Your Cryptocurrency Newsletter for 30 SEPTEMBER, 2020

If you are interested in cryptocurrencies, this newsletter is for you. [img]  [Learn more about RevenueStripe...](   [Learn more about RevenueStripe...]( [img]( [FeedBinary Newsletter]( [Bitcoin Aims for Yearly Highs After Breaking These New Records]( Bitcoin has now gone 64 consecutive days about $10,000, breaking its previous record and igniting new-found bullishness. BTC price makes a new record for consecutive daily closes above $10,000. Positive break-out from a symmetrical triangle pattern targets $13,800, but the close proximity of the support and resistances exposes traders to a lot of volatility.Bitcoin mining hashrate also made a new all-time high of 160 exahashes/sec.Bitcoin broke a new record today as the price of BTC recorded 64 consecutive days above $10,000. The last time this happened was during the 2017 bull run, during which prices doubled in two weeks. [bitcoin aim yearly high] The three-month daily realized volatility of the alpha cryptocurrency has also subsided considerably below the average of 4% to 2.6%, at press time. These are positive characteristics of Bitcoin’s value proposition as a replacement for gold and an inflation hedge. Bitcoin Price Analysis Trend analysis of the daily chart shows BTC price is looking to break above the symmetrical triangle with a target around 2019 yearly highs of $13,800. Yesterday’s positive breakout above the symmetrical triangle was short-lived, however. BTC price subsided below the resistance from the triangle due to a lack of volume. A consolidation above $11,083 would make the upward path clearer.On a weekly scale, BTC is approaching the resistance at $11,600 from the parallel range between support and resistance at $5,000 and $11,600, respectively. [btc weekly price] If Bitcoin breaks above the $11,600 resistance, it may continue back to all-time highs of $19,666 on Bitstamp. Another reversal indicator, the Tom Demark (TD) sequential count, is also turning bullish after a 1-4 negative correction in the past four weeks, which is positive. The TD sequential count is spread from one to thirteen. It predicts a reversal at the 9th or 13th count and suggests continuity of the previous trend (which was bullish in this case) after a 1-4 correction. Bitcoin Miners Log New High in Hashrate On Sept. 20, the difficulty for mining Bitcoin reached a new all-time high, increasing by 8.7%. The rise in Bitcoin mining difficulty requires more computational power for validating a BTC block, reducing the profitability for each miner. Nevertheless, the growth of the mining industry seems unaffected by the rising difficulty. It recorded a new all-time high just four days later. The difficulty ribbon indicator, which plots the moving averages of the mining difficulty, is one of the most reliable indicators of miner sentiments. Moving averages are spread over periods between 9 days to 200 days. An expanding band of these moving averages towards the upside signals miner growth. Whereas, a drop in the moving averages of difficulty is indicative of a downtrend in Bitcoin prices.Historically, the compression in these bands of moving averages (represented by vertical green bars) has acted as a reliable buying indicator. The compression is usually followed by an increase in the difficulty, which signals positive sentiments of the miners. Currently, BTC is confirming a breakout from the recent compression due to the reduction in rewards after halving in May. Market Sentiments On the derivatives front, sentiment is slowly reversing from its bearish stand as price makes a break towards $11,000. A daily funding rate of 0.03% is the base interest rate for these contracts; rates below 0.03% represent larger unsettled contracts for shorts than longs. [btc swaps] Moreover, rates above 0.15% represent heightened bullish sentiment from derivatives traders and are usually met with a short-term pullback. Currently, the derivative trader’s sentiment on BitMEX is neutral, positioning BTC for a move to either side.The fear and greed index of Bitcoin is also in the neutral territory with a slight inclination towards fear, suggesting uncertainty in the market. Though data suggests Bitcoin is primed for another breakout, the close vicinity of the support and resistances, as mentioned above, predict considerable volatility in the short-term. [Read Full News]( The post [Bitcoin Aims for Yearly Highs After Breaking These New Records]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [How U.S. Adversaries Are Using Cryptocurrency to Evade Sanctions]( Virgil Griffith had a reputation as a “cult hacker,” a “tech-world enfant terrible.” A 2008 profile in The New York Times Magazine, published when he was 25, called him the “Internet Man of Mystery,” and cast him as “a troublemaker … A twerp. And a magnet for tech-world groupies,” drinking White Russians and “revel[ing] in the attention of his female fans.” Griffith had become notorious the year before, when he launched WikiScanner, a website that used IP address databases to expose the anonymous editors of Wikipedia entries. The site’s release brought on a wave of news coverage, as IPs associated with government agencies, political parties, major multinational corporations and religious institutions, from Pepsi to the CIA to the Church of Scientology, were all implicated. The attention transformed him into a minor celebrity. By 2014, Griffith was still marketing himself as a troublemaker. In a promotional video for the reality show “King of the Nerds,” in which he was a contestant, he describes himself as a “journeyman of the internet dark arts.” “I consider myself a rebel,” he adds, speaking into the camera. “Or at the very least, I play to my own drum.” [cryptocurrency evade sanction] Griffith had been living in Singapore and working for a cryptocurrency organization, the Ethereum Foundation, for two years when the U.S. State Department denied him permission to visit North Korea for the Pyongyang Blockchain and Cryptocurrency Conference in April last year. But his rebel attitude meant he went anyway. He was arrested months later when he flew back to the U.S. on Thanksgiving. It was then that the Justice Department revealed that Griffith was facing up to 20 years in prison for violating U.S. sanctions on North Korea, because, according to the FBI, the Alabama-born hacker had “participated in discussions regarding using cryptocurrency technologies to evade sanctions and launder money.” How Crypto Can Circumvent Sanctions Since its first nuclear test in 2006, North Korea has been wrestling with U.N. sanctions on everything from its imports of oil and luxury goods to its exports of coal and minerals, as well as certain kinds of financial activity. A host of other countries and multilateral bodies have implemented further measures against North Korea. Unilateral U.S. sanctions are particularly restrictive, targeting a longer list of individuals, businesses and economic activities, including banks, companies and individuals based outside North Korea that are suspected of supporting the state’s weapons program. But instead of complying with the sanctions, North Korea has reportedly continued to fund those weapons through illicit activities, including the state-sponsored trafficking of arms, drugs and even its own citizens. Last year’s Pyongyang cryptocurrency conference, which was aimed at “building bridges of friendship and collaborations” with tech experts, looked like the regime’s latest attempt to add cryptocurrencies to those sanctions-evading activities. Since 2017, a handful of other states, including Iran, Cuba and Venezuela, have joined North Korea in experimenting with cryptocurrencies as a way to evade international and U.S. sanctions and achieve financial independence. For decades, nations targeted by U.S. sanctions have searched for ways to move their money outside the U.S.-dominated financial system. To monitor all kinds of international payments, the U.S. relies on the SWIFT messaging service that banks use to communicate payment instructions to each other, and on the correspondent banking system, which routes almost all payments through New York. It is this system, and the oversight it enables, that makes the U.S. ability to implement sanctions particularly effective. Cryptocurrencies offer an entirely new financial infrastructure, cutting out the need for banks and enabling peer-to-peer transfers that bypass borders as well as regulators’ jurisdictions. Cryptocurrency “mining” involves a highly complex process of verifying other users’ transactions, which requires specialized hardware with significant processing power. Once mined, cryptocurrencies can be exchanged for other assets—whether hard or soft currency, or other cryptocurrencies—or traded by users directly, a process that is now simplified and facilitated by companies like Coinbase that host currencies in app-based “wallets.” Instead of recording transactions in a bank’s ledger, they are catalogued in “blocks” on a blockchain⎯a transparent, distributed ledger technology that stores data on thousands of servers at once, and enables any user to see everyone else’s records in near real-time. According to Reuters, Griffith may have also been trying to arrange the delivery of crypto mining equipment to help the North Korean regime generate Ether, a cryptocurrency created by his company Ethereum. But North Korea has so far gained more attention for stealing cryptocurrency than creating it. For years, state-backed groups have been helping the regime raise funds by hacking into cryptocurrency exchanges, businesses that enable cryptocurrency to be traded for other assets. Between January 2017 and September 2018, North Korean hackers are thought to have stolen $571 million in cryptocurrency from five exchanges in Asia. Authorities gained insight into how this money was laundered when two Chinese nationals, Tian Yinyin and Li Jiadong, were indicted by the U.S. Treasury Department in March. The U.S. said that Tian and Li stole the equivalent of $100.5 million in cryptocurrency from unnamed exchanges, $34 million of which they converted into Chinese yuan, and a further $1.4 million of which they used to buy iTunes gift cards. “Without many other ways to legally bring money into the country, North Korea has resorted to straight up stealing it,” says Fred Plan, senior threat analyst at the cybersecurity company FireEye. “North Korea has extremely well-developed cyber capabilities, so for many of the country’s problems, the application of cyber operations has been the go-to solution,” he adds. “Given one of North Korea’s most pressing problems currently is the need for money, it’s no surprise they would exercise their cyber capabilities [to offset] their array of financial problems.” That is especially true since cryptocurrencies deprive the U.S.-centered financial infrastructure of the ability, he says, to “understand, manipulate or track” transactions. The Perils of ‘Sovereign’ Crypto Independent cryptocurrencies, like Bitcoin and Ether, were created with the aim of freeing money from government influence and oversight. But in recent years, states around the world have been researching to see how they can take advantage of the efficiency of blockchain technology without losing control of currency. Though no other country is known to carry out brazen crypto heists like North Korea, other states are coming to view blockchain technology as part of a longer-term strategy aimed at undermining U.S. financial power, either by investing in the technology or by developing their own state-backed, “sovereign” cryptocurrencies, also known as central bank digital currencies. These differ from currencies like Ether or Bitcoin because they are centralized, meaning that payments can be frozen, canceled or otherwise regulated by a central authority, like a country’s central bank. Many central bank digital currencies use blockchain technology, or technology inspired by it. Sweden’s digital currency, the e-krona, for example, uses a blockchain-inspired technology, and China’s digital yuan is also expected to use blockchain to take advantage of its ability to simplify and secure transactions. The emergence of central bank digital currencies has been read as a threat to cryptocurrency’s original aim, since they further empower the very financial systems and governments that crypto was designed to circumvent. As the manager of one cryptocurrency services provider based in Switzerland wrote in VentureBeat in 2018, “In case anyone has forgotten: The end goal of cryptocurrencies was to decentralize power, not to bolster existing centers of authority.” Russia has also been working on establishing a “crypto rouble.” At a meeting in Tokyo in 2017 where representatives of 25 countries met to try and set international standards for blockchain, the head of Russia’s delegation, who also worked for the FSB, its intelligence agency, reportedly said, “The internet belongs to the Americans—but blockchain will belong to us.” U.S. adversaries are not the only ones experimenting with this technology. The Belfer Center’s Digital Currency Tracker lists seven countries have launched their own pilot digital currencies—China, South Korea, Thailand, Ukraine, Sweden, Uruguay and the Bahamas⎯with at least a dozen more conducting research and development, including the United States. Some countries are attracted to centralized digital currencies due to their promised ability to eradicate inefficiencies in the financial system, while others are interested in eliminating financial exclusion. Senegal and Tunisia, for example, have experimented with using cryptocurrencies to reach citizens who don’t have bank accounts. But the ramifications for U.S. financial dominance could be the same unless the global financial system, centered on the U.S., can evolve alongside these new digital currencies. Rather than adapt, though, the U.S. is responding to this new financial landscape by attempting to regulate or ban some digital currencies outright. In 2018, for example, President Donald Trump used an executive order to ban U.S. companies and citizens from using Venezuela’s Petro. But beyond new regulation, policymakers in the U.S. have few options to crack down on these new currencies. “It’s not like nuclear materials, where there’s a lot of hardware and expensive stuff. We’re really talking about software,” Fanusie says. “A lot of it is open source. It’s free software that’s really easy for the developers to create, so they can’t necessarily stop a country from creating these new systems.” The Future of Finance For countries under sanctions, cryptocurrencies—whether the likes of Bitcoin, or state-backed digital currencies like Venezuela’s Petro—are a long-term strategy, not a short-term fix. Attempts so far to evade sanctions using this technology, including North Korea’s cybercrimes, have shown that countries are not yet capable of moving enough money around at scale to insulate their economies from sanctions. But it’s early days. We’re still in the very early stages of understanding how different digital currency projects would be structured,” says the Belfer Center’s Kumar. “A world where there are many competing digital currencies,” she adds, “could become a very complicated system with many competing offerings for people to use for payments. The possibility of sanctions evasion is just one part of a larger challenge as economies around the world adapt to the rise of digital currencies. “These new financial pipelines are going to require innovative approaches to governance and compliance in order to maintain global financial integrity,” Fanusie and his colleague, Trevor Logan, wrote in a report last year for the Foundation for Defense of Democracies. They said that authorities “must do more than passively monitor adversaries’ attempts to build new systems,” and that “U.S. policymakers and financial sector stakeholders will need to take the lead in this evolving international ‘crypto race.’” They urged the U.S. to thoroughly investigate the emerging threats posed by digital currencies, hire blockchain experts to guide U.S. financial authorities, and “encourage computer science talent to build blockchain solutions” by funding private pilot programs. [Read Full News]( The post [How U.S. Adversaries Are Using Cryptocurrency to Evade Sanctions]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ [Afraid of DeFi? Here’s How to Earn 41% APY on Bitcoin without Wrapping it]( Decentralized finance yields are incredibly attractive, but options markets can also provide similar sized returns for those willing to take risks. The number of investors interested in yield farming has grown immensely over the past 6-months as decentralized finance (DeFi) applications became better known and easier to use. This has led to an uncountable number of liquidity pools offering annual percentage yields (APY) surpassing 1,000% and the total value locked in DeFi contracts has risen to billions of dollars. Bitcoin investors who wanted a piece of the action managed to participate in DeFi yield farming by converting their BTC into tokenized formats like Wrapped BTC (WBTC) and renBTC (RENBTC). [afraid of defi] This allows BTC holders to interact with all of the ERC-20-based tokens, but some analysts question how decentralized the Bitcoin custody is behind those offerings; therefore, it makes sense to explore more centralized solutions.Although it is impossible to directly extract yield on Bitcoin (BTC) deposits at these DeFi platforms, investors can still benefit from centralized services. While it is improbable to find APYs above 12% there are at least safer ways to earn yield on ‘uninvested’ Bitcoin. Centralized services such as Bitfinex, Poloniex, BlockFi, and Nexo will typically yield 5% to 10% per year for BTC and stablecoin deposits. To increase payout, one needs to seek higher risk, which does not necessarily mean a less known exchange or intermediary. By trading BTC options at Chicago Mercantile Exchange (CME), Deribit, or OKEx, an investor can comfortably achieve 40% or higher yields. The covered call strategy has its risks The buyer of a call option can acquire Bitcoin for a fixed price on a set future date. For that privilege, this buyer pays an upfront for the call option seller. Although the buyer might typically use this instrument as an insurance, sellers are mostly obtaining fixed income trades.Each contract has a predetermined maturity date and strike price, so potential gains and losses can be calculated beforehand. This covered call strategy consists of simultaneously holding BTC and selling the equivalent size in call options. It would be unfair to name it a fixed income trade, as potential losses loom whenever there is a more considerable price drop at options expiry. However, one can adjust such risk while setting up the trade. It is worth noting that limiting exposure will result in lower yields. [profit loss] The above chart represents a covered call strategy for the November expiry, yielding a 6% return in two months, equivalent to 41% APY. As previously mentioned, the covered call might present losses if the BTC price at expiry is lower than the strategy threshold level. Although the 6% yield achieved by selling 0.5 BTC at $9K and 0.5 BTC $10K call options, the strategy needs BTC to sustain above $10K at the November 27 expiry to achieve its full return. Any level below $8,960 will result in a loss, but that is 16.6% below the current $10,750 Bitcoin price. By selling these call options, the investors will make 0.1665 BTC ($1,957 at current price); therefore, the covered call investor should acquire the remaining 0.8335 BTC ($9,793) either via futures regular spot markets. However, if the buyer is unwilling to take this risk, it is possible to reduce the loss threshold. It is worth noting that most derivative exchanges allow option trades starting from BTC 0.10, with CME being the only exception. A 25% APY return can be achieved by selling 0.5 BTC $8K and 0.5 BTC $9K November call options. By reducing expected returns, one will only face negative outcomes below $8,370 at the November 27 expiry, 22% below the current spot price. Take notice of how the $313 net profit stabilizes above $9K outcomes. To achieve this equilibrium, one needs to buy $8,187 worth of BTC, either via futures or regular spot markets. The call options premium will raise the remaining BTC 0.303 ($3,257), but only the option seller gets paid beforehand. Implied volatility drives covered call returns Implied volatility is options markets main risk gauge, and it increases as traders perceive a higher risk of sudden price moves. This indicator will increase regardless of investors’ optimism, as volatility relies exclusively on absolute price changes. A constant daily 4% loss across a few weeks results in extremely low volatility, which would be the same as a fixed daily 4% gain. The volatility will increase in periods of extreme uncertainty; therefore, option sellers will demand a larger premium. As Skew data shows, the BTC 3-month options implied volatility currently stands at a 59% annualized basis. Despite being relatively low, the figure is still enough to provide a 41% APY using covered call strategies.Investors can benefit from a higher reading, but the risk of suffering losses using covered calls also increases. This reflects traders’ fear of unexpected price swings; therefore, an increased implied volatility indicates higher odds of an expiry price below the options strategies’ profit threshold. All investments carry some degree of risk All passive yield strategies have embedded risks. While it is possible to use a stop loss on covered calls, it should be noted that options markets can be reasonably illiquid during intense BTC price swings. This means it’s important here to never close futures or spot positions independently from the options. DeFi might have its appeal, and even if one is willing to accept the risks associated with wrapped BTC, there are unknowns from faulty smart contracts, potential DeFi protocol breaches, clogs in the Ethereum network during peak traffic and the increased fees which can reduce profits and amplify losses. Outside individual pools and DeFi apps, there’s also room for oracle price sourcing manipulation which can cause cascading liquidations. The main advantage of the covered call is it enables investors to set their own appetite for risk and have a clearer picture of their potential profits. By opting for centralized solutions, investors can avoid high gas fees and the risk of being front run by wealthier or more savvy DeFi farmers. [Read Full News]( The post [Afraid of DeFi? Here’s How to Earn 41% APY on Bitcoin without Wrapping it]( first appeared on [Feed Binary](. [Read Full Story]( ------------------ You Might Like     [Learn more about RevenueStripe...]( ------------------ ------------------ Connect with TheFeedBinary on Facebook and Twitter [fb](  [tw]( ------------------ You received this email because you operate or create content for a website/service and based on your website it seemed like this could be important information to you and your users. FeedBinary daily newsletter is managed by [Postbox Consultancy Services Pvt. Ltd.]( C-4/5, IBD Emporia, Kolar Road, Bhopal, Madhya Pradesh, INDIA, 462042 Want to change how you receive these emails? [Update your preferences]( or [Unsubscribe](