Category Archives: Bitcoin

Bitcoin (BTC) addresses holding at least 1,000 BTC, the so-called whales, have started accumulating more tokens during the recent market recovery. As of Feb. 10, the total supply in these addresses was 8.096 million BTC versus 7.95 million on Jan. 24, according to data from Coin Metrics.

The buying sentiment among the richest crypto investors picked momentum during Bitcoins recovery in the past two weeks as BTC rebounded from its 2022 low of $33,000 on Jan. 24 to around $43,500 on Feb. 11.

Small Bitcoin investors, addresses that hold less than 1 BTC, so-called fishes, also joined the accumulation spree during the recent Bitcoin price rebound.

Meanwhile, data resource Ecoinometrics shows the Coin Metrics data in the form of clusters, showing a synchronous accumulation behavior among Bitcoin whales and fishes.

Interestingly, the clusters looked the same as they did in the days leading up to BTCs record high of $69,000 in November 2021.

Once more this cycle, this rebound in price correlates pretty well with both the small fish and the whales addresses buying simultaneously for an extended period of time, wrote Nick, an analyst at Ecoinometrics, in anotepublished on Fed. 7, adding:

A report published by CoinShares this week also showed a rise in inflow across crypto funds last week. Notably, the capital injections into these funds have quadrupled to $85 billion, with $71 million flowing into Bitcoin-focused investment products, suggesting renewed institutional interest is also buoying BTCs price recovery.

Nick suggested that Bitcoin has enough room to grow its valuation in the coming months, citing a so-called aggregated risk score, derived from four parameters: risk of overextended market, risk of a low-demand and high-supply situation, risk of holders taking profits, and risk of increased selling pressure.

Related:Bitcoin rejects sell-off as 7.5% US inflation fails to keep BTC down for long

The outcome is represented in the colors red and blue suggesting a hot and cool market, respectively. The hotter the market, the higher the selling pressure.

Right now it is just warming up, the Ecoinometrics analyst said, adding that in theory, there is no obstacle to the price rising much higher except for the lack of momentum.

Meanwhile, on-chain data tracking planform Whalemap projected $46,200$49,000 as Bitcoins current resistance range, citing higher trading activity inside the price area in the past.

Similarly, the firm noted that the $41,400$42,400 range is now acting as support, as shown in the chart below.

Closest on-chain resistance according to whale accumulations is only at ~$47,000, it noted.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoins 30% recovery in two weeks has BTC whales back in accumulation mode - Cointelegraph

Bitcoiners are optimists.

When Satoshi Nakamoto wrote and released the first code that began the Bitcoin experiment, it was an inherently optimistic act in response to the economic and monetary turbulence referenced in the genesis block.

Satoshi was a cypherpunk, a group which envisioned shaping a better future through deliberate technological innovation, particularly in regards to software.

Cypherpunks write code.

By leveraging software, a single individual could have an outsized impact on the world and future societal outcomes. Unfortunately, however, this optimism has more recently been warped beyond recognition and become detached from the focus on actual progressive technical development.

I mean to highlight and push back on this attitude of inevitability, which stands in stark contrast to Bitcoins original practical optimism. Two prominent examples come to mind: PlanBs stock-to-flow (S2F) model and Michael Saylors Bitcoin strategy and rhetoric.

In PlanBs infamous price projection model S2F, the path to bitcoins dominance is charted, assured and deterministic. Sure, the author never claims its absolute precision. After all, all intellectually honest parties will agree volatility is unavoidable in bootstrapping a new monetary system from zero. But the popular attitude around S2F' and all similar models is clear:

Number goes up.

Its not a mystery why. With this idea as a guiding star theres nothing to do but sit around, stack sats with any available cash flow, and wait for the prideful moment you can tell everyone, I told you so. The lure of inevitability is easy, simple and seductive.

While Michael Saylor has been vocally critical of the S2F model, he seems to mirror the same underlying attitude of assumed inevitability. Saylor and his firm, MicroStrategy, are the most famous and aggressive public buyers of bitcoin in the world. MicroStrategy holds more than 124,391 bitcoin, while Saylor has stated he holds 17,732 as of 2020. Yet nearly two years into making their first public foray into Bitcoin, neither Saylor nor MicroStrategy have visibly engaged in any work to enhance the development efforts of Bitcoin or the surrounding software ecosystem to the benefit of that massive investment.

Saylors messaging in interviews is consistent, and to be sure, he does an excellent job of boiling down core concepts to general audiences via apt metaphors. Digital gold is an excellent mental model for describing bitcoins supply cap value to a new audience, one which he leverages liberally. But as the aphorism goes, All models are wrong. Some are useful.

Even the usefulness of the digital gold metaphor, however, quickly collapses beyond a superficial analysis, so allowing it to shape narrative and thinking too seriously quickly becomes counterproductive. This is for the simple reason that bitcoin isnt an inanimate rock or a static element on the periodic table. Its ever-evolving software, one that must continue to be maintained and improved on.

Saylors messaging and active investment strategy betrays the same underlying attitude behind models like S2F: The work behind Bitcoin is done, and success and growth is assured based on its static properties.

Number go up.

The issue with this attitude is simple. The battle is not won and not by a long shot. Suggesting otherwise, worse than creating misleading expectations, actively hampers our efforts to continue improving Bitcoin as a technology today.

How can we when a significant portion of the ecosystem, including its most prominent investor, are happy to stack sats and let a small cadre of open-source developers continue to do the work of actually advancing the Bitcoin protocol?

Some will take issue with this very premise and argue that Bitcoins success is inevitable based on the strength of that technology today. Bitcoins success, however, is not actually an all-or-nothing prospect that we can speak authoritatively about in advance.

Even if we accept the argument that the success of bitcoin as an asset due to its fixed supply and network effect is of high certainty, that does not guarantee the success of Bitcoin as a platform for a full stack, peer-to-peer financial ecosystem.

Its well known that Bitcoins base protocol layer has limited transaction throughput by design. This design choice ensures that the base layer remains as decentralized as possible its most important property. On top of this foundation, new software tools and layers can and are being built which increase the scalability of transaction throughput and other functions.

These solutions present a wide array of differing trade-offs, from relatively simple and purely centralized like Cash App and exchanges to self-custodial and largely decentralized like the Lightning Network. The latter category of solutions are intrinsically more difficult to build, so Bitcoin inevitability and the resultant complacency is simply not compatible with the community wide effort needed to enable these solutions to win out over easier, centralized alternatives.

Failing to correct for this will result in the wider Bitcoin ecosystem suffering from choke points and resilience shortcomings which can and will be easily leveraged by adversarial actors to attack the network and its participants.

Potential future outcomes in this area are nuanced and uncertain, and they can ultimately only be shaped via action. We can choose to ignore this and continue to rest on our laurels, assured in a degree of limited success at best. Or we can choose to continue down the technological rabbit hole of extending self-custodial and P2P solutions to as many people as possible.

The limiting factor for supporting more innovative self-custody and P2P solutions on top of Bitcoin remains in the core protocol itself.

To be clear, Bitcoins core protocol is limited and focused as a deliberate design decision which improves both scalability (unlike much more stateful alternatives like Ethereum) and attack surface. However, its current capabilities are simply not enough to support a full-stack P2P ecosystem. There are dozens of open Bitcoin Improvement Proposals (BIPs), many of them which possess significant conceptual ACKs (meaning agreement with the general goal of the proposal) with work slowly underway or, worse yet, at stages of high maturity simply waiting for adequate review, discussion and motivation to merge. With four years elapsed between the last two significant protocol updates, SegWit and Taproot, theres surely much improvement to be made.

However, complementary to the inevitable success attitude is the inevitable ossification attitude. Protocol ossification refers to when a protocol becomes so widely used that the number and diversity of stakeholders involved makes continued development of the protocol practically impossible, freezing it in place. This is, of course, ultimately an indicator of success, as it speaks to the widespread dominance of that protocol.

However, some will argue that ossification sooner rather than later is actually desirable as a defense against malicious changes to the Bitcoin core protocol, a la SegWit2x. This attitude entirely ignores and greatly increases another exploitable attack vector: stalling and preventing beneficial changes to the protocol which can enable more robust peer-to-peer and self-custodial solutions on subsequent layers. Indeed, after the spectacular failure of SegWit2x, any adversary would likely conclude the stalling strategy to be far more viable.

In understanding that our window for beneficial protocol enhancements may, in fact, be rapidly closing due to the natural process of protocol ossification, and that stalling further development is arguably a much more likely attack vector than pushing through a deliberately malicious change, our urgency to continue extending Bitcoin functionality today should be higher rather than lower. There is certainly no pro-Bitcoin case to hasten ossification now or in the near future, especially in the context of there being many more obviously beneficial changes and extensions to be made. Protocol ossification, like properly understood Bitcoin maximalism, isnt prescriptive but rather descriptive.

It should be noted that the argument here isnt that any shortcuts be taken, or some arbitrarily determined schedule of soft forks be adhered to for the sake of progress.

I do, however, hold that taking another four years to implement a significant extension of the core protocol would be an utter failure for the Bitcoin community. With so many compelling active BIPs and a passionate and active ecosystem of individuals and organizations, there is simply no reason for it.

Community discussion needs to be aggressively focused on shortening the process to develop, vet, debate, improve and activate these proposals safely while we still have the ability to do so. Indeed, after over 5.5 BTC was organically pledged to a bounty in support of finding showstopping bugs in BIP-119 CTV, there does seem to be significant community demand to do just that.

Bitcoin has come a long way in 13 years, and as should be expected, its progress and growth has led to dramatic changes in its reach and community makeup. With this change comes an evolving landscape of discourse and ideas, and the ideas that win out will increasingly be the simplest ones which appeal to the greatest common denominator. It should be no surprise then that digital gold, for all its elegance, has gained such traction. Or that simple price projection models which confirm our most basic biases are tracked and iterated on with such fanfare.

The issue lies not with such ideas existing or even gaining popularity. All models, while flawed, serve their purpose. The purpose of these concepts is to initiate the beginning of a funnel for more mainstream audiences. To provide easily digestible analogies allows newcomers the comfort to begin wading into an immensely deep ocean. This purpose flounders, however, if their own evangelists and the community at large fails to lay the groundwork and impetus to push ever deeper.

As a community, we fail when, in chasing the mainstream, we lose sight of the original spirit in which Bitcoin was created and bootstrapped. We fail when we are so easily seduced by our own clever marketing, and victimized by our own overconfidence, that we lose sight of the core principle which brought about this humble experiment and upon which all else continues to depend on. We can succeed by remembering it.

Cypherpunks write code.

This is a guest post by Ariel Deschapelle. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Against The Inevitability Of Bitcoin - Bitcoin Magazine

Bitcoin surged to new heights in 2021 as companies like Tesla and Mastercard warmed to crypto. But with regulators circling, the currents ahead are likely choppy.

Bitcoin is the talk of the financial world.

The world's largest cryptocurrency started 2020 at $9,000. As time passed, bitcoin's value rose sharply, soaring to an all-time high above $68,000 in November 2021.

Major companies from Tesla to Mastercard have jumped into the market, prompting a rally in bitcoin and other tokens like ethereum and solana.

Bitcoin has matured from a virtual currency used by criminals to an asset that's been embraced by Wall Street firms. Many investors now liken the cryptocurrency to gold, believing it provides a store of value akin to the precious metal.

But as regulators start taking a closer look at crypto and volatility plagues the market, whether bitcoin can continue its stellar run looks increasingly uncertain.

So, what's next for bitcoin? Watch the video above to learn what the future holds in store for the No. 1 crypto.

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How Wall Street learned to love bitcoin - CNBC

Legendary value investor Bill Miller reiterated in a Wednesday interview that holding bitcoin is akin to having insurance against financial catastrophe, echoing comments he made last month as he disclosed that bitcoin comprised half of his fortune.

Miller explained that bitcoin doesnt account for 50% of his portfolio any longer given the digital currencys price decline over the past couple of months. However, he said his allocation to bitcoin still is very big.

It's like an insurance policy, the chairman and chief investment officer of Miller Value Partners said, according to a Markets Insider report.

Insurance policies have no intrinsic value. In fact, you want them to have no intrinsic value. You dont want to have your house burned down, or get in a terrible accident, but you pay for insurance every year in case that happens, he added.

Whether anything has intrinsic value or not is a topic of debate, as some argue all value is subjective to human judgment. However, Millers point converses with the instability of many countries financial systems around the world.

Bitcoin is insurance against financial catastrophe as we see in Lebanon, or in Afghanistan, or many of these other countries where we saw (that) around the time of the pandemic, Miller said.

Afghanistan last year suffered from intense economic instability after a complete U.S. military withdrawal led to the governments collapse. Residents of the Afghan capital, Kabul, hit a brick wall in August as they sought to withdraw money from their bank accounts and flee the country as Taliban fighters took over the city demanding the governments surrender. Bitcoin quickly became a tool for financial freedom in the central Asian country.

Miller, who holds the record for most consecutive years outperforming the S&P 500 between 1991 and 2005, also said in the interview that KPMG Canadas recent bitcoin allocation was a bullish move.

I think you're going to see a lot of adoption among foundations and endowments and institutions this year, and that's going to continue, he said.

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Legendary Investor Bill Millers Bitcoin Position Is Very Big - Bitcoin Magazine

Binance, the worlds largest cryptocurrency exchange by trading volumes, is making a strategic investment in the 104-year old magazine Forbes to improve consumer understanding of cryptocurrencies and blockchain.

Forbes and Magnum Opus Acquisition Limited, a publicly-traded special purpose acquisition company (SPAC), officially announced Thursday securing a $200 million strategic investment from Binance.

Forbes previously announced plans to go public through a business combination with Magnum Opus in August 2021, with the deal expected to close in Q1 of 2022.

Binances strategic investment will be through Binances assumption of subscription agreements representing $200 million of commitments in the $400 million private investment in public equity (PIPE) that was announced along with Forbes intention to go public.

With Binance assuming existing PIPE commitments, the overall size of the PIPE will remain at $400 million, and Binances investment will be according to substantially the same terms as the existing PIPE investors, the announcement reads.

As part of the deal, Binances chief communications officer Patrick Hillmann and head of Binance Labs Bill Chin will join the Forbes board of directors.

According to Forbes CEO Mike Federle, the investment from Binance will help the firm get texperience, network and resources of the worlds leading crypto exchange and one of the worlds most successful blockchain innovators.

Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets, he noted.

Binance founder and CEO Changpeng Zhao emphasized the importance of supporting media in the crypto industry as part of the companys commitment to boost consumer knowledge and adoption of crypto, stating:

A spokesperson for Binance told Cointelegraph that their investment in Forbes "would be the first investment of this kind" in the media industry, adding: "Web2 had a profound impact on the media sector. We believe that Web3 may have an equally important role to play in the future of journalism and publishing.

Related: Meet the top 5 busiest crypto funders of 2021, according to PwC

Binance has apparently been succeeding on its mission to promote knowledge about crypto and Bitcoin so far. In April 2020, Binance acquired CoinMarketCap, the most popular crypto website with 187 million visits as of August 2021. Apart from offering market capitalization charts, the website provides news, updates, and current market leaders. The firm subsequently launched its own crypto education portal, known as CMC Alexandria, in September 2020.

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Binance invests $200M in Forbes to boost consumer knowledge on Bitcoin - Cointelegraph

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"Bitcoin Bottom Line" hosts Steven McClurg and C.J. Wilson opened this latest episode by talking about international bitcoin adoption.

Wilson asked McClurg if he believes the criticism that leaders of countries face will diminish after more countries begin to adopt Bitcoin. McClurg does not anticipate this to change and he recognized that a lot of people that come into power and want to make positive changes in their country have a difficult time doing it all at once. He includes an example of Saudi Arabia taking small strides to improve its country, but it cannot change all at once.

McClurg stated, Changing your entire currency system to bitcoin with the hope of financial freedom is one step in the direction to overall freedom.

Wilson said that we must look at these situations on a broad, long-term scale; have a low time preference, and be patient. Like the government, it can be difficult for companies to change quickly, especially if they are public.

Many people have been moving to or visiting El Salvador recently. The hosts believe that this is due to its Bitcoin adoption. Over the past two years, many people have been moving to places with like-minded people and fewer taxes.

Texas government officials have become pro Bitcoin recently. Texas is looking to attract the mining industry and has great potential because it is an oil- and gas-energy-focused state. Wilson noted surprise that many other states have not followed in Texas and Wyomings footsteps of adopting Bitcoin, especially with their natural resources.

McClurg stated that Bitcoin is a movement for the people, and it has been happening organically. Politicians are increasingly becoming pro-bitcoin. Wilson hopes that Bitcoin adoption will become a non-story because it will be successful and ubiquitous. McClurg predicted that in two to four years, political candidates who are not pro-bitcoin will be compared to flat earthers.

McClurg and Wilson ended the episode by looking at the nuance of crypto to say that we do not have to make generalizations. We can take a unique look at every leader, state, city and country to rank them internally.

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What Is The Future Of International Bitcoin Adoption? - Bitcoin Magazine

Today, there are more than 12,000 coins and even more data points in the crypto universe. The cryptocurrency ecosystem is showing no signs of slowing down.

How does it compare to the stock market?

There are more cryptocurrencies than stocks in the US right now," says Matthew Sigel, Head of Digital Assets Research, at VanEck. "But investors don't have a comprehensive framework for understanding the drivers of the returns within that cryptocurrency market."

Sigel sat down with Action Alerts Plus Portfolio co-manager, Bob Lang, as part of our FREE webinar, Beyond Bitcoin and Metaverse: Crypto Categories Investors Should Know.

Editors Note: The webinar was recorded on January 28, 2021.

Topics include crypto's Back to the Future moment, key crypto categories explained,DeFi vs. traditional finance, monetizing the Metaverse, and so much more.Beyond Bitcoin and Metaverse: Crypto Categories Investors Should Know, is brought to you by our partners at VanEck.

[00:00:05.16] Bob Lang: The cryptocurrency world is evolving fast. There are now over 12,000 coins in the crypto ecosystem. And with so many coins and even more data points, a rigorous classification system is becoming increasingly essential for investors to structure sound investment decisions. So what are they, and which digital asset categories offer the biggest opportunities and risks short term and long term?

[00:00:28.86] Hello, and welcome to Beyond Bitcoin and Metaverse-- Crypto Categories Investors Should Know. I'm Bob Lang. Joining us today is a leading expert who spends his day in the crypto universe-- Matthew Sigel, head of digital assets research at VanEck. Thanks for joining us today. So let's get right to it.

[00:00:46.99] First, Matthew, what is digital asset categorization, and why is it so important to sort out the crypto world in this way?

[00:00:54.27] Matthew Sigel: Traditional investors have been trying to measure performance versus benchmarks for a long time. And one of the tools that help them achieve that is by breaking down the equity markets into sectors like technology, financials, consumer staples, telecom, et cetera. And that not only gives individual investors a chance to express a particular view on the sector, but it also gives diversified portfolio managers better information sources so that they can understand the drivers of their performance and make adjustments to reflect their views on sectors or to understand what stocks are driving the performance of an individual sector.

[00:01:40.53] So it's much the same in the case of cryptocurrencies. There are more cryptocurrencies than stocks in the US right now. But investors don't have a comprehensive framework for understanding the drivers of the returns within that cryptocurrency market without this type of categorization framework that we've developed. So we've tried to introduce eight different categories that can be used by traditional investors or crypto investors, much the same way that folks use the GICS Level 1 Index from S&P. And those sectors are now trackable on Bloomberg. And we think they give a lot of information to investors to understand the performance drivers within this vast crypto ecosystem.

[00:02:28.71] Bob Lang: Well, these are distinct non-overlapping categories that form the building blocks for new a crypto classification scheme at VanEck. Can you tell us more about how these benefit investors?

[00:02:39.18] Matthew Sigel: These eight cryptocurrency categories that we've developed at VanEck are distinct, non-overlapping sectors that will give investors a better window into what's working and what's not in the broader cryptocurrency market. So we think that investors are going to use these categories to express their views on a specific sector within cryptocurrencies and also to better understand how their diversified portfolio is acting by understanding the differences between how these end markets are acting.

[00:03:16.59] Bob Lang: Are there competing views on the categorization of crypto, and do you see, Matthew, these categories continuing to evolve?

[00:03:24.48] Matthew Sigel: One of the challenges that we faced when deciding on the methodology for this type of taxonomy was whether to make the categories mutually exclusive. That is, many of our competitors have introduced more of a basket-type approach, so collections of cryptocurrencies form an investable basket. But oftentimes, one cryptocurrency will fit into more than one basket. And that makes it a little more challenging to understand the broader performance dynamics within the space. You might not get a full view of what's happening in a category if the coins that comprise it are also part of another category.

[00:04:09.55] So I'd say that was one of the big decisions that we had to make, which was making these categories mutually exclusive. Another challenge has to do with just how fast-moving and flexible this space is. Many of these coins are open-source software projects whose final destination is still unknown. And it's possible that the category that they're in now may not be the one that they're in tomorrow.

[00:04:37.09] So this exercise is a recurring one, requires a lot of maintenance, continual upkeep. And we should expect the categories to change over time and the constituents also to change. And investors can understand those changes by going to the website, the MVIS website, or the VanEck website, where the index categories are released monthly.

[00:05:01.02] Bob Lang: Would you say, in effect, that these indices with common characteristics and value in measuring their performance as a group, and are all indices investable?

[00:05:10.84] Matthew Sigel:: On top of this crypto classification system that we've unveiled, we've released eight separate indices. So we've chosen the four most investable categories. And then for those categories, we've launched two indices for each of them, so a broad index that captures all the coins in that category, over $250 million market cap, and then a leaders index, which is the same category coins but a larger market cap requirement, $1 billion and up. And then we've introduced an invest-ability component. So a coin cannot make it into the leaders' category unless it is traded on one of the top-tier cryptocurrency exchanges and custodied by one of the top cryptocurrency custodians.

[00:05:55.34] And so in that way, the leaders' indices represent a true investable benchmark that investors can use to measure their own performance and also to measure the performance of the categories versus each other. That's a very helpful tool for investors in this space who have not had such a taxonomy in the past.

[00:06:13.75] These categories comprise coins that have common characteristics and share common values. So we see value in measuring them as a group and then measuring the groups versus each other to give investors an idea of how these baskets of coins with common characteristics are performing in the marketplace.

[00:06:32.96] Bob Lang: So do you see any potential for new categories and classifications as the crypto universe expands?

[00:06:38.23] Matthew Sigel: We started with these eight categories that represent something akin to a GICS Level 1, so the broadest cut of the ecosystem. We're in the process of working on it and will soon release a level 2 categorization. So each of the eight categories has between three to five subcategories, a further refinement of that system of common use, common values, creating groups of coins that investors can measure against each other.

[00:07:13.49] Bob Lang: Well, let's break down some of these categories for investors. The Street's crypto editor calls DeFi the next big thing and a real game-changer. Do you agree with that, and how so?

[00:07:23.83] MATTHEW SIGEL: Decentralized finance protocols, DeFi, are essentially software programs that run on top of another cryptocurrency. And they use a combination of that protocol's assets as a means to automate a financial service. So DeFi protocols connect lenders and borrowers, buyers and sellers without requiring a centralized institution.

[00:07:48.76] DeFi protocols comprise an overlapping ecosystem of decentralized applications and smart contracts. Most operate on Ethereum, which is the largest open-source blockchain smart contract platform. But many other blockchains now support decentralized finance applications.

[00:08:06.88] Bob Lang: Matthew, which tokens top the MVIS DeFi Leaders Index? And with such complicated earnings models, how are the leaders determined?

[00:08:17.02] Matthew Sigel: The MVIS Decentralized Finance Index comprises coins such as Uniswap, Aave, and Maker. These are the largest decentralized exchanges. And they create value by hosting a marketplace where buyers and sellers can meet to exchange cryptocurrencies and by taking a small commission of every trade. The complicating factor is that those commissions are denominated in the native token. So you pay Uniswap in Uniswap coins. And that represents a stream of earnings that can be valued by market participants using a discounted cash flow analysis or price to sales.

[00:09:00.07] Bob Lang:: Let's talk about DeFi protocols, which can be divided into several subcategories. What are they, and can you give us some examples of those?

[00:09:09.28] MATTHEW SIGEL: DeFi protocols include subcategories such as decentralized exchanges like Uniswap, lending and borrowing platforms like Compound and Aave, derivatives exchanges like Synthetix, asset managers like Mirror or Numeraire, insurance protocols like Nexus, and then protocols that aggregate all of those services together like Yearn Finance. It's really a fast-moving sector with a lot of changes. And we hope that this classification and subcategory model will give investors a better idea of what types of coins are working and what types of coins are underperforming. And that'll help capital get allocated more efficiently in the marketplace.

[00:09:53.80] Bob Lang:: What are some of the unresolved challenges that are facing DeFi? Some say this is a chance to rebuild finance from the ground up. Would you agree with that?

[00:10:02.86] Matthew Sigel: DeFi platforms enable buyers and sellers to find each other online without a centralized exchange or intermediary taking a large commission. And because it's a cheaper and faster and less censored way to transact, decentralized finance has been taking a lot of market share from both centralized crypto exchanges and the broader financial system at large.

[00:10:29.64] Now, there are a lot of uncertainties about the space still-- regulatory uncertainty, technological uncertainty. But the underlying innovation-- faster, cheaper, more frictionless value transfer across the world, 365, 24/7-- that's an innovation, a technological innovation that we don't think is going to slow down anytime soon.

[00:10:51.51] Bob Lang: Huge advantage to the currency. Many digital currency investors, Matthew, are familiar with exchanges. We use them, of course, for our digital currency transactions. Can you walk us through this category for the viewers?

[00:11:06.89] Matthew Sigel: The exchange category includes the tokens of centralized cryptocurrency exchanges such as FTX and Binance, who, in many cases, have chosen to list their entities as cryptocurrencies that trade on a cryptocurrency exchange rather than going public in an IPO on a traditional securities exchange. Many times, the underlying model is similar. The exchange will collect profits that it derives from charging its users commissions.

[00:11:40.26] And those profits will be denominated in the native token. In the case of FTX, that's the FTT token. So the exchange category includes those centralized cryptocurrency exchanges like Coinbase who, instead of listing in an IPO or raising capital in the traditional private markets, instead fund their equity via these crypto tokens which trade on crypto exchanges.

[00:12:08.19] Bob Lang: Hackers, Matthew, just hit the crypto exchange Crypto.com, siphoning some $35 million. What would you say are the biggest vulnerabilities? And should investors brace for more theft of this size if not greater?

[00:12:20.82] Matthew Sigel: As activity grows in cryptocurrency, and indeed in any industry, there are always opportunities and risks for technological mistakes and hacking. We've seen that in many industries. In fact, the proportion of cryptocurrency illicit activity fell in 2021 versus 2020. So we're optimistic that increased analytics and tools in the industry are helping regulators and exchanges better monitor the flow of funds in the industry and more quickly apprehend the wrongdoers.

[00:12:56.37] So many of the largest hacks that we saw last year, the funds were actually returned voluntarily after the perpetrators have doxed online thanks to the transparency that the blockchain provides. So it's true that in crypto, there are bad actors, as there are in every industry. But we're pretty optimistic that because of these analytics and tools that are available to anyone who's observing the blockchain-- anyone's crypto wallet can be tracked and monitored-- that the opportunities for wrongdoing are actually falling over time, not rising.

[00:13:30.24] Bob Lang: That's good news for future investors. Let's talk about the store of value, Matthew. What is that, and what falls under it, store of value?

[00:13:39.27] Matthew Sigel: The store of value category includes bitcoin and bitcoin derivatives. So we believe that bitcoin's proof of work consensus model is unique among cryptocurrencies. It provides the most robust security. And it guarantees that every bitcoin that's created contains the same amount of thermodynamic energy. And that is a point of attraction for investors who compare bitcoin to a hard asset such as gold, which also requires a lot of physical investment in order to mine.

[00:14:17.13] So bitcoin's high energy use is more of a feature than a bug, but it does merit its own category as a store of value thanks to the simplicity of its code, its energy intensity, and importantly, its fixed supply, making Bitcoin really the only fungible asset in the world that doesn't respond to higher demand with higher supply. That cannot happen with bitcoin.

[00:14:43.11] Bob Lang: Very unique, the qualities there. So investors often equate, Matthew, bitcoin to the whole crypto sphere, but there's so much more. How should investors think about Bitcoin as it compares to other altcoins?

[00:14:56.16] Matthew Sigel: The cryptocurrency industry is now $1.6 trillion roughly. Of that, bitcoin is about $700 billion. So we think investors are starting to differentiate between the various categories in crypto. Bitcoin stands alone as a store of value thanks to its unique proof-of-work consensus. We believe that it deserves a weighting in a portfolio that is commensurate with one's views on stored value. So maybe for gold and bitcoin, that may be 0% to 5% of an investor's portfolio.

[00:15:32.58] A large proportion of the ex-bitcoin cryptocurrency universe is more closely related to the growth equity component of your investment portfolio. These are bets on software protocols that are gaining market share thanks to their innovative ability to send value across the world in a more frictionless nature. So perhaps that allocation in an investor's portfolio, the ex-bitcoin smart contract allocation, might also be a 0% to 5% allocation.

[00:16:06.18] And perhaps it might be compared to one's investment in FAANG stocks, which represent 20% of the S&P 500 but whose profits may be at risk if indeed cryptocurrencies form a competitive threat thanks to the lower cost and lower take rates that they charge. So that's how we think about it over here.

[00:16:28.35] Bob Lang:: Well, The Street's crypto editor says governance tokens are as important as DeFi, as it tackles one of the core issues with crypto. For those new to this concept, can you explain governance tokens?

[00:16:39.69] Matthew Sigel: Governance tokens are an important part of cryptocurrencies. So governance tokens represent the right to own the decision-making of an entity. So if you owned 10% of the Uniswap DAO, the Uniswap Decentralized Autonomous Organization, then you would have a 10% vote in the corporate actions of that entity. So a decentralized autonomous organization is essentially a corporation that lives online where all stakeholders have the right to vote on corporate actions.

[00:17:16.50] Many times, the entity cannot spend even a dollar without the approval of the DAO members. So this governance right can be very valuable if the underlying entity owns a valuable asset, such as a decentralized exchange which might be earning hundreds of millions of a year in the case of Uniswap in trading profits. The Uniswap DAO's treasury is now $2 billion.

[00:17:43.35] And to spend even a dollar of it, the community has to vote. The community gets to vote. And that's why the token value of many of these governance tokens ballooned well beyond the size of the actual treasury. It's because these entities are earning profits, and the community gets to decide the destination of those profits, the use of those profits.

[00:18:07.11] So it's a new wrinkle on the corporation, which restores autonomy to the everyday player and really flips the script on capital formation. So we think we're going to see a lot of very interesting DAOs in 2022 that raise a significant amount of capital. One of the most interesting was, late last year, the Constitution DAO that raised $43 million, tried to bid on a hard copy of the US Constitution. They were outbid by Ken Griffin. But we have a hunch that the next DAO may not be so unlucky.

[00:18:41.71]Bob Lang: Well, it was a heck of a try. That's for sure. Let's talk about the regulatory environment here for a moment. Is the regulatory environment around these still uncertain? What do you think?

[00:18:52.83] Matthew Sigel:: The US regulatory environment is particularly uncertain. It's quite unique to have a new technology that the US is not leading on. And that is in large part due to the current administration's view on cryptocurrencies. The current STC is, we think, holding the bitcoin ETF hostage. We're trying to get Congress to act.

[00:19:21.66] Every day that we move closer to a midterm, there is less chance of Congress acting. That's just the history of legislation. So we think this year, there's likely to be very little that happens in terms of meaningful regulation. And in the absence of meaningful regulation, the innovation will keep moving forward. So it should be a good year for crypto because of that.

[00:19:48.03] Bob Lang: We've seen a flurry of partnerships between companies like Mastercard, Visa, American Express with cryptocurrency giants. What's driving all this activity?

[00:19:56.44] Matthew Sigel: What's driving the activity among the credit card companies to release bitcoin credit cards and other crypto credit cards is consumer demand. So consumers are sick and tired of unaccountable, unelected officials taking a large proportion of their savings, whether that's the banking sector or whether that's Web 2. So they're asking for these products.

[00:20:19.47] And in return, the market is providing them. And we think that's a big reason why crypto volatility, specifically bitcoin, is probably set to fall over the coming years. The early adopters of this technology were retail investors who were more volatile in their trading strategies. As the more sticky institutional buyers come in-- sovereign entities like El Salvador, which declared bitcoin legal tender, corporations who now own more than 1% of bitcoin outstanding, and the next leg will be these micro-payments, credit card rewards, gaming-- that will form the base of the pyramid-- a consistent source of demand, tiny pieces of bitcoin being bought by everyday people who are asking their financial institutions to provide products like these bitcoin credit card rewards.

[00:21:09.03] So we're hugely excited about that. We're trying to do some work on tracking the wallets associated with these credit cards so that we can begin to size and scope how big the demand will be. But it's a key linchpin in the thesis that bitcoin volatility should fall over time.

[00:21:25.62] Bob Lang: Yeah, good-- it's a good move for consumers, I think. Mastercard recently partnered with Coinbase for the crypto exchange's upcoming NFT marketplace. What could this mean for all the players as well as users, and could we see more partnerships like this down the road?

[00:21:41.08] Matthew Sigel: NFTs really just prove the ability to make digital items scarce. The original, killer app to demonstrate that utility for the marketplace was art-- profile pictures, files of digital art. This year, we think that utility will broaden out to include sports ticketing and concert ticketing along with gaming applications. So in the case of ticketing, what if the courtside NBA ticket that you bought also came with a 10% chance of dinner with one of the players after the game?

[00:22:25.60] That's the type of additional goods and services that can be bundled into an NFT-- connecting the digital world with the real world on top of it, proving digital scarcity, unlocking a series of benefits for ecosystem participants. It's the same type of model that these cities like Miami are trying to exercise with their city coins. If you own enough of the coin, you might get access early to, let's say, a museum opening or a park. And in that way, these cryptocurrencies really reward early participants, large participants who have conviction, and incentivizes them to do good and avoid wrong. And NFTs will enable that type of permission technology solution and bring a lot of value to consumers over the next year.

[00:23:21.60] Bob Lang: Matthew, media, and entertainment is pretty exciting area. NFTs are offering the early steps of monetizing the metaverse, of course. Can you walk us through that category?

[00:23:30.48] Matthew Sigel: Consumers already play in the metaverse when they use platforms like Roblox or Fortnite. These are real-time rendered 3D virtual worlds which can be experienced persistently by an effectively unlimited number of users with an individual sense of presence, with continuity of identity and history, and even some payments ability. The difference between the closed metaverse-- the Roblox and Fortnite ecosystems-- and the open metaverse is that in the open metaverse, all of these platforms can talk to each other. And they all can operate on a common unit of account, whether that's a stablecoin like US dollar coin or whether that's a more traditional cryptocurrency like bitcoin.

[00:24:19.23] And in the open metaverse, all these platforms being interoperable with each other will make a much more vibrant marketplace where consumers are going to have a lot more choice. And as we've seen in technology generally, open-source systems tend to beat closed systems. And we think that the same thing is going to happen with the metaverse. So think of it as Roblox or Fortnite but on the blockchain and interoperable because of the global nature of cryptocurrencies.

[00:24:50.65] So each of these metaverse platforms may have its own token and may use that token to incentivize certain behaviors, whether that's building interesting architecture, displaying NFTs, lingering for a certain amount of time, making certain goods or services available to customers. All of that will happen within each ecosystem's token, but those tokens will be interchangeable via bitcoin or Ethereum or US dollar, coins, or other stablecoins. So it really makes for a very scalable ecosystem in which users will share currencies in common. And we think that's a more attractive business proposition than walled garden ecosystems which tend to charge higher take rates and which are smaller.

[00:25:39.24] Bob Lang: Matthew, millennial investors are receiving one of the largest wealth transfers in history, $24 trillion. Why is it so important to understand this group of investors along with the investing process?

[00:25:50.31] Matthew Sigel:: In that scene in Back to the Future when he's playing "Johnny B. Goode" in front of all the high schoolers, and they're all staring at him glassy-eyed, and he says, I guess you guys aren't ready for that, but your kids are going to love it-- that's what's going on with cryptocurrencies. I can see it in my own family.

[00:26:06.69] The kids just understand this intuitively because they're digital natives. And the old fogies don't get it. And every day, more old fogies are dying, and more kids are turning 18 and getting access to their own money. So the math is inevitable here, just like the math was inevitable when it came to gaming-- World of Warcraft, Fortnite. The same thing will happen with digital currencies.

[00:26:30.64] And that's why we think it's important to get an early start, to dollar cost average in, because many of these assets are expensive, and to keep conviction that over the long run, because of this enormous wealth transfer that's about to happen, trillions of dollars headed from baby boomers to the younger generation who are increasingly digital native, they will adopt cryptocurrencies. There will not be young people who have zero weighting. And that will be a big change in how assets are allocated over time.

[00:27:00.12] Bob Lang: Huge change from one generation to the next. It happens through history, right? What are the key takeaways that investors should walk away with after this talk?

[00:27:08.93] Matthew Sigel: The key takeaways here are that up until now, investors have not had a transparent, comprehensive taxonomy that they can use to measure these mutually exclusive cryptocurrency categories against each other. And we think that the eight indices that we've released, these category indices, are going to do a great job of educating investors what are the common characteristics of these coins, how are they performing, as well as providing investable benchmarks that professional investors can use to measure themselves against the market. So we plan to use them for both purposes here.

[00:27:47.31] Bob Lang: That's fantastic. So with that, we're going to wrap it up. Thank you, Matthew Sigel. You've been watching The Street's special presentation-- Beyond Bitcoin and Metaverse-- Crypto Categories Investors Should Know. I'm Bob Lang. And for more information, head over to thestreet.com or our partners at vaneck.com.

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Bitcoin, Metaverse, DeFi and Other Crypto Categories Explained - FREE Webinar - TheStreet

The government and central bank in Russia have reached an agreement on how to regulate cryptocurrencies, according to a Tuesday announcement.

Russias government and central bank are now working on a draft law that will define crypto as an analogue of currencies rather than digital financial assets set to be launched on Feb. 18. Cryptocurrencies would function in the legal industry only if they have complete identification through the banking system or licensed intermediaries.

Kommersant notedthat Bitcoin (BTC) transactions and possession of cryptocurrency in the Russian Federation are not prohibited; however, they must be done through a digital currency exchange organizer (a bank) or a peer-to-peer exchange licensed in the country.

The report also highlights that cryptocurrency transactions of more than 600,000 rubles (roughly $8,000) would have to be declared; otherwise, it could be considered a criminal act. Those who illegally accept cryptocurrencies as payment will incur fines.

This news comes after months of speculation about how the Russian government will handle digital currencies. While it is still unclear what this decision will mean for businesses and citizens in Russia, it seems that the country is slowly warming up to the idea of cryptocurrencies.

Related: Russian central bank registers nations first digital asset manager

In January, the Bank of Russiacalled for a nationwide crypto ban in a report that warned about the speculative nature of the industry. The bank also stated that financial firms should not facilitate crypto transactions as part of that proposal to ban digital assets.

However, the proposalgenerated opposition from the Russian Ministry of Finance. A few days after the central banks call for a ban, Ivan Chebeskov, a ministry official, said that the government should regulate crypto rather than prohibiting it entirely. He warned that a total ban might result in Russia falling behind in technology.

Reports have also emerged that President Vladimir Putin supports efforts to regulate the countrys crypto mining sector.

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Russian government and central bank agree to treat Bitcoin as currency - Cointelegraph

The Great Resignation triggered a talent war and a very tight labor market, pushing employers to reconsider perks they offer. Now, a new survey suggests that nearly one in four workers would prefer a company that offers a Bitcoin payroll benefit when deciding between equivalent job offers. In turn, NYDIG recently launched a Bitcoin savings plan allowing employees be paid in crypto.

See: These Countries May Be Next To Accept Bitcoin as Legal TenderFind: Crypto Leaders Tackle Super Bowl Ad Campaigns: A Bitcoin Giveaway and More

The NYDIG workforce survey Bitcoin Benefits 2022 found that offering a Bitcoin savings plan may be an important retention tool. Additionally, as Bitcoin is becoming more and more prevalent, Bitcoin holders are saying they want to increase their stockpile by being paid a portion of their salary in Bitcoin as an employee benefit, the survey noted.

Patrick Sells, chief innovation officer for NYDIG, told GOBankingRates thatNYDIG launched the Bitcoin savings plan in response to the demand to make Bitcoin more accessible in everyday life. One in five employees surveyed by NYDIG said they would leave their current company for another if they could receive a portion of their paycheck in Bitcoin.

Companies see the power Bitcoin has in attracting top talent and are partnering with NYDIG to leverage it, Sells added.

Discover: Bitcoin and Crypto Taxes in 2022: What You Need To Know

Per the survey, 54% of Bitcoin holders want to be paid a portion of their salary in Bitcoin as an employee benefit and 42% would leave their current job for an identical role that paid them in Bitcoin.

In terms of age groups, the survey noted that 27% of employees under 30 expressed a likelihood to leave their current job for an equivalent role that let them get paid in Bitcoin, while that figure is 21% of the 30-44 age bracket, 19% of the 45-60 age bracket, and 6% of the 60-plus group.

Ron Levy, CEO and co-founder of The Crypto Company, told GOBankingRates that this survey proves a significant increase in Bitcoin acceptance and adoption.

Theres an argument to say that the younger generation is more comfortable with digital currency than any other sector. With 87% of those surveyed being at least moderately concerned about inflation, you could argue this younger generation is bullish on Bitcoin to the same degree they are concerned about inflation, Levy said. The rush to Bitcoin as a place for them to invest in their future is imminent. I believe that the hockey stick growth from that tipping point is still ahead of us.

Learn: Ethereum vs. Bitcoin: Which Crypto Is Better?Explore: Can Gold and Bitcoin Coexist in a High-Inflation Environment? Why You Should Hold Both Investments

Among the first to offer the benefit are companies owned by former NFL talent Drew Brees, who will also be using a Bitcoin savings plan to convert a portion of his compensation to BTC. Several companies Brees is involved with will also be making the optional benefit available, including Everbowl and StretchZone, according to an NYDIG announcement.

Sells told GOBankingRates that: We are proud to partner with former NFL superstar Drew Brees who sees the value of Bitcoin and its importance in saving for the future.

More From GOBankingRates

Yal Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yal is now freelancing and most recently, she co-authored the book Blockchain for Medical Research: Accelerating Trust in Healthcare, with Dr. Sean Manion. (CRC Press, April 2020) She holds two masters degrees, including one in Journalism from New York University and one in Russian Studies from Universit Toulouse-Jean Jaurs, France.

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Bitcoin Payroll: The Future of Hiring? Crypto Benefits Plan Could Attract Workers and Improve Employee Retention - GOBankingRates

These Bitcoin predictions by trading bots will most likely become true in 2022

Monitoring Bitcoin trends for the last couple of months reveals that even after going through an intense bearish phase, BTC is slowly and consistently rising in value. The crypto underwent a rollercoaster of volatility since its bullish price rally in the past year. But even after its massive ups and downs, Bitcoin remains at the forefront of the cryptocurrency world and its value remains to be a dominant asset in the digital asset landscape. Several investors are questioning crypto experts if they should invest in Bitcoin and other cryptocurrencies right now, but it is quite difficult to speculate the present condition of Bitcoin or any other cryptocurrency for that matter since the prices could climb in the near term while offering a good momentum or can even result in a drastic fall leading to millions of dollar of losses. Previously, there have been a number of bold Bitcoin predictions, some of which were quite noteworthy and prominent. But predictions by trading bots ensure that those might come real in the near future. In this article, we have listed the top Bitcoin predictions according to trading bots in 2022.

The crypto industry is filled with individuals who are ready to scam investors of their hard-earned profits. A quite similar phenomenon will take place if Bitcoin rises exponentially in 2022. Besides, even following real Bitcoin Predictions influencers might not be a safe option. While their opinions and statements may eventually prove right, they do not necessarily help in the long run.

Investors and market analysts believe that this growing popularity of cryptocurrency in 2022 will result in increased Bitcoin Predictions regulations. The existence of notorious Bitcoin brokers also makes it quite difficult for investors and traders to protect their money. So, there is certainly an increasing demand, which is likely to increase further among government organizations, to continue to expand regulatory measures for BTC.

The crypto market includes several other cryptocurrencies apart from Bitcoin Predictions that have proven to be even more profitable than BTC. Over the years, BTC has expanded its territory and made up almost 70% of the total market capitalization in early 2021. But the crypto trading bots predict that with the rise of distinct digital currencies, including NFTs, and metaverse cryptocurrencies, BTC will soon lose prominence in the market.

After Bitcoins ongoing bearish trend, this might seem like a quick possibility, but even analysts have predicted that if Bitcoin manages to break its past record, then there are massive chances of the crypto hitting the US$100,000 mark soon enough.

Crypto investors are on the lookout for massive developments in the spot ETF domain in the US. Currently, futures ETF is one of the greatest attractions for investors so there might be developments in the spot Bitcoin exchange-traded funds.

In 2022, Bitcoins supply cap is poised to remain at 21 million Bitcoins and investors can expect this figure to remain static throughout the year. With regulatory measures still in the dark, users of the BTC network can expect blocks to be minded every 10 minutes.

In 2022, investors should expect billions in value to be transferred on the Bitcoin Predictions network almost every day. The usage of the asset will exponentially increase to promote financial inclusivity amongst the unbanked and persecuted. After the increase of its usefulness, hash rates are expected to go up with more miners securing the network.

Trading bots have predicted that Bitcoin will keep following the proof-of-work consensus mechanism despite the increasing popularity of proof-of-stake that accelerated the popularity of Ethereum. The Bitcoin Lightning Network will also witness massive adoption among several other networks.

The relationship between decentralized coins and centralized institutions is quite bitter. But centralized banks want to utilize the vast number of opportunities provided by cryptocurrencies. Currently, major banks are undertaking projects that reflect on the decentralized nature of cryptocurrencies and are initiating such programs according to the customers needs.

At the beginning of 2022, Bitcoin Predictions might not have shown its true potential, but that does not mean that it will lose its prominence so easily. The past couple of weeks witnessed an optimistic growth that demonstrated that Bitcoin will continue to rise despite its volatility.

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Top 10 Bitcoin Predictions for 2022 According to Trading Bots - Analytics Insight