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Cryptocurrency

Yesterday’s flash crash in the price of bitcoin explained

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Cryptocurrency markets around the world were yesterday thrown into panic yesterday when bitcoin fell 28% yesterday, breaking below the $10,000 floor. Ripple fell by 46%, while ethereum lost 30%, dropping below the $1000 floor. This led to over $400 billion being wiped out from the entire market capitalization. Market capitalization is the total value of cryptocurrencies traded in the market.

What caused the flash crash ?

 Fear, Uncertainty and Doubt (FUD) in China and North Korea

The South Korean government was rumoured to have instituted a ban on trading of cryptocurrencies by its citizens leading to a fierce protest. The government later issued a clarification, stating that trading with anonymous accounts will no longer be allowed. South Korean exchanges are major players in terms of volume, especially for ripple.

Authorities in China were alleged to have unveiled plans to ban bitcoin mining. The country had last year banned its citizens from trading in cryptocurrencies and ordered exchanges in the country to shut down, leading to a similar crash.

Expired bitcoin contracts 

An unlikely yet plausible reason for the crash were bitcoin future contracts that expired yesterday. Though the volume of future trades are a small proportion of the entire market, most of them were set at a strike price of $10,000, thus creating an incentive to crash the price to that level.

Bitcoin futures are simply contracts to buy or sell bitcoin at a particular price or quantity on a specified date. Futures are a way of hedging, with the expectation that the price will go up or down before the appointed date.

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Why the fuss about bitcoin ?

Though bitcoin’s dominance has fallen to barely 35% of the entire market cap, the currency serves as the measure of value for most investors. The coin also remains the primary means of exit and entry for several alt coin pairs alongside ethereum.

Will a flash crash repeat itself ?

Another crash could occour in the near future, as many countries either clamp down on trading cryptocurrencies or establish regulations around them. Some bitcoin futures also expected to be liquidated at the end of the month.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

Cryptocurrency

How to protect your crypto from cyber robbers

Nairametrics proffers some vital solutions on how best to protect your crypto assets.

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Bitcoin robbers move 3503 BTC worth $38.5 million, Twitter cyber hackers gained $100,000 worth of cryptos, SEC warns against illegal cryptocurrency operator and its products, Crypto-Criminals on a rampage, capitalizing on COVID-19 Pandemic

The recent bullish run in the crypto industry has attracted some bad actors whose motive primarily is to rob investors, crypto traders, and larger entities of their crypto-assets.

Just yesterday, India TV News reported that cyber-criminals targeted high-income individuals across India. Victims received messages through their social media groups asking them to sell and buy Bitcoin via a mobile app.

Manan Shah, Founder and CEO of Avalance Global Solutions, told IANS that the rich are not immune to these growing menace. He said:

“I have seen so many wealthy Indians falling into the trap of such fake cryptocurrency wallets in the recent past. One gentleman just came to me who lost $50,000 (over Rs 37 lakh) while dealing with one such fake platform.”

READ ALSO: Nigeria to begin gold production in 2021 with the Segilola Gold Project

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Recall that about a month ago, Nairametrics reported that crypto scammers gained  $24 million worth of BTC in H1 2020.

As the COVID-19 pandemic has kept a lot of individuals more active online, scammers are pulling various types of scams such as fake ICOs, BTC recovery, fake exchanges, giveaways, video scams, fake tumblers, Ponzi schemes, malware, and many more.

READ ALSO: Nigeria attracts more Bitcoin interest than any country globally

Nairametrics proffers some vital solutions on how best to protect your crypto assets in the midst of all the scams. They include:

Verification

Always make sure you know the individual you are dealing with. If an individual is offering you an investment opportunity, check if they have a proper website and a Linkedin account. Read the white paper, and Google the project to see what others are saying about it.

If an individual is asking you for cryptos or your money, they are probably trying to defraud you. But if you are not sure, try to verify their claims and ask for proof of their identity. If you are still not sure if you are dealing with a scammer or not, you can send an e-mail to a relevant regulatory authority.

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READ ALSO: LINK, most profitable crypto-asset in 6 months, gains 451%

Be Sensitive

Always be sensitive. If it sounds or feels too good to be true, it’s most likely a scam; even when it sounds reasonable, it could be a scam. If someone claims to have a recording or something else belonging to you, ask for proof.

Do proper background checks

Before sending your cash to any crypto exchange or online wallet, make sure you are using the correct website. If an entity or individual tells you they will make you rich, ask them for evidence. Scammers don’t like to waste time, so they will probably move on to the next victim once they notice you are not easily deceived.

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Never release your private keys

Never give out your private keys to anyone, including your family members, and don’t keep your private keys where others might find them. Write down your keys and put them somewhere safe.

READ ALSO: Bitcoin thieves move 3,897 BTC worth $42 million in 1 hour

If you use a crypto exchange, use as many of their security measures as possible (like an authenticator, phone verification, or others) and make sure your passwords are complex. These measures will not make it impossible to be hacked or scammed, but they will make the scammers have a very hard time defrauding you.

Using cold wallets or a proprietary smartphone is recommended. These are specifically designed tools to keep your bitcoin from falling into the hands of hackers on the internet.

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Cryptocurrency

Bitcoin is on rampage as it breaks through $12,000 price level

BTC recorded a plus of 2.18% and was trading at a price of $11,974.

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BTC wallets, Bitcoin users rise in Nigeria despite Senate, CBN campaign against it, Answering the big Bitcoin question - buy, sell or hold?, Bitcoin hits a 12-month low, Bitcoin price under pressure, stays under $7000, How to protect your bitcoin from hackers, Bitcoin Whales Gathering More Bitcoins, Waiting For the Bullish Run, Bitcoin is scarce, entities, individuals hold for long term

The world’s flagship cryptocurrency has broken through the strong resistance level of $12,000. This happened just some hours ago, according to information obtained by Nairametrics.

Why BTC is up presently?

Bitcoin bulls have been on a bullish run, triggered by high liquidity in the global money markets. Investors remain bullish in the long term despite the blurred global economic outlook and resurgence of the COVID-19 virus.

Renowned crypto investor and co-founder of Gemini Exchange, Tyler Winklevoss, earlier today tweeted about BTC’s surge saying; “And Bitcoin has breached 12k. Great way to start the week!”

READ MORE: Tether whales move over 300,000,000 USDT in a single day

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Over the weekend, Bitcoin’s price mostly fluctuated between the $11,400 and $11867 price levels. But just some hours ago, the popular crypto asset finally broke through the $12,000 mark.

READ ALSO: Bitcoin whale transfers 92,857 BTC worth $1.1 billion

Within the last 24 hours, BTC recorded a plus of 2.18% and was trading at a price of $11,974 at the time of writing. The market capitalization has risen from $216 billion to almost $220 billion and the Bitcoin dominance slightly to 60.7%. In addition, the control of Bitcoin’s supply has been steadily shifting towards smaller entities

The percentage of supply owned by entities holding ≤ 10 $BTC grew from 5.1% to 13.8% in 5 years, while the percent held by entities with 100-100k BTC declined from 62.9% to 49.8%. These show that more retail investors are grabbing a stake on the most popular crypto asset and diminishing the strength of BTC whales.

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Cryptocurrency

PAX Gold: Crypto backed by gold but outperforms gold

PAX Gold (PAXG) is a crypto asset backed by Gold.

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PAX Gold: Crypto backed by gold but outperforms gold

It’s crypto. It’s physical gold. And recently, it was approved by the New York State Department of Financial Services for custody and listing. It’s a product from the crypto-verse that combines gold and crypto into a single unit.

Data from Coinmarketcap showed PAX Gold traded at about $1,521 as of March 21, 2020. As of the time of writing this report, the crypto asset was trading at about $2,039.40, showing gains in percentage terms of about 134%. Meanwhile, Gold price so far has gained just 35% in 2020.

READ MORE: ChainLink’s digital coin skyrockets 388% in 130 days, still soaring

Why PAX Gold: The sudden surge in this gold-backed stablecoin, since the era of the COVID-19 pandemic, appears to be driven by increased awareness of its unique features, which include access to gold without bullion fees or other storage costs.

Quick fact: PAX Gold (PAXG) is a crypto asset backed by Gold. A PaxoGold digital coin is backed by one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, stored in Brink’s gold vaults. Any entity or individual who owns PAX Gold owns the underlying physical gold held in custody by Paxos Trust Company.

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READ MORE: QKC: fastest rising crypto asset in 30 days, gains 100%

Paxos has recently responded to all its digital coins being listed on the New York State Department of Financial Services (NYDFS), stating that it validated the company’s time, energy, and expense which it put into compliance.

Commenting on the green list, Dan Burstein, Chief Compliance Officer at Paxos said: “As the Chief Compliance Officer at Paxos, I’m proud that the culture of Paxos is truly centered around compliance. We build products that the world has never seen before, and we build them for the innovators in the space, not the bad actors.

“Our engineers and product managers prioritize compliance as we create new products, our business development team considers compliance as we structure new partnerships, our operations team helps onboard and service customers according to our high compliance standards, our information security team ensures we hold our customers’ digital assets and personal information in the most secure way possible— the list goes on.”

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