Prime mover: As Ethereum Enthusiasm Grows, “Bear Case” Could Still Double Prices

The cryptocurrency markets are sending strong signals right now that innovations from emerging technologies such as decentralized finance or DeFi could shake the global order of banks, money managers and insurance companies.

A recurring theme in CoinDesk’s investment: Ethereum Economy’s virtual conference on Wednesday was just how much money there is to be made in the fast-growing digital asset industry.

The discourse on returns and returns was heightened during technical discussions on protocols and governance systems and arcane blockchains such as “layer 1” and “layer 2”, “rollup” and “shards”.

Traditional market regulators are also beginning to recognize the growth possibilities that cryptocurrency bulls have been betting on for years.

The tech movement is “obviously revolutionary, and I think at the end of the day it could lead to massive disintermediation of the financial system and traditional players,” Heath Tarbert, president of the US Commodity Futures Trading Commission, told CoinDesk Chief Content Officer Michael Casey. . (Link here to the video interview.)

DeFi, where developers use open source software to create semi-automated lending and trading systems on blockchain networks, has shown its potential in recent months as projects like Compound and Uniswap have attracted billions of dollars worth of cryptocurrencies. A number of “yield farming” projects such as Yearn.Finance have made it easy to rack up extra rewards, a way to squeeze fixed income returns into digital asset markets.

The cryptocurrency industry appears to have emerged from its larval stage: the shape is taking shape, but the challenges of coming of age have yet to be overcome, from trustworthiness to marketing and, of course, climbing to the point where millions of users can be welcomed.

There are strong risks, as with the flames of recent months of DeFi projects like SushiSwap, whose founder suddenly decided to cash out tokens at the top of the market, causing the market to crash, and Yam, who succumbed to a bug.

“In many cases, you can risk permanent loss of your capital by participating in some of these activities,” said Ryan Watkins, senior research analyst at Messari, in one of the panels.

And it is premature to compare the cryptocurrency scale with the traditional financial system.

“Today, 99.9% of the money is still in progress,” Binance CEO Changpeng “CZ” Zhao said in a one-to-one session with reporter Leigh Cuen at the CoinDesk conference. “We still need gateways.”

Those too are starting to emerge. Bloq, a blockchain infrastructure company led by former CNN.com web developer Jeff Garzik, is launching a product that allows users to earn money by purchasing customized “holding pools” of digital assets, CoinDesk’s Jaspreet Kalra reported Wednesday.

“The future is dynamic wallets that are expensive to build in traditional finance,” said Tarun Chitra, CEO of Gauntlet, a simulation platform for cryptographic networks. Its Zoom feed was by far the most colorful:

Another company, Blox, intends to help customers pool ether (ETH) to overcome a threshold needed to “bet” on the Ethereum blockchain. Staking is similar to owning an interest-bearing deposit and will air with a major update expected to arrive by the end of 2020.

But annual returns could range from 4.6% to 10.3%, wrote CoinDesk’s Sebastian Sinclair. Compare that to the 0.01% offered on a JPMorgan Chase savings account.

In one of the panels at the conference, David Hoffman, founding father of DeFi-focused publication Bankless, mapped the bullish case for the ether and said prices could rise to $ 10,000 or more, from around $ 380 now.

In a later session, Vishal Shah, founder and CEO of the cryptocurrency exchange Alpha5, mapped the bearish case, but concluded by saying that prices could double in that scenario.

Ether prices have already tripled this year. High ratings might just be an advertising campaign. Or it could be a sign that cryptocurrency traders are looking forward to the maturation of the industry.

The bitcoin market has gone undecided, according to Wednesday’s doji candle.

Key indicators such as the 14-day relative strength index remain bullish. Furthermore, the five and ten day averages continue to orient north, indicating that the path of least resistance is towards the upside.

Macro-wise, rising stocks of negative-yielding global debt is a major bullish development for hedging perceived inflation or holding of assets of value like bitcoin. “In the future, the pursuit of yield is likely to be a major driver of bitcoin price growth and adoption,” Stack Fund CEO Matthew Dibb told CoinDesk in a WhatsApp chat.

Additionally, recent revelations about bitcoin holdings from payments firm Square and Stone Ridge Asset Management have validated the appeal of cryptocurrency as an alternative investment.

As such, the odds seem stacked in favor of a continued bull run. That said, the cryptocurrency remains vulnerable to selling in global equity markets in the short term. As of press time, bitcoin is trading in the red near $ 11,340.

Read more: Growing global stocks of negative-yielding debt are good for Bitcoin, analysts say

Ethereum’s Vitalik Buterin Invites Power Users to Move to Level 2 Downsizing. (CoinDesk)

Grayscale (owned by the parent company of CoinDesk Digital Currency Group) raises $ 1 billion on all products in Q3. (CoinDesk)

The 83-page regulatory framework for cryptocurrency enforcement from the US Department of Justice is fired forward at international exchanges. (CoinDesk)

Algorand’s new European accelerator to boost startups with funding up to $ 500,000. (CoinDesk)

Hopes for a US stimulus package vanish. (CNBC)

The vice president of the Federal Reserve says it is an “open question” whether the US central bank will have to continue buying Treasury bonds indefinitely. (WSJ)

The pandemic response will drive global public debt to a record high, the IMF says. (WSJ)

The largest economies in the world have extended a program that allows poorer nations to suspend debt repayment. (WSJ)

Finance chiefs of the five largest US lenders have mixed views on the COVID economy. (Reuters)