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The Cryptocurrencies That Outperformed During Bitcoin’s Crash

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Virtually the entire cryptocurrency ecosystem has been washed out over the past week as news of government crackdowns and other negative headlines dominated the discussion.

However, not every coin has fallen. One of the generally positive things about falling cryptocurrency values ​​is that different assets react differently to the sell-off.

Of course, the damage is widespread. Bitcoin is down 12% in the past week and ether, the second most important cryptocurrency, is down 21%. With the exception of stablecoins, which are valued around $ 1 because they are pegged to the dollar, the top 12 coins have all fallen. But others have risen during that time.

Barron searched for coins within the top 100 cryptos by market capitalization that outperformed over the past week and found several that held up.

Source: coinmarketcap.com

This includes coins that aren’t exactly household names but are being studied as potentially useful technologies: Polygon, Helium, Celsius, and Maker. It is dangerous to assume that the relative winners will keep up in the longer term – cryptocurrencies can move heavily and suffer from poor liquidity due to trading in opaque unregulated markets. With smaller coins in particular, investors need to understand the platform they are buying into as they are essentially investing in an early stage venture capital start-up.

Nevertheless, projects that have been sold out are worth seeing. Perhaps one reason why some of these coins performed well was because they dodged some issues affecting the entire crypto network during the sell-off.

“One thing we saw during the panic was that both centralized and many decentralized exchanges were struggling to keep up with demand,” said Matt Hougan, chief investment officer of crypto fund provider Bitwise Asset Management, Barron’s in an E -Mail. “Many centralized exchanges simply went out for some time during the sell-off as they were overwhelmed by traders.”

This may have been the case with Polygon, formerly called Matic, the 14th most valuable cryptocurrency. It is a so-called “Layer 2” technology that is based on the Ethereum blockchain and is intended to make transactions faster and cheaper. Hougan believes Polygon was able to bypass some of the system congestion during the sell-off as more transactions are to be processed. “Because of this approach, their network was not overloaded,” he wrote. “This allowed the users to continue trading without any problems [Polygon] while other approaches faced challenges. “

Polygon is involved in some of the hottest areas of cryptocurrency, including working with trading platforms to make it easier to trade non-fungible tokens or NFTs. Currently trading NFTs can be expensive due to the “gas fees” associated with using trading platforms.

The polygon may also have increased for another reason – it seems better for the environment than some other coins. It uses a “proof of stake” system to validate transactions on the blockchain. Bitcoin uses “Proof of Work,” a system that is much more energy-intensive. Tesla CEO Elon Musk criticized Bitcoin’s impact on climate change, causing some evidence for stake tokens to surpass evidence for work tokens.

Helium is a particularly unusual cryptocurrency that is part of a project to decentralize wireless communication. The goal is to get households and businesses to install small telecommunications hubs on their property – almost like mini cell phone towers – and then reward them with a token called HNT. The company claims to have almost 42,000 hot spots worldwide. It was funded by New York venture capital firm Union Square Ventures.

The Celsius network is known for allowing people to gain interest in their crypto holdings or borrow crypto. Celsius says it has more than 700,000 users and that it is gaining nearly 100,000 users a month. Lending and borrowing are becoming increasingly popular on crypto platforms, and Celsius is becoming a bigger hub for that.

Maker is a token that is part of another unique financial project within cryptocurrencies. MakerDAO is an organization that created a decentralized stablecoin called DAI that can be borrowed without a middleman. Maker is a major hub in the “defi” movement that seeks to move traditional banking activities to a decentralized network where there are no gatekeepers and where people can lend or borrow currencies more easily. The Maker tokens give users a voting stake in creating the market and are likely to increase in value as DAI is used more frequently.

Write to avi.salzman@barrons.com

Cryptocurrency

Crypto retreats as bitcoin and ethereum lead mild sell-off

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Bitcon and Ethereum prices fell 4% on Friday. Photo: Yuriko Nakao / Getty Images

The cryptocurrency market saw a small sell-off on Friday morning, with Bitcoin (BTC-USD) and Ethereum (ETH-USD), the world’s first and second largest coins, down around 4%.

Bitcoin, currently trading at $ 37,866 (£ 27,259), hit levels of $ 41,330 on June 15, a key resistance area of ​​$ 41,250, but has continued to decline since then.

This week it was rocked by an announcement by the US Federal Reserve that it could hike rates through the end of 2023. Assets deemed risky, such as certain stocks and crypto, have also been weighed down by ongoing fears that the Fed may unwind its bond purchase program earlier than expected.

Bitcoin has been in decline for the past few days.  Chart: Yahoo Finance

Bitcoin has been in decline for the past few days. Chart: Yahoo Finance

On Thursday, the World Bank also rejected a request from El Salvador to help introduce Bitcoin as legal tender.

The bank said it could not support El Salvador’s plans due to the environmental impact of Bitcoin mining and the transparency drawbacks.

It came when the UK’s Financial Conduct Authority (FCA) reiterated its warning that people “should be ready to lose all their money” when investing in cryptocurrencies.

The regulator estimates that 2.3 million adults in the UK now own crypto assets, up from 1.9 million last year, with more and more people viewing them as either a complement or an alternative to mainstream investments.

Enthusiasm for crypto assets is also growing. More than half of crypto users said they have had positive experiences so far and are likely to buy more, from 41% to 53%, according to the FCA. Fewer people also regret buying cryptocurrencies, from 15% to 11%.

Sheldon Mills, FCA’s Executive Director, Consumer and Competition, said, “The market has continued to grow and some investors have benefited from rising prices.

Watch: What is Bitcoin?

“However, it is important that customers understand that if something goes wrong, they will likely not have access to the FSCS or the Financial Ombudsman Service as these products are largely unregulated.

The story goes on

Cryptos have recently been empowered with institutional support. Several organizations, including MicroStrategy (MSTR), have invested billions of dollars in cryptocurrencies, and traditional financial firms like PayPal (PYPL) and Goldman Sachs (GS) have started managing the asset on behalf of customers.

“While things may seem calm to the inexperienced, behind the scenes activity is still strong,” said Paolo Ardoino, CTO at Bitfinex. “Options markets are buzzing while institutions test strategies.”

He added, “Bitcoin has become an integral part of some of the most diverse portfolios around the world. Long-term private investors ride the wave. The builders of Bitcoin keep building. The first Bitcoin upgrade in four years has been approved and will take effect in November. The developers are working in anticipation of the upgrade. The community continues to improve the global financial networks. “

However, according to a survey by Bank of America, 81% of fund managers say Bitcoin is still a bubble.

View: What are the risks of investing in cryptocurrency?

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bitcoin price: Top cryptocurrency prices today: Ethereum, Polkadot, Uniswap down up to 6%

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NEW DELHI: Major cryptocurrencies traded lower on Friday as US regulators delayed Bitcoin ETF approval. This has clouded the sentiment of crypto investors. However, digital tokens pegged to dollars have shown signs of resilience. The majority of the top 10 digital tokens traded with cuts at 9:30 a.m. IST.

The Securities and Exchange Commission (SEC) said in a regulatory filing that it will seek public comments on a proposal to list Bitcoin ETFs with Cboe Global Markets Inc. It’s not the first time this year the SEC has delayed responding to crypto advocates.

Contrary to the views of the US Securities and Exchange Commission, the UK’s Financial Conduct Authority said more people are viewing crypto assets as a mainstream investment rather than “gambling” with ownership of bitcoin and similar cryptocurrencies in the UK this year rose to 2.3 million adults.

Regulators have repeatedly warned investors about the “speculative” nature of largely unregulated crypto assets, which have fallen between 40 and 50 percent since peaking in May. However, global securities index publisher MSCI is considering the introduction of indices for cryptocurrency investments, another step towards mainstream adoption for digital currencies.

“It was an eventful week for cryptos. Both BTC and ETH have been trading almost unchanged since the beginning of the week. We might see a small sell-off as sellers become more active. Polkadot remains under tremendous selling pressure The dollar-pegged cryptocurrency Tether, which is usually very stable, has risen slightly, “said Edul Patel, CEO and co-founder of Mudrex.

Bluechip venture capital funds, known for placing risky bets, like to invest in Indian crypto and blockchain startups, but say the uncertain political environment stands in their way.

Crypto shopping cart: Quick Glance (Source: coinmarketcap.com, as of 9:30 a.m., ACTUAL on 06/18/2021)

  • Bitcoin: $ 37,963.57, down 2.32 percent
  • Ethereum: $ 2,346.29, down 3.65 percent
  • Tether: $ 1.00, up 0.06 percent
  • Binance Coin: $ 354.07, down 0.99 percent
  • Cardano: $ 1.48, down 3.62 percent
  • Dogecoin: $ 0.3052, down 2.73 percent
  • XRP: $ 0.8415, down 1.84 percent
  • USD coin: $ 1, up 0.05 percent
  • Polkadot: $ 22.31, down 5.58 percent
  • Uniswap: $ 21.73, down 4.51 percent

Note: price change in the last 24 hours

Tech View from ZebPay Trade Desk

1inch was launched in 2019 with the aim of helping users find the best asset prices on decentralized exchanges. Within 2 years, 1inch has grown into one of the most widely used decentralized exchanges with over $ 290 million in their liquidity pool.

The 1 inch network is a collection of decentralized protocols with a DeFi aggregator and an Automated Market Making Protocol or AMM. Last December, 1inch launched its 1inch (1INCH) governance token, and the 1inch network was supposed to be managed by a decentralized autonomous organization (DAO).

ETMarkets.com

Tech-wise, 1inch has hit a ‘Morning Star’ pattern (Three Candle Trend Reversal Pattern) in the daily timeframe at the support level of $ 2.4 and is up nearly 56 percent, hitting the weekly high of $ 3.945.

However, the bulls failed to get a grip on the asset and failed to break the $ 4.00 resistance. As a result, the price has declined nearly 15.5 percent from its recent highs. To continue to bounce, 1inch needs to trade above $ 4 and close. The asset is currently trading at $ 3.319.

Main stages

Support: 2,442, $ 2.9

Resistance: $ 4, $ 5.4

The time is in UTC and the daily time frame is 12:00 PM – 12:00 PM UTC

(The views and recommendations in this section are the analysts’ own views and recommendations and do not represent those of ETMarkets.com. Please consult your financial advisor prior to entering into any position in any of the above assets.)

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Cryptocurrency

Bitcoin (BTC) flaws set stage for alternatives

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Bitcoin, the most famous cryptocurrency in the world, has some shortcomings – and that, according to a Cornell University professor, has led other digital currencies to develop more workable options.

It’s not as anonymous as people think, and “mining” bitcoin is bad for the environment, stressed economics professor Eswar Prasad. It doesn’t work well as a currency either, he told CNBC on Thursday.

One interesting aspect is that other cryptocurrencies have come up with solutions to address some of Bitcoin’s shortcomings, said Prasad, who was formerly head of the China division of the International Monetary Fund.

1. Mining is harmful to the environment

Bitcoin mining refers to the energy-intensive process required to produce new coins and ensure that the payment network is secure and verified.

The electricity used to validate transactions on the Bitcoin blockchain as well as the mining process is “certainly not good for the environment,” said Prasad.

Tesla CEO Elon Musk said last month that his electric car company is no longer accepting bitcoins as payment for environmental reasons, causing the price of bitcoin to drop 5% in minutes.

He has since made a U-turn, saying in a tweet on Sunday that Tesla will accept Bitcoin in transactions if it can confirm “reasonable” and “clean energy use by miners”.

Crypto miners use specially designed computers to solve complex mathematical equations that make a coin transaction effective. The miners are rewarded for their efforts by getting paid in the cryptocurrency.

However, the entire process of creating a bitcoin requires a lot of energy and, according to the Cambridge Bitcoin Electricity Consumption Index, can use more electricity than entire countries like Finland and Switzerland.

On the other hand, Ethereum – the second largest cryptocurrency sometimes seen as an alternative to Bitcoin – is developing a different mining method that uses less energy, as Prasad pointed out.

Read more about cryptocurrencies from CNBC Pro

It is called “Proof of Stake” and is the underlying mechanism for Ethereum, which activates so-called “validators” in the network if they can prove that they own ether or a “stake”.

Ultimately, it should eliminate the need for massive computing power to validate transactions, and the Ethereum Foundation claims it will use 99.95% less energy than before.

“This will be a lot less energy intensive and could offer many of the benefits that Bitcoin should offer. It could also make transactions a lot cheaper and faster, ”said Prasad.

It’s not there yet, however, he added.

2. Not so anonymous after all

Earlier this month, U.S. law enforcement officials announced they had recovered $ 2.3 million in Bitcoin paid to a cyber criminal group involved in the ransomware attack on the Colonial Pipeline in May.

The FBI said its agents were able to identify a virtual wallet that the hackers used to collect payments from the Colonial Pipeline.

“The main idea of ​​Bitcoin … was to provide pseudonymity,” said Prasad. “But it turns out that if you use Bitcoin a lot, and especially if you use Bitcoin to get real goods and services, it will eventually become possible to link your address or physical identity to your digital identity.”

What is interesting, he said, is that there are other cryptocurrencies trying to fix this and provide more anonymity. He named Monero and Zcash as examples.

Chris Ratcliffe / Bloomberg via Getty Images

“So Bitcoin has really started a search for a better alternative and people seem to be looking for a medium of exchange that doesn’t have to go through a trustworthy institution like the government or a commercial bank – but that’s not quite there yet “said Prasad.

3. Doesn’t work well as a currency

In theory, Bitcoin should provide an anonymous and efficient medium of exchange, but “it didn’t work in that regard,” said the economics professor.

Rather, it is “slow and awkward” to use Bitcoin to pay for goods and services, and the market is very volatile, Prasad said.

Bitcoin is prone to large fluctuations in volatility, as evidenced by the 30% decline in a single day over the past month.

“So you could take a bitcoin to a store and get a cup of coffee one day and a lavish meal with the same bitcoin the next. So that doesn’t work well for the medium of exchange, “he said.

Bitcoin has become a speculative asset for people who hope it will increase in value instead of using it as a means of payment, Prasad said.

– CNBC’s Sam Shead contributed to this report.

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