Blockchain and Cryptocurrency News Roundup
- Post by: bag2q
- September 7, 2020
- Comments off
7 September 2020.
Here’s a short summary of some of the biggest headlines in Crypto this past week. Coinbase is planning a token launch platform for crypto startups. “Chef Nomi” swapped all his SUSHI holdings for ETH, claiming it was not an exit scam. After the sharp Bitcoin price drop in the early days of September, will there be a v-shaped recovery from Bitcoin’s biggest drop since March? Analysts say it’s unlikely. Finally, how are banking difficulties driving crypto adoption in Latin America?
Coinbase planning token launch platform for crypto startups
“Last year’s speculative comments have become a reality: cryptocurrency exchange Coinbase really is working on a platform that will allow startups to launch their own token via initial exchange offerings (IEO).Decrypt
CEO Brian Armstrong confirmed the plans during a podcast interview with O’Shaughnessy Asset Management CEO Patrick O’Shaughnessy, with a transcript noting that the service could be called “Coinbase Launch”—although that’s not set in stone just yet.
“We’re working on a product, we’ll probably call it Coinbase Launch or something like that,” said Armstrong, “but it’s a way for anybody who wants to do a crypto startup to come in and say, ‘All right, I want to issue a token. Maybe I want to raise money. Maybe I just want to use it to build my community.’”
“[We’ll] just hand-hold people through that process and help them with the custody of it, help them create the smart contract, help them with the governance issues, [and the] vesting of these things if you need to distribute those to employees,” he added.
Essentially, Coinbase would build the platform to launch tokens, but it wouldn’t be hands-off like Kickstarter: the exchange would help with the step-by-step process of functionally executing on those plans. Seeing a token launch with the Coinbase stamp of approval could ease the minds of some potential investors, versus it launching on a lesser-known platform.
Armstrong went on to liken the planned platform to a combination of startup toolkit Stripe Atlas and startup job/investment site AngelList, adding, “I don’t know what exactly the analogy would be, but that could be a huge unlock for the crypto economy as well, to get a thousand new startups built like that”
Chef Nomi swapped all his SUSHI holdings for ETH, claiming it was not an exit scam
Chef Nomi, the mysterious founder of SushiSwap—the latest decentralized finance protocol to flourish above the thriving canopy of this summer’s DeFi craze—has cashed out. Over the weekend, the self-described “head chef” withdrew 2.5 million SUSHI from the decentralized exchange in exchange for 18,000 ETH—worth about $6 million. He also removed 20,000 ETH, worth another $7 million, from the same liquidity pool. The move, recorded on Etherscan, comes just after the creator of SushiSwap, a fork of the popular Uniswap exchange, was hit with mounting criticism that he controlled nearly half of the coins in the system. In somewhat of a prophecy, a Twitter poster going by the name of Sasa pointed out on Tuesday that Chef Nomi had $27 million worth of SUSHI “ready to be dumped on the SUSHI/ETH pool.”Since Chef Nomi withdrew the liquidity for the token—in other words, reduced the amount of SUSHI available to trade for ETH on SushiSwap—the price of a SUSHI has more than halved in the past 24 hours, from about $5 to $2.35. It’s the latest blow to SUSHI’s ailing price this week. The price of SUSHI peaked on Tuesday at $10.81, but has been falling ever since, along with the rest of the crypto market. In a Twitter thread this morning, Chef Nomi explained that he liquidated all his SUSHI because he cares about the community and wants to hand things over to other developers. In return, he’s been hit by a rash of “blaming and FUDing,” he said.Decrypt
V-shaped recovery from Bitcoin’s biggest drop since March unlikely, say Analysts
Despite a slight bounce Friday morning, some analysts don’t expect bitcoin to chart a quick recovery from the double-digit price drop over the last two days.Bitcoin fell by over 10% on Thursday to $10,006, according to CoinDesk’s Bitcoin Price Index.Coindesk
That’s the biggest single-day percentage decline since March 12 when bitcoin prices crashed around 40% amid a major sell-off across the equities markets.
Other data sources such as Bitstamp even logged bitcoin as dropping a little below $10,000.
At the press-time price of $10,520, the cryptocurrency is down 18.59% from the recent high of $12,476 registered on Aug. 17.Similar double-digit price pullbacks observed in April and May were quickly reversed in a couple of days, a sign of buy-the-dip mentality.
This time, though, a quick V-shaped recovery back to recent highs around $12,000 looks unlikely due to cryptocurrency’s increased sensitivity to traditional markets.
“The worst may be behind us, but bitcoin can take days to form a good base,” crypto analyst Edward Morra, who called the market top at $12,000, tweeted early on Friday.
Matthew Dibb, co-founder, and COO of Stack, a provider of cryptocurrency trackers and funds, told CoinDesk that prices could drop below $10,000 if the global equity markets retrace.
“Macro factors are currently at play, and bitcoin shows a higher correlation to global equities markets in this ‘risk-off’ period,” Dibb said.
Indeed, sharp losses on Wall Street look to have accentuated the bitcoin price drop on Thursday.
Stocks may extend the sell-off, pushing bitcoin below $10,000 on Friday if the all-important U.S. non-farm payrolls report shows the labor recovery is losing momentum.
How banking difficulties drive crypto adoption in Latin America
Blockchain analytics firm Chainalysis recently published research indicating how unbanked individuals and businesses in Latin America are using cryptocurrencies as a speculative investment, a store of value, and a means of exchange. An inefficient banking sector in Latin American countries has pushed some individuals and businesses to embrace the use of cryptocurrencies. The ongoing COVID-19 pandemic has not slowed down the number of crypto transactions in the region.Of course, Latin America is a group of nations in the Western Hemisphere where Romance languages like French, Portuguese, and Spanish are predominantly spoken.Blockchain.news
Banking issues and the need for remittances are two factors that drive unique patterns of crypto usage beyond the speculative investment common to the many parts of the world. These issues are driving Latin American individuals and businesses to conduct commercial transactions with cryptocurrency.
Wait times and high cost of remittances have been regarded as a problem that cryptocurrency can solve. Digital currency can be moved overseas instantly without high fees common to the international transfer of fiat currency. According to Chainalysis, 90% of cryptocurrencies received by Latin America come from outside the region. Most remittances in fiat currency to Latin American countries come from the US, majorly from migrant workers sending money back to families. Furthermore, the data indicates that East Asia has a strong link with Latin America. Several crypto payments are from Latin American businesses buying goods from Asian exporters to re-sell at home.
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