market diversification. We are delighted to offer Campden the same professional insights that we have spent years developing, as we collectively embrace a new era characterized by institutional adoption and generational wealth participation in the digital asset market,’ said GDA Group Executive Chairman David Shafrir.”
Source: India Today
“Iran has launched a fresh crackdown on illegal cryptocurrency mining after a recent decision to impose interim shutdowns at authorized bitcoin farms to prevent controversial power blackouts in major cities. A video circulating in social media earlier this week had shown a view to a large cryptocurrency farm located in southeastern Iran where tens of thousands of ASICs were operating to mine digital gold. The Energy Ministry halted the supply of electricity to the farm which is owned by a Chinese-Iranian investment company.”
Source: Business Insider
“While many parts of the market are showing signs of “irrational exuberance” that should alarm some investors, UBS’s Mark Haefele says there are still some risk assets outside of bubble territory.”
INDUSTRY WIDE SNAPSHOT
Right now, we’re seeing a new type of stablecoin emerge in the DeFi world: algorithm-backed stablecoins. Unlike fiat-backed stablecoins, algorithm-backed stablecoins are not collateralized by an asset, fiat or otherwise. Instead, they make use of a smart-contract executed algorithm that controls the supply of cryptocurrency/tokens so as to maintain a specific peg value for a given level of demand.
For instance, if the price of a stablecoin with a 1:1 USD peg exceeds $1, additional units of the coin/token are issued to increase the supply until the price returns to $1. The spread between the excess price and the coin/token peg value of $1 is collected as profit by the coin issuer. It works the same for the reverse scenario.
In the case that the price continuously remains below the peg value of $1 and the seigniorage for buying coins/tokens back is exhausted, the coin issuer turns to issuing “seigniorage shares”. These are essentially promissory instruments issued to buyers for additional capital to buy back coins/tokens to reduce supply.
The two most prominent advantages to the algorithm-backed stablecoin model are:
1) There is no underlying collateral reserve required.
2) These stablecoins are generally uncorrelated from volatility in other cryptocurrencies/assets since they are uncollateralized.
However, these coins are still in their early stages, and the most well-known one, Basis, has since been shut down. If this sounds interesting, Frax Finance is beginning a liquidity mining program for their own algorithm-backed stablecoin.
Source: Jim Clair
“They claim to know methods that will help you level up your life, dream big, then double those dreams while tripling your income. The methods entail goals, productivity hacks, and advice on “how to start your personal empire.”
Yet most personal development coaches speak at motivational events, often selling more stuff. We know little of their business background, except their version of how they became millionaires. Are they credible teachers on attaining success?”
The price of Bitcoin has been moving sideways since last week as it came up to $40,000 area but then fell to $33,813 at its lowest point yesterday. This occurred after a recovery and now we are seeing another minor one with the price reaching $37,486. Currently it is being traded slightly lower but is still in an upward trajectory.
Source: Trading View
Looking at the hourly chart, you can see that the price made it slightly below the 0.382 Fib level on Sunday’s low but managed to pull back up above it. This could indicate that support has been found but we are still yet to see if it manages to exceed the local high at the 0.618 Fib level.
The primary scenario is one in which we are seeing an ABC correction of a higher degree and so far this has played out. The downfall below the 0.5 Fibonacci level has confirmed the previously assumed ABC to the upside which is the B wave from the higher degree count.
This is why from here we would be expecting the continuation to the downside, but that might not come as expected. The C wave which was projected to the downside should have been developing a five-wave impulse but has instead made a three-wave decrease followed by a recovery.
Now if the price continues increasing this count might get invalidated but this would potentially still be the part of the correctional count which is set to push the price lower.
This concludes another issue of the ‘Digital Asset Digest’. We hope you enjoyed this week’s edition. We are constantly making changes and are always open to feedback.
On another note, a research report on one of our portfolio companies was recently released and we think you’ll learn a lot from it. To check out this free report, click here!