crypto India

 

The crypto sector in India, the second most populous country in the world is showing record growth in recent history despite the tough economic outlook due to the Coronavirus pandemic. 

More and more investors and traders are becoming part of the emerging sector especially after the Supreme court allowed the industry to continue despite the reservations of the central Reserve Bank of India (RBI). The RBI had placed a blanket ban on cryptocurrencies in the country due to regulatory and money laundering concerns but the crypto community successfully lobbied against it in court and got much-needed reprieve earlier this year. However, this tussle is far from over and the RBI is aiming to use its own jurisdiction to suppress the growth of the sector in different ways.

A New Survey

Nevertheless, the crypto industry is enjoying extraordinary growth according to a survey by Indian blockchain media organization called Bit2Buzz. The media group conducted a survey of the local cryptocurrency exchanges and DeFi banks mushrooming across the country and got their feedback regarding various items. 

Participants asked about the Effects of Covid-19 on Blockchain Economy

The main questionnaire focused on the current uptick and how these companies are coping with the pandemic that is ravaging economies around the world. India remains one of the hardest hit countries in the world. 

Until recently, the country was under a strict lockdown for more than a couple of months that saw tens of millions of migrant workers fired from their jobs and many had to walk their way across thousands of miles to their home towns thus presenting an unprecedented crisis for the government. The lockdown has now been eased but the economic woes continue because of the new reality checks in place. 

Results

In the survey cryptocurrency exchanges including popular ones like Wazirx, Unocoin, Coindcx, Pocketbits, and Bitbns were surveyed. Blockchain-based fintech solutions Cashaa, Bank of Hodlers, and Oropocket were also sent questionnaires. 

Exchanges Report Increase in Activity

All five of the top exchanges reported considerable increase in trading volumes and activity on their platforms. Wazirx CEO Nischal Shetty reported the highest increase in trading with over 470% net increase in volume alone and new signups are at record levels too. 

DeFi Banks Report No Noticeable Impact

Interestingly, the three DeFi banks Cashaa, Bank of Hodlers, and Oropocket didn’t declare any major change due to the pandemic, positive or negative. 

Women Traders/HODLers

While the involvement of Indian women in online platforms is increasing, it is still quite low overall. According to the survey results, UnoCoin exchange showed that almost 15% of its users were female. 

This was the highest level of women participation among cryptocurrency exchanges. Other exchanges including Bitbns reported 11% while Pocketbits reported only 2%. Wazirx and Coindcx didn’t close the percentage of female users according to the survey. 

Women involvement in crypto banks on the other hand was quite high with Oropocket reporting 39% female users, Cashaa 30%, and Bank of Hodlers 5%. 

Conclusion

The nascent cryptocurrency industry within India, especially exchanges are experiencing considerable growth during recent times. However, the initial euphoria might die over time as seen elsewhere and the graph may flatten in the near future. 

But, India being a massively populated country still has a lot of potential for the future especially with respect to contributing towards a global cashless society.

 Central Bank Digital Currency (CBDC)

 

As we continue through an extended period of economic uncertainty, the stability of the US dollar as well as many other FIAT currencies remain questionable. With unprecedented money printing that the world has yet to witness, the risk of hyperinflation and monetary collapse in countries throughout the world are more likely now than.  The worst is yet to come and we have already started to witness the impacts of inflation as the prices of groceries and other utilities start to rise. Lebanon is currently in a state of economic unrest as the distrust in central banks reaches an all time high, Venezuela is still coping with their financial crisis and the US response to an impending global recession is dismal at best, simply responding by printing more money. Debates continue to ensue on whether keeping the US dollar as the world reserve currency is the best course of action, or if countries need to take it upon themselves to institute a new standard, in which they retain more control.

End of the dollar system, new global currency?

Using the COVID pandemic to exemplify the need to revitalize monetary policy has been common amongst prevalent investors, economic advisors and countries. Some individuals insist that Bitcoin was intended to thrive under these circumstances and why it should trump the US dollar as a new global standard. That Bitcion’s inception was to inherently protect against economic uncertainty as a trustless, decentralized store of value that can’t be hyperinflated. Others propose we assume a path that is reminiscent of the gold standard before we abandoned it in 1971. However, when it comes to Bitcoin, many still view it as a speculative asset, one that is too volatile in nature and couldn’t assume the role as the new world reserve currency. And going back to the gold standard is a near impossible task due to the difficulty associated with verify the amount of gold in reserves that each country claims to have.

Central Bank Digital Currency (CBDC)

As each country takes the natural route of prioritizing their own purchasing power and increasing their economic standing, the most likely outcome is a transition to CBDCs also known as central bank digital currencies. Not only will this be the most practical route to preserve each country’s relative purchasing power, but gives each country more control, traceability and regulation on the money injected into the system. China has been working on their version of the digital Yuan for over a year and has already started testing them in select locations. Other countries are likely to follow suit as it seems we already live in a world where most transactions occur digitally, so a centralized digital cryptocurrency may be the most efficient monetary policy moving forward.

Payments in China are almost entirely digital, with users paying with smartphones at almost every location. In Sweden, they are the closest to becoming entirely cashless, with some businesses even declining physical cash as a means of exchange. With Bitcoin introducing blockchain technology to the world, many banks, countries and companies are interested in utilizing the underlying infrastructure to promote their own form of cryptocurrency. The major difference however being while Bitcoin is decentralized with a max supply, these CBDCs are still subject to hyperinflation due to the ability to print more of these coins with even less effort needed than we currently see with cash printing.

The agenda to push CBDCs is a smart move for countries as they can undoubtedly use the current sentiment surrounding “cash being dirty” during a pandemic to incentivize people to transition to an entirely online based form of currency. However, one should understand that true cryptocurrencies by nature are decentralized without a single point of failure. Cryptocurrencies were created to incentivize all members of the ecosystem, to restore purchasing power to contributors as well as create a transparent and decentralized network that can operate without trusting a single entity, using a free market structure that relies on technical fundamentals to verify and record transactions. The problem with many of these CBDCs as well as some other centralized projects such as JPM coin and Facebook’s libra is they incentivize the distributors without offering users the same advantages decentralized cryptocurrencies propose. A single point of failure means the success of the cryptocurrency relies on the legitimacy on the centralized authority to be responsible with the distribution and regulation of the cryptocurrency. As they control the supply, we are still faced with the same issue we see now, with the FED injecting trillions of dollars into the system, lowering interest rates and not allowing the free market to run its path. The introduction of CBDCs are a plausible solution that will likely work in the short term, but doesn’t solve the underlying issues of fractional reserve banking. Rather, it will likely push impending recession further down the line, in the same way excessive printing and bailouts circumvented the fundamental flaws in the recession of 2008. With that being said, many speculate on whether CBDCs will be detrimental to the success of Bitcoin and diminish its use case. While the inception of CBDCs doesn’t necessarily solve the problems of quantitative easing and holding companies accountable, their introduction might potentially expedite the process of Bitcoin adoption.

Central Bank Digital Currency (CBDC) vs Bitcoin

A major barrier for Bitcoin is the technical aspect of the cryptocurrency. Many who are introduced into Bitcoin are boggled down by the concept of a digital currency. The debate on “backing” and “tangibility” are some of the prevalent reasons why people claim Bitcoin can’t be a legitimate store of value. And while the “backing” issue will only be resolved through further education, proven usability without tangibility will be a step in the right direction for Bitcoin. As China continues to introduce users to the concept of the digital Yuan and other countries compete to initiate their own CBDCs, they are doing the heavy lifting to onboard people onto the idea of completely digital currencies. With countries pushing citizens to move towards a completely digital economy, the idea of cryptocurrency becomes less far-fetched. The last barrier at that point is contrasting the stark differences between decentralized cryptocurrencies like bitcoin and centralized ones still subject to unsustainable inflation.

For countries and companies to reject the idea of cryptocurrency only a few years ago to move towards creating their own is a major shift in positive sentiment towards the industry. The undeniable use case it presents as well as their adoption means they acknowledge the disruptive nature of cryptocurrency and must race to compete or will find their current monetary systems obsolete. For now, it will be interesting to see how citizens respond to the claimed benefits of CBDCs and how it will impact them personally. Nonetheless, CBDCs remain bullish for Bitcoin and cryptocurrency on a whole as more individuals are exposed to an industry that was previously foreign.

Introduction

This week, we enter the first month in the third quarter of 2020, and with the Bitcoin BTC halving hype over, we turn to the technical charts of the BTCUSD following a top-down approach for a deeper understanding of the direction of the bitcoin price.

Bitcoin BTC MINERS’ REWARD

The Bitcoin BTC miners’ reward has been a fundamental driver of the BTCUSD exchange rate over the years. However, a sharp slump in the BTC miners’ reward following the last halving did not result in a similar drop in the bitcoin price, an indication that miners are not willing to let go of their Bitcoin BTC holdings.

At this point, miners would instead hold on to the BTC stash and opt for the borrowing of fiat currency to cover for mining expenses.

Let’s move on to the technical charts of the BTCUSD following a multiple time frame approach.

BTCUSD: Monthly

bitcoin price

Above is the monthly chart of the Bitcoin BTC vs. USD highlighting the resistance zone spanning between February 2018 ($11,780.00) and May 2018 ($6427.16) and support zone, which falls within the $4265.00 and $3122.28 range.

The first exit of the resistance zone on June 01, 2018, marked the corrective wave-A after the fifth Elliot impulse wave structure that spanned from January 2015 to December 2017.

A breakout above the bearish accumulation resistance set in December 2018 confirmed the bottoming of the corrective wave-A. It sets out for a corrective wave-B that also topped in June 2019 at $13831.41.

The March 2020 bearish price plunge is viewed as an end to the wave-C as the December 2018 support zone, which served as a springboard, sending the bitcoin price back into the resistance zone.

BTCUSD: Weekly Candlestick Chart

bitcoin price graph

Coming one level down to the weekly time frame, as shown above, the BTCUSD enters the February 17, 2020, resistance zone, and we start to notice a slowing in bullish momentum.

As the bitcoin price now trades above the MA-200 and MA-50 levels, with the stochastic entering the oversold area, bitcoin bulls expect a similar surge in price like April 29, 2019.

However, the newly formed bullish accumulation support ($8630.00) is a level to look out for should the bitcoin price close below it.

BTCUSD: Weekly Heiken-Ashi Chart

bitcoin price

The Heiken-Ashi price chart is known to filter out noise from the price chart and help traders clearly identify trends in the form of consecutive bullish or bearish closing bars.

Following a regular bullish divergence that set support at $3,850.00, the bitcoin price viewed from the Heiken-Ashi candlestick failed to close below the MA-200 and set out to form consecutive bullish closing bars.

The bullish formation is similar to the bullish trend that started from January 28, 2019, the current bullish trend form visible price wicks that show a weakness in the bullish trend upon trading within the MA-50 zone.

BTCUSD: Daily

bitcoin price graph

Lastly, a view from the daily time frame shows the BTCUSD entering a resistance zone established on May 18, 2020, after the hidden bullish divergence setup.

The bulls will have to drive the bitcoin price above the $9966.12 resistance for a continuation of the upswing.

Conclusion & Projections

Though the analysis above leans further towards a bullish trend, and the bitcoin price already trades above the significant $10K round-number mark, we conclude by showing both bullish and bearish outlook below.

Bullish Outlook

Following the higher weekly time frame for direction, the BTCUSD maintains a slowing but bullish trend, going forward into Q3, 2020.

Bearish Outlook

A bearish weekly closing Heiken-Ashi bar or a bearish weekly candlestick close below the $8630 bearish accumulation support will confirm a possible price slump towards the $6K area.

 

ethereum

The Ethereum price index has come a long way since it was launched back in 2015 as a programmable blockchain network. It was then believed that it would truly harness the power of decentralization and immutability that Bitcoin pioneered in. 

However, the cryptocurrency is still stuttering and hasn’t recovered as well as Bitcoin’s after the bear market of 2018-19. Its native cryptocurrency Ether (ETH) continues to play second fiddle to Bitcoin in the cryptocurrency charts. Let us take a closer look at things and try to figure out where it is headed!

Ethereum-the Fallen Messiah?

Ethereum’s launch back in 2015 was one of the most anticipated events on the blockchain calendar at that time. For the first time in history, a programmable blockchain that could store permanent untamperable records on its ledger till eternity. This was a big deal back then as Bitcoin has limited functionality regarding storing personalized records. 

Ethereum was touted as the messiah of blockchain technology and many hoped that it would scale quickly to cater for the massive needs of the people around the world. However, fast forward five years and the network is still at crossroads rather than showing signs of achieving its potential. 

The Ethereum price index has also fallen considerably and despite some recovery in the Q2 of 2020, it is still giving mixed signals overall. 

A Brief History of Ethereum Price Index

2013: Ethereum concept visualized by founders Vitalik Buterin, Joseph Lubin, Gavin Wood and others. Back then, Bitcoin was below $500. 

2014: A crowdsale took place successfully with investors pitching in to support the new network. 

30 July 2015: Ethereum network went live. 

2017-2018: Ethereum price index goes up massively. From less than $15 before 2017 to a mammoth $1432 all-time high ever recorded in January 2018. However, the price soon tanked and by the end of the year, it was back in $500 territory. 

2019: The long-term bear market continued and the cryptocurrency hit below $91 before recovering a bit. However, the recovery is not as good as Bitcoin’s with the premier cryptocurrency recovering as much as 60% of its all-time high value while Ethereum can only manage 40%. 

2020: Ethereum price remains stable and produces a slight uptick in anticipation of the future in which several big developments are around the corner. The cryptocurrency is being traded within the $200-$240 range nowadays. 

Ethereum Follows the Altcoin Verse

One thing for sure is that Ethereum follows the overall altcoin market in most instances and is way more volatile than Bitcoin itself. Altcoins or short for Alternative Coins is a term used for all other digital currency coins than Bitcoin itself.

ETH - BTC

The graphs show this proof as all of the altcoins posted stronger results during the 2017-2018 bull market than Bitcoin but failed to hold it in the long-term. While Bitcoin didn’t appreciate as much as the altcoins, it did post some stronger results in the pullback and retained much of its value while altcoins underwent a carnage and most of them pulled back as much 90% from the all-time high positions in January 2018. 

Ethereum was one of them. The Ethereum price index suffered a dip from an all-time high position of $1432 to $91 during the last two years or so. However, recent recoveries have given some sense of stability within the market for the coin. 

Ethereum at Crossroads

The Ethereum networks and with it its price index is once again at crossroads. This is because of a massive update that is waiting to happen in December this year that will mark the shift from Proof-of-work (POW) consensus algorithm to Proof-of-stake (POS) algorithm. This new update is revolutionary as none of the big coins use this protocol. The update is expected to make Ethereum more efficient but poses many challenges of its own. 

The Ethereum price index in the long run will follow the success of the new update to the network. This is an aggressive update that will challenge the status quo of the cryptocurrency world, but will it succeed? Only time can tell us that!

 

Ripple's CEO Brad Garlinghouse

Ripple's CEO, Brad Garlinghouse, recently took to Twitter to share that the United States' regulators must pay heed to the cryptocurrency industry, in the wake of China's decision to launch their own virtual currency. Garlinghouse who currently serves as the CEO of the widely acclaimed Ripple Labs, a blockchain and cryptocurrency providing company, posted his comments on the social media platform where he mentioned that now is the ideal time to make an entry into the digital currency industry.

United States lagging behind China

In his comments, he also reiterated that the United States is lagging behind and in many ways is being driven out by its biggest competitor China. Garlinghouse mentioned that China is gaining strength with every passing day and is attaining top spot in fiat money and cryptocurrency payments. He also disclosed that the regulatory bodies in the US have not taken any decision for quite some time now, and that now is the perfect opportunity to improve as well as promote innovation.

In his tweet, he said, "U.S. regulators: now is the time to step up and lean into digital currencies. Remaining complacent is actually setting us back, while China’s grip on both crypto and fiat payments becomes stronger."

Brad further clarified that the members of the US Congress received several calls regarding digital dollar, however none of the members of the government or even the Fed has taken any positive decision yet. He criticized the very attitude and approach of the US government and officials he called on the regulators to adopt as well as embrace both cryptocurrency and blockchain innovations.

Central Bank Digital Currency

It must be noted that China has constantly been making major advancements in the creation of its own digital currency-yuan to such an extent that the country has even carried out pilot tests of the CBDC or Central Bank Digital Currency in real-world. China carried out these trials in partnership with Subway, Starbucks, as well as McDonalds in four of its major cities.

With trade tensions between China and the US mounting, Garlinghouse urged the United States regulators to innovate digital currency to better compete with its rival China. The Chinese authorities have been working on the digital money initiative for over 5 years now with the central bank of the country getting close to implementing it in reality. According to Garlinghouse, the Chinese digital currency will severely impact the global economic condition. In fact, several experts from the industry are of the opinion that the Chinese digital currency can pose a major threat to dollar's already declining global dominance.

As far as China is concerned, over 1.2 billion individuals or over 80percent of the country's population is already using their smartphones for making payments for numerous goods & services digitally. He said that China could utilize the yuan to ensure quick remittances and profound improvements within the country. However, things will change once China brings its digital currency - Yuan into business as well as economic relationships with foreign countries.

Before Garlinghouse, even Bitcoin bull Mike Novogratz had criticized and stated that the United States would lose its leadership position within the blockchain and fintech area if it continues to oppose innovations in the blockchain and crypto sector.

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