We’ve written frequently about the 4 year cycle in cryptocurrency prices. Cryptocurrency – this first of which was Bitcoin – was introduced in 2009. Four years later, in 2013, prices surged to a blowoff top. Exactly four years later, in 2017, prices again surged to another blowoff top.
Using this 4 year cycle as a guide, later this year, in 2021, the cryptocurrency market should again experience another blowoff top.
Let’s take a look at the previous altcoin season and use that price information to make an educated forecast of where the altcoin market is likely headed later this year.
Whereas Bitcoin was released in 2009, the first Altcoin wasn’t released until 2011. However, Bitcoin is the undisputed leader of the entire cryptocurrency market. The 4 year cycle in altcoins does not see a peak 4 years after the introduction of the first altcoin, but rather the altcoins follow the leader – Bitcoin – and rise and fall in tandem with it.
Here is the chart of the first blowoff top of the entire altcoin market cap:
You can see from the chart above that the total market cap of the entire altcoin market reached its peak of $2,004,339 billion on December 4, 2013.
Like Bitcoin, after reaching its blowoff top in 2013, the altcoins went into a bear market for the next 2 years.
It was not until June of 2016 that the altcoin market convincingly topped its previous all time high, and it wasn’t until more than 3 years later, on December 28, 2016 – exactly 1,120 days – that the altcoin market exceeded its previous all time high for good.
What did the altcoin market do after exceeding its old all time high for good?
The answer can be found in the following chart:
After permanently exceeding the 2013 all time high on December 28, 2016, altcoins then rose for the next 375 days to set a new all time high of $551,926,104 billion on January 5, 2018.
That’s a gain of 27,536%, or stated another way, 275-to-1.
Now let’s take a look at what has happened since then, and see if the altcoin market is following the same pattern, and if so where the 2021 altcoin season is heading.
The 4 Year Cycle In Action
Like what happened in 2013, after reaching its blowoff top in 2017, the altcoins went into a bear market for the next 2 years.
It wasn’t until more than 3 years later, on February 11, 2021 (4 days ago!) – exactly 1,133 days – that the altcoin market exceeded its previous all time high for good.
The cycles are amazingly close. In the previous altcoin cycle it took exactly 1120 days for the altcoin market to convincingly exceed its previous record peak, and in the current altcoin cycle it has taken 1133 days to do the same.
The difference in timing is a mere 13 days, which is only one tenth of one percent!
So where to from here?
The Next Altcoin Blowoff Top
Using this cycle as guidance, it would indicate that the altcoin market will go up for the next 375 days and reach a top on February 20, 2022.
If the overall percentage gain is identical, that would place the total altcoin market cap at over $151 trillion.
Over a decade ago, a white paper by Satoshi Nakamoto was distributed to a cryptography mailing list outlining a novel proposal for a “peer-to-peer electronic cash system” called bitcoin. This innovation spurred a new, global industry and asset class that has created hundreds of billions of dollars in value, and inspired a generation of entrepreneurs and innovators.
From the foreword
Another pro-crypto statement:
The World Economic Forum Global Future Council on Cryptocurrencies represents a broad cross-section of experts working to make cryptocurrencies useful across a wide range of use cases.
From the foreword
And one more:
Cryptocurrencies have reached a point of inevitability. We have dedicated our careers to advancing the adoption and use of cryptocurrencies because we believe they represent an enormous opportunity to grow the global digital economy and benefit consumers and businesses across the world.
From the foreword
When on reads the report, it becomes very clear that the World Economic Forum clearly believes that cryptocurrency will permeate all economic and financial transactions globally.
We pointed out how closely 2021 price behavior is following 2017 price behavior:
This year, Bitcoin reached its high on January 8, only 3 days later than it did in 2017.
In 2017, the previous 4th year of the Bitcoin cycle (2021 is also a 4th year of the Bitcoin cycle), Bitcoin made an intermediate high on January 5 and an intermediate low on January 25.
This year, Bitcoin made an intermediate high on January 8, and made an intermediate low on January 28 – again, exactly 3 days later than it did in 2017.
The timing of these swing lows and highs is remarkable.
Using this data, we predict that February will not see a new all time high for the price of Bitcoin.
If the pattern continues to follow 2017 this precisely (at some point it will diverge, markets don’t repeat so precisely for extended periods of time), the new all time high for Bitcoin will not arrive in February, as the pattern in 2017 saw Bitcoin top its early January high on February 28th of that year.
Comparing 2021 to 2017, the cycle has been experiencing a 3 day delay, which would suggest a new all time high for Bitcoin will not be reached this year until March 3.
Of course, this forecast is not guaranteed. Highly charged positive crypto news events could cause Bitcoin to surge to new highs sooner, while the unexpected appearance of negative Bitcoin news sphere could delay the timing of a new all time high for Bitcoin.
We are quite certain, however, that a new all time high for Bitcoin is only a matter of time.
Several of our news articles this year – as well as several from last year – included details regarding the 4 year cycle in cryptocurrency prices. The editors at Top5Cryptos are strongly of the opinion that the entire cryptocurrency market is correlating to the previous 4 year cycle patterns in excess of 90%.
Using this year cycle pattern, we are going to predict the general price action of the crypto market for the months of February and March.
First, though, we will look at the crypto price behavior during the previous 4 year cycle top of 2017.
Bitcoin Price Performance In Early 2017
Bitcoin started the first day of 2017 at $1,003. It rose rapidly, gaining nearly 19% by January 5th.
Bitcoin then fell by 24% to reach a low on January 25.
From that date, Bitcoin basically bounced up and down in price without going much in either direction. Prices were choppy from January 25 until February 16.
From February 16 to February 24, Bitcoin had a sustained upward movement in price, reaching the same price that it had attained on January 5 of that year.
From February 24 until March 1, the price of Bitcoin remained near the high of January 5. However, on March 2, Bitcoin broke out above the high of January 5, rising about 8% above the peak price attained in early January.
Bitcoin then suffered a 20% correction into a low on March 19.
Bitcoin then again experienced choppy sideways price action until March 30.
April was the month that the climb in the Bitcoin price really kicked into high gear and Bitcoin left for good the trading range it had been in the first 3 months of the year.
Here is what the Bitcoin chart looked like for the above described time period in 2017:
RISK DISCLOSURE: BY ACCESSING OR USING ANY BITTREX SERVICES YOU ARE VOLUNTARILY CHOOSING TO ENGAGE IN SOPHISTICATED AND RISKY FINANCIAL TRANSACTIONS. YOU ARE FURTHER ACKNOWLEDGING THAT YOU ARE AWARE OF THE MANY RISKS ASSOCIATED WITH THE USE OF THESE SERVICES AND WITH ENGAGING IN TRANSACTIONS IN CRYPTOCURRENCIES, INCLUDING BUT NOT LIMITED TO, RISKS OF FINANCIAL LOSS, TECHNOLOGY GLITCHES (INCLUDING BUT NOT LIMITED TO PROBLEMS WITH THE BLOCKCHAIN TECHNOLOGY), AND HACKING. BITTREX WORKS HARD TO PROVIDE STATE-OF-THE-ART SYSTEMS AND SECURITY. NONETHELESS, CERTAIN ISSUES AND RISKS ARE UNAVOIDABLE, AND IF SUCH ISSUES OR PROBLEMS ARISE IN CONNECTION WITH YOUR USE OF BITTREX’S SERVICES, INCLUDING TECHNICAL DIFFICULTIES WITH DEPOSITING OR TRADING CRYPTOCURRENCIES, IT MAY TAKE DAYS, WEEKS, OR MONTHS TO RESOLVE, AND SOME ISSUES MAY NOT BE RESOLVED AT ALL. BY AGREEING TO THESE TERMS, YOU ACKNOWLEDGE THAT BITTREX IS NOT RESPONSIBLE FOR THE AFOREMENTIONED RISKS, AND YOU VOLUNTARILY ASSUME AND ACCEPT SUCH RISKS IN DECIDING TO ENGAGE IN CRYPTOCURRENCY TRANSACTIONS ON THE BITTREX PLATFORM.
Sometimes legal wording/disclaimers can be extra wordy and confusing. Often, this is done on purpose.
This updated terms of service can be broken down into 3 parts:
If you continue to use Bittrex knowing these risks, the responsibility for these risks are yours and not Bittrex.
While those 3 points seem sensible and realistic at first glance, but, as the saying goes, the devil is in the details.
Let us quote directly from the above language, only we will take out much of the wordage – without changing any of it – just to make a point:
YOU ARE AWARE OF THE MANY RISKS ASSOCIATED WITH THE USE OF THESE SERVICES… INCLUDING …. HACKING. IT MAY TAKE DAYS, WEEKS, OR MONTHS TO RESOLVE, AND SOME ISSUES MAY NOT BE RESOLVED AT ALL. BY AGREEING TO THESE TERMS, YOU ACKNOWLEDGE THAT BITTREX IS NOT RESPONSIBLE FOR THE AFOREMENTIONED RISKS, AND YOU VOLUNTARILY ASSUME AND ACCEPT SUCH RISKS.
Again, we’re not lawyers and this is NOT legal advice. As non-lawyers, we read the above statement and conclude that Bittrex is telling you that if they get hacked, the losses “MAY NOT BE RESOLVED AT ALL,” and that “BITTREX IS NOT RESPONSIBLE,” and finally, you “ASSUME AND ACCEPT SUCH RISKS.”
If our understanding is correct, that means that if Bittrex loses any of your money in any type of “hacking,” you’re out and you cannot hold Bittrex accountable for the losses.
Would you deposit into a bank if the bank’s legal disclaimer told you that if the bank gets robbed, you’re money is gone and you cannot hold the bank responsible?
Leading Estonian high-tech cryptocurrency exchange service, NordikCoin, is announcing that it will start accepting customers from Asian markets. The company will first begin accepting customers in selected jurisdictions, while further expansion is expected to continue in 2021. Whilst expanding its global reach, the company itself and its day-to-day operations will continue to be domiciled in global cryptocurrency haven Tallinn, Estonia.
Bitcoin on the rise
Bitcoin has been in the limelight for over a decade now, rapidly expanding its scope of applications, and continuously rising in value. On January 8th 2021, Bitcoin hit a new milestone by surpassing $42,000 in value, proving that its popularity is steadily increasing.
To support the rise in demand, Estonian cryptocurrency exchange NordikCoin will apply its European KYC and AML rules to customers from new Asian jurisdictions, with the main focus on security and compliance. NordikCoin’s AML/KYC policy stands for Anti-Money Laundering and Know Your Customer and was designed to prevent and mitigate possible risks of money laundering and terrorism financing.
NordikCoin aims to be one of the fastest and most hassle-free ways of buying Bitcoin. The exchange supports all major credit cards, whilst crypto wallets are provided free of charge to its customers. Due to the innovative use of electronic ID solutions, users from supported jurisdictions can set up their accounts in under five minutes – after which they can start trading Bitcoin immediately. The company is known for bringing innovation into the cryptocurrency space, being one of the first Bitcoin exchanges with Lightning Network protocol support.
Inevitably, one of NordikCoin’s main priorities has been to follow all the latest cybersecurity standards and best practices, ensuring that the cryptocurrency exchange environment is safe and reliable for all users across the globe. This is, in part, due to the fact that the team behind NordikCoin is comprised of experienced lawyers, auditors and technologists from around the world.
Japan next for rapid expansion
One jurisdiction which is being considered for NordikCoin’s Asian expansion is Japan. The country has witnessed a notable surge in Bitcoin holdings by 11%, suggesting that it’s the perfect launchpad. Several crypto exchanges are already present and thriving in the Japanese market, regardless of current COVID-19 restrictions and difficulties. Key exchanges include Okcoin, Bitflyer, Bitbank and Btcbox, among others.
David De Marco, CEO of Omni Matrix Ltd, the parent company of NordikCoin.com, shares his excitement for the Asian expansion plans:
– Our expansion into the Asian market marks a unique opportunity for the company to present its innovative cryptocurrency trading services globally. We are thrilled to announce that we will be expanding our customer onboarding processes to facilitate clients from Asian markets. We are confident that this is the perfect stepping stone for the new era of cryptocurrency exchange with NordikCoin leading the way.
Asia has been dominating the cryptocurrency market in the past couple of years, with financial giant SBI taking a lead. The company made a series of crypto moves recently including a planned 2022 launch of a digital exchange with Switzerland’s SIX, a partnership with Ripple and, most recently, the acquisition of U.K.-based cryptocurrency trading firm B2C2. Asia has been found to adopt blockchain technology much faster than many Western countries, incorporating innovations quickly and efficiently. NordikCoin’s expansion plans seem to be a great way for Europe and Asia to join forces and increase efforts of pushing Bitcoin and cryptocurrency into the limelight.
The evidence is abundant that 2021 is the year that will bring a jaw-dropping Altcoin Season. Just as the sun rises in the East and sets in the West, Bitcoin is the first cryptocurrency to rise in price, and the Altcoins eventually follow.
Bitcoin Leads, The Altcoins Follow
There’s no questioning that Bitcoin is the definitive OG of the cryptoshere, as is most likely best highlighted by the point that the flagship digital asset has been in a position to pique the interest of many prominent legacy financial institutions – like Microstrategy, BlackRock, Grayscale – during the last year or thereabouts.
Even with all the sell offs and volatility which was witnessed during the last week, data available on the web definitely shows that the number of addresses with 1,000 or over Bitcoin (referred to as “whales” in the crypto world) has continued to increase. As is ALWAYS so with professional institutional money, the “buy-the-dip” strategy is employed with full force.
While big institutional players plant news stories and give interviews that create fear, uncertainty and doubt (FUD) – thus driving the price down as nervous traders sell – at the same time they are accumulating for themselves at lower prices.
Like it or not, that’s standard operating procedure for traditional markets, and especially crypto.
And where Bitcoin leads, the altcoins will follow.
Forecasting Altcoin Market Activity for the Coming Year
We’ve been pounding the table that 2021 is going to be another moonshot type of year due to the 4-year cycle. 2013 was the year of the first 4-year cycle top. 2017 was the second instance of a tremendous crypto bull run into the second top of the 4-year cycle.
2021 will be the year of the third top of the 4-year cycle.
In order to gain a better understanding of how the 4 year cycle top will play out, we’ll go back and examine the previous iteration of the cycle.
Looking At The Altcoin Season Of 2017
It’s been said that “History doesn’t repeat, but it sure does rhyme.” If you go back and look at historical prices of Bitcoin from previous years, it’s very obvious that Bitcoin isn’t following the 4-year cycle precisely 100% on a daily basis, but the correlation is over 90%.
In other words, Bitcoin price action rhymes with previous Bitcoin price action.
Let’s look closely at Bitcoin’s price action in 2017 as well as the leader of the altcoins, Ethereum.
Bitcoin Price Action In 2017
Bitcoin was priced at $1,003 on January 1, 2017.
It took 138 days for Bitcoin to double in price. (May 18)
It took 216 days for Bitcoin to triple in price. (August 4)
It took 226 days for Bitcoin to quadruple in price. (August 14)
It took 284 days for Bitcoin to quintuple in price. (October 11)
Ultimately, Bitcoin went up more than 19-fold into the 4-year cycle high on December 17, 2017.
Ethereum Price Action In 2017
Ethereum was priced at $8.20 on January 1, 2017.
It took 60 days for Ethereum to double in price. (March 1)
It took 72 days for Ethereum to triple in price. (March 13)
It took 74 days for Ethereum to quadruple in price. (March 15)
It took 75 days for Ethereum to quintuple in price. (March 16)
By the first day of summer, June 21, Ethereum had increased in price by a factor of 41 times over.
Ultimately, Ethereum went up more than 170-fold into the 4-year cycle high on January 10, 2018.
Altcoin Season Lessons
Looking at the above prices of both Bitcoin and Ethereum, we can gain insights into how the altcoin season of 2021 will unfold.
Here are some key takeaways:
Once altcoin season starts to gain momentum, prices of meritable altcoins will rise faster than Bitcoin.
March is likely to be a very good month for the leading altcoins.
By the summer of 2021, a handful of the best altcoins should be as much as 40 times higher in price compared to where they started the year.
The top altcoins could go up in price more than 150 times their value at the start of the year.
Bitcoin will reach its 4-year cycle peak 3 to 4 weeks before the altcoins do, and will start its new bear market.
The entire altcoin market will follow Bitcoin into its next bear market.
An altcoin season is also a term used for a season in which an altcoin is outperforming the price of the original: Bitcoin. There are three stages to an altcoin season. The first stage is when there is a profiting trend on an altcoin that is very new, or a trend that is new to a particular altcoin. The second stage is when the profiting trend dies down, and there is no longer any substantial profit potential from the altcoin in question.
In the third phase, after the profiting trend has died down, the altcoin season starts to see a new influx of traders who are looking to make a long position in the market. By this stage, the profitability potential in trading on any altcoin is significantly reduced. During the second phase, the price movement of all-time high prices of bitcoin continues on its upward trek.
One of the factors that makes the altcoin season so interesting to follow is the fact that there is considerable amount of volatility in the market. The large increase in volatility is what allows an investor to profit from the trading of ether and another high valued alternative currency. Volatility is usually considered a good thing for experienced traders because it increases the opportunities to profit from price movement – both UP and DOWN.
For investors and holders, however, the volatility can be nerve wracking.
lastly, it’s important to remember that the altcoin season doesn’t last forever. In fact, most (statistically it’s over 90%!) investors lose money during the bearish period. However, if you find several profitable altcoins during this time, it can be literally, life-changing.
Come the end of 2021, just remember one fact: trees don’t grow to the sky.
Crypto Rating – XLM $0.69 Crypto Rating, an esteemed authority and providing realistic price predictions on various cryptocurrency assets, has given XLM a price forecast of just $0.46 within a year, and in the next five years expects Stellar to reach a price target of $0.69. Given past performance, these estimates are modest.
The Economy Forecast Agency – XLM $0.64 The Economy Forecast Agency uses a long-term forecasting valuation model to predict prices of various assets, including cryptocurrencies, projects Stellar Lumens growth to reach just $0.64, matching the sentiment of many of the other experts and analysts listed.
Long Forecast Stellar Prediction – $0.30 Long Forecast gave an entirely conservative prediction, as their stellar price prediction forecasts that XLM might reach $0.30, which make sit look like it won’t grow much as compared to the current price.
Wallet Investor XLM Price Prediction – XLM $1.05 Wallet Investor updates prices and predictions every three minutes using the latest technical analysis. They have very conservatively made a 5-Year forecast of $1.005.
Mega Crypto Price – XLM $5.10 The price forecast at Mega Crypto Price has been very optimistic for all the cryptocurrencies and its the same for XLM price forecast, too, predicting that Stellar could be worth $5.10 by the end of 2020. The team says that this can be achieved as long as there are no major security flaws and the overall sector performs well.
Monetize Info – XLM $3.00 Monetize believes that Stellar’s major partnerships will be the major reason behind an upcoming price surge, which might result in XLM’s price reaching $2-$3 by 2020. Beyond IBM, Stellar’s partners include Stripe, Deloitte, etc.
For example, Stripe gave Stellar a 3-million-dollar capital injection a few years back which Stellar immediately returned in XLM.
The Economy Forecast Agency – XLM $0.64 This website features a long-range forecasting model to make market forecasts for corporate clients. The website has its own price prediction for 2020, which says XLM will see a high of $0.64 in 2020, which is by far the most conservative and pessimistic of XLM’s price predictions.
There are other popular websites that share predictions for the price of Stellar Lumens, however, the forecasts are rather outdated and have already proven inaccurate. For instance, cryptonewsz.com predicts:
The predicted high for 2021 might be around $0.089 and on the downside, the low might be around $0.065.
As of press time, January 20, 2021, and at last check the current price of XLM is just a tad under $0.29. Stellar Lumens has already tripled the yearly high predicted by cryptonewsz.com.
A Summary of Stellar Lumens Predictions
The above Stellar Lumens price predictions for 2021 range from a low of $0.10 to the highest XLM forecast price of $5.10.
Our Analysis suggests that all of the above 11 XLM predictions are too low.
It is our conviction that 2021 is the year in which the next 4 year cycle top is due. The first 4 year cycle top arrive in 2013, and the second 4 year cycle top arrived in 2017.
XLM To Surge For 4 Year Cycle High In 2021
Bitcoin is the only coin that we have data for both 4 year cycle tops. To calculate our Ethereum price prediction for 2021 we only had data from one 4 year cycle top. We reported that, “Ethereum went up by a factor between 89x and 173x during 2017 for the last 4 year cycle top.”
We use previous price performance as a guide to possible future price performance. Of course, it’s no guarantee, only a guide.
So what was Stellar Lumens’ price performance in 2017?
Stellar Lumens In The Previous 4 Year Cycle High
On January 1, 2017, XLM was priced at one-fourth of a cent, $0.0025. It ended the year at 36 cents, $0.36. However, it did reach an all time high 4 days later at over 93 cents.
Depending on whether you’re looking at the highest price reached on January 4, or whether you’re looking at the end of the year price 4 days prior, XLM went up in price between 144x and 372x.
We do not expect XLM to increase by the same amount. Bitcoin’s 2nd four year cycle saw gains much less than its first, and we expect Stellar Lumens to do the same.
All factors considered, including the macro financial climate, the new crypto-friendly administration in the U.S., and the 4 year cycle, we are expecting XLM to go up in price by a factor between 29x and 74x.
Stellar Lumens started this year at a price just shy of $0.13. Thus, are target high price for XLM at year end is between $3.77 and $10.01.
Stellar Lumens at $10.01 in 2021
We believe the conditions favor a very strong crypto bull run in 2021, and thus we are going to base our Stellar Lumens price prediction on the high side of the range and forecast an end of the year price target for XLM to be $10.01.
What Is Stellar?
Stellar is an open source, decentralized protocol for digital currency to fiat money transfers which allows cross-border transactions between any pair of currencies. The Stellar protocol is supported by a Delaware nonprofit corporation, the Stellar Development Foundation, though this organization does not enjoy 501(c)(3) tax-exempt status with the IRS.
Stellar is an open-source protocol for exchanging money or tokens using the Stellar Consensus Protocol. The platform’s source code is hosted on GitHub.
Servers run a software implementation of the protocol, and use the Internet to connect to and communicate with other Stellar servers. Each server stores a ledger of all the accounts in the network. 3 nodes are operated by the Stellar Development Foundation, in conjunction with 21 other organizations, providing for a total of 66 validator nodes. Transactions among accounts occur not through mining but rather through a consensus process among accounts in quorum slice. The current network fee is 100 stroops, equivalent to 0.00001 XLM or 1/10,000th of a cent.
History of Stellar
In 2014, Jed McCaleb, founder of Mt. Gox and co-founder of Ripple, launched the network system Stellar with former lawyer Joyce Kim. Before the official launch, McCaleb formed a website called “Secret Bitcoin Project” seeking alpha testers. The nonprofit Stellar Development Foundation was created in collaboration with Stripe CEO Patrick Collison and the project officially launched that July. Stellar received $3 million in seed funding from Stripe. Stellar was released as a decentralized payment network and protocol with a native currency, stellar. At its launch, the network had 100 billion stellars. 25 percent of those would be given to other non-profits working toward financial inclusion. Stripe received 2 percent or 2 billion of the initial stellars in return for its seed investment. The cryptocurrency, originally known as stellar, was later called Lumens or XLM. In August 2014, Mercado Bitcoin, the first Brazilian bitcoin exchange, announced it would be using the Stellar network. By January 2015, Stellar had approximately 3 million registered user accounts on its platform and its market cap was almost $15 million.
The Stellar Development Foundation released an upgraded protocol with a new consensus algorithm in April 2015 which went live in November 2015. The new algorithm used SCP, a cryptocurrency protocol created by Stanford professor David Mazières.
Lightyear.io, a for-profit entity of Stellar, launched in May 2017 as the commercial arm of the company. In September 2017, Stellar announced a benefits program, part of its Stellar Partnership Grant Program, which would award partners up to $2 million worth of Lumens for project development. In September 2018, Lightyear Corporation acquired Chain, Inc and the combined company was named Interstellar.
Real-world Applications of Stellar
In 2015, it was announced that Stellar was releasing an integration into Vumi, the open-sourced messaging platform of the Praekelt Foundation. Vumi uses cellphone talk time as currency using the Stellar protocol. Stellar partnered with cloud-based banking software company Oradian in April 2015 to integrate Stellar into Oradian’s banking platform to add microfinance institutions (MFIs) in Nigeria.
Deloitte announced its integration with Stellar in 2016 to build a cross-border payments application, Deloitte Digital Bank. In December 2016, it was announced that Stellar’s payment network had expanded to include Coins.ph, a mobile payments startup in the Philippines, ICICI Bank in India, African mobile payments firm Flutterwave, and French remittances company Tempo Money Transfer.
In October 2017, Stellar partnered with IBM and KlickEx to facilitate cross-border transactions in the South Pacific region. The cross-border payment system developed by IBM includes partnerships with banks in the area.
In December 2017, TechCrunch announced Stellar’s partnership with SureRemit, a Nigerian-based non-cash remittances platform.
On January 6, 2021, Ministry of Digital Transformation of Ukraine announced cooperation and partnership with Stellar in development of Ukraine digital infrastructure after which Stellar value increased by 40%.
Retail demand is also currently at “unprecedented levels.”
Israeli trading and investing platform Etoro warned customers in Europe on Friday of possible limitations on crypto purchasing over the weekend. In an email, the exchange said: “The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support buy orders over the weekend. In light of this, it may be necessary for us to place limitations on crypto buy orders.”
eToro’s statement acknowledging unprecedented demand is just one of many that point to the fact that there isn’t enough Bitcoin available at today’s prices to meet demand.
In last month’s investor letter we discussed that after 30 months of operation, Square’s Cash App is estimated to be buying around 40% of all newly-issued bitcoin.
PayPal just launched their new service that enables customers to buy, sell, and hold cryptocurrency directly from their PayPal accounts. It’s already having a huge impact.
The bitcoin community is proud to have grown to 100 million users over twelve years. PayPal has 300 million active users. As we’ve argued — and will argue more fully in our December investor letter — this rally is much more sustainable than 2017. One of the main differences is the ease of investing in bitcoin now — via PayPal, Cash App, Robinhood, etc.
Previously the friction to buy bitcoin was pretty onerous: take a selfie with your passport, wait days to a week to get activated, daily limits.
PayPal’s crypto infrastructure provider is Paxos. Prior to PayPal’s integration of crypto, itBit, the Paxos-run exchange, was doing a fairly constant amount of trading volume — the white line in the chart below.
When PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins.
PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins.
Only 900 New Bitcoins Created Each Day
Bitcoin supply is growing daily. Literally, it’s growing by 6.25 newly created Bitcoins with each new block mined. By design, one Bitcoin block is mined every 10 minutes, resulting in an average of 144 new blocks every day. 144 x 6.25 equals 900 new Bitcoins created each day.
Genuine Bitcoin Investor Demand
As we reported above, just Paypal and Cash App are responsible for buying more than 900 Bitcoin per day.
Let’s look at another rather obscure place to buy Bitcoin: LocalBitcoins.com. This is a site outside of the massive mainstream crypto exchanges. It is sort of a peer-to-peer classified ad site that matches buyers with sellers on an individual level.
Contrast that to the average daily trading of Bitcoin at localbitcoins.com which is a mere $6 million. The difference in size is staggering. The point being, trading volume at localbitcoins.com is a tiny, extremely tiny, amount of Bitcoin being bought each day.
Now, be aware that most of the trading volume on Binance and other big exchanges is just that: trading, not investing. A trader can buy and sell multiple times per day with each of those trades adding into the cumulative total trading volume.
So let’s look at the numbers. $6 million worth of Bitcoin are being bought right now every day on localbitcoins.com.
How many Bitcoin is that?
$6,000,000/$37,000 each equals 162 Bitcoin.
Remember, there’s only 900 being created. And this tiniest little peer-to-peer exchange is responsible for its users buying up almost 1/5 of all newly created Bitcoin each and every day. This is purely Bitcoin volume, and does not include other cryptos such as XRP and Litecoin.
Paypal and Cash App are already buying more Bitcoin than are being created each day. This tiny little site is facilitating the buying of nearly 20% of all new Bitcoin being create. What about the customers of Binance? What about demand from the customers of Coinbase, Gemini, Kraken, Bittrex, Bitstamp, Huobi, Bitfinex, and hundreds of other exchanges are are many times lager than localbitcoins? Where will all the Bitcoin come from for those buyers to be able to purchase?
Only Existing Holders Can Supply Bitcoin To Match Soaring Demand
One thing is certain, there is no way to increase the supply of new Bitcoin being created each day and available on the market. With demand absolutely overwhelming new supply, that only leaves existing holders willing to sell in order to satiate buyer demand.
Which means only one thing: prices will continue to be bid higher.
A Big Nothing Burger Or The Pin That Pops The Bubble?
If the events in the crypto market of December 2020 teach us anything, it’s that the actions of the financial regulators can cause quakes that have a tremendous impact on crypto prices.
Think back to late November and early December. There was an abundance of enthusiasm towards XRP with the (back then) forthcoming airdrop of Spark tokens. In late November, the price of XRP stood at 26 cents.
Airdrop Of Spark Tokens
With the interest in holding XRP tokens so as to benefit from the Spark airdrop, crypto investors were rushing into XRP, and drove its price above 70 cents.
The upward momentum in price was invigorating.
Even after the airdrop, the price of XRP was hovering around 60 cents as late as December 20.
Enter The SEC
Then the news hit.
The SEC had filed a lawsuit against Ripple. The price immediately crashed to 20 cents, wiping out more than 2/3rds of XRP’s value in a matter of days.
The moral of the story: actions taken by financial regulators can have an overwhelming effect on price.
Back in April 2019, the New York Attorney General (NYAG) accused stablecoin operator Tether of covering Bifinex’s $850 million losses by sourcing its USDT to cover the shortfall. Nevertheless, Tether replied calling this accusation in “bad faith” and “riddled with false assertions”. Note NYAG has filed charges against iFinex, the parent company of Bitfinex and Tether.
During the preliminary injunction in May 2019, Judge Joel Cohen extended the deadline to ninety more days. By August 2019, NYAG presented another proof and evidence in the case highlighting how Bitfinex and Tether were allegedly involved in covering up the $850 million losses. Later, the NYAG also called out iFinex’s motion “an improper attempt to impede a lawful investigation”.
The case took an interesting turn last year in September 2020 when Judge Cohen ruled that both Tether and Bitfinex should produce documents disclosing their financial relationship. In addition, he also passed an injunction barring Tether to issue loans to Bitfinex by ninety more days.
Last month, on December 9th, 2020, Attorney General Letitia James filed a document requesting Judge Cohen to extend the timeline to January 15. The Attorney General said that “the parties continue to cooperate on the production of documents in response to the 354 Order, and anticipate that the production might be finalized in the coming weeks.”
Two days ago, Friday, January 15, was the d-day for iFinex to produce necessary info and the documents so that NYAG is able to continue the investigation further. iFinex had to produce documents detailing the issuance and redemptions of Tether’s USDT stablecoins, and also disclose the trading activity on Bitfinex concerning Bitcoin and USDT.
We’re currently at the crossroads of the most crucial cases in the crypto space. Tether’s market cap has grown to $25 billion, and the token currently sits at #3 on coinmarketcap’s list of the largest cryptocurrencies in existence.
XRP just is not winning now, as Kraken currently stands as the newest crypto exchange set to suspend trading in XRP tokens. The reason given, similar to the a number of other institutions as well as exchanges which dropped XRP like a hot potato in recent weeks, was because of the SEC enforcement actions brought against Ripple.
Kraken announced on Jan. fifteen that it will halt trading in XRP for US residents. From the company’s statement:
Given the recent SEC filing against Ripple Labs Inc., we are halting XRP trading for U.S. residents no later than January 29, 2021 at 5pm PT (January 30, 2021 at 1:00 UTC). We may begin implementing this process at any time on January 29, 2021, so all U.S. clients are strongly encouraged to resolve their positions prior to that day.
U.S. residents with open XRP spot positions on margin should satisfy their margin obligations by January 28, 2021 at 11:59pm PT or their positions will be liquidated in accordance with our Terms.
The exchange specified that US residents would still be in a position to deposit, hold, and withdraw XRP after the freeze takes place. The activity impacts just US residents; “Clients residing in some other places aren’t affected.”
The announcement additionally contains a FAQ list. It covers subjects like just how long the ban can last (they will adjust to any kind of change in the SEC saga). The upcoming change to a deposit-hold-withdraw mainly regime might improve when the circumstance should improve. Furthermore, the company’s plans about the Spark tokenairdop remain unrevised.
The SEC Move
News about Ripple has been decidedly negative since the SEC filed its lawsuit against Ripple. The SEC claims that the company sold $1.2 billion of unregistered securities in the type of XRP tokens. Former CEO Christian Larsen along with current CEO Brad Garlinghouse can also be charged with offering another $600 million in unregistered securities in the type of XRP.
Ripple Labs is actually guarding itself in court and in the media. Garlinghouse especially has taken to Twitter to clarify the company’s position, stating that nobody has been quiet, neither can they give up this fight. Garlinghouse claims to be on the proper side of the facts and of history, and is looking forward to Ripple’s day in court – in addition to engaging with the brand new SEC leadership when appointed.
Ripple Treading Water
Exchanges with substantial US exposure even moved fast. Garlinghouse observed that the US accounts for approximately five % of XRP holders, though the exchanges kept a watch on compliance. Bitstamp, Binance, Coinbase, along with OKCoin are actually among the exchanges which have signaled stoppages.
In a single indication as to just how Ripple is going to leave this eddy of exercise, SEC Commissioner Hester Peirce, commonly recognized as ‘Crypto Mom‘, reported in a recent interview that fees like these frequently get settled out of court.
The Ripple news of late has been very complicated for XRP supporters. XRP has been on a losing streak ever since the US SEC filed a lawsuit against it in late 2020. The coin has since lost its third spot to Tether (USDT), and then also the fourth spot within the past 24 hours. Right after a short term rebound during which it regained the fourth position it had held, XRP currently lost it once again to Polkadot (DOT).
Polkadot cost surged 37% in the past 24 hours, and DOT replaces XRP as the 4th largest coin by market cap. Polkadot has been surging for rather some time now, initially starting about December 28th. Right after reaching the cost of ten dollars in the first days of January, the coin has been trading sideways until January 10th, when it dropped back again to somewhat above eight dollars.
The drop was short lived.
Right after that, nonetheless, it began a brand new price surge which took it up by about 85% in a single week. Actually, within the last twenty four hours, the coin has gone up by 37%. The market cap of it hit $15.6 billion, while the day trading volume of it rests above $7.5 billion at the time of writing.
XRP, meanwhile, is actually trading in the red for the past 7 days, down a modest 11.7%. The coin however, has risen by 4.17 % within the last twenty four hours. The market cap of it stands at $12.9 billion at the time of writing, while the trading volume of its sank under $4.3 billion.
Huge Exchanges Began Eliminating XRP
The turn of the calendar continues to be quite chaotic for XRP. First, the SEC sued its parent company, Ripple, for offering an unregistered security. Next, the coin got delisted from a selection of exchanges, in which smaller exchanges can manage to eliminate it right away, while much larger ones, including Binance, announced that the coin was going to be delisted in mid January.
The removal of its from Binance as well as the peers is likely the reason behind a good priced dip which XRP is experiencing at this time. The coin currently sits at $0.2817, with the price tag continuing to work lower. Meanwhile, Polkadot is actually seeing an immediate rise in usability, with a few reports actually professing that Asian traders are actually making use of it to forecast the cost of Bitcoin.
Ripple’s late 2020 rise was due partly to a massive airdrop of Flare (FLR) tokens. Now, the smart contract solution is actually adding support for Litecoin (LTC). An FLR airdrop to Litecoin users is actually in the works.
XRP wallets included in the December snapshot will receive a Flare tokens (worth a great amount of money, potentially).
In a Jan. 8, 2020 tweet, Flare says that they will “reduce” the number of Flare tokens for the project’s founders by five billion. This extra will be distributed to “Litecoin participants.” The Tweet promises clarification in the coming week.
A Flare for airdrops Tokens on the Flare network, known as Spark, will be used for governance and as collateral following the expected token drop in Q2, 2021. The business plans to bring smart contracts to Ripple’s XRP. Previously, Ripple was seen as a vehicle for funds transfer, and Flare claims that Spark tokens will add value.
With this tweet, the company is actually announcing what was somewhat unexpected: that the network will support other cryptocurrencies besides XRP, namely Litecoin.
Flare received a large amount of hype and press before the December snapshot for the airdrop to XRP holders.
For what it is worth, the company is naming their FLR tokens XFLR tokens (for XRP) on their site. There can probably be LFLR tokens for Litecoin. But it may not stop there. Flare could add support for other cryptos.
The rationale for choosing to integrate with Litecoin, over some other similarly sized digital assets, may have come right down to the fact that after XRP, LTC was the next biggest asset currently with no smart contract capabilities.
The Litecoin Foundation has stated it is “very excited to see the capability of smart contracts and interoperability coming for Litecoin through Flare.”
This also opens up the possibility of more such integrations that would bring the DeFi ecosystem to all non-ETH coins in the near future.
Flare has said it may support other networks in the future, but this was given little attention. Support for, say, the Bitcoin network could have implications that are huge and give ETH a run for its money.
Smart contracts and Ethereum competition? The short version of the purpose of Flare is actually to facilitate smart contracts on protocols that don’t have them built in. Flare is backed by XRP, and the airdrop to most XRP-hodling wallets cast Flare into the spotlight.
The very last several weeks have seen insane interest in Ethereum, and as the time tested and secure smart-contract chain, that is no surprise. The #2 crypto may have new investors interested in case they feel like they “missed the boat” with Bitcoin.
But the tech backing Ethereum’s value is the smart contracts. Though there are actually lots of other similar protocols that are potential rivals (DOT, EOS), ADA, Ethereum still reigns supreme.
Nevertheless, if other networks (like XRP or LTC) could support smart contracts, that would widen their appeal. In case these protocols could be interoperable via the Flare network, that would be a coup for Spark tokens (Flare hasn’t suggested they’ve plans for this).
At the beginning of 2021, the world’s oldest cryptocurrency, Bitcoin, has seen an all-time high of over $40,000 on 8 January 2021, which is not surprising, since institutional investors as well as high-net-worth individuals consider BTC as a hedge against extraordinary fiscal stimulus programs. Here is an AMA summary from Chief Research Officer, Dan at BTCC.
Growing Number of Institutional Players Entering the Crypto Market
The year of 2020 also has seen numerous examples of institutional investors turning their attention to the world’s most popular cryptocurrency. For example, one of the largest insurance firms, MassMutual, has purchased $100 million of Bitcoin on December 2020.
We expected to see the crypto market to rise from the end of 2020 to 2021. The difference between the bull run this year to the one in 2017 is that previous bull was driven by individual investors and some whales. However, the bull run this year is mainly driven by institutional investors pushing the price up.
Top 10 Cryptocurrencies to Look Out for in 2021
The major theme of crypto market next year will be around DeFi, Polkadot, and ETH 2.0, therefore we will expect ETH remain unchanged at the top 2. While XRP, BCH, LTC and EOS are not what the market needs for next year, we expect to see these coins fall out of their current ranking.
Here is a prediction of crypto ranking in 2021 by Dan: BTC, ETH, USDT, LTC, XRP, BNB, LINK, UNI, DOT, BCH.
BTCC currently offer 9 major cryptocurrency trading pairs including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), EOS (EOS), Ripple (XRP), Stellar (XLM), Dash (DASH), and Cardano (ADA). Users can trade Bitcoin with leverage.
Founded in 2011, BTCC is the world’s longest-running crypto exchange and currently headquartered in the UK. With nearly 10 years of operating history, BTCC is known for its safe and stable, top-end market depth, and as well as faster transaction speed.
As of yesterday, XRP was back in the fourth position with a market cap of $10.5 billion. Litecoin, meanwhile, was worth just over $10 billion. In the last week, Litecoin’s price has gained more than 30% while XRP during the same time period has only risen by about 8%.
Litecoin’s price has more than doubled since mid-December, climbing to $163 at the time of this writing from a low of about $70 on December 11, 2020. XRP was also on a tear before the SEC announced a lawsuit against Ripple for allegedly violating securities laws. From its peak to its low, XRP price tumbled more than 73%, according to CoinMarketCap data. XRP has only recovered a portion of what it lost.
XRP’s road to recovery is likely to be a bumpy one as investors await the outcome of the litigation — a process that legal experts say could take several years to play out. We do have the opion – just our opinion – that a settlement will be reached sooner rather than later. Without a settlement with the SEC, the value of XRP could struggle to regain momentum. A wave of delistings at major exchanges has also dampened enthusiasm for XRP.
Meanwhile, Litecoin’s ascendancy likely has more to do with Bitcoin than any change in the project’s underlying fundamentals. Being the oldest of the cryptocurrencies, Bitcoin has assumed the role of the leader. Where Bitcoin goes, the altcoins follow.
Maybe it was the holidays, maybe it was wishful thinking, but along the way investors developed some hope that the worst of the bad news had already hit and bid up the price of XRP in anticipation of better days ahead.
Alas, it was not to be as more bad news just crossed our desk. Binance, the world’s largest cryptocurrency exchange, has announced that it is delisting XRP trading for U.S. residents beginning on January 13, 2021.
A statement on the company’s website reads:
Effective Wednesday, January 13, 2021 at 10am EST, XRP will be delisted from Binance.US. XRP trading and deposits will be suspended.
When will XRP investors get a break from the barrage of bad news?
As to be expected, Ripple has something to say about the SEC charges.
Ripple’s CEO Brad Garlinghouse tweeted that the SEC is unjustifiably attacking crypto and blasted chairman Jay Clayton’s decision to sue his firm right before the holidays.
“Jay Clayton is taking notes from the Grinch this holiday season, leaving the actual legal work to the next administration,” Garlinghouse said, referring to the chairman’s departure at the end of Trump’s presidential tenure.
Ripple has formally responded with a 6 page statement that states:
A. The SEC’s theory, that XRP is an investment contract, is wrong on the facts, the law and the equities.
B. To prove its case amounts to an unprecedented and ill-conceived expansion of the Howey test and the SEC’s enforcement authority against digital assets.
C. The SEC’s theory that XRP is an investment contract ignores the economic reality that XRP is, and has long been, a digital asset with a fully functional ecosystem and a real use case as a bridge currency that does not rely on Ripple’s efforts for its functionality or price.
D. XRP is a currency. XRP is similar to bitcoin and ether, which the SEC has determined are not securities. 1. By alleging that Ripple’s distributions of XRP are investment contracts while maintaining that bitcoin and ether are not securities, the Commission is picking virtual currency winners and losers, destroying U.S.-based, consumer-friendly innovation in the process.
E. This case is distinguishable from the Initial Coin Offering (“ICO”) and/or Simple Agreements for Future Tokens (“SAFTs”) cases that the Commission has brought previously, which involved no developed ecosystem or established utility for the underlying asset, and where the tokens were sold directly to purchasers by the issuer based on promises of profits and ongoing efforts that were articulated in white papers and other forms.
“In light of the recent SEC filing against Ripple Labs Inc., which alleges that XRP is a security, we are going to halt all trading and deposits of XRP for our US customers on 8 January 2021 at 9 PM UTC. We will closely follow the unfolding situation and continue to adapt accordingly.”
As reported by us two days ago, Ripple was slapped with a bombshell lawsuit by the U.S. Securities and Exchange Commission SEC on Dec. 22, causing the XRP price to plummet.
Earlier today we reported that XRP was bouncing back from its 3-day price crash, and was up over 40% in the past 24 hours. However, Since the news of the Bitstamp news was released, XRP’s price rise has fizzled, with the current price at the time of publication only up 10.4%.
Notably, Bitstamp is the first major exchange to drop XRP due to its predicament with the regulatory watchdog. The Luxembourg-based company was founded back in 2011. The Bitwise Crypto Index Fund has also axed its holdings of XRP.
The price of XRP crashed more than 50% this week after the SEC filed a lawsuit against Ripple — the company closely associated with XRP — along with its executives Brad Garlinghouse and Christian Larsen for selling over $1.3 billion worth of XRP to the public.
As of early morning East Coast time in the U.S., the price of XRP has jumped more than 44%, providing XRP crypto bulls with a much welcomed Christmas gift.
Bitwise Asset Management, a leading crypto fund manager since 2017, issues this release to announce that the Bitwise 10 Crypto Index Fund (OTCQX: BITW) (the “Fund”) has liquidated its position in XRP.
On Tuesday, December 22, the U.S. Securities and Exchange Commission (“SEC”) filed an action in the United States District Court for the Southern District of New York alleging, among other things, that XRP is a security subject to the registration requirements of the federal securities laws.
The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws. Bitwise’s decision to liquidate its position in XRP was based on consideration of new public information from the SEC’s complaint.
Prior to the sale of the asset on December 22, 2020, XRP was approximately 3.8% of the Fund. The Fund liquidated its position and reinvested the proceeds in other cryptocurrencies for its portfolio.
Bitwise is issuing this release in accordance with the disclosure obligations of OTCQX®. The Fund’s Annual Report, published to satisfy the Alternative Reporting Standard disclosure guidelines for OTCQX® and OTCQB, discloses the significant risks associated with an investment in the shares.
Investors are encouraged to read the Annual Report and carefully consider these and other risks, including the fact that if any of the assets held by the Fund are determined to be a “security” under federal or state securities laws by the Securities and Exchange Commission (“SEC”) or any other agency, or in a proceeding in a court of law or otherwise, it may have material adverse consequences for the Fund and the BITW shares.
Bitwise Asset Management is a leading provider of crypto index and beta funds. Based in San Francisco, Bitwise’s team combines expertise in technology with decades of experience in traditional asset management and indexing—coming from firms including Facebook, Google, Wealthfront, BlackRock, Fidelity, Deutsche Bank, IndexIQ, and ETF.com. Bitwise is backed by leading institutional investors and asset management executives, and is a frequent commentator on crypto in the press. It has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, The Wall Street Journal, The New York Times, and many other leading publications. The firm is a trusted partner to financial advisors, RIAs, multifamily offices, hedge funds, and other professional investors as they navigate the crypto space.
Recently there has been an interesting development in the world of the futures and options markets; the creation of the new futures and options marketplace called the “Bitcoin Fund”. This is not your typical conventional futures broker dealer that you would deal with at your local brokerage firm. There are even a YouTube video showing the “how to get started” process that they have put together, as well as information on the dynamic nature of the market itself. As more businesses begin to explore the technology of virtual digital currency futures trading there will be those that venture into it’s very profitable business aspects.