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Mass adoption would ruin cryptocurrencies. Keep it in a niche

Published

7 months ago

15 June, 2024

Mass adoption would ruin cryptocurrencies. Keep it in a niche

Cryptocurrencies would be better off remaining a niche.

The biggest cryptocurrency crisis so far has been, without a doubt, the rapid decline and tremendous fall of FTX. At the time of the collapse of what turned out to be Sam Bankman-Fried’s personal piggy bank, it was the third largest cryptocurrency exchange. Its demise sent shockwaves across the industry, bringing down not just prices but a host of companies.

Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

This article is excerpted from The Node, CoinDesk’s daily roundup of the top stories in blockchain and cryptocurrency news. You can sign up to get the full service newsletter here.

At the time, in late 2022, it was unclear whether the cryptocurrency concept would ever recover: the blatant fraud of what was until then one of the most reliable and consumer-friendly cryptocurrency companies seemed to confirm the widespread assumption that all of this it was just a ruse to hide a fraud.

Today, things are improving, although there remains a pervasive fear that the industry is repeating old mistakes and is headed for another punishment. For veteran cryptocurrency investors and observers, this is and always has been normal: since the days of bitcoin (BTC) 2014 market crash, following the Mt. Gox bankruptcy, e subsequent reboundthe cyclical nature of the market has been an accepted part of life.

But isn’t it strange that this maturing industry has normalized these boom-and-bust cycles? It seems to me that the mass adoption of any blockchain or consumer application depends on whether the price of its token – or the industry itself – is not always at risk of imminent collapse.

And that’s the point. To a large extent, the biggest problem with the growth of cryptocurrencies is the growth of cryptocurrencies. This whiplash between euphoria when markets rise and despair when they fall, every four years or so, is the result of cryptocurrencies’ quest for mass adoption.

The process is clear, a textbook case for economist Robert Shiller “irrational exuberance.” Promises to reinvent everything from money to the Internet itself pique interest. People believe in the dream of decentralization (or, for many, the promise of easy money). Popularity drives prices up, which reflexively it drives them up further as more and more people invest, until something breaks.

Almost always, the things that fail are the things that blockchains were built to mitigate or replace. And these things, almost always, were built to make cryptocurrencies attractive and/or easy to use. It is not an uncommon opinion that “the masses” will probably not self-guard. But without self-custody, what’s the point of something like Bitcoin?

“The risk of growing adoption is that new entrants are unaware of the core tenets of Bitcoin: decentralization, self-custody, hard money, etc. If new entrants do not learn, understand, and espouse these core beliefs, the characteristics that make them these realities may not remain in the protocols over time,” said Alex Thorn, head of corporate research at investment bank Galaxy Digital.

Adoption means respecting the law (which is often at odds with cryptocurrency values) and creating easy-to-use logins and logins (which can be compromised). There is a tension – if not a direct competition – between the goals of decentralization and mass adoption. Grow cryptocurrency too much and you risk destroying what it is actually useful for. “Just bending to the dominant financial system ends up giving away a lot of the opportunities that matter with this technology,” said Nathan Schnieder, a professor of media studies at the University of Colorado Boulder and author of “Governable Spaces.”

It’s a point echoed by University College Dublin lecturer Paul Dylan-Ennis, who said that “cryptocurrency is a subculture that can’t accept being a subculture. Most of our problems stem from how talking about “onboarding the next billion” makes us decay our values.”

There is a certain irony in the fact that developers, founders and investors have spent 15 years and billions of dollars searching for a “killer app” for blockchain, yet it already has one.

Satoshi Nakamoto, and those who actually follow in his footsteps, have built digital tools that can be used in any way and cannot (easily) be taken away.

That’s all. This is the whole point of cryptocurrencies.

Mind you, these are huge markets. But today, as in other times when cryptocurrencies appear to be on the verge of breaking out, this use pales in comparison to the speculative use of cryptocurrencies, where capital comes in, jumps from coin to coin or protocol to protocol, and causes the number to rise – essentially creating a circular economy.

Alright then. Gambling is a use case to some extent. But if people want cryptocurrencies to be used productively, developers, founders, and investors should work for the people who have a real need for money and censorship-resistant tools. Almost by definition, this is a limited audience.

This is just my opinion. Many disagree.

Molly White, author of the critical crypto news stories Web3IsGoingGreat and “Citation Needed,” argues that crypto is already mainstream. “There are individual projects that are still small and niche, but with Brian Armstrong and Sam Bankman-Fried rubbing shoulders in Congress and BlackRock and Fidelity launching bitcoin ETFs, I think the ship has probably sailed,” she said in a direct message.

Privacy advocate, educator, and monero superuser SethforPrivacy sees things differently. The “unfortunate reality is that most people do not yet realize the need for Bitcoin nor are they willing to take on as much personal responsibility, and as such we must focus our efforts on improving Bitcoin for those who do. Today,” he said.

It is also argued that decentralization is the very reason why cryptocurrencies will go global, so to speak.

“The ONE thing that makes Bitcoin’s global rise possible is its most cypherpunk attribute: it is owned by no one and is run by users, not states or corporations,” said Alex Gladstein, chief strategy officer at Human Rights Foundation.

However, it is not exactly clear what the masses want. Ethereum advocate Emmanuel Awosika, for example, admits that “while we believe *everyone* wants privacy, censorship resistance, and protection against nation-state attacks, some people are fine with a product that solves a problem and has good UX.”

While not everyone needs, let alone wants, privacy, resistance to censorship and maximum decentralization, Awosika added: “We should explore the possibility of putting cryptocurrencies in the hands of as many people as possible.”

Likewise, Roko Mijic, of “Roko’s basilisk” fame, argued that it’s actually scale that gives decentralized tools any power, which is evidently true as Bitcoin is difficult to attack because it has miners spread across the world. “You can’t resist censorship from within a small-scale crypto network because the government will simply destroy the entire network,” Mijic said.

Justin Ehrenhofer, founder of Moonstone Research in Chicago, echoed this sentiment, pointing out that a currency is only useful if it is widely accepted, and therefore “cypherpunks should focus on building systems that attract outsiders.” However, he added that “with widespread adoption” there has been a degradation of the spirit of cryptocurrencies, as the average user stores their wealth in custodial exchanges.

I guess the question is, how valuable are cryptocurrency fundamentals?

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We are the editorial team of Blocksight, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on Blocksight, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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News

Ether Drops Further After ETF Launch

Published

6 months ago

23 July, 2024

Blocksight Staff

Bitcoin Surpasses $66,000 Thanks to Strong ETF Flows

Key points

Spot ether ETFs began trading in the U.S. today, with the funds initially having more than $10 billion in collective assets under management.
Analysts expect the launch of spot ether ETFs to have a net negative impact on the underlying price of ether in the near term, due to expected outflows from the pre-existing Grayscale Ethereum Trust.
Spot Bitcoin ETFs continue to see strong inflows, with BlackRock’s IBIT alone seeing more than $500 million in inflows on Monday.
Franklin Templeton, a spot ETF issuer on bitcoin and ether, has invested in a project that intends to bring Ethereum technology to Bitcoin.

Nine-point ether exchange-traded funds (ETFs)) started trading on the stock market on Tuesday, but all the optimism ahead of their approval did not translate into gains for the cryptocurrency markets.

Ether (ETH), the native cryptocurrency of the Ethereum blockchain, dropped less than 1% around the $3,400 level as of 1:30 PM ET, while Bitcoin (BTC) fell more than 2% to around $66,000.

Ether ETFs’ Debut Isn’t as Flashy as Bitcoin ETFs’

Spot ether ETFs began trading at just over $10 billion assets under management (AUM)), according to Bloomberg Intelligence analyst James Seyffart, most of that money is in the current Grayscale Ethereum Trust (ETHE) which has now been converted into an ETF.

“In the long term, Grayscale will simultaneously have the highest and lowest fees in the market. The asset manager’s decision to keep its ETHE fee at 2.5% could lead to outflows from the fund,” Kaiko Research said in a note on Monday.

Outflows from ETHE, if they occur, would be similar to those faced by Grayscale’s Bitcoin Trust (GBTC) after spot bitcoin ETFs began trading in January of this year, most likely due to high fees for the two original funds. Grayscale’s existing fund charges 2.5% fees, while a new “mini” ether ETF will charge 0.15% and commissions for other ETFs are set at 0.25% or less.

Such outflows could impact the price of ether and market sentiment.

“There could be a pullback shortly after the launch of Ethereum spot ETFs, i.e. outflows from Grayscale Ether Trust could dampen market sentiment in the short term,” Jupiter Zheng, a partner at Hashkey Capital’s liquid fund, told The Block.

But Grayscale remains optimistic.

“Compared to the splashy debut of spot bitcoin ETPs in January, the launch of ethereum ETPs has been relatively muted,” said Zach Pandl, Grayscale’s head of research, adding that investors may be “undervaluing” ether ETFs that are “coming to the U.S. market in tandem with a shift in U.S. cryptocurrency policy and the adoption of tokenization by major financial institutions.”

Bitcoin ETF Inflows Continue to Rise

As for bitcoin, there is clearly no lack of demand for spot ETFs, such as BlackRock’s iShares Bitcoin Trust (IBITS) recorded its sixth-largest day of inflows in its short history on Monday, at $526.7 million, according to data from Farside Investors. Daily inflows for the overall spot bitcoin ETF market also hit their highest level since June 5.

In particular, asset manager Franklin Templeton, which has issued both bitcoin and ether ETFs, appears to have decided to cover its back when it comes to Ethereum by investing in Bitlayer, a way to implement Ethereum technology on a second-layer Bitcoin network, according to CoinDesk.

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News

Spot Ether ETFs Start Trading Today: Here’s What You Need to Know

Published

6 months ago

23 July, 2024

Blocksight Staff

Spot Ether ETFs Start Trading Today: Here's What You Need to Know

Key points

Spot ether ETFs will begin trading on U.S. exchanges on Tuesday. Nine ETFs will trade on Cboe BZX, Nasdaq and NYSE Arca.
Ether ETFs offer investors exposure to the price of their underlying assets.
Commissions on these new ETFs generally range from 0.15% to 0.25%.
These ETFs do not provide exposure to Ethereum staking.

The U.S. Securities and Exchange Commission (SEC) has officially approved nine ether spots (ETH)exchange-traded funds (ETFs) for trading on U.S. exchanges. Trading for these new cryptocurrency investment vehicles begins today. Here’s everything you need to know.

What new ether ETFs are starting to trade today?

Spot ether ETFs starting trading today can be found at Quotation, NYSE Arkand Cboe BZX. Here’s a breakdown of each ETF you can find on these three exchanges, along with the fund tickers:

Cboe BZX will list the Invesco Galaxy Ethereum ETF (QETH), the 21Shares Core Ethereum ETF (CETH), the Fidelity Ethereum Fund (FETH), the Franklin Ethereum ETF (EZET) and the VanEck Ethereum ETF (ETHV).

Nasdaq will have the iShares Ethereum Trust ETF (ETHA) created by BlackRock, which also operates the largest spot bitcoin ETF under the ticker IBIT.

NYSE Arca will list the Bitwise Ethereum ETF (ETHW) and the Grayscale Ethereum Trust (ETHE). The Grayscale Ethereum Mini Trust (ETH), which will begin trading on the same exchange.

How does an ether ETF work?

Spot ether ETFs are intended to offer exposure to the price of ether held by the funds. Ether is the underlying cryptocurrency of the Ethereal network, the second largest crypto network by market capitalization.

ETF buyers are buying shares of funds that hold ether on behalf of their shareholders. Different spot ether ETFs use different data sources when it comes to setting the price of ether. Grayscale Ethereum Trust, for example, uses the CoinDesk Ether Price Index.

None of the ETFs launching today include pointed etherwhich represents a potential opportunity cost associated with choosing an ETF over other options such as self-custody or a traditional cryptocurrency exchange.

Ether staking currently has an annual return of 3.32%, according to the Compass Staking Yield Reference Index Ethereum. However, it is possible that the SEC will eventually approve Ether staking held by ETFs.

How can I trade Ether ETFs?

ETFs can simplify the trading process for investors. In the case of cryptocurrencies, instead of taking full custody of the ether and taking care of your own private keysSpot ether ETFs allow investors to purchase the cryptocurrency underlying the Ethereum network through traditional brokerage accounts.

Today, not all brokers may offer their clients spot ETFs on cryptocurrencies.

What are the fees for ether ETFs?

The fees associated with each individual spot ether ETF were previously revealed In the S-1 OR S-3 (depending on the specific ETF) deposit associated with the offerings. These fees are 0.25% or less for all but one.

The Grayscale Ethereum Trust, which converts to an ETF, has a fee of 2.5%. The Grayscale Mini Ethereum Trust has the lowest fee at 0.15%. These fees are charged on an annual basis for the provider’s management of the fund and are in line with what was previously seen with spot bitcoin ETFs.

Brokers may also charge their own fees for cryptocurrency trading.

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News

Kamala Harris Odds Surge Amid $81M Fundraise. What Does It Mean for Bitcoin and Cryptocurrencies?

Published

6 months ago

23 July, 2024

Blocksight Staff

Kamala Harris Odds Surge Amid $81M Fundraise. What Does It Mean for Bitcoin and Cryptocurrencies?

Market odds and memecoins related to US Vice President Kamala Harris have soared as the latest round of donations tied to the Democratic campaign raised $81 million in 24 hours, bolstering sentiment among some traders.

The odds of Harris being declared the Democratic nominee have risen further to 90% on cryptocurrency betting app Polymarket, up from 80% on Monday and setting a new high.

Previously, in early July, bettors were only betting on 8%, but that changed on Saturday when incumbent President Joe Biden announced he would no longer run in the November election. Biden then approved Harris as a candidate.

Polymarket traders placed $28.6 million in bets in favor of Harris, the data showsThe second favorite is Michelle Obama.

Somewhere else, Memecoin KAMA based on Solanaa political meme token modeled after Harris, has jumped 62% to set a new all-time high of 2 cents at a market cap of $27 million. The token is up a whopping 4,000% from its June 18 low of $0.00061, buoyed primarily by the possibility of Harris becoming president.

As such, Harris has yet to publicly comment on cryptocurrencies or her strategy for the growing market. On the other hand, Republican candidate Donald Trump has expressed support for the cryptocurrency market and is expected to appear at the Bitcoin 2024 conference on Saturday.

However, some expect Harris or the Democratic Party to mention the sector in the coming weeks, which could impact price action.

“While he has not yet received the official nomination, there is consensus that last night’s development is in line with current Democratic strategy,” cryptocurrency trading firm Wintermute said in a Monday note emailed to CoinDesk. “Keep an eye on Democrats’ comments on this issue in the coming days.

“The prevailing assumption is that Harris will win the nomination and any deviation from this expectation could cause market volatility,” the firm added.

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News

Top 30x Cryptocurrency and Coin Presales Today: Artemis Coin at #1, Others Are: BlockDAG, 99Bitcoin, eTukTuk, and WienerAI

Published

6 months ago

23 July, 2024

Blocksight Staff

Top 30x Cryptocurrency and Coin Presales Today: Artemis Coin at #1, Others Are: BlockDAG, 99Bitcoin, eTukTuk, and WienerAI

The cryptocurrency market has seen a lot of growth and imagination lately, with new ventures popping up regularly. A critical pattern in this space is the rise of crypto pre-sales, which give backers the opportunity to get involved with promising projects early on. Artemis is a standout option for crypto investors looking to expand their portfolios amid the many pre-sales currently underway.

Cryptocurrency presales, commonly referred to as initial coin offerings (ICOs), allow blockchain ventures to raise capital by offering their local tokens to early backers before they become available on open exchanges. Investors can take advantage of these presales by purchasing tokens at a lower price. If the project is successful and the token’s value increases, investors stand to receive significant returns.

>>> Explore the best cryptocurrency pre-sales to buy now <<

The Ultimate List of the Top 5 Cryptocurrency Pre-Sales to Invest In

Artemis: The aim of Artemis (ARTMS) will become the cryptocurrency equivalent of eBay or Amazon. The upcoming Phase 4 will see the launch of the Artemis Framework, which will serve as a stage for digital money exchanges where buyers, sellers, specialized organizations and those seeking administration can participate in coherent exchanges.
DAG Block: uses Directed Acyclic Graph technology to increase blockchain scalability.
99bitcoin: operates as a crypto learning platform
WienerAI uses AI-powered trading bots for precise market analysis.
eTukTuk focuses on environmentally sustainable transportation options, such as electric vehicle charging infrastructure.

We have determined that Artemis is the best new cryptocurrency presale for investment after conducting extensive research. It presents itself as the unrivaled cryptocurrency presale choice currently open.

>> Visit the best cryptocurrency pre-sale to invest in now <<

Top 5 Crypto Pre-Sales and Best Cryptocurrencies for Investment Today

Artemis (ARTMS) is attempting to establish itself as the cryptocurrency version of eBay or Amazon. The Artemis Crypto System, which will act as a platform for cryptocurrency transactions, will be launched in Phase 4. Buyers, sellers, service providers, and requesters will all benefit from seamless trading with this system. Customers will be able to purchase things, such as mobile phones using digital money, as well as sell products such as involved bicycles and get paid in cryptocurrency. Additionally, crypto money can be used to pay for administrations such as clinical consultations, legitimate care, and freelance work. Artemis Coin will act as the main currency of the ecosystem, with Bitcoin and other well-known cryptocurrencies from various blockchain networks backing it.

Artemis Coin has increased in price from 0.00055 to 0.00101 from 0.00094. Artemis may be attractive to individuals looking to recoup losses in Bitcoin, as predicted by cryptocurrency analysts. At this point, it seems to present an interesting presale opportunity.

>>> Visit the best cryptocurrency pre-sale to invest in now <<

The world of digital currency pre-sales is an exciting and exciting opportunity that could open the door to game-changing blockchain projects. Projects in this article, like Artemis Coin, offer the opportunity to shape the future of various industries and the potential for significant returns as the industry develops.

However, it is imperative to approach these investments with caution, thorough research, portfolio diversification, and awareness of the risks. You can explore the digital currency pre-sale scene with greater certainty and increase your chances of identifying and profiting from the most promising venture opportunities by following the advice and methods in this article.

>>> Join the best cryptocurrency pre-sale to invest in now <<

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