Hello and welcome to this week's edition of Overbit Round Up.
Bitcoin, the world's largest cryptocurrency by market value, was up 10.2 per cent as of press time Wednesday.
At a glance, it seemed that Bitcoin traders were disregarding potentially harmful news for the cryptocurrency coming out of China, such as blockchain search engine bans, mining shutdowns in certain provinces, and arrests of more than 1,000 individuals for money laundering related to cryptocurrency.
Despite the pessimism in the East for cryptocurrency, on-chain analytics show that exchange outflows, meaning bitcoins leaving exchanges, reached the highest level of 2021 in recent days. "According to data aggregator CryptoQuant, exchange holdings across major venues is down to $2.46 million, the lowest since May 17," reported CoinDesk.
Though there could be many reasons for these outflows, movements like these typically point to widespread accumulation, as larger buyers withdraw coins once their spread-out purchasing activity is over.
The recent upward price action was undoubtedly led by Bitcoin, but other market assets quickly followed suit. Ether, the second-largest cryptocurrency by market value, was trading at $2,571 up just over 2 per cent in the previous 24 hours. The asset is above the 10-hour and 50-hour moving averages, which is a bullish indication for market technicians. Though, data from Dune Analytics points to gas fees at nearly 2021 levels as well, indicating that dapp and defi usage has not picked back up since the May selloff.
In any case, resilience to bearish news is undoubtedly a reassuring sign for cryptocurrency market participants, especially after seeing such a reactive market the past few months.
Talks of DeFi usage brings us to our last story for today's edition of Overbit Weekly Round Up - DeFi Derivatives.
According to a key commodities regulator on Tuesday, unlicensed decentralised financial markets may be unlawful in the United States. Dan Berkovitz stated that federal law "does not provide any exemption" for decentralised financial markets, despite many cryptocurrency enthusiasts believing (and hoping) otherwise.
"DeFi marketplaces, platforms, or websites are neither DCMs or SEFs. There are no exemptions from registration in the CEA for digital currencies, blockchains, or smart contracts," He stated.
Since its launch last summer, DeFi has attracted tons of attention, especially even more so as cryptocurrency prices market-wide have skyrocketed in the past year.
Aside from legality, Berkovitz raised concerns that DeFi markets selling derivatives may not have the same safeguards as their counterparts. "None of these benefits or protections exists in a pure 'peer-to-peer' DeFi system," Berkovitz stated.
Yet again, we find the innovation of cryptocurrencies and blockchain directly clashing with the ethos of government intervention and regulation. Seeing stories like El Salvador officially adopting Bitcoin as legal tender just a week earlier helps to remind readers just how early we are: nobody quite knows how to react to the revolutionary tech.
As always, thanks for reading Overbit Round Up. Take care and safe trading until next time.