$1.89B liquidated: Why did Bitcoin and ETH price correct sharply overnight?
More than $1.89 billion worth of cryptocurrency futures positions were liquidated over the past 24 hours as Bitcoin and Ether sharply dropped.

$1.89B liquidated: Why did Bitcoin and ETH price correct sharply overnight? MARKET ANALYSIS
In the last 24 hours, $1.89 billion worth of futures positions have been liquidated after Bitcoin (BTC) and Ether (ETH) sharply fell, with BTC reaching below $46,000 on Binance.


BTC/USDT 15-minute price chart (Binance). Source: TradingView.com
Most of the liquidations came from Bitcoin and Ether, which accounted for $555 million and $336 million, respectively. But altcoins like XRP, EOS and Litecoin (LTC) also saw large liquidations as the market plummeted.


Liquidations across crypto exchanges. Source: Twitter @CryptoRank_io
The lion's share of the liquidations happened on Binance, while Bitfinex saw the least. This suggests that the former may have the biggest share of novice traders, according to Bitfinex chief technology officer Paolo Ardoino.

"Bitfinex has almost 1B in open interest but extremely low liquidation rate compared to competition," explained Ardoino.

"Finex seems to have traders that use leverage slightly more carefully."
Factors behind the short-term price drop
Bitcoin was relatively resilient compared with the rest of the market during the correction. Mostly, large-cap altcoins and decentralized finance tokens saw the biggest losses, such as Cosmos' ATOM and SushiSwap's SUSHI dropping by over 20% in a single day.

The market likely corrected as a result of the altcoin futures market being extremely overheated for a prolonged period.

In recent weeks, many altcoins on platforms like Binance Futures saw funding rates spike to around 0.3% to 0.7%. This is 30 to 70 times higher than the average 0.01%.

This is likely the reason behind Bitcoin’s relatively small drop of around 7% compared with the 20% to 30% corrections in the altcoin market.

But unlike Bitcoin, Ether showed short-term weakness even as Bitcoin was rallying to a new all-time high, as Cointelegraph reported.

Hence, when BTC began to fall, Ether saw a much larger loss compared with Bitcoin, dropping by 9% in the same period.

Throughout February, especially when the ETH/BTC pair was showing strength, ETH saw a smaller pullback compared with Bitcoin as it entered price discovery. The weakness of ETH against Bitcoin has had a negative impact on the altcoin market in the last 24 hours.

Why a recovery is likely
According to Ki Young Ju, CEO of CryptoQuant, there are enough stablecoin reserves in the cryptocurrency exchange market to trigger another leg up for Bitcoin.

In the crypto market, sidelined capital is often stored in stablecoins rather than cash or in bank accounts because they are much easier and faster to deploy on exchanges. Ju said that it is an ideal time to buy Bitcoin, given that a newfound rally is more likely. He wrote:

“If you're a long-term investor, now is the time to buy $BTC. Not sure how many corrections would be along the way, but the on-chain indicator says there are enough stablecoins in exchanges compared to Bitcoins to get another leg up.”

Stablecoins ratio. Source: CryptoQuant
In addition to favorable fundamentals, altcoins have begun to recover quickly after a capitulation-like correction.

Following the strong relief rally of altcoins, Bitcoin and Ether followed suit, recovering to $48,000 and $1,800, respectively.

The combination of the swift recovery of large-cap altcoins and the abundance of stablecoins on exchanges raises the probability of the BTC rally to continue.

Source: https://cointelegraph.com/news/1-89-billion-liquidated-why-did-bitcoin-and-eth-price-correct-sharply-overnight

FTX CEO claims competitor responsible for racist messages delivered to Blockfolio users
'Teflon' Sam Bankman-Fried illustrates why the crypto community holds him in high regard, as Blockfolio exploit results in clear communication and a rapid response.

FTX CEO claims competitor responsible for racist messages delivered to Blockfolio usersNEWS
On February 9, Blockfolio's Signal feed was briefly compromised, resulting in some users receiving racist messages within the company's app.

Users said that the culprits went so far as to threaten loss of funds if deposits were not removed from the crypto portfolio platform. While the derogatory messages were reportedly scrubbed by Blockfolio's security team within about 30 minutes, the incident left many wondering how such an attack could have occurred.

Tweeting on Tuesday, SBF offered updates about the incident, alleging that a competing exchange was to blame.


“We have spent the last four hours investigating every angle and tracking down leads; we're relieved to say that we've figured out what happened,” SBF tweeted, adding:

“This offensive content was produced and published by a competitor exchange of ours who maliciously gained access to someone else's Blockfolio News/Signal capabilities.”
The FTX CEO condemned the culprit, but did not name the competitor. Access to the Signal feed reportedly did not affect or jeopardize any funds.

According to SBF, Blockfolio has completed their investigation into the matter, and the company has fixed the vulnerability that ignited the situation. The FTX CEO promised to improve the security infrastructure around Blockfolio’s non-trading protocols to prevent similar incidents in the future.

Bankman-Fried was praised by many in the cryptocurrency community for reacting swiftly and transparently to the incident, and as a measure of compensation he apparently added $10 to the trading accounts of affected users. SBF also stated that he has donated to organizations dedicated to fighting racial and societal injustices as a result of the incident.


FTX acquired Blockfolio for $150 million back in August 2020. This is not the first security-related issue the company has experienced. In May 2020, a white-hat hacker named Paul Litvak reported a security flaw that exposed the platform's source code on older app versions to malicious actors.

At the time, Litvak revealed that the vulnerability was over two years old. Fortunately for Blockfolio, no malicious actor was any the wiser about the flaw's existence, allowing the company to solve the issue and double-down on a commitment to user privacy.


Source: https://cointelegraph.com/news/ftx-ceo-claims-competitor-responsible-for-racist-messages-delivered-to-blockfolio-users

Bank of Korea publishes book on central bank digital currency's legal issues
South Korea's central bank has issue a book on legal matters that would need to be addressed to ensure the smooth operations and usefulness of a future central bank digital currency.

Bank of Korea publishes book on central bank digital currency's legal issuesNEWS
Last fall, the Bank of Korea announced it would be testing the distribution of a central bank digital currency in 2021. Preparations appear to be going ahead on multiple fronts, with the bank's publication of a new book today dedicated to the legal questions raised by the potential issuance of such a currency.

According to a summary in Korean media, the book calls for revisions to the law to ensure that a future CBDC could successfully operate. The Bank of Korea has notably been using blockchain technology to manage the transactions in its 22-month long CBDC pilot program, which commenced back in April 2020 and will wrap up in December of this year. Testing the currency's distribution in 2021 represents the third phase of this project, following a focus on technological development and initial operational analyses in phases one and two.

The newly-published book confirms this timeline and scope, outlining that “the Bank of Korea is conducting an analysis of operational procedures for a CBDC rollout, and outside consulting is also underway. This year, we're going to launch a CBDC pilot system in a virtual environment, and run tests to verify its functions and safety.” In addition, the bank states the motivations behind the project and potential benefits of a future digital currency:

”Transformation from cash to digital currency could raise GDP by as much as 3 percent. Digitalization of currency would accelerate currency circulation and reduce maintenance costs. It would also be an efficient way to realize negative interest rates, overall enhancing the government's monetary management.“
The prospective usefulness of a CBDC for sustaining negative interest rate policies has been acknowledged by other central bank representatives, including the deputy governor of Japan, in the past year. While these policies have indeed been adopted in Japan since 2016, and in Europe since 2014, other central bankers have left the door open to a similar move amid the uncertain recovery of their COVID-19 economies, most recently the Bank of England.

Alongside this aspect, an unnamed analyst cited by Korean media has pointed to China's accelerated rollout of a digital yuan and suggested that its prospective impact on the international monetary system is a factor in Korea's own research and development efforts this year:

“The U.S. dollar may be the standard currency for cash, but China is aiming to make digital yuan the new dominant medium. South Korea needs to develop strategies on what position the country will take in the new monetary era.”
The expert further highlighted the need to investigate any potentially negative consequences of CBDCs, such as their amplification of existing economic inequalities due to “gaps in digital information.”
South Korea's central bank has issue a book on legal matters that would need to be addressed to ensure the smooth operations and usefulness of a future central bank digital currency.

Bank of Korea publishes book on central bank digital currency's legal issuesNEWS
Last fall, the Bank of Korea announced it would be testing the distribution of a central bank digital currency in 2021. Preparations appear to be going ahead on multiple fronts, with the bank's publication of a new book today dedicated to the legal questions raised by the potential issuance of such a currency.

According to a summary in Korean media, the book calls for revisions to the law to ensure that a future CBDC could successfully operate. The Bank of Korea has notably been using blockchain technology to manage the transactions in its 22-month long CBDC pilot program, which commenced back in April 2020 and will wrap up in December of this year. Testing the currency's distribution in 2021 represents the third phase of this project, following a focus on technological development and initial operational analyses in phases one and two.

The newly-published book confirms this timeline and scope, outlining that “the Bank of Korea is conducting an analysis of operational procedures for a CBDC rollout, and outside consulting is also underway. This year, we're going to launch a CBDC pilot system in a virtual environment, and run tests to verify its functions and safety.” In addition, the bank states the motivations behind the project and potential benefits of a future digital currency:

”Transformation from cash to digital currency could raise GDP by as much as 3 percent. Digitalization of currency would accelerate currency circulation and reduce maintenance costs. It would also be an efficient way to realize negative interest rates, overall enhancing the government's monetary management.“
The prospective usefulness of a CBDC for sustaining negative interest rate policies has been acknowledged by other central bank representatives, including the deputy governor of Japan, in the past year. While these policies have indeed been adopted in Japan since 2016, and in Europe since 2014, other central bankers have left the door open to a similar move amid the uncertain recovery of their COVID-19 economies, most recently the Bank of England.

Alongside this aspect, an unnamed analyst cited by Korean media has pointed to China's accelerated rollout of a digital yuan and suggested that its prospective impact on the international monetary system is a factor in Korea's own research and development efforts this year:

“The U.S. dollar may be the standard currency for cash, but China is aiming to make digital yuan the new dominant medium. South Korea needs to develop strategies on what position the country will take in the new monetary era.”
The expert further highlighted the need to investigate any potentially negative consequences of CBDCs, such as their amplification of existing economic inequalities due to “gaps in digital information.”


Source: https://cointelegraph.com/news/bank-of-korea-publishes-book-on-central-bank-digital-currency-s-legal-issues

Tesla's $1.5B Bitcoin purchase leaves treasury experts scratching heads
Some treasury experts are finding it difficult to understand why Tesla recently bought $1.5 billion worth of Bitcoin — the best performing asset of the last decade.


Tesla's $1.5B Bitcoin purchase leaves treasury experts scratching headsNEWS
Corporate treasury commentators are criticizing Tesla's $1.5 billion Bitcoin splurge, echoing the well-worn rhetoric of BTC’s volatility.

Speaking to Financial Times, Jerry Klein, managing director at New York-based investment management firm Treasury Partners said that there was no use case for plowing corporate cash into Bitcoin.

Another critic quoted by FT, Campbell Harvey of Duke University in Durham North Carolina, called Tesla’s Bitcoin acquisition “unusual” and “risky” adding that it will not serve as a hedge against market uncertainties.

Critics of Tesla’s Bitcoin purchase say the move potentially puts shareholders at risk given the volatility of Bitcoin. Some point to historical crashes like the 2018 bear market and the 50% dump that occurred on Black Thursday in March 2020.

However, these arguments seem to leave out Bitcoin’s established “no look-back price trajectory” wherein each crash does not revert to a price level before the previous all-time high.

Also, Bitcoin’s parabolic bounce from its lows does not appear in these anti-BTC arguments. For instance, the Black Thursday crash of 2020 was followed by an almost eight-fold increase by the end of the year.

Since August 2020, business intelligence firm MicroStrategy has been acquiring Bitcoin and has spent about $1.1 billion in buying 71,079BTC. At the current price, the company’s Bitcoin stash is valued at almost $3.3 billion — a 200% gain on its investments.


Source: Coin Dance
Bitcoin was the best performing asset of the last decade, gaining almost 9,000,000% and far outstripping all other asset classes. Indeed, as of the time of writing, only Bitcoin bought above the $47,000 price level is currently at a loss.

Speaking to CNBC, MicroStrategy CEO and Bitcoin bull Michael Saylor countered the volatility rhetoric, saying holding cash reserves amounted to a stable loss of 75% of their shareholder value over the last decade whereas investing in BTC offered a volatile appreciation that doubled every six months. According to Saylor:

“Companies that are converting their dollars into Bitcoin are taking a non-performing asset [cash] and they are turning it into the best performing asset. Bitcoin has been appreciating at something like 230% year after year for a decade […] I’d rather have a volatile appreciation at 230% a year than a stable depreciation at a rate of 15 to 20% a year.”
The billions of dollars in economic stimulus packages by major economies are also expected to exert further downward pressure on fiat currencies.

Apart from the backlash over Tesla’s Bitcoin investment, these corporate treasury critics also said that other companies will not be lining up to follow Tesla’s lead.

However, Tesla is only the latest in an expanding cast of public companies holding Bitcoin on their balance sheets. As previously reported by Cointelegraph, 1,400 firms signed up for MicroStrategy’s Bitcoin-buying bootcamp.

Indeed, Apple bull RBC Capital Markets recently clamored for the iPhone maker to follow Tesla’s example in buying Bitcoin. RBC even called on Apple to go a step further by creating a Bitcoin exchange.

The largest cryptocurrency by market capitalization is currently up almost 60% year-to-date.


Source: https://cointelegraph.com/news/tesla-s-1-5b-bitcoin-purchase-leaves-treasury-experts-scratching-heads

Solana will host a DeFi hackathon offering a $200,000 prize pool and $200,000 in seed funding to aspiring developers.

Solana announces DeFi hackathon offering $200k in seed fundingNEWS
Solana has announced an upcoming DeFi hackathon offering $200,000 in seed funding from the Solana Foundation.

The hackathon, which is scheduled to take place from Feb. 15 through March 1st, will be hosted in partnership with Sam Bankman-Fried of FTX’s Project Serum.

Bankman-Fried will also offer mentorship to hackathon participants alongside Solana CEO Anatoly Takovenko. Bankman-Fried stated:


https://cointelegraph.com/news/solana-announces-defi-hackathon-offering-200k-in-seed-funding/amp

Band, Loopring and Cream aim to increase their DeFi market share by building new partnerships and offering solutions that address fees, lending and price discovery.

Band, Loopring (LRC) and Cream secure a slice of DeFi with new partnershipsALTCOIN WATCH
The U.S. dollar lost about 7% of its value in 2020, while Bitcoin rallied about 300% during the same period. As Bitcoin’s institutional adoption increases, United States companies may start to diversify their treasury with other stores of value, and Bitcoin (BTC) stands a good chance to garner a portion of it.

https://cointelegraph.com/news/band-loopring-lcr-and-cream-secure-a-slice-of-defi-with-new-partnerships

IBM has cut its blockchain team down to almost nothing, according to four people familiar with the situation.

Job losses at IBM (NYSE: IBM) escalated as the company failed to meet its revenue targets for the once-fêted technology by 90% this year, according to one of the sources.

“IBM is doing a major reorganization,” said a source at a startup that has been interviewing former IBM blockchain staffers. “There is not really going to be a blockchain team any longer. Most of the blockchain people at IBM have left.”

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IBM’s blockchain unit missed its revenue targets by a wide margin for two years in a row, said a second source. Expectations for enterprise blockchain were too high, they said, adding that IBM “didn’t really manage to execute, despite doing a lot of announcements.”

A spokesperson for IBM denied the claims.

“Our blockchain business is doing well, thank you,” Holli Haswell, a director of public relations at IBM, said via email. “We have realigned some leaders and business units to continue to drive growth – we do that every year.”

A former IBM staffer who had been working on enterprise blockchain, however, said there have been a succession of “Resource Actions,” or RAs, which basically means firing people based on business performance as opposed to personal performance.

“I would wager less than 10% [of the blockchain product and engineering team] is still working on IBM Blockchain,” said the ex-IBM source. “There have been tons of reorgs. Pretty much everyone is gone. IBM is now 100% focused on hybrid cloud, so everything that doesn’t support that is deprioritized.”

IBM has pumped a lot of money into blockchain since 2016, when it began talking about the technology’s potential to transform the way industries do business.

If IBM’s blockchain innovation work is now confined to some R&D, and does not even extend to consulting, as one of the sources said, this sounds an ominous note for the enterprise blockchain space in general – perhaps particularly for the Hyperledger collection of blockchains, to which IBM was a key contributor.

In its recent full-year results statement, IBM as a whole reported revenue fell 6% on an annualized basis. Looking back to its 2017 financial statement, IBM called itself the “blockchain leader for business.” All mention of the technology is now absent from the company’s statements.

No more TV commercials
In the past several years, IBM has pushed ahead with a series of blockchain networks built on Hyperledger Fabric. Big Blue’s major blockchain networks are FoodTrust, a farm-to-supermarket tracking system backed by Walmart; and TradeLens, a shipping container logistics blockchain backed by Maersk. IBM has also added the Trust Your Supplier network and previously had a go at payments via World Wire.

While cryptocurrencies and public blockchain networks appear to have flourished in 2020, the economic shock of COVID-19 has impacted innovation departments inside large firms, to the extent that areas not immediately generating revenue – such as blockchain – have been trimmed.

Another source, an enterprise blockchain engineer with former ties to IBM, estimated more than 100 blockchain-related jobs were cut at Big Blue over the last year.

The source also pointed out that Jerry Cuomo, IBM’s head of blockchain and an evangelist for the tech going back to 2016, has been moved and is now working on artificial intelligence.

“Jerry is indeed overseeing additional strategic, high-growth parts of the IBM business but is still involved in blockchain,” said Haswell, the company spokesperson. “He is a very senior technical leader and that is what we do in IBM – people’s roles expand.”

After publication of this article, Haswell further disputed the reporting, adding:

"IBM maintains a strong team dedicated to blockchain across the company. We have shifted some resources but remain committed to the technology, blockchain ecosystem and services. We see blockchain as a driver for our cloud business."

https://www.coindesk.com/ibm-blockchain-revenue-misses-job-cuts-sources