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Crypto Firm Grayscale Sees Notable Institutional Inflows in Q2

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One of the common critiques that cynics use to bash the Bitcoin and cryptocurrency space is that this whole market is retail-driven. In 2017, this may have been the case. Then, Wall Street was still in the midst of learning about Bitcoin and its ilk and thus made no announcements on the matter.

For some reason, skeptics of this industry have taken this narrative and applied it to 2019. But, Nasdaq, CBOE, CME, New York Stock Exchange, TD Ameritrade, JP Morgan, Ernst & Young, and countless other big names in finance have launched or are working on cryptocurrency products.

And most importantly, a report from industry investment firm Grayscale suggests that institutions continue to siphon fair amounts of capital into this space.

Grayscale’s Crypto Fund Inflows “Dominated” by Hedge Funds

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Just like other investors, Grayscale’s clients have also been subject to the fear of missing out. As revealed in the firm’s latest Digital Asset Investment Report for Q2, it secured over $84.8 million in investment during the last quarter, marking the strongest inflows since the true start of the bear market in Q2 of 2018.

Per the report, much of the capital that Grayscale received in Q2 was allocated to its Bitcoin Trust, the firm’s flagship vehicle that trades on American over-the-counter markets. This may be one of the reasons why Bitcoin dominance has rallied in this uptrend, not declined as it did in early-2018. What’s also interesting is that a purported 84% of the $84.8 million inflow was sourced from institutional players, mainly “hedge funds”.

Bitcoin Dominance Rally a Clear Sign of Institutions

This seemingly confirms a report from FN London, which stated that Bitcoin’s rally from $3,150 to over $10,000 was supported by funds, not retail investors.

Fund managers and cryptocurrency executives speaking to the outlet explained that the rapid growth in Bitcoin dominance, which is up to 66% from 33% at the

peak of 2018’s mania, is the perfect indicator of renewed institutional investment. Jamie Farquhar, a portfolio manager at NKB Group, said:

“My view of the recent rise in Bitcoin dominance is that much of this move was driven by institutional buyers. Macro managers and high net worth individuals are generally, in my experience, focused almost entirely on BTC.”

In other words, Bitcoin is effectively the favorite cryptocurrency for institutions.

Fidelity Investments’ involvement in this industry corroborates this. For years now, the Boston-based financial services giant has been laser-focused on Bitcoin, with reports revealing the company has been mining BTC for years. Aside from a mining operation, the company also has custodial services and a trade execution desk for Bitcoin, and Bitcoin only.

You can see a similar trend with the cryptocurrency-focused financial vehicles already on the market, or those that are looking to come to market. Look no further than the incessant stream of crypto-backed exchange-traded fund applications. Notice how nearly all of them are 100% Bitcoin, save for a few outliers such as Crypto Crescent’s Bitcoin and Ethereum fund announced earlier this month.

So again, the fact that Bitcoin dominance is shooting higher, even as some altcoin projects have begun to deliver impressive products, only gives credence to the “institutions are here” narrative

Binance CEO Begs to Differ

What’s weird is that Changpeng “CZ” Zhao, the chief executive of Binance, noted that the so-called “institutional herd” is not as present as some may say.

Speaking to Bloomberg, the Chinese-Canadian businessman suggested that Bitcoin’s move to $10,000 and beyond wasn’t mainly catalyzed by your average institutional player.

Instead, Zhao notes that it’s been a combination of retail and institutional investment. Backing this quip, the CZ cited data from Binance, claiming that 60% of all trading volume on Binance is a result of retail players — about the same percentage as it was last year.

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Davos Needs to Wake Up to the Ills of Centralization

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This is part of a series of op-eds previewing the World Economic Forum in Davos, Switzerland. CoinDesk will be on the ground in Davos from Jan. 20–24 chronicling all things crypto at the annual gathering of the world’s economic and political elite. Follow along by subscribing to our pop-up newsletter, CoinDesk Confidential: Davos.

Michael J. Casey is the chief content officer of CoinDesk. The opinions here are his own.

As the world’s most influential and self-entitled gather in Davos, Switzerland, for next week’s World Economic Forum, a predictable set of problems are on their minds: climate change, political polarization, trade tensions and cyber-attacks top their list of worries, according to the WEF’s just-released Global Risks Survey.

Those are weighty issues. But if we look at them through the decentralization mindset encouraged by cryptocurrencies and blockchain technology, it’s hard not to conclude that elephants in rooms are being overlooked. It’s with those issues, the ones not being talked about, where the real important stuff lies.

The disintermediating, fragmenting and decentralizing impact of the internet has made the 21st century’s political and economic structure profoundly different from the previous one. But the Baby Boomers who run our governments and companies still tend to apply 20th century assumptions about centralized money and power. They fail to see how our outdated political and economic institutions are out of touch with this new reality, and how that explains society’s ever-waning trust in them. It’s a myopia that also means they often fail to recognize, much less understand, the alternative decentralized models quietly emerging from the developers building cryptocurrency, blockchain and digital identity technologies.

So, as I head to Davos with my CoinDesk colleagues for a week of reporting and speaking engagements, I want to contemplate some of the issues “Davos Man” might be missing.

It’s worth remembering the people for whom these issues most matter are not those cocktail-sipping elites but regular Joes and Joans. This year may well mark the most divisive U.S. election in decades. If our bickering leaders aren’t focused on these big themes, where does that leave us in four years’ time? We need these issues on the ballot.

China’s digital yuan

China is expected to launch a digital currency sometime this year. The question not being asked enough is: As this project grows – and likely many others from other countries and companies – what will it mean for the dollar-centric global economy and its multitudinous stakeholders?

How will digital fiat currencies impact global trade and capital flows? Do they pose a competitive threat to the dollar and, by extension, to U.S. economic power? What would such a transformation mean for how the international community tackles the big-ticket issues Davos elites worry about: petrodollar investments in carbon-rich assets, for example, or global trade tensions?

The digital yuan might seem like a superficial change, akin to a more advanced banknote or a state-run version of a mobile banking or payments app. But while China’s centrally managed approach to digital-currency technology is in some respects the antithesis of the decentralized model behind bitcoin, it is nonetheless a radical change.

Two things matter: One, a digital fiat currency will circulate without banks managing the flow and, two, it is programmable, which makes it much more powerful than analog currency. Marc Andreessen says “software is eating the world.” Money-as-software might just devour it.

A digital currency will enable the Chinese government to directly manage and monitor its users’ spending patterns. Putting aside the terrifying surveillance prospects behind this “panopticon” vision, this information-gathering power will greatly aid China in its international aspirations. Its economic response machine will be run by a far superior data-analytics system than anything employed by any other country.

A “programmable” yuan will provide the missing payment component that hundreds of Chinese blockchain and smart-contract projects need. It will enable autonomous machines, micropayment infrastructure management systems, smart cities and other ideas the West will struggle to keep up with.

As I’ve argued elsewhere, currency programmability, when interoperable with other countries’ fiat digital currencies, could also enable Chinese companies and their foreign partners to do a direct runaround of the dollar-based trade system.

Currently, the yuan occupies an immaterial amount of cross-border trade and reserve asset holdings. But as this technology poses alternatives to the dollar and if China aggressively inserts its version into investment projects in Africa, for example, or into its 65-country Belt and Road Initiative, its international usage could grow rapidly.

Recently, a Harvard-MIT simulation

game found that digital fiat currencies could quash America’s capacity to impose sanctions on rogue states.  But the issue goes wider: If non-dollar digital fiat lets anyone bypass the intermediating U.S. banks that U.S. regulators lean on to catch international criminals, why will anyone use banks for cross-border money movements at all? Where does that leave Wall Street, that engine of American economic power?

Some people, including former U.S. Commodity Futures Trading Commission Chairman Chris Giancarlo, have recognized this threat to U.S. economic leadership. But Chinese digital currency dominance does not appear to be on many leaders’ radars – it’s certainly not featuring in the Democratic primary presidential debates.

So, come on, Davos, let’s talk about it.

Digital privacy

To be fair, privacy in the internet age, defined as the threat to our online personal data, will probably get a decent examination at Davos 2020. 

The Cambridge Analytica story, Edward Snowden’s unveiling of the NSA’s citizen-snooping system and the growing awareness that Silicon Valley behemoths such as Google are managing our lives, has put this issue front and center. It deserves to be.

The problem is the structural factors behind this dangerous surveillance capitalism system are poorly understood.

Most political reactions to the drumbeat of stories about data abuse by Facebook and Google amount to leaders tut-tutting at these companies, occasionally fining them and demanding they just stop being bad. Few realize that, essentially, they can’t stop being bad. These centralized entities, with their closed, non-interoperable “walled gardens” of data, have built their entire business models – and therefore their shareholders’ profit expectations – on surreptitiously and systematically extracting information about human lives.

The other problem is the ad-hoc efforts to change these businesses’ behavior clashes with other demands placed upon them.

Witness the contradiction in lawmakers’ critiques of the Facebook-founded Libra digital currency project. On the one hand, they demanded it protect users’ privacy but on the other they demanded it maintain all the monitoring necessary to prevent money laundering. Or look at how Facebook’s critics simultaneously demand its social media platform remove disturbing hate-speech content and that it also cease arbitrarily censoring and “de-platforming” users.  Without understanding the problem, people can’t see how holding both of these positions is untenable. 

There are two approaches to this issue: a political one, such as an antitrust order to constrain the internet giants, or a technological one, in which social media platforms move to a decentralized structure of user control (one potentially where zero-knowledge proofs or other advanced forms of encryption enable verification without revealing identities).

Let’s discuss these options, Davos.

Disinformation

You thought fake news was a problem. You ain’t seen nothing yet.

As Arif Khan writes in this pre-Davos opener for CoinDesk, fake news is going on steroids.

With people such as Jordan Peele using clever stunts to highlight the problem, “deepfakes” – in which image manipulation technology is making it increasingly difficult for people to detect reality-altering changes to a digital video or image – are starting to get people’s attention.

Yet, the full extent of how much society depends on the glue of trustworthy information is greatly underappreciated. The foundation of our democracy, of our legal system, of our business relationships and of everything else in between is at stake when the truth cannot be verified.

How do we get ahead of this when artificial intelligence is progressing so rapidly and when information is no longer delivered to us through central filters?

A solution will require a combination of tools like AI detection software, watermarking and blockchain-based tracking of digital media provenance.

It also requires stakeholders at technology companies, media organizations and government bodies to jointly establish standards for those technologies so we can all agree on how we’ll re-establish the integrity of the information we rely on.

This is an urgent problem, one tailor-made for a mountain-town gathering of money and power.

Let’s look outside the bubble. Let’s become inquisitive. Let’s abandon rigid, outdated ways of thinking. Let’s say goodbye to know-it-all Davos Man, because clearly he doesn’t.

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EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – 16/01/20

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EOS

EOS fell by 0.67% on Wednesday. Following a 22.09% rally from Tuesday, EOS ended the day at $3.7647.

A mixed start to the day saw EOS strike an early morning intraday high $3.9400 before hitting reverse.

Falling short of the first major resistance level at $4.1995, EOS fell to a mid-morning intraday low $3.5687.

Steering clear of the first major support level at $3.2453, EOS recovered to $3.8 levels before falling back to $3.6 levels.

Finding support late, however, EOS moved back through to $3.7 levels to limit the loss on the day.

At the time of writing, EOS was down by 4.79% to $3.5845. A bearish start to the day saw EOS fall from an early morning high $3.7961 to a low $3.5216.

Steering clear of the major resistance levels, EOS fell through the first major support level at $3.5756.

For the day ahead

EOS would need to move back through to $3.76 levels to support a run at the first major resistance level at $3.9469.

Support from the broader market would be needed for EOS to move back through this morning’s high $3.7961.

Barring another broad-based crypto rebound, however, EOS would likely come up short of the morning high.

In the event of a rebound, Wednesday’s high $3.94 and first major resistance level would likely cap any upside.

Failure to move back through to $3.76 levels would see EOS struggle throughout the day.

A fall back through the first major support level at $3.5756 would bring sub-$3.5 levels into play before any recovery.

Barring an extended sell-off, however, EOS should steer clear of the second major support level at $3.3865.

Looking at the Technical Indicators

Major Support Level: $3.5756

Major Resistance Level: $3.9469

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum rose by 0.33% on Wednesday. Following on from a 15.51% rally on Tuesday, Ethereum ended the day at $166.29.

A mixed start to the day saw Ethereum strike an early morning intraday high $172.18 before hitting reverse. Falling short of the first major resistance level at $176.56, Ethereum fell to a mid-morning intraday low $159.13.

Steering clear of the first major resistance level at $149.20, Ethereum recovered to $168 levels before a fall back to an afternoon low $160.35.

Finding late support, however, Ethereum moved back through to $166 levels and into the green.

At the time of writing, Ethereum was down by 3.37% to $160.68. A bearish start to the day saw Ethereum slide from an early morning high $167.28 to a low $158.17.

Steering

clear of the major resistance levels, Ethereum fell through the first major support level at $159.55.

Story continues

For the day ahead

Ethereum would need to move back through to $166 levels to support a run at the first major resistance level at $172.60.

Support from the broader market would be needed for Ethereum to break through the morning high $167.28.

Barring a broad-based crypto rebound, however, resistance at $170 would likely cap any upside.

Failure to move back through to $166 levels could see Ethereum spend the day in the red.

A fall back through the first major support level at $159.55 would bring the second major support level at $152.82 into play.

Barring an extended crypto sell-off, however, Ethereum should avoid a return to the morning low $158.17.

Looking at the Technical Indicators

Major Support Level: $159.55

Major Resistance Level: $172.60

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP fell by 0.06% on Wednesday. Following a 10.68% rally from Tuesday, Ripple’s XRP ended the day at $0.23360.

Tracking the broader market, Ripple’s XRP fell from an early morning high $0.24233 to a mid-morning intraday low $0.22546.

Steering clear of the major support and resistance levels, Ripple’s XRP bounced back to an early afternoon intraday high $0.24285.

Falling short of the first major resistance level at $0.2484, Ripple’s XRP fell back to $0.23 levels to end the day in the red.

At the time of writing, Ripple’s XRP was down by 4.41% to $0.2233. A bearish start to the day saw Ripple’s XRP fall from an early morning high $0.23492 to a low $0.22120.

Steering clear of the major resistance levels, Ripple’s XRP fell through the first major support level at $0.2251.

For the day ahead

Ripple’s XRP will need to move back through to $0.2340 levels to support a run at the first major resistance level at $0.2425.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.23 levels.

Barring a broad-based crypto rebound, resistance at $0.23 would likely leave Ripple’s XRP short of the first major resistance level at $0.2425.

In the event of a rebound, Wednesday’s high $0.24285 and first major resistance level would likely cap any upside.

Failure to move back through to $0.23 levels could see Ripple’s XRP fall further back.

A fall back through the first major support level at $0.2251 would bring sub-$0.22 levels into play.

Barring a crypto meltdown, however, Ripple’s XRP should steer of the second major support level at $0.2166

Looking at the Technical Indicators

Major Support Level: $0.2251

Major Resistance Level: $0.2425

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Thanks, Bob

This article was originally posted on FX Empire

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TOP 3 Price Predictions: BTC, ETH, XRP — Is Long-Term Bull Run Approved?

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The cryptocurrency market keeps setting new heights in 2020. If, earlier, Bitcoin grew against the decline of altcoins, now, the situation is completely different. All top 10 coins are in the green zone and some crypto, such as Bitcoin Cash and Bitcoin SV, are showing even better price dynamics.

Top 10 coins by Coinstats

Top 10 coins by Coinstats

Keep an eye on the key data of Bitcoin, Ethereum, and XRP.

NameTickerMarket CapPrice Volume (24h)Change (24h)
BitcoinBTC$155 548 251 461$8 565,47$30 206 826 4292,25%
EthereumETH$16 603 686 984$151,95$10 556 380 4425,24%
XRPXRP$9 603 283 325$0,221446$1 710 364 9454,74%

BTC/USD 
Our weekly price prediction has come true as the price of Bitcoin has surpassed the $8,400 mark. 

On the daily time frame, one can see how the pulse broke through the upper border of the descending blue channel. In this channel, the price of Bitcoin has been declining for six months, after the annual maximum of 2019, which was established on June 26, at around $14,000.

BTC/USD chart by TradingView

BTC/USD chart by TradingView

Today, BTC is likely to re-test the resistance of $8,800. If, after a rollback from the maximum zone, the upper border of the channel supports the pair, then traders will witness a price exit from the semi-annual downtrend.MUST READUpdated: Bitcoin (BTC) Price Blasts Past $8,500 While Bitcoin SV (BSV), Dash (DASH), and Zcash (ZEC) Skyrocket More Than 20 Percent –

If the price returns to the

channel, then it is too early to talk about a trend change.

Bitcoin is trading at $8,490 at press time.

ETH/USD

Yesterday, the price of Ethereum stayed in the area of the hourly moving average EMA55. At the end of the day, there was a weak attempt by buyers to overcome the resistance of $144, but it ended with a pullback to the level of average prices.

ETH/USD chart by TradingView

ETH/USD chart by TradingView

Tonight, a strong bullish impulse knocked the price out of its sideways trend and broke the maximum of last week at around $150. During the day, Ethereum could reach $152; however, this is unlikely as the coin is already overbought. In this regard, the more likely scenario is a correction to $148. 

Ethereum is trading at $151.97 at press time.

XRP/USD

Yesterday, buyers were able to gain a foothold above the average price level and stayed there until the end of the day. Tonight, a bullish impulse broke through the resistance of $0.215 and set a maximum of around $0.2250. The price of XRP has not yet broke the annual maximum, which it already managed to set on January 7 in the area of $0.226.

XRP/USD chart by TradingView

XRP/USD chart by TradingView

In terms of the short-term price projection, XRP might face a rollback as one of the last bullish candles was closed with a long wick. Respectively, the closest stop is the support zone at $0.22.

XRP is trading at $0.2212 at press time.

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