Canadian Company Mojo Invests $1.5 Million in Bitcoin, Plans to Allocate More Next Year

On December 23, 2020, the Canadian financial tech firm Mogo announced its plans to invest 1.5% of the company’s reserve assets into bitcoin by the year’s end. Mogo’s president and CFO said the initial corporate investment of up to $1.5 million in bitcoin builds on the company’s product development related investments in bitcoin during the […]

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Perfect storm leads to big sell-off for Bitcoin and DeFi: Weekly recap

A sharp correction in equities markets led Bitcoin price and DeFi tokens to sell-off sharply but have investors turned bearish?

Digital asset markets were on a parabolic surge until investor confidence took a major hit to close out the week with a bearish tilt due to a perfect storm of negativity.

Before reading the rundown, catch up on the most-read stories centered around the price of Bitcoin, the macroeconomic picture and the DeFi phenomenon gaining traction. 

A significant drop in equities markets was led by blue-chip stocks that had been at all-time highs. As this occurred, many tokens tied to DeFi platforms corrected sharply, most notably, SushiSwap (SUSHI) which lost nearly 40 percent of its value. 

Daily cryptocurrency market performance

 Daily cryptocurrency market performance. Source: Coin360

The correction in traditional markets appears to have influenced Bitcoin’s (BTC) more than 10 percent drop before a small bounce back to the $10.3-$10.4K range. 

More isn’t always merrier

Technology stocks that led US equities to record highs this summer reversed sharply this week, sending the Nasdaq Composite index tumbling almost five percent in its biggest fall since June. 

Apple’s shares lost eight percent — wiping more than $150 billion from the iPhone maker’s value — while Amazon, Alphabet and Microsoft all fell more than four percent. 

As a result, the VIX index jumped above the 30-point mark for the first time since mid-July, and the equivalent volatility index for the Nasdaq shot up to more than 40 points — nearly double its mid-August low.

Historically, the VIX has only surged into the 30s a handful of times in the past and almost always leads to a significant retracement.

It is a reminder that crowded trades bring a lot of volatility when someone begins to unwind their positions. Digital asset traders are more than aware of such dynamics and while the bulls may be feeling particularly salty about the reversal of fortunes, the pull-back offers an opportunity to rebuild.

The futures curve also flattened aggressively as leverage buyers were the first ones to look for cover, and there are plenty of opportunities in the options market to take advantage of market mispricing.

Are DeFi tokens the new pink sheets?

Ethereum transactions soared to multiple new all-time highs for the second time in three weeks and Uniswap V2: Router 2 is now the lead contributor to gas usage, according to Etherscan. The decentralized exchange is followed by Tether (USDT); and then the latest DeFi sweetheart that is SushiSwap: MasterChef LP Staking Pool.

And so, Tether has finally been dethroned from its top spot as the main contributor of gas usage. 

Total value locked (USD) in DeFi

Total value locked (USD) in DeFi. Source: Defi Pulse

The fact that it was toppled by none other than a DeFi platform speaks a lot for the recent growth of the industry and, as it stands, over $9.34 billion is locked across various platforms. Currently, Aave, Maker and Uniswap constitute about $1.5 billion TVL each. 

On the one hand, DeFi is a high risk, high reward market, but so is trading small-cap (pink sheet) stocks. Both clearly have a market, and always will among those with an appetite for risk.

Is relief from high gas fees on the way?

The ongoing focus on DeFi and the recent hyperactivity on Ethereum has resulted in sky-high congestion and gas fees. This led Ethereum founder Vitalik Buterin to point out several solutions through rollups and sharding.

ZK-Rollups are a zero-knowledge proof technique that helps rollup or batch many transactions into a single transaction, and therefore, helps reduce congestion on the Ethereum blockchain. Less congestion means lower fees.

Optimistic and ZK roll ups can increase capacity from ~15 tx/sec to ~3000 tx/sec by doing most of the transaction processing on layer 2. Sharding, on the other hand, increases the capacity of the base layer by ~100x. 

This could lead to a 100x decrease in fees, though realistically in the long term it would not decrease quite as much because the demand for Ethereum is also likely to increase.

The only solution to high transaction fees is scaling and Tether, Gitcoin and other apps are doing the right thing by migrating to ZK rollups. A positive development is that Tether is now planning to add support for another Layer-2 scaling solution (ZK-Rollups).

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Mike Novogratz’s Galaxy Digital Holdings Reports $38.5 Million Income for Q2: “We’ve Crossed the Rubicon’ 

Mike Novogratz's Galaxy Digital Holdings Reports $38.5 Million Income for Q2: “We’ve Crossed the Rubicon’ Galaxy Digital Holdings reported on Friday, August 14 that its comprehensive income for Q2 grew to $38.5 million. The figure reflects both net realized and unrealized gains from digital assets, as well as investing activities of $28.3 million. In an earnings call, Galaxy Digital President, Chris Ferraro, said operating revenue growth is just over 24% […]

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Bullish Bitcoin Price Trend Intact Even After BTC Retests $11.4K Support

After dropping 4.89% to confirm $11.4K as support, Bitcoin price is slowly making its way back toward $11.8K.

  •  Bitcoin (BTC) price swiftly fell to $11,322 after reaching a daily high at $11,909

  • The drop came as U.S. jobless claims fell to $1.2 million but lawmakers inability to reach a deal on the next coronavirus stimulus package has worried some investors

  • Despite the pullback to the $11.4K support, Bitcoin price remains in an uptrend 

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

Earlier today Bitcoin (BTC) price abruptly dropped to $11,322 after topping out at $11,909.

The mild correction came as U.S. jobless claims fell to 1.2 million and U.S. markets opened slightly in the red but by the end of the day Dow and S&P 500 closed with a 0.7% and 0.17% gain. 

Meanwhile NASDAQ continued to trek higher, closing the day with a 1.66% gain.

While stocks continue to move higher each week, today’s collapse of talks between U.S. lawmakers attempting to negotiate the next phase of coronavirus economic stimulus could weigh on investor confidence and cause markets to open in the red next week.  

BTC/USD 4-hour chart

BTC/USD 4-hour chart. Source: TradingView

Traders will note that BTC price had begun losing momentum around $11,800 and once the price dropped below the high volume VPVR node at $11,583, the price quickly fell to retest the support at $11,400. 

While inconvenient for some, today’s pullback shouldn’t surprise as its routine for Bitcoin price lower levels to confirm that a former level of resistance now functions as support. 

At the time of writing BTC is holding above $11,650 but a drop below $11,500 and the $11,400 support could result in another drop to $11,200. 

As long as the price holds above $11,100 the pattern of higher lows remains, meaning the bullish uptrend remains intact. 

Bitcoin daily price chart

Bitcoin daily price chart. Source: Coin360

Surprisingly, as Bitcoin price dropped 4.89%, altcoins held up relatively well, except Ether (ETH) which pulled back 8.76% to $362.35 before recovering to $379.80. 

At the time of writing, Cardano (ADA) is down 4.19%, XPR has dropped by 3.03% and Tezos (XTZ) shaved off 5.99% to trade at $3.05. 

According to CoinMarketCap, the overall cryptocurrency market cap now stands at $350.7 billion. Bitcoin’s dominance index currently at 61.1%.

Keep track of top crypto markets in real time here
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Diginex’s Equos Set To Become First Crypto Exchange Listed in US

An upcoming merger is slated to see Diginex’s newly launched Equos exchange become the first crypto trading platform listed in the United States.

Blockchain-powered financial services company Diginex launched its new Equos digital asset exchange on July 30.

The exchange will initially host crypto asset spot trading, with plans for “perpetual swaps, dated futures, options, and other derivatives products” to soon follow. The platform will support USD and the USD Coin (USDC) stablecoin at launch. 

The spot exchange is licensed under an exemption to the Singapore Payment Services Act, with Diginex having also applied to become a ‘Major Payment Institution’ with the country’s regulator.

The platform will also facilitate interoperability with Diginex’s hot and cold digital asset custodian, Digivault, in addition to Diginex’s over-the-counter trading desk and forthcoming integrated derivatives trading venue, Diginex Access.

Diginex prepares for merger 

Equos’ launch comes ahead of Diginex’s merger with the NASDAQ-listed special purpose acquisition company, 8i Enterprises Acquisition Corp.

With the acquisition expected to have been completed by the fourth quarter, Equos is slated to become the first digital asset exchange listed in the United States.

“This is a pivotal moment for us to launch ahead of our transaction with 8i Enterprises Acquisition Corp,” said Diginex’s chief executive, Richard Byworth. “Our planned listing on Nasdaq is further testament to compliance, regulation, and transparency.”

Diginex expands partnership with Itiviti

On July 21, Diginex announced an expanded partnership with trading technology firm Itiviti to leverage its ‘Tbricks’ solution. 

Tbricks offers automated risk, profit and loss, and portfolio management services to institutional clients. 

Diginex will use Tbricks to launch Diginex Access, with the firm already leveraging Itiviti’s global order routing network.

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