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Bitcoin’s Parabolic Price Run Pushes the Cryptocurrency’s Market Cap Above $1 Trillion

Bitcoin’s current bull run has served to push the world’s first and biggest cryptocurrency to a market capitalization of $1 trillion.

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Bitcoin’s current bull run has served to push the world’s first and biggest cryptocurrency to a market capitalization of $1 trillion.

According to data from CoinMarketCap, the price of the digital currency has surged by over 8.8% in the past 24 hours, crossing a new all-time high (ATH) of $56,000.00 within that time frame.

Currently, the combined market capitalization of the global cryptocurrency market stands at $1.71 trillion. Bitcoin has proven to be a star digital asset in the crypto space, establishing itself as a unicorn responsible for more than 61% of the value of the entire cryptocurrencies. There are over 8,520 in all.

Institutional Buy-Ups Paid Off

The embrace of Bitcoin by institutional investors is paying off with a corresponding increase in price. A Bitcoin adoption cycle was notably kickstarted with a move from Jack Dorsey’s backed payment firm, Square Inc, and Michael Saylor’s business intelligence firm, MicroStrategy Inc. back in the second half of 2020.

Since these publicly-listed firms dabbled into the world of Bitcoin, it has led to other firms promptly following their lead. Today, many Wall Street firms are shoring up their balance sheets with Bitcoin, bemoaning the unattractiveness of the US dollar amid unrelenting money printing used for covid-19 stimulus packages.

Bitcoin, with a $1 trillion market cap milestone attained today, has further strengthened the appeal of the cryptocurrency industry as the inflow of funds may serve to make regulators rethink their position in the industry. Another step to gain more exposure to Bitcoin for corporate investors is through Exchange-Traded Fund products, and while other nations such as Canada have approved their first Bitcoin ETFs, the US has yet to approve any Bitcoin ETF application.

When this hurdle is crossed, Bitcoin is bound to see a wave of money inflow and the cryptocurrency will gain an even bigger market capitalization in the near future.

Image source: Shutterstock

Currently, the combined market capitalization of the global cryptocurrency market stands at $1.71 trillion. Bitcoin has proven to be a star digital asset in the crypto space, establishing itself as a unicorn responsible for more than 61% of the value of the entire cryptocurrencies. There are over 8,520 in all.

Source: https://blockchain.news/news/bitcoin-parabolic-price-run-pushes-cryptocurrencys-market-cap-1-trillion

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Total Value Locked in Maker Reaches a Record High as Maker Foundation Returns Dev Fund to DAO

Maker’s total value locked (TVL) surged to $12.02B, hitting a record high amid Maker Foundation’s announcement that it would refund 84,000 MKR from the development fund to the MakerDAO.

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Maker (MKR), a cryptocurrency built on the Ethereum blockchain, is designed to minimize the price volatility of its own USD-pegged cryptocurrency, DAI.

DAI is issued through a full mortgage guarantee of digital assets. DAI stablecoin, which launched in 2017, has always remained anchored to the U.S. dollar on a 1:1 ratio.

Through the MakerDAO system, users can create Collateralized Debt Positions (CDPs) and use Ethereum as collateral to generate DAI.

Earlier today, the Maker Foundation announced that it will refund 84,000 MKR from the development fund to the MakerDAO community. The refund originates from MKR tokens that have been transferred to the “governance” module.

According to official blog reports, the MakerDAO community currently does not set any conditions or expectations for the returned MKR tokens. This move is to carry out the decentralization of the agreement.

While upgrading the liquidation system of the Maker protocol and the DAO’s Core Unit Framework, Maker stated that the Foundation will focus on its own dissolution and regularly announce the progress until the end of this year to further diversify the power of the protocol until it is completely dissolved. An announcement from the Foundation reads:

“The Foundation now turns inward to focus solely on its dissolution.”

On May 3, the governance facilitators, on behalf of the MakerDAO risk management team, will start a three-day poll. This public opinion survey will provide a platform for the governance community members of MakerDAO to vote on the type of vault that will be added to the liquidation 2.0 system.

The types of vaults cover UNI-A, ZRX-A, AAVE-A, BAT-A, RENBTC-A, LRC-A, etc.

If the governance poll is passed, the executives will vote to complete the upgrade to the Liquidation 2.0 system within 30 days as permitted by the Smart Contracts Team plan.

The integration with the liquidation 2.0 system will provide higher security, predictability, and decentralization, and bring greater predictability and stability to the liquidations executed by the protocol settlement.

Source:DeFi Pulse

According to DeFi Pulse, Maker is ranked as the largest cryptocurrency in the decentralized finance market with a total value locked (TVL) of $12.02 billion. This is a new record-high for Maker.

Despite the overall downturn of the crypto market and Bitcoin’s decline from $58K to $55K, MKR rose by 4.85% within 24 hours and 29.56% in the past week. At the time of writing, MKR is trading at $5,751.

Image source: Shutterstock

Through the MakerDAO system, users can create Collateralized Debt Positions (CDPs) and use Ethereum as collateral to generate DAI.

Source: https://blockchain.news/news/total-value-locked-maker-reaches-record-high-maker-foundation-returns-dev-fund-dao

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$3.6 Billion Worth of Bitcoin Options Will Expire Today

Today, $3.6 billion in Bitcoin options will expire. This provides investors with the last opportunity to buy or sell Bitcoin at a predetermined price.

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Today, $3.6 billion Bitcoin options will expire. This provides speculators with the last opportunity to buy or sell Bitcoin at a predetermined price.

Bitcoin options provide traders with a unique opportunity to buy or sell BTC at a set price. The price of an option contract will vary depending on the time of purchase, the strike price, and the day of expiry. An option’s exercise price is the price the underlying asset can either be bought or sold for.

Source: Deribit

The figure above shows the distribution of Bitcoin (BTC) options that will expire on April 30. According to data from crypto derivatives exchange Deribit, the current “maximum pain price” that Bitcoin will expire at is $54,000, which is very close to Bitcoin’s current price. At the time of writing, BTC is trading at $54,403.

The greatest pain point is the price at which the Bitcoin options buyer loses the most in the market.

In other words, the maximum pain price will cause investors who previously purchased options to lose their time and opportunity cost of reinvestment of option premiums. This is the price that makes most options worthless because it is no different from buying or selling Bitcoin on the public trading market. However, the holders of the option still need to pay for the option premiums to guarantee their spot.

Source: BTC Option Open Interest By Strike Price on Expiration Date of April 30 via Bybt 

The strike price of most call options and put options on April 30 was around $54,000. Around this level, a total of 960.5 BTC call options 771.4 BTC put options will expire. In general, call/put ratio is 1.44, greater than 1, which proves that there are still more bullish investors.

As can be seen from the above figure, there are still many investors with a large amount of open interest at an exercise price of around $80,000, and open interest has reached 7.76K BTC.

Open interest is the number of option contracts held by investors in all markets after the end of the previous trading day.

As the current price is moving around $54K, it seems that Bitcoin is neither bullish nor bearish in the short term and Bitcoin’s consolidation may continue for a substantial period of time.

Since the holders of the bullish contract who have accumulated Bitcoin at a high strike price will most likely not exercise the option. If they chose to execute this option, these investors will buy Bitcoin at a higher price, thereby pushing up the price.

Conversely, most of the bearish open interest is focused around $50,000 and $52,000, valued at 3.75K BTC and 4.06K BTC. There is also not a high probability that bearish speculators will be willing to sell assets at this predetermined price.

However, it is worth noting that the maximum pain price of the options contracts with an expiry date of May 7 is hovering around $56,000, higher than the current “maximum pain price” of $54,000. This proves that there are still more bullish investors that may push Bitcoin’s price to $56K for next week.

Currently, the total amount of open positions for Bitcoin options are $13.54 billion, of which more than 88% are from Deribit, the world’s largest crypto derivatives exchange, and the total number of expiring options contracts is estimated to be approximately 68,500 BTC.

Image source: Shutterstock

Source: https://blockchain.news/analysis/3.6-billion-worth-bitcoin-options-will-expire-today

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SEC Postpones VanEck’s Bitcoin ETF Application to June

The SEC has postponed its consideration of VanEck’s Bitcoin ETF application, pushing the decision from May 3 to June 17.

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Those who had been anticipating a decision on the Bitcoin exchange-traded fund (ETF) application from VanEck may have to wait longer to get an answer.

The United States Securities and Exchange Commission (SEC) has exercised its right and has postponed its scheduled decision on VanEck’s ETF application from May 3rd to June 17 according to a filing released by the commission on Wednesday.

VanEck has been at the forefront of pursuing a Bitcoin ETF product in the United States. The company’s push has been ill-favoured as the US has rejected every ETF application submitted before it prior to this time. VanEck reapplied back in March, and the SEC responded, making a case that it needed more time to review the application.

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” said SEC Assistant Secretary J. Matthew DeLesDernier in the filing.

The SEC altogether can postpone the review process to up to 240 days, and if this extended timeline is applied to VanEck, the company may not be getting a definitive answer until mid-November.

The Case for a Bitcoin ETF

There are more than 8 Bitcoin ETF applications awaiting approval from the SEC. Amongst the notable firms that have sent in their application include Fidelity investments which also filed its application back in March.

As the price of Bitcoin has grown remarkably this year, and institutional funds continue to flow into the digital asset, market stakeholders are pressing on the SEC to soften its stance and introduce exchange-traded fund products in the US. This will boost further mainstream adoption of cryptocurrency and push for better regulations for the industry, says market stakeholders.

While Canada has outpaced the US in its Bitcoin ETF approvals, many anticipate that with Gary Gensler as the new SEC Chairman, cryptocurrency regulations may be reshaped and addressed quicker.

Image source: Shutterstock

Source: https://blockchain.news/news/sec-postpones-vanecks-bitcoin-etf-application-june

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