Autor Cointelegraph By Brian Newar

Former Goldman Sachs banker explains why Wall Street gets Bitcoin wrong

Former Goldman Sachs banker explains why Wall Street gets Bitcoin wrong

Uverejnil používateľ | aug 17, 2022 |

John Haar, a former asset manager at financial institution Goldman Sachs believes the lack of support from “legacy finance” for Bitcoin stems from a poor understanding of the cryptocurrency. Haar’s views were expressed in an essay on Aug. 14, which was originally sent to private clients of Bitcoin brokerage platform Swan Bitcoin. Haar previously spent 13 years at Wall Street asset management giant Goldman Sachs, before joining Swan Bitcoin as managing director of Private Client Services in April 2022.  The essay explains that not only do people in “legacy finance” fail to understand what he considers one of Bitcoin’s (BTC) primary principles, the idea of sound money is lost on them in general, which Haar says leads them to negative opinions about the crypto. “After many conversations, I can say that if there are people in legacy finance who have a well-researched stance on why Bitcoin is not a good form of money or why Bitcoin will not succeed, I was not able to find them.”Haar noted that he became interested in Bitcoin in 2017 based on the hype he saw in traditional media about it. He believes that the history and fundamentals of Bitcoin made him excited to discuss it with anyone, adding that Bitcoin “improves upon gold’s shortcomings.”On the other hand, Haar notes that negativity from Wall Street is a result of six different reasons stemming from a lack of research on Bitcoin and an understanding of history. He acknowledged that becoming familiar with the Bitcoin lexicon and its underlying principles is a “daunting task,” but that people in legacy finance do themselves no favors by pretending to understand them.“It’s much more common for one to pretend to be well-versed on a given topic and take a strong opinion regardless of one’s underlying knowledge — and this is especially true for a topic that touches the world of investing.”He also believes conditioning through governmental central planning, people generally following the consensus, only thinking about its application in developed countries, and a desire to maintain the status quo are also contributing factors. Haar said that these last four aspects conspire in various ways to act as a shield for legacy finance to stand behind in defense of the financial systems that are already in place.Related: Crypto-focused venture firm Dragonfly acquires hedge fund: BloombergHaar adds that “There is nothing inherently bad about these things,” but notes that these behaviors prevent people in legacy finance from becoming independent thinkers and early adopters of new technology. He also pointed out that the people in legacy finance are often highly specialized in their field, which he suggests has the tendency to give those people tunnel vision of their own world. “They earn a living by knowing the specifics of their corner of the financial services sector. There is little incentive for them to examine the fundamentals of the system.”

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Expansion of short-term BTC holders suggests 'final flush' of sellers

Expansion of short-term BTC holders suggests 'final flush' of sellers

Uverejnil používateľ | aug 16, 2022 |

A recent spike in short-term BTC holders could signal a “final flush” of sellers, meaning the capitulation events have played out, leaving the market ready for months of accumulation. The latest The Week On Chain report from market analysis firm Glassnode on Aug. 15 points out that short-term holders (STHs) have expanded their holdings by 330,000 BTC since May’s catastrophic LUNA collapse. As a result, they may be the canary in the coal mine signaling the path to market recovery.During the mass sell offs starting in May through June, Short-term holders of Bitcoin (BTC) established a new trend by buying up extremely cheap coins at or below $20,000 which puts them in an “advantageous financial position.”After a dramatic capitulation event, the ownership structure of #Bitcoin has been reshaped.As markets sell-off, $BTC migrates from weaker hands, to those stepping in at the lows. Here, we explore how to track this migration of coins using age bands.https://t.co/xBxdvALRmZ— glassnode (@glassnode) August 15, 2022The report states that an outflow of about 200,000 coins from long-term holders (LTHs) and exchange net outflows since May appear to have been the main contributors to the swelling STH supply. Altogether, these events indicate that a capitulation has occurred and that STHs “stepped in during the flush out, and now own coins with a much lower cost basis.”STHs are defined as wallets that have held BTC for no more than 154 days. They become LTH at 155 days.Typically, STHs buy coins at or near all-time high prices and selling much lower as “extreme STH accumulation is normally concurrent with bull market topping formations.” However Glassnode stated that buyers from May and June created a “constructive divergence” in bucking that trend.“Such events describe a transfer of coins to new buyers whom are initially classed as STHs, but have a low cost basis, but are in an advantageous financial position to HODL from there on,” it added.Related: Bitcoin price corrects after hitting a wall at a multi-month descending trendlineGlassnode suggests that the next aspect of a market turnaround that analysts must look at is whether the new STHs from May and June “have the conviction to hold on” and contribute to further price increases.

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Korean regulators investigate banks over $6.5B tied to Kimchi premium

Korean regulators investigate banks over $6.5B tied to Kimchi premium

Uverejnil používateľ | aug 16, 2022 |

South Korean banks are being investigated for their role in facilitating $6.5 billion in suspicious overseas remittances which have been tied to companies arbitraging cryptocurrency. According to an Aug. 15 report from Asia Times, the Financial Supervisory Service (FSS) ordered an investigation into South Korean banks last month after identifying a significant amount of overseas remittance transactions at the end of June.The investigation found that a majority of the $6.5 billion remitted overseas between Jan 2021 and Jun 2022 came from crypto exchange accounts before being sent out of the country, suggesting some Korean companies are exploiting the “Kimchi premium (kimp).”The Kimchi premium is the gap in cryptocurrency prices in South Korean exchanges compared to foreign exchanges. Investors buy crypto from foreign exchanges and sell them on local Korean exchanges for a profit. Regulators have been concerned about Kimchi premium trading as it encourages capital flight from the country. Currently, the kimchi premium sits at a modest +3.37% but was above +20% as early as last April according to market tracker CryptoQuant.Reports from Shinhan Bank and Woori Bank found that most of the money remitted was first transferred out of domestic crypto exchanges to various corporate accounts of Korean companies.These large remittances have raised red flags that investors are using huge sums of money to exploit the Kimchi premium, according to an Aug. 15 report from local news outlet Asia Times.There are also suspicions that the funds remitted are being used for money laundering, according to the KBS news outlet on Aug. 14, with some employees from the unnamed companies that performed the remittances having been arrested.The total amount sent overseas was more than double what the FSS had expected to find when it ordered banks to look into the matter. Asia Times reported that the FSS is now expected to conduct additional on-site investigations of domestic banks, which could uncover more funds that have been remitted.Related: South Korea’s financial watchdog wants to ‘quickly’ review crypto legislation: ReportThe FSS is now expected to issue sanctions toward Shinhan and Woori for allowing the greatest amount of remittances. Asia Times wrote that Lee Bok-Hyeon, head of the FSS said “We are taking the foreign exchange transaction seriously, and sanctions are inevitable.” On-site investigations are ongoing at Shinhan and Woori but will be completed on Aug. 19.

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NFT games have edge over ‘money in, no money out’ games: Polygon's Urvit Goel

NFT games have edge over ‘money in, no money out’ games: Polygon's Urvit Goel

Uverejnil používateľ | aug 15, 2022 |

Polygon’s VP of Global Business Development for gaming Urvit Goel believes games that integrate nonfungible tokens (NFTs) have a natural edge on traditional games that don’t allow users to sell their in-game items.Goel spoke candidly with Cointelegraph in Seoul last week about Polygon’s (MATIC) push toward helping NFT games proliferate and why game publishers in South Korea like Neowiz and Nexon are diving headfirst into the space.One of the main arguments Goel made is that the traditional business model that NFT games are competing against may be inherently weaker. In traditional gaming, users typically buy in-game items with real money, but they cannot sell those items to get back any dollar value.However, with most games in the gaming finance (GameFi) space, users can buy items as nonfungible tokens and sell them on when they are done playing the game. Goel referred to the traditional model as “money in, no money out,” and emphasized that gamers should be able to take back at least some of the dollar value they put into a game.“We just want to give users the ability to own the content they’re buying. And if they choose to sell it, great if they choose to keep it, great […] But even if you get a penny back out, it’s better than nothing, right?”Goel said he perceived clear signals that traditional game publishers are gearing up for big pushes into GameFi, starting with South Korea’s gaming giant Nexon, which owns the MapleStory title. It announced in June that it would put a version of its flagship title on-chain as MapleStory N according to mmorpg, a gaming news media outlet.Polygon has also entered into a partnership with South Korea’s Neowiz to put new and existing titles on-chain.He noted that the entrance of such large companies is creating “a little bit of a domino effect” in the industry in order to “show that they’re still innovative.” Goel hinted that the bosses of the big firms entering the blockchain space must have a great deal of confidence in the technology or they wouldn’t dress up their top-tier titles for GameFi.“These developers don’t have to come on blockchain to have successful businesses. They’re already generating hundreds of millions, if not billions of dollars of revenue in traditional web teaming.”Goel’s notions about gaming and blockchain are in line with ROK Capital’s Anthony Yoon who told Cointelegraph that GameFi and crypto are a “natural fit” for publishers.Related: Game dev explains why blockchain should be ‘invisible’ in P2E gaming: KBW 2022Part of Goel’s confidence in the bright future for NFT gaming and GameFi comes from the buzz within the communities. Although he said he did not have hard data to support his opinion, he believes that many people within large communities that have “millions of followers” are excited about the new game products being brought to their channels.“So to me, that data speaks a lot louder than an article written by a journalist about why ‘X’ NFT’s will be good.”

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Network and token freeze after Acala exploit raises questions

Network and token freeze after Acala exploit raises questions

Uverejnil používateľ | aug 15, 2022 |

The Acala Network’s aUSD stablecoin depegged by over 99% over the weekend and forced the Acala team to pause a hacker’s wallet, raising concerns about its claim of being decentralized.On Aug. 14, a hacker took advantage of a bug on the iBTC/aUSD liquidity pool which resulted in 1.2 billion aUSD being minted without collateral. This event crashed the USD-pegged stablecoin to a cent, and in response, the Acala team froze the erroneously minted tokens by placing the network in maintenance mode. The move also halted other features such as swaps, xcm (cross-chain communications on Polkadot), and the oracle pallet price feeds until “further notice”We have identified the issue as a misconfiguration of the iBTC/aUSD liquidity pool (which went live earlier today) that resulted in error mints of a significant amount of aUSD1/— Acala (@AcalaNetwork) August 14, 2022While the move to put the network in maintenance mode and freeze funds in the hacker’s wallet may have been meant to protect users and the network from any further harm, proponents of decentralization have cried foul.Acala is a cross-chain decentralized finance (DeFi) hub that issues the aUSD stablecoin based on the Polkadot (DOT) blockchain. aUSD is a crypto-backed stablecoin which Acala claims is censorship-resistant. iBTC is a form of wrapped Bitcoin (BTC) which can be used in DeFi protocols.Community members have noted the irony of Acala’s claims about aUSD’s censorship-resistance since the protocol froze funds so swiftly. Twitter user Gr33nHatt3R.dot pointed out on Aug. 14 that decisions “would have to go to governance to be ‘decentralized’ finance.”“If Acala centrally controls that decision is this really DeFi?”A member of the project’s Discord channel usafmike proposed rolling back the chain to reverse the token mints altogether, but was challenged by skylordafk.dot, another member who said such an action would “set a harmful precedent.” As of the time of writing, the network was still in maintenance mode to block all token transfers, but the team confirmed that the bug had been fixed. The wallets that received erroneously minted aUSD have been identified, and 99% of them were still on Acala which leaves the possibility that they may be retrieved by the community if it votes to do so.Related: Binance recovers the majority of funds stolen from Curve FinanceThe Acala exploit is the second major one in a week as Curve Finance (CRV) experienced an attack on its front end on Aug. 9 which directed users to approve a malicious contract. Acala’s problem differs from Curve’s as the latter’s pools were not compromised as users who directly interacted with its smart contracts experienced no issues.aUSD is the latest stablecoin to lose its peg in the past few months, starting notoriously with Terra USD (UST) in May, which has since been renamed to Terra Classic USD (USTC). Other notable depegs include Tether (USDT) and Dei (DEI).

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