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Crypto Market Forecast: W/C 28 September 2020

A curated weekly summary of forward-focused crypto news that matters. This week -a major hack at the Kucoin exchange, Grayscale Investments buys 17,000 bitcoin - and decentralized derivatives exchange LEVERJ launches BTC/USD and ETH/USD perpetual swap futures

It was a week of marginal price slides for large-cap assets in the cryptographic asset market with the Bitcoin price falling by ~1% over the last seven days. Over the same period, the Ethereum Price (ETH) and Ripple Price (XRP) fell by ~3% and ~1% respectively and the overall market cap for crypto fell by ~1%.

Singapore-based exchange Kucoin announced on Saturday that it had suffered a major hack and the latest updates suggest it may have lost up to USD203 million of user funds. A statement released by the exchange says that Bitcoin, ERC-20s, and other tokens were transferred out of its hot wallets during a security breach. Kucoin says that funds in its offline cold wallet remain secure and that any user funds lost as part of the incident will be covered by its insurance fund.

Exchanges like KuCoin use hot wallets as temporary storage systems for cryptocurrencies that are in the process of being exchanged on the platform. While compromisable because they are connected online, they need to be used to power immediate demand for currency conversions and funds transfers. An Ethereum address has been identified that tracked some of the stolen funds. The perpetrator now appears to be in the process of swapping out the ERC-20 tokens collected during the hack which include Ocean protocol (OCEAN) and Synthetix Network Token (SNX).

In moves to limit the damage, Tether (USDT) has frozen at least $35 million worth of its currency and Velo Labs has announced it will invalidate all of the 122 million VELO tokens lost in the hack, worth about USD76 million. In addition, Ocean protocol paused its smart contract after it lost USD8.2 million.

As users of centralized cryptocurrency exchanges continue to face concerns around the safety of their funds, the decentralized exchange sector continues to rise in prominence. Uniswap, a DEX on the Ethereum platform, has recently hit an all-time high for total value locked (TVL) in the platform of ~USD2 billion. This now makes it the largest protocol in DeFi. Daily trading volumes on Uniswap hover around USD290 million making the exchange more actively traded on than well known centralized exchanges like Coinbase Pro and Bitfinex.

Crypto news for the week ahead

28th September – Lisk block reward halving

Lisk (LSK) an open-source platform for building blockchain applications executes block reward halving at the start of this week to take rewards from 2LSK to 1LSK. Halvings have the direct effect of slashing miner revenues but also have the effect of reducing token inflation, potentially rewarding holders in the long term by making their accumulated LSK more scarce. In the lead up to the halving, the price of LSK has fallen by ~14% in the last week and trades for around USD1.20.

28th September – Bella protocol launch of liquidity mining

Bella, a DeFi protocol that is designed to resemble traditional mobile banking has built a suite of open finance products including automated yield farming tools, a lending protocol, and 1-click savings accounts. This week it launches a liquidity mining for users to earn native BEL tokens. Miners can earn liquidity by providing to the BEL/USDT, BEL/ETH, ARPA/USDT liquidity pools on Uniswap.

28th September – LEVERJ launches perpetual swap futures

Decentralized cryptocurrency derivatives trading platform LEVERJ has this week launched BTC/USD and ETH/USD perpetual swap futures with up to 100X leverage. LEVERJ is a decentralized crypto exchange founded by a team of Wall Street veterans from J.P. Morgan, Goldman Sachs, and Credit Suisse. The exchange is built on the Ethereum platform and provides enterprise standard trading solutions while remaining non-custodial.

Top 10 Crypto Summary

Crypto Market Cap top 10
It was a mixed week of trading for assets in the Brave New Coin top 10. While the big three of BTC, ETH, and XRP slid slightly, an altcoin rally was lead by Chainlink (LINK) and Cardano (ADA). Onchain data provider Santiment reports that both blockchain projects experienced a pickup in address activity and token circulation preceding the rises in price.

Bitcoin Price Chart

Bitcoin Price Chart
Bitcoin markets recovered from an early-week slump to end the last seven days close to where they began. Grayscale Investment, a leading cryptocurrency asset manager, has increased its Bitcoin position by a sizeable 17,100 BTC in the week. This continues a recent bullish trend of institutional players increasing their exposures following the 16,796 BTC investment made by publicly listed tech firm MicroStrategy in mid-September.


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