Bitcoin DeFi May Be Unstoppable, What Does It Look Like?

Bitcoin DeFi May Be Unstoppable, What Does It Look Like?

One of the quietest yet best-funded bitcoin companies in the world is gearing up to enter the 2020 decentralized finance (DeFi) bull run. 

In July the DG Lab conglomerate, which like Ethereum powerhouse ConsenSys includes both an investment arm and an adjacent software company, open sourced its proposal for self-sovereign derivatives trading on the Bitcoin blockchain, using the Lightning Network. 

These contracts turn bitcoin, the asset itself, into programmable money capable of a wider variety of functions. 

Related: Bitcoin Surges Past $12,000 to New 2020 High

This offers a stark contrast to the typical DeFi approach so far, which relies on “wrapped” representations of bitcoin or exchange platforms. The Silicon Valley startup cLabs recently acquired DeFi firm Summa, which spearheaded the bitcoin-on-Ethereum approach. Now it looks as though DG Lab, founded in 2015, is the leading incumbent exploring DeFi opportunities for Bitcoin. 

“I’ve been working on a proposal to integrate DLC [Discreet Log Contracts] and channels into the Lightning Network,” DG Lab researcher Ichiro Kuwahara said of his recent work. “We can establish many contracts without broadcasting transactions on the blockchain.”

This software uses the Lightning Network to execute business logic without clogging up the base-layer blockchain. The hottest trend among Bitcoin veterans these days is imagining DeFi functionality applied to the bitcoin currency through such layers. There are many opinions on how to approach this opportunity, from DLC to soft forks.

Related: Huobi Launches Consortium of DeFi Providers and Platforms With MakerDAO, Compound

Not everyone agrees on how to use Lightning for smart contracts. 

Bitcoin veteran Jeremy Rubin, who launched his Judica startup this summer, believes Blockstream’s Liquid Network, which companies like Crypto Garage use to experiment with such smart contracts, overcomplicates the construction. 

“I think we can do it much simpler. … It’s solvable on-chain but can be done in [Lightning] channels as well,” Rubin said in an interview, explaining how his proposed Bitcoin soft fork could optimize the base layer for smart contracts. “I can construct this contract, which is a derivative, without you being online. I can make a valid contract then email it to you.”

These days, both ends of a Lightning transaction need to participate at roughly the same time for the payment to go through. (Or, at least, both need to set everything up in advance.) Rubin is arguing there’s a way to make it so one party can execute a consensual transaction. Public keys allow the other party to see, whenever they come online, proof of everything about the deal.

“It’s this notion of flow and conditionality that doesn’t currently exist in Bitcoin,” Rubin said. “[These 2020 DeFi projects] are about helping define commutes … a sequence of steps that can happen based on choices along the way.”

There are enough engineers working on DeFi options for Bitcoin that one of them might technically work, even if socially it doesn’t catch on. Only time will tell which ones find product market fit, and how that may or may not spur crypto adoption.

Stepping back, the DeFi bulls at DG Lab Fund raised over $93 million in 2019 and, according to the firm’s blog post, are raising a second fund in 2020. 

The fund invested in DG Lab, the separate namesake startup, which simultaneously attracted investors from Japanese enterprises including the e-commerce giant and the telecommunications provider KDDI. Meanwhile, the DG Lab Fund itself invested in River Financial, Arwen, Blockstream and Curv, to name a few, in addition to startups in adjacent sectors such as AI and security. 

“We have several startups that are working with DLC. For example, Suredbits is one of the key players in this field and we are working closely with them,” said Shunichi Kimuro, senior manager at DG Lab Fund. “We wanted to show what is possible using the Bitcoin protocol by using our peer-to-peer [P2P] derivatives.”

Yet another startup called Crypto Garage, in which DG Fund did not invest directly, is using Blockstream’s Liquid technology to explore this type of smart-contract software.  

“You define the outcomes of your contracts and create a transaction for each of the outcomes. And it can only be unlocked with one of the outcome transactions or with mutual agreement between the contract participants,” Crypto Garage engineer Thibaut Le Guilly said in an interview. 

Rubin pointed out that even if he disagrees with Le Guilly on certain aspects these Bitcoin projects have much more in common with each other than with Ethereum DeFi projects.

“There’s a really big gap between DeFi, as Ethereum is trying to do it, and P2P finance,” Rubin said. “Uniswap is really great. But they tokenize their liquidity pools. … We [Bitcoiners] are talking about finding a way for people to work directly with each other.”

Bitcoin DeFi projects aren’t using representatives of bitcoin, they want to enable traders to do tasks directly with bitcoin.

“There are about 20 people in the Bitcoin community working on tools, applications and specifications for [Discreet Log Contracts], including at SuredBits,” Le Guilly said in an interview. “[Traders] don’t have to involve an exchange.”

It appears as though Ethereum DeFi advocates offer a different interpretation of decentralization than their node-obsessed Bitcoiner brethren. Bitcoin advocates are focused on every user being able to participate in the network by running their own full financial stack, while Ethereum fans are more focused on the ability to offer their services from any data center around the world.

Bison Trails CEO Joe Lallouz said his infrastructure startup can easily move accounts across borders, thanks in part to a distributed team. This, from his perspective, is a slightly decentralized step away from Silicon Valley norms. 

“If Amazon said you can’t run nodes, for example, we can very quickly and seamlessly move our infrastructure to other cloud providers,” Lallouz said. “Everyone at the same time would have to say the blockchain network is something we don’t support [to censor our customers] across the internet.” 

While Ethereum DeFi experiments attract quick flashes of capital, losing considerable sums as advocates iterate, Bitcoin DeFi experiments seem comparatively modest. Yet, veterans know not to underestimate the Bitcoin development scene in Tokyo, home to the creators of self-sovereignty experiments including BTCPay and DG Lab. This period may just be the calm before a perfect storm. 

“Once there are enough people to create a real market, we might offer services or tools we can monetize,” Crypto Garage’s Le Guilly said. “At this stage, our goal is to raise awareness about what can be done with Bitcoin.”

  • Bitcoin DeFi May Be Unstoppable, What Does It Look Like?
  • Bitcoin DeFi May Be Unstoppable, What Does It Look Like?


Author: Leigh Cuen

Bitcoin News Today – August 15, 2020 • PumpMoonshot

Bitcoin News Today – August 15, 2020 • PumpMoonshot

  • Bitcoin’s correlation to other markets has been shifting
  • Bitcoin becomes closely correlated with gold and precious metals
  • There is an imminent USD plunge, and it could push the price of Bitcoin and gold higher
  • Bitcoin News Today – As the world’s most dominant digital currency continues to establish its position as a top asset on the global stage, its correlation to other markets has been shifting. Bitcoin was closely correlated with the stock market in late February and early March, but the recent price action of the digital currency has broken that correlation.

    Bitcoin (BTC) Price Today – BTC / USD

    The digital currency is now becoming closely correlated with gold and other precious metals. Interestingly, while Bitcoin is increasingly becoming a “safe haven” asset, it has been forming an inverse correlation to the US dollar. When the price of the US dollar plunges, it boosts the value of Bitcoin and gold significantly.

    An analyst recently said that he is watching a bear flag forming on the daily chart of the USD, indicating that it is at the “verge of breaking down.” This possible upcoming decline would provide a major boost to Bitcoin, and it could push the price of the digital currency over the $12k mark.

    At the beginning of this year, tales surrounding the potential status of BTC as a safe have asset were pervasive. However, the narratives became invalid after the digital currency plunged to the lows of $3,800 in March. Since then, it seems that these tales have now come to fruition, with Bitcoin increasingly becoming correlated to gold and precious metals.

    This striking formation might be because of investors growing fearful about the looming inflation because of the excessive printing of new money. This has significantly increased the demand for scarce assets. According to data from Skew – an analytics platform – the connection between Bitcoin and gold is now the closest it has ever been.

    The one-month correlation of Bitcoin and gold peaked at about 69 percent just a few weeks ago, before it plunged to the current level of 49 percent. This is still a significant increase from its one-month annual rolling average of 12.8 percent.

    Pointing to the current technical outlook of the USD, one crypto trader said that it seems to be forming a bear flag. While pointing to a chart, he said:

    “DXY (US DOLLAR) – prior double bottom (W) setup looking more like a bear flag getting ready to break down – would be bullish for Bitcoin and precious metals.”

    Since BTC has formed an inverse correlation to the USD, the potential downtrend that the analyst pointed to could significantly push the price of the digital currency higher, possibly settling well over the $12k hurdle point.

    News Source


    by PumpMoonshot

    Bitcoin News Today – August 15, 2020 • PumpMoonshot

    5 Things to Know This Week

    Bitcoin (BTC) starts a new week at the upper end of its new price range near $12,000 — will the market finally crack it this week?

    Cointelegraph takes a look at five things to consider when working out where Bitcoin is headed in the coming days. 

    Unlike previous weeks, macro markets and their impact on Bitcoin are back in the spotlight on Monday.

    China leads the way, with its stocks rallying to near their highest levels in two years on news that the People’s Bank of China, or PBoC, is planning to ease monetary policy.

    The Shanghai Composite Index rose 2.3% on the day, with year-to-date gains sitting at 13% despite the coronavirus turmoil.

    Elsewhere, the S&P 500 is already up over 50% versus its March crash lows, with Goldman Sachs analysts revising their end-of-year forecast upwards. The target is now 3,600 points, not 3,000 — a new record high.

    Even at publishing time, the index was just 14 points away from the all-time highs it had seen in February before coronavirus hit. 

    Bitcoin Vs. S&P 500 1-year chart. Source: Skew

    “As the last few months have demonstrated, equity prices depend on not just the expected future stream of earnings but the rate at which those earnings are discounted to present value,” Bloomberg quoted Goldman’s David Kostin as writing in a note Friday.

    “Looking forward, a falling equity risk premium will outweigh a rise in bond yields, and combined with our above-consensus EPS forecast, will lift the S&P 500 Index to 3,600 by year-end.”

    What future awaits cryptocurrencies?

    Stocks previously exerted significant influence on Bitcoin, with its S&P 500 correlation already at 95%. As Cointelegraph reported, despite gold taking over in recent weeks, analysts still believe that a dramatic change in stocks would be reflected in Bitcoin as well given the recent correlation all-time highs.

    Bitcoin gold correlation

    Bitcoin gold correlation. Source: Skew

    Bitcoin’s correlation to gold has dropped since the latter lost its $2,000 support level — from 68% to 48% in August, data shows.

    Bitcoin vs. gold 1-year chart

    Bitcoin vs. gold 1-year chart. Source: Skew

    Within Bitcoin, market sentiment is facing a hurdle of its own. 

    $12,000, a level that has seen several retests over the past two weeks but failed to become support, continues to cause traders problems. Recent price action has underscored the fact that $12,000 does not have the appeal to crack as resistance. 

    “We are still in an uptrend so I should lean on the side of bullish,” said Cointelegraph Markets analyst filbfilb on Aug. 13 in his Telegram channel. He also considers altcoins moving higher as BTC price stays sideways a bullish sign particularly after “price action showed a big bounce out of demand,” he explained. “Lots of wicks.” 

    Over the weekend, meanwhile, fellow analyst Michaël van de Poppe suggested that the repulsion of $12,000 was strong enough to spark a more pronounced retracement for BTC/USD. A bounce off support at $10,500 was “very likely,” he argued before strength appeared to climb higher and finally flip $12,000 to support.

    “Given the significance of this level, I’m starting to think this is becoming a very likely scenario,” Van de Poppe told Twitter followers. 

    “However, a clear break and flip of $12K are continuations towards $13K and possibly $15-17K area.”

    BTC/USD price chart showing possible $10,500 retrace and reversal

    BTC/USD price chart showing possible $10,500 retrace and reversal. Source: Michaël van de Poppe/ Twitter

    Bitcoin has returned to trading within a corridor in August after taking out $10,500 and $11,000 resistance in abrupt moves, which surprised market participants with their speed and durability.

    Above $12,000, once swept aside, little stands in the way for BTC/USD in terms of resistance until the area around its $20,000 all-time highs from 2017. 

    Beyond price features, Bitcoin is looking stronger than ever under the hood. 

    On Monday, Bitcoin’s network hash rate was sitting at all-time highs of 129 exahashes per second (EH/s).

    Hash rate refers to the overall computing power that miners have dedicated to validating the blockchain and processing transactions. 

    The metric is an estimate rather than a hard-and-fast measurement, with the all-time highs concerning the seven-day average hash rate. 

    Miner behavior changes and impacts the estimate, and hash rate therefore fluctuates. Last week, additional concerns surfaced after one mining pool suddenly sent 800 BTC to exchange Binance — potentially in advance of a sale.

    Nonetheless, the latest numbers serve to show that miner sentiment remains strong. Network difficulty, arguably the most important signal for determining Bitcoin’s immediate health, is also set to increase at its next adjustment in six days’ time. That will also deliver a new all-time high.

    As Cointelegraph has reported, a popular theory suggests that sustained strength in network fundamentals subsequently triggers an advance in price. 

    Bitcoin 7-day average hash rate

    Bitcoin 7-day average hash rate. Source: Blockchain

    One factor — or rather a basket of them — is triggering a warning this week. 

    The Crypto Fear & Greed Index, which uses multiple sources to calculate an impression of investor sentiment, continues to sound the alarm over excessive “greed” among hodlers.

    On Monday, the Index sat at 84/100, just three points off its all-time high of 87 from June 2019. 

    Derived from the Fear & Greed Index for traditional markets, the metric aims to suggest when volatility up or down may ensue.

    Specifically, the higher zone in which the Index currently resides means a significant change that the market is “due for a correction.”

    In late March, by contrast, the Index hit lows of 8/100 as investors were “too worried” over Bitcoin’s strength after the cross-asset crash two weeks previously.

    Crypto Fear & Greed Index as of Aug. 17, 2020

    Crypto Fear & Greed Index as of Aug. 17, 2020. Source:

    As is often the case, zooming out just a little on Bitcoin delivers a much stronger bull case for the buyer.

    In charge of the perspective this week is quant analyst PlanB, whose Stock-to-Flow price forecasting model has returned to the limelight.

    Specifically, in exactly one year’s time, the model demands a BTC/USD price of $100,000. In the meantime, PlanB says, plotting Bitcoin’s monthly closing value since May’s halving delivers a next price target of $14,000 — the aim is to beat its highest-ever monthly close from December 2017.

    Bitcoin S2F Cross-Asset model chart

    Bitcoin S2F Cross-Asset model chart. Source: PlanB/ Twitter

    “3rd red dot (currently $11850) above 2nd red dot (#bitcoin July close $11356) and above 1st red dot (June close $9132) .. next target: Dec 2017 ATH close $14K,” he commented uploading the latest version of the model’s price chart.


    Blockchain Bites: Bitcoin on DeFi and DeFi on Bitcoin – Accu-rate

    Blockchain Bites: Bitcoin on DeFi and DeFi on Bitcoin – Accu-rate




    Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High

    Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High

    Bitcoin remains in consolidation below a critical resistance despite hashrate reaching record highs over the weekend. 

    • Data from Glassnode shows the seven-day average for bitcoin’s hashrate – the computing power dedicated to mining blocks – rose to a record high of 129.03 exahashes per second (EH/s) over the weekend.
    • Bitcoin’s July rally has stalled near $12,000, making the psychological level a resistance to beat for the bulls. It was sidelining near $11,900 at press time.
    • But some argue that an increasing hashrate is a bullish price signal.
    • Earlier this year, Jeremy Britton, CEO of Boston Trading Co. told Finance Magnates rising hashrate forced miners to hoard rather than sell newly mined coins, reducing downwards pressure and raising the price floor.

    Also read: Marathon Signs New $23M Contract With Bitmain for 10,500 Bitcoin Mining Rigs

    • Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High
    • Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High
    • Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High
    • Bitcoin Price Holds Below $12K Even as Hashrate Hits All-Time High


    Author: Omkar Godbole

    Bitcoin, Ether, and XRP Weekly Market Update August 17, 2020

    Bitcoin, Ether, and XRP Weekly Market Update August 17, 2020

    The total crypto market cap added $9.3 billion to its value for the last seven days and now stands at $373.7 billion. The top 10 currencies were mostly in green for the same period with ChainLink (LINK) and EOS (EOS) leading the group with 38.4 and 25.6 percent of increase respectively. By the time of writing bitcoin (BTC) is trading at $11,791 while ether (ETH) moved up to $420. Ripple’s XRP is hovering around $0.298.

    Bitcoin moved down to $11,687 on Sunday, August 9, and closed the seven-day period 5.6 percent up. The most popular cryptocurrency found stability near the previous weekly high at $11,500 and successfully turned that level into horizontal support. It remained above it for four straight sessions.

    On Monday, August 10, the BTC/USD pair climbed up to $12,000 during intraday, but the resistance was way too strong for bulls to surpass. Still, the coin closed with a green candle up to $11,900.

    What we saw on Tuesday was a sudden drop to $11,390 as bitcoin erased 4.2 percent of its value. The $11,500 level was broken, but as we already know – support is not a number, but rather a zone, in this case, $11,500-$11,400.

    The mid-week session on Wednesday was a good one for bulls. BTC regained positions and stabilized its price near $11,570, but not before falling as low as $11,140 in the morning.

    On Thursday, August 13, the BTC/USD pair climbed up to $11,805 and successfully confirmed its position above the horizontal support. During intraday, bears were able to push the price all the way down to $11,285.

    The last day of the workweek was more of a consolidation effort by buyers as the coin remained flat, with no major price changes.

    The first day of the weekend came with a short candle up to $11,845. BTC hit the major horizontal resistance at $12,000 in the early hours of trading.

    On Sunday, August 16, it continued its way up and closed the seven-day period at $11,900 with 1.8 percent of the increase.

    The 24-hour trading volumes remained in the $21-$23 billion throughout most of the week then fell down to $19 billion on Sunday.

    The Ethereum Project token ETH closed the previous week at $390 or 4.8 percent higher compared to the Monday opening. The coin, however, was rejected at the $400 mark on Sunday, August 9 as the horizontal resistance was too strong for the weak weekend volumes.

    Actually, the 24-hour trading volumes were 48 percent lower compared to those from August 1-2.

    On Monday, August 10, the ether climbed up to $396 and formed a short green candle after once again hitting $400 in the early hours of the session.

    The second day of the workweek came with a sudden drop to $379 and the leading altcoin lost 4.2 percent of its value.

    Then on Wednesday, August 12 it fell down to $364 during intraday without reaching the horizontal support at $360, but managed to recover in the evening hours and closed at $387.

    On Thursday, in just 3 hours’ time, the ETH/USD pair skyrocketed all the way up to $425 smashing through the $400 resistance line an adding 9.8 percent to its value.

    The breakout was confirmed on Friday when the coin extended its gains to $439.

    The weekend of August 15-16 started with a small correction to $432 on Saturday. The short red candle that was formed was most probably related to price-taking activities after the rapid price increase.

    On Sunday, the ether remained flat, ending the seven-day period 10.7 percent up.

    The 24-hour volumes remained in the $10-$12 billion area in the first three days of the week then started to increase and reached $16 billion on Thursday and Friday. The move was followed by a drop back to $12 billion on the weekend.

    The Ripple company token XRP continued to slide on Sunday, August 9, and reached a weekly low of $0.287, still remaining flat for the seven-day period.

    On Monday, the XRP/USD pair it formed a similar candle but in the opposite direction and partially recovered from the losses registered in the previous few sessions. It closed at $0.294, but not before hitting the $0.30 mark during intraday.

    On Tuesday, August 11, we witnessed a highly volatile session, during which the coin was trading in the wide range between $0.27-$0.308. Bears managed to once again push the price below the $0.29 support and we saw it close at $0.283.

    The mid-week session on Wednesday was a calm one as the major altcoin remained stable near the above-mentioned levels.

    On Thursday, August 13, the XRP/USD pair started to pick up the pace and climbed up to $0.294, successfully adding 3.8 percent to its value.

    The last day of the workweek came with a second consecutive day of gains as the “ripple” moved up to $0.30.

    The weekend of August 15-16 started with a relatively calm session on Saturday and with no major price fluctuations.

    On Sunday, the coin moved North to close the day and the week at $0.304.

    Our Altcoin of the week is TRON (TRX). The decentralized applications platform founded by Justin Sun was 35 percent up for the last seven days. The coin also registered a 45 increase for the two-week period, reminisce of its glory days.

    TRX peaked at $0.028 on Sunday, August 16, and reached #15 on the CoinGecko’s Top 100 list with a market cap of approximately $1.98 billion.

    The exact reason for the surge is not known, but it is most probably related to the recent partnership with the WAVES protocol that was announced on August 13.

    As of the time of writing, TRX is trading at 0.00000233 against BTC on Binance.

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    Author: Georgi Hristov

    Bitcoin DeFi May Be Unstoppable, What Does It Look Like?

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