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50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Fifty traders who use Indian crypto exchange Instashift have shared their thoughts on the current crypto environment in India. Most of them said that they “hodl” and would continue to invest in crypto despite regulatory uncertainty.

Also read: RBI Argues Supreme Court Should Not Interfere With Its Crypto Decision

Most Respondents Are Hodlers

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaA survey was conducted in the first week of October by Indian cryptocurrency exchange Instashift exclusively for news.Bitcoin.com. Launched in March, Instashift offers the buying and selling of over 80 cryptocurrencies.

Fifty active traders in India participated. The goal of the survey was to find out what they think about various crypto-related issues including their investment concerns, the crypto banking ban by the Reserve Bank of India (RBI), and whether they will keep investing in crypto despite regulatory uncertainty.

Among the 50 traders who responded, 43 said that they hodl while seven revealed that they invest short-term.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Furthermore, 40 traders believe bitcoin is a safe haven against rupee inflation while 10 traders disagree.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Crypto Investing Despite RBI Ban

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaIndia is currently drafting crypto regulations which were supposed to be ready in September but have been delayed. Meanwhile, RBI, the country’s central bank, has banned financial institutions under its jurisdiction from providing services to crypto businesses. A number of petitions have been filed against the ban. The country’s supreme court has been trying to hear them since Sept. 11, but the hearing has continually been postponed.

The banking ban by the central bank has adversely impacted some exchanges. One of the country’s largest crypto trading platforms, Zebpay, recently shut down its exchange operations due to the banking problem.

Despite the ban, 32 Instashift traders said that they would continue to invest in crypto even if the RBI intensifies its crackdown such as freezing crypto accounts. Another 12 traders noted that they are also likely to continue trading while six respondents said they would discontinue crypto trading.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

In addition, 36 traders believe that the Indian government will amend existing laws to accommodate cryptocurrencies. Ten respondents believe that the regulators will remove restrictions on crypto. However, only four traders believe that crypto will be legalized and regulated in India.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Preferred Cash-Out Methods

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaA number of crypto exchanges in India have come up with their own solutions to the RBI ban. Some have introduced exchange-escrowed peer-to-peer trading services, which they claim have gained much popularity.

Respondents were asked about their preferred methods of cashing out cryptocurrencies into rupees. Forty-eight traders said they prefer to cash out using peer-to-peer sites. Five traders prefer to use local cash deals, four prefer to use gift cards and online deals, and four others prefer to cash out using prepaid crypto Visa and Mastercard services.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

On Sunday, another cash-out method was introduced by one of India’s largest crypto exchanges, Unocoin. The company has launched crypto ATMs to bypass the RBI ban and allow its users to deposit and withdraw rupees. This option was announced after the Instashift survey had concluded, so it was not included in the survey.

As for where to keep their funds, 24 traders prefer to keep them in BTC, 14 prefer altcoins, and 12 specifically prefer stablecoins. Recently, an increasing number of crypto exchanges in India have started listing stablecoins such as tether (USDT) and trueusd (TUSD).

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Future Prospects of Crypto Ecosystem in India

Amid the banking ban, 35 respondents believe that the fear of regulatory uncertainty is the biggest hurdle stopping the Indian crypto economy from flourishing. Twenty-six traders believe that the lack of banking support is the biggest challenge. Twenty-five traders put the lack of understanding of the crypto industry as the most important factor, while 18 traders attributed the lack of liquidity in the market as the top reason.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Despite all the hurdles, 41 traders said that they are long-term investors and will continue to invest in crypto. Seventeen traders admitted that they are apprehensive but expect the government to eventually create a positive environment for cryptocurrencies. However, four respondents are entertaining the idea of exiting the crypto space altogether.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

What do you think of the current crypto environment in India? Let us know in the comments section below.


Images courtesy of Shutterstock and Instashift.


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Will Fidelity satisfy the institutional bitcoin glut?

Despite the bear market that began eight months ago, there is one niche that never slowed down; bitcoin OTC (over the counter) trades, or block trades, as some prefer to call it.  Throughout this time, I have had institutional clients looking to buy anywhere from 100,000 btc up to 1,000,000 btc. The bitcoin price movement did not seem to have any impact on this glut.  There was a New York City private investment bank looking to buy 500,000 “to test the waters”, and a US-based family office looking for 1,000,000 btc “to get the things going” and a public bank looking for 1,000,000 btc asking to transact “outside the US”.  The buyers that I have personally interacted with generated enough demand to buy every single bitcoin ever mined.

Suffice to say, none of those deals went through …

As a broker in these transactions, you stand to make between 0.25 to 1 percent of the total amount, and if you do the math, one’s profits could be very significant.  So, if we have several parties that all want to do business and expect to make large profits by doing so, why do these transactions fall through? Although there is no official data about these transactions, I am confident that there has never been a transaction done north of 100,000 btc.

The part of the equation that I intentionally left out is sellers.  None of the sellers that were claiming to have a capacity to furnish these amounts of bitcoin actually had it.  Or at least none of them were willing to provide evidence in a way that would satisfy buyer’s concerns. Additionally, the talks tend to break down because the two sides cannot come to an agreement on the procedures.  

This part may seem trivial to an outsider, but it is not.

Let’s say we have a Party A that wants to sell 100,000 bitcoins and a Party B that wants to buy them. A Party A will not send their bitcoins until they receive a payment from B because, once they do send it, there is absolutely no way to reverse it.  On the other hand, Party B is also reluctant to send their share because they are afraid of getting defrauded. A buyer wants to see a POC (proof of coin; POC comes in different forms, a Satoshi, an attestation by the lawyer, a video etc.) before they provide a POF (proof of funds). And the seller does not want to send a POC because either he is afraid of getting hacked or because he doesn’t have the coins. 

The most common solution to this problem is an escrow agent. However, good old-fashioned escrow agents do not understand these type of transactions (as they don’t understand how bitcoin works.) I have had experiences interacting with these escrow agents only to discover, to my dismay, that they do not even have the most basic understanding of how to confirm a bitcoin transaction. They are also wary of the crypto space, and the new crop of crypto escrows lacks credibility.  And when established escrows move into this space, they typically don’t provide bitcoin escrow, they will only escrow the fiat.

Because of these difficulties, the  news that Fidelity Investments is getting into crypto business is huge.

Fidelity Launches Platform for Institutional Crypto Trading

According to CNBC, Fidelity will be “providing cryptocurrency and trade execution” for institutional investors.  If these plans come to fruition, it may imply that finally, the glut exhibited by institutional investors will be satisfied, at least partially — although it is still unlikely that we’ll see millions of bitcoins changing hands on a daily basis.  

This may not only lead to the bitcoin price rising short-term but could eventually change the long-run equilibrium by shifting the real bitcoin supply curve to the left as many of the institutional investors are looking to hold it long-term as “new gold”.  

 

 

The first chart is a regular bitcoin supply-demand representation (for the sake of simplicity, 21 million supply is assumed).  In the second chart, I introduce Real Supply which I define as total bitcoin supply minus the bitcoins that were lost and minus the bitcoins that are not liquid due to being held as a long-term investment.  Finally, the third chart represents the shift in equilibrium after the pent-up institutional demand is materialized. – The demand shifts to the right, but also real supply is shrunk as some of those institutional buyers are going to hold they newly acquired coins long-term.  As a result, the price of bitcoin increases.

The days when Central Banks from around the world will start adding bitcoins to their reserves may be not far away…

 

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Institutional Interest in Crypto During Bearish Times is Bullish

An oversold market makes the best time to enter. And experts believe it is happening with crypto industry as it retains a yearly bearish bias.

The significant dip seen in 2018, followed by consecutive strong rebounds from a specific bottom area has upped medium-term bullish sentiments in the crypto market. Bitcoin, the cryptocurrency with the highest dominance, for instance, has reversed its downtrend on multiple occasions upon testing a $250-wide area below $6,000 as strong support. The price action has led bulls to conclude that it would be impractical for bears to crash Bitcoin below the $6,000-range, citing miners’ breakeven ROI, and the influx of institutional funds around the oversold bottom.

Big Names Entering Crypto Space

The growing number of crypto hedge fund launches this year has testified that there is a demand for crypto gateways among institutional investors. Significant monies have entered the $211 billion space by spreading some portion of their investment portfolio to digital currencies like Bitcoin, Ripple, EOS, and Ethereum.

The endowments of several high-profile institutions, including Harvard University, MIT, Stanford University, Yale University, Dartmouth College, and the University of North Carolina have spread their risks into at least one cryptocurrency fund.

Other investors are entering the space with over-the-counter markets or so. Michael Novogratz, a one-time hedge fund billionaire, converted 30-percent of his wealth to crypto assets and announced a $500 million crypto-fund. Dan Morehead of Pantera Capital-fame invested in 43 cryptocurrency-related startups and is currently one of the largest institutional owners of digital assets. The list is too long.

Garry Tan, a prominent seed investor, stated that investors believe that Bitcoin is bottoming out and noted a “buying-the-dip” sentiment among prominent investors, majorly citing David Swensen, Yale’s Warren Buffet, who recently invested an undisclosed sum into two crypto-funds.

 

Strong Fundamentals

There is also a significant amount of money waiting at the door on speculation that the US Securities and Exchange Commission will give the green light to some Bitcoin ETFs by mid-2019. More so, if the SEC appoints a new legal definition to crypto-assets, then institutional investors in the US could be assured of receiving watchdog protections, no different than forex and gold futures.

Prominent industry leaders are already meeting lawmakers and regulators to come up with a concrete crypto law that could decide the fate of the industry in the US. Once Bitcoin is regulated as a security or any other asset, then institutional money will tail the high-net individuals and hedge funds already in the space. It could result in a strong rally, coupled with factors that investors will be buying Bitcoin low against the projected values ranging between $14,000 to even a million dollars.

 

Image from Shutterstock

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Bithumb Launches New DEX with No Transaction Fees and Airdrop Event

Bithumb, South Korea’s second largest cryptocurrency exchange officially launched its Decentralised Exchange (DEX) on October 15 and marked the occasion with two events – free transaction fee event and an Airdrop event, the details of which have been published on the company website.

No Transaction fee period and Airdrop event

The Free Transaction Fee event will enable users to trade on the platform without paying any fees to the exchange. They will be required to pay only the Gas fee to the Ethereum Network. The event, which began on October 15, will continue for a month till November 15.

The company is also distributing approximately $100,000 (500 ETH) in an Airdrop event to celebrate the opening of the DEX. The coins will be distributed to the top 1000 traders who have traded on the platform for 2 weeks. To qualify for the free coins, the traders must have traded more than 1 ETH worth trade volume on the exchange.

The top trader will receive coins worth 50 ETH, the trader with the second rank will get coins worth 30 ETH, and the trader with the third rank is entitled to coins worth 15 ETH. The amount of the Airdrop giveaway will keep decreasing as the ranks get lower. The period of the event is from October 15 to October 30, and payments will start on November 1.

How is Bithumb’s DEX different from a centralized exchange?

The DEX has been developed using the R1 protocol in collaboration with ONEROOT, a global blockchain company. The DEX offers superior security as compared to centralized exchanges, as all of the DEX’s assets are stored in Smart Contracts and controlled independently by the users. Even in the event of a hack, the DEX’s assets are not at a risk of loss. The histories of all transactions are also recorded transparently on the blockchain, which eliminates the possibility of any tampering of data.

The matching and settlement of orders on the exchange are separated by the R1 protocol. Order matching is done off-chain, which allows for fast transaction speed. The DEX will also share order data and liquidity with other exchanges using the R1 protocol, which will empower it with better trading depth and increased asset liquidity.

In June this year, a $30 million hack had tarnished the name of the exchange temporarily. However, the exchange actively took damage control measures and recovered $16 million of the lost funds.

In July, the company also announced its plans of launching in Japan and Thailand. As per reports, Bithumb has applied with Japan’s Financial Services Agency (FSA) and Thailand’s Securities and Exchange Commission (SEC) for regulatory approval for operating in these countries.

 

Image from Shutterstock

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The Daily: Tether Regains Ground, Coinbase Does Dublin

The Daily: Tether Regains Ground, Coinbase Does Dublin

Today’s edition of The Daily starts where Monday’s left off: by looking at the latest on Tether, whose stablecoin anchors so much of the cryptoconomy. In related news, we detail Bitfinex’s banking situation and reveal why Coinbase has chosen Dublin to be its European headquarters.

Also read: Tether Sheds Its Peg

Tether Regains Ground

The chart below isn’t your average Binance altcoin experiencing some characteristic volatility. It is in fact that of two supposed stablecoins trading against one another: tether (USDT) and trueusd (TUSD). Following yesterday’s shenanigans, which saw tether slip to around $0.88 on some exchanges, the token has regained a little ground and now sits at $0.95, according to Blockmodo.

The Daily: Tether Regains Ground, Coinbase Does Dublin

The data remains skewed, however, by the fact that tether is valued at a flat $1 on Bitfinex, where it is the only U.S. dollar trading pair. Sites such as Coinmarketcap, which record tether’s seemingly perfect dollar parity on Bitfinex, create the impression that USDT’s global average is higher than it actually is. At the time of publication, 1 TUSD was trading for 1.06 USDT on Binance. While Binance offers a range of stablecoins, it remains heavily invested in tether, with holdings of ~$850 million, meaning it owns more USDT than even Tether itself. On Monday, Tether came out fighting, with chief compliance officer Leonardo Real insisting:

Although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by U.S. dollars (USD) and that assets have always exceeded liabilities.

Huobi, the world’s fourth largest exchange, has now followed the lead of Okex and introduced a handful of new stablecoins to alleviate traders’ concerns. TUSD, USDC, GUSD and PAX will all be listed on Oct. 19. The market capitalization of Circle’s USDC has grown by 85% in the past week, surpassing $25M, with more than 40 platforms now supporting the stablecoin. Bitfinex, meanwhile, has confirmed that its fiat deposits are on course to be restored, a move that ought to restore a measure of confidence in the exchange:

Coinbase Seeks Dubliners to Join Irish Outpost

“Coinbase is expanding its European presence by opening a new office in Dublin,” revealed the serpentine exchange, whose tentacles span multiple continents and crypto sectors. “We look forward to tapping into the city’s diverse talent pool and contributing to its burgeoning crypto economy,” they added. What Coinbase didn’t mention is that Ireland’s famously low corporate taxes will have been pivotal in sealing the deal. The California-based firm will be joining the 700 other U.S. companies to date that have made Dublin the seat of their European operations, including Apple.

The Daily: Tether Regains Ground, Coinbase Does Dublin

“I am delighted that Coinbase is opening an office in Dublin,” said Ireland’s Minister for Financial Services and Insurance Michael D’Arcy. “This decision highlights the competitive offering and attractiveness of Ireland for financial services.” Coinbase has now embarked on a recruitment drive ahead of the opening of its Dublin office.

Eraswap and X Cloud Usher in
Censorship-Resistant Platforms

The Daily: Tether Regains Ground, Coinbase Does Dublin
Cloud X

We’ve written a lot lately about censorship and the tools being developed to thwart crackdowns by the dominant web platforms such as Facebook and Twitter. Decentralized applications have the potential to ease some of the pain points that are afflicting web users, including account shutdowns and permabans. Eraswap, a platform that aims to refine social media via a social economy and marketplace dapp tailored to the user’s interests, can be added to that list. Then there’s Internxt, which has just released the beta of its X Cloud decentralized storage with 10GB provided for free.

Distributed storage is big business right now, with the likes of Akash also releasing its own cloud storage solution designed to thwart internet censorship. Having inked partnerships with Blackberry, Civic and Y Combinator, Internxt has already drummed up a fair bit of interest in its decentralized storage solution.

What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.


Images courtesy of Shutterstock.


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