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512

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: September 09, 2021, 03:26:23 PM »

El Salvador Day and Bitcoin’s Crash

For El Salvador and Bitcoin, 7 September became a day to remember: for the first time in history, a cryptocurrency has been adopted as legal tender. Meanwhile, Bitcoin went through the biggest correction in a single day since the Chinese crypto recession because El Salvador was neither technologically nor mentally ready to accept cryptocurrency. El Salvador’s president Nayib Bukele tried to soften the negativity from the correction by stating that the country was “buying the dip”.



Salvadorians are migrating to other countries in search of work but continue to send money transfers to their relatives. In 2019, they amounted to 20% of the country’s GDP, or $6 billion. The transfers in USD remained critically unprofitable, enriching the banking structures in the United States. For Nayib Bukele, this became one of the main reasons for integrating Bitcoin. Now, the Bitcoin network’s fee constitutes $3 while it costs $18 to send money from Los Angeles via Western Union, $7 via Ria, and $5 via Xoom and Boss.

Per the country’s new law, retailers will have to accept USD as well as BTC as payment. The government will be responsible for paying the conversion costs, for which a $150 million reserve fund has been created. Retailers will be able to choose the legal tender they receive. Apparently, with cryptocurrency’s growing adoption, the government’s expenses will also grow. Meanwhile, high volatility will amplify the problem.



On the day Bitcoin was adopted as legal tender, its volatility exceeded 20%. For retailers, this could signify a loss of profit of a similar amount if they had set the price of goods in BTC. This is why most retailers have preferred to receive fiat funds.

For many Salvadorans, crypto technologies still largely remain unknown territory, and pensioners are afraid that these innovations are directed at taking their USD pensions from them. That’s why there were several protests in El Salvador on the day, with several thousand people rallying in front of the Supreme Court.

Nayib Bukele asked the IMF to help integrate Bitcoin into the financial system, but his request was turned down. Even worse, $1 billion in financial aid that the IMF was considering for El Salvador has been held off for an unknown period. In July, Moody’s credit rating agency lowered El Salvador’s investment rating because of mounting financial risks, which has badly affected demand for its government bonds.

These circumstances are intensifying fears that the government will collapse, the country will fall into crisis and the Bitcoin experiment will flop. All these sentiments caused the cryptocurrency to record the biggest single-day drop since May.


The StormGain Analytical Group
(a platform for trading, exchanging and safeguarding cryptocurrency)

513

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: September 07, 2021, 12:06:43 PM »

Ethereum putting pressure on Bitcoin

Ethereum is growing more confidently than Bitcoin, and there are objective reasons for this that could send the altcoin to the highest market capitalisation in the long run. We told you about them at the start of this year, and now it’s time to update the data.



This month, the altcoin has grown twice as much as Bitcoin has, experiencing 50% growth. The main driver has been the London hard fork that took place on 5 August. It introduced a deflationary mechanism resulting in the base fee now simply being burnt, while miners claim tips on top of it. In 29 days, 174,000 ETH, or $565 million, have been burnt.



The gap at the 12-month distance has been even more impressive, showing Ethereum go up by 820% versus 350% for Bitcoin. The altcoin owes its popularity to its smart contracts, whose functional capabilities have caused a boom in the DeFi (decentralised finance) and NFT (non-fungible token) markets.

DeFi allows participants to exchange tokens, receive passive income and lend and borrow without intermediaries. The algorithms written into the smart contracts are in charge of executing the operations. The market is so promising that Bank of America and ING Bank are already declaring DeFi a threat to the traditional banking sector, which has grown from $8 billion to $97 billion in 18 months.



NFTs are unique tokens that are normally used as copyright tags. They are easy to gift, sell or buy. This year, auctions with digital pictures have already been held at such venues as Christie’s and Sotheby’s. The most expensive NFT was purchased for more than $69 million from Mike Winklemann.

The NFT power is in its accessibility and dilution of geographical and legal boundaries. For example, artists from Zimbabwe have been making a living on this technology. Huliodraws sold his latest work, Meme Reunion, for 0.55 ETH. And teenagers can even make pocket money without having a bank account. By way of example, a 12-year-old boy from London received $400,000 from the sale of Weird Whales.



The practicality of smart contracts has led to the Ethereum network seeing more transactions than Bitcoin since 2017, with the discrepancy growing ever since.



The altcoin can take the leading position in capitalisation after the transition to the proof-of-stake protocol scheduled for 2022. Now, the scalability problems have led to high network workloads, with the average fee once again exceeding $30. Higher fees slow down the adoption of Ethereum and limit its usage.

What do you think about Ethereum’s chances of getting ahead of Bitcoin? Let us know in the comments!


The StormGain Analytical Group
(a platform for trading, exchanging and safeguarding cryptocurrencies)

514

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: September 03, 2021, 02:38:36 PM »

Hidden Threat: Tether is reluctant to disclose its reserves structure

Tether is the leading bridge currency between fiat money and crypto assets. It boasts a market capitalisation of $66 billion and a daily turnover of $88 billion. The stable operation of crypto exchanges depends on the financial state of affairs at the namesake company because an overwhelming majority of exchanges use Tether as their base currency. According to the company’s initial claims, every USDT is backed by one US dollar. However, audits have proven this claim to be untrue. Now, the company is trying to hide the what things are actually like from the public.



This year, the New York Attorney General’s Office (NYAG) finished its investigation into Tether. As result of a pre-trial settlement, Tether has agreed to pay out $18.5 million and report on its reserves to the authorities regularly (read more about this in our article). After that, it was found that half of the USDT reserves were composed of undisclosed commercial papers, and only less than 4% were held in fiat funds.



Tether’s fiat reserves exceed its liabilities, but their structure raises a lot of questions. For example, in the event of a crisis, the inability to convert USDT to USD at a 1:1 rate will cause a rapid fall in the stablecoin’s valuation and damage confidence in crypto exchanges. As a result, cryptocurrencies will go through a bigger correction than the one that occurred in May 2021.



It’s not surprising that the community keeps a close watch on the developments in the Tether case, but the company doesn’t feel comfortable under such scrutiny. On 31 August, representatives from the organisation filed a request to the New York Supreme Court to the NYAG from releasing access to information about the company.

'...we vigorously oppose the notion that proprietary information of our company, or any company in our community, should be made public simply to satisfy Internet trolls or other detractors.'

Now, the disclosure of the details and commercial papers that constitute half of USDT’s backing will depend on the Supreme Court’s decision. If the assets turn out to be of low quality, it will damage confidence in the token and cause a backlash on the cryptocurrency market.


The StormGain Analytical Group

516

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 31, 2021, 12:45:58 PM »

Solana Enters Top 8

Ethereum’s unsolved problems have led to the emergence of interesting projects that are moving by leaps and bounds to resolve their predecessor’s mistakes. One such project, Solana, has seen its price increase by over 200% in August alone, putting it among the Top 8 cryptocurrencies by market capitalisation.



Smart contracts are becoming more popular because of the boom in the DeFi (decentralised finance) and NFT (non-fungible token) markets. Most projects use the Ethereum blockchain, which has been unable to cope with the workload. Network fees have risen again despite the London hard fork on 5 August to remove the network’s auction mechanism for transaction fees. We expressed our concerns at the start of the month, and, unfortunately, they have come true: costs have risen to highs last seen in February.



High expenses and low transaction throughput are forcing projects to search for alternative blockchains. Solana is one of the most promising; with an average transaction fee of $0.00025, its top transaction throughput can reach 50,000 transactions per second, which is thousands of times faster than Ethereum and Bitcoin’s blockchains. Several unique solutions make this possible, such as the blockchain’s use of a proof-of-history element that puts time markers on every block. As a result, a new block is created every 400 ms, while it takes 10–15 seconds with Ethereum. Meanwhile, it retains all the positive features of proof-of-stake, including passive income through staking.

Two weeks ago, Solana debuted on the NFT market with the launch of the Degenerate Ape Academy collection. In just 10 minutes, 10,000 monkeys were sold, and the coin’s price jumped 40%. Institutional investors have since expressed interest in the cryptocurrency’s success, leading to Osprey registering Solana Trust with the SEC.



Bill Noble, Token Metrics’ top analyst, believes that Solana can only be stopped if the cryptocurrency market crashes. Otherwise, the coin will soon reach $145.


The StormGain Analytical Group

518

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 27, 2021, 10:55:07 AM »

Metrics: Bitcoin keeps growing despite lacklustre user activity

Bitcoin’s price has risen by 40% to around $50,000 without high speculative activity amidst a background of plunging trading volumes and a low number of transactions. Is this indicative of a looming correction?



Bitcoin transactions are around five-year lows, which was last observed together with an 85% drop in prices from the highs of 2017.



In addition to the lower number of transactions, trading volume has also dropped, which Arcana Research views as a bearish signal. The recent price growth has not correlated with vast interest.



However, several objective reasons can explain this. Firstly, the number of transactions has fallen because of pressure from Chinese regulators. Some exchanges are changing their registration, others are refusing to accept Chinese citizens’ funds, and miners have simply been prohibited from working in some provinces. Secondly, the world’s largest crypto exchange, Binance, has become a subject of public discontent in many countries. Because of regulatory pressure, the exchange has lowered its leverage from 1:100 to 1:20, leading to a slump in trading volume.

Meanwhile, the Fear and Greed indicator is showing that market optimism has gone last. SOPR (Spent Output Profit Ratio) indicates the same thing: most traders are once again making profit from selling their coins



While traders took a break and are not showing much activity, institutional investors continue their hunt for bitcoin. For example, MicroStrategy bought $177 million worth of BTC at an average price of $45,000 per coin and currently owns 108,992 BTC. Citigroup has followed in Goldman Sachs’ footsteps, submitting an application to regulatory bodies for access to Bitcoin futures on the Chicago Mercantile Exchange.

Currently, activity on the network does not indicate an impending correction. The drop in volume is related to regulatory pressure and reduced trading leverage. Meanwhile, holders and institutional investors are continuing to accumulate.


The StormGain Analytical Group

519

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 24, 2021, 08:23:34 AM »

NVIDIA: Mining processors vs video cards

Increased GPU prices have caused a backlash between miners and gamers. AMD has come clean, saying that this conflict is none of its business. However, NVIDIA has tried to split up its GPU product line and produce an ASIC equivalent, with little success.

The third-generation graphic cards released in autumn last year are highly efficient at ethereum mining. Meanwhile, the coin rose from $350 in October to $2,000 in five months, and graphic adapters are becoming hard to find.



The first decision NVIDIA made was to limit the output of some graphic cards, but miners managed to bypass this obstacle. The second decision was the production of specialised chips for mining. In February, the company announced the launch of its new CMP (crypto-mining processor) series. The 30HX and 40HX models became available for order in Q1 2021.



However, the demand for these was not as high as NVIDIA expected. The company planned to earn $400M on CMP sales by the end of Q2, but actual income was $266M. Commenting on the figures, Chief Financial Officer Colette Kress said that the company did not expect substantial revenue contribution from CMP sales in the future.

There are several reasons for this product line's failure. First, even top-end machines are lagging behind the top-of-the-line graphic cards in terms of hashing power. Second, the cost and energy efficiency remain pretty much similar. Therefore, few people are willing to buy highly specialised machines with no video output. Let's take compare the effectiveness and ROI of CMP 30HX vs RTX 3060.

The mining chip produces 26 Mh/s, consuming 125 W. The graphic card can be accelerated to up to 48 Mh/s while consuming 170 W. Energy-wise, it's more profitable, but it costs more: $1,000 vs $750. However, because of the permanent increase in mining difficulty, hashing power is what makes the ultimate difference, and even profitability calculators show that RTX 3060 is almost twice as good as CMP 30.



It takes 300 days to reach full ROI on the graphic card, compared to 414 days for the CMP. Because of increased mining difficulty, you will have to unplug 30HX at some point, while RTX 3060 will keep on producing revenue. Another thing is that even if the graphic card is discarded for mining, it can still be used for its intended purpose, but there is no second life for the CMP.

The NVIDIA CPM product line is the same old graphic card, only slightly redesigned and cheaper. However, consumers did not appreciate this approach: as ethereum's price increased, so, too, is the demand for graphic cards.


The StormGain Analytical Group

520

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 23, 2021, 09:43:49 AM »

Hermitage and Rammstein at Odds over NFT

Non-fungible tokens (NFTs) are a new type of crypto asset that has simplified buying and selling, exchanging and working with digital artworks' copyrights. This market continues to grow exponentially despite all the difficulties cryptocurrencies have been facing.

In March, we saw a spike in the interest in NFTs caused by the success of Mike Winkleman's picture, Everydays: The First 5,000 Days. It turned out to be the most expensive JPEG file in history, selling for $69 million at a Christie's auction. There was also a rally on the cryptocurrency market, and Ethereum, the platform for most NFTs, rose from $1,400 to $4,400 in May.



Increasing interest in cryptocurrencies and non-fungible tokens has caused a record growth of network fees on the Ethereum network. Sceptics were prophesying a downfall of the NFT market, but that didn't happen. Now, fundraising is at March levels again, and the daily NFT turnover at OpenSea has grown eight-fold.



The daily volume has reached 60,000 NFTs, and the trading volume in the last month grew by 933% to hit $1.2 billion. And that is just the data for a single platform. The entire market is now projected to grow from $1 billion to $15 billion next year. The growing interest in NFTs is leading some to monetise their activities, from football clubs to giants like NASA.

Occasionally, unpleasant copyright-related things happen. For example, DC Comics asked artists in March not to use their characters to make NFTs as the company was planning to enter the new market. Furthermore, last week, a scandal broke out between the group Rammstein's lead vocalist and the Hermitage Museum. Till Lindemann recorded a video for the song Lubimiy Gorod (Beloved City) for the museum. However, according to his agreement with the Hermitage, he could only use the recorded materials in the video. The singer nevertheless launched an NFT collection based on the visuals recorded.



Five tokens have been put up for auction, advertised as 'Hermitage Edition'. The most expensive of them has been priced at $100,000, and there are 10 copies. Buyers will also have the opportunity to dine with Lindemann in Moscow.

The Russian state-owned Hermitage has sent a letter of claim to both the Rammstein frontman and NFT Frame Art, the platform that listed the tokens. However, the museum has not disclosed its proposal for resolving the conflict. Currently, nothing is known about any responses.

Like DC Comics, Hermitage also has plans to monetise art objects. In autumn 2021, an exhibition will take place, where the museum will put its own NFTs up for sale. The Hermitage's director, Mikhail Piotrovsky, has said that "NFT is a route that creates democracy, makes luxury more accessible, but at the same time exceptional and exclusive".

Despite the lack of a clear legal framework, the number of NFT proponents is growing. This will make cryptocurrencies more attractive and speed up their integration in the near future.


The StormGain Analytical Group

522

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 17, 2021, 12:32:58 PM »

Ethereum will soon abandon mining. Will GPUs get cheaper?

At the World Blockchain Conference in late July, Vitalik Buterin set the beginning of 2022 as the date of a possible transition to a proof-of-stake protocol, when validators will become responsible for processing transactions, and miners will be put out of a job. However, this does not stop either miners or hardware manufacturers.

On 5 August, the London hard fork took place, followed by the Altair update on 19 August. According to the roadmap, these are the last steps before the merger of the two forks, codenamed ‘The Merger’, happens. The difficulty bomb is scheduled for early December but will most likely be rescheduled for Q1 2022.



Over 90% of Ethereum mining is done with GPUs. However, in recent years, a breakthrough was made in producing ASICs for the ETHash algorithm. For instance, in early 2021, NVIDIA presented its first chip for ETH mining, which can hash 26 Mh/s at 125 W. The availability of efficient machines attracted institutional investors, for whom the payback period is less in the Ethereum network than in the Bitcoin network. According to the CEO of Luxor mining centre, Ethan Vera, the ROI period on Ethereum mining hardware is four months, but over a year for Bitcoin.

This circumstance has caused mining companies to increase their hash power despite the PoS risks. In October 2020, Hive Blockchain became the biggest public Ethereum miner at 3.4 Gh/s; it plans to ramp up its hashing power to 5.5 Gh/s by the end of 2021. Hut 8 is close behind, having bought $30 million worth of hardware from NVIDIA, which will give it 1.6 Gh/s more hash power this month.

Miners expect that The Merger implementation period will shift: this regularly happens in Vitalik Buterin’s network. So, they don’t want to miss out on the profit they could make on the second-largest cryptocurrency.



ASIC manufacturers are backing miners in their arms race. Bitmain, Innosilicon and iPollo have already announced the availability of Ethereum ASICs by the end of this year. iPollo has already received pre-orders worth $200 million.

The most frequently asked question among some in the crypto community is ‘when will GPUs get cheaper?’ The risk of proof-of-work being abandoned does not dampen companies’ ardour in their pursuit of hashing power. Gamers’ last hope hangs on the development of ASICs that could push GPUs out of mining. Mining difficulty will grow as long as institutional demand is met, and the GPU mining ROI period will soon surpass one year. If ETH doesn’t reach its all-time high again by that time, miners’ demand for them will substantially decrease.


The StormGain Analytical Group

523

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 13, 2021, 11:10:24 AM »

Bitcoin or Gold: 571,000% or -5.5%?

Bitcoin has proven to be a more profitable investment than gold.

Gold loses to Bitcoin in the 1-year and 10-year ranges.

While some are debating whether investments in bitcoin and gold can be compared, the maths gives a clear answer that doesn't favour the precious metal. The 10-year yield of gold has gone into the red while investments in Bitcoin have reached a mind-boggling 571,000%.



Back in 2017, a troy ounce of gold could get you 1 digital coin. Since then, the price of gold has fallen to be 25 times less than that of Bitcoin. Gold has always been viewed as a hedge against inflation, so it's even more surprising to see it fall to a four-year low four days before the United States releases its inflation report.



Inflation is at its highest level in the past ten years. The Federal Reserve is starting to curb its bond-buying programme in Q4 and won't hike interest rates before 2023. Peter Schiff, a key proponent of gold, believes that traders are wrong to sell it. The Fed won't be able to cope with inflation in the next few years, and Bitcoin shouldn't be perceived as digital gold.

The comparison of gold to Bitcoin looks dubious: many investment tycoons, such as Jamie Dimon of J.P. Morgan and David Solomon of Goldman Sachs, criticise cryptocurrency while still creating services to invest in and trade it. In early 2021, JPM analysts predicted that Bitcoin would drive out gold as a store of value and assessed its price in the long term at $146,000.



Is Bitcoin really becoming an alternative hedge against inflation instead of gold? Today, the US CPI is being released today: if demand is still above market expectations and Bitcoin keeps growing on this news, the trend will receive another confirmation.

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The StormGain Analytic Team

524

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 12, 2021, 11:30:43 AM »

$1.5 Billion worth of ethereum to be burned by year’s end

On 5 August, the London hard fork took place and launched a deflationary mechanism for Ethereum. In it, the base payment for processing transactions will now be burned, and miners only get a ‘tip’ for mining a block. Around one-third of the newly mined ETH will be burned.



In general, about 2.5 ETH get burned every minute, which, at the current pace and the price of the altcoin, will lead to $1.5 billion worth of the asset being taken out of circulation by the end of the year and 0.4% from its entire capitalisation. This is expected to act as a deflationary mechanism that will lead to an increase in price due to reduced supply. The network’s upgrade has already caused a 13% price spike, although many envision Ethereum reaching $4000 – $5000 by the end of the year.



Despite the storm in the Chinese market, investments in the cryptocurrency market are at their peak. For example, in the first half of 2021, world venture capital investment funds constituted $288 billion, 95% higher than in the same period in 2020. The biggest interest is with the projects linked to NFTs and DeFi services, most of which have been built using Ethereum smart contracts. Because of that, the share among all cryptocurrencies has grown from 8% to 20% in six months.



But not everything is working according to plan. Despite the deflationary mechanism, the hard fork was meant to lower the fee size by abandoning the auction model. Despite the relatively small ‘tip’ size, the cumulative fee size has continued to grow.



High fees hinder the attraction of new investments and diminish interest in Ethereum, but everything is expected to change with the coming of Proof-of-Stake, which is expected to launch in December 2021. The new algorithm will end mining, increase operation speed and decrease transaction costs. The nearing transition that many are anticipating, plus the deflationary mechanism, could be a catalyst for Ethereum’s price growth for the rest of the year.


The StormGain Analytical Group

525

Crypto-related Sites / Re: StormGain is a crypto trading platform for everyone.

« on: August 10, 2021, 04:13:36 PM »

Should you invest in Dogecoin’s copycat?

The popular meme cryptocurrency Dogecoin has increased in price 2,000-fold since it launched. It currently ranks 8th among cryptocurrencies by market capitalisation, coming in at $26 billion. This success was the reason for a wave of copycats, and Elon Musk — called “the Dogefather” by his admirers — played an important role in their surge in popularity.



In 2013, Jackson Palmer and Billy Marcus launched Dogecoin as a joke and named it so that no one would take it seriously. But users loved it, and the coin quickly amassed a vibrant community. In 2014, they used Dogecoin to raise funds for charity events, after which the coin became really popular, and its price started a meteoric rise.

More than once, Elon Musk declared his love for the community on Twitter, and the cryptocurrency’s price jumped after every tweet.



Dogecoin’s success sparked many copycats, with the website news.bitcoin.com finding 30 of them as of 4 August, though there are, in fact, more.



Contrary to Dogecoin, a decentralised coin supported by miners’ operations, the copycats’ issuance is in the hands of individuals primarily chasing material wealth. For some reason, Elon Musk pumps them, too, every now and again, causing serious price movements for these low-liquidity assets. At the beginning of July, he wrote the inscrutable “BabyDoge, doo, doo, doo…”, which was followed by Baby Doge Coin rising threefold. Less than two weeks later, he made a DaddyDoge shout-out for his audience: in one day, that coin’s price rose ten times, and its daily volume increased from $300,000 to $15,000,000.

But not all individuals support the Dogecoin copycats. Searching for acknowledgement, Shiba Inu’s founders gifted half of their issued tokens to Vitalik Buterin, over $7 billion at the time. He sent $1 billion to an Indian anti-COVID fund and simply burnt the rest, asking the community not to bother him with such gifts. Following the news, the token’s price plummeted down.

However, this is typical of such copycats: once a high-visibility person mentions them, their price increase several-dozen-fold but doesn’t stay there. So, if you want to have a laugh along with the others and invest in a meme cryptocurrency, Dogecoin is still the best bet.


The StormGain Analytics Group