Bitcoin’s next breakout will happen during US office hours

Last week, there wasn’t a whole lot happening in crypto. But thankfully this week, there have been some major new developments.

We have…

• Intriguing research showing when Bitcoin’s price is most likely to breakout.
• Vitalik confirming Ethereum 2.0 will scale to 100,000 transactions per second (TPS).
• And what IOTA’s co-founder describes as the most important day in the history of IOTA’s development.
• Plus news on Tezos’ never-ending ICO saga and even some topical news about the Bank of England’s gold vaults.

So let’s dive in.

Bitcoin’s next breakout will likely happen during US office hours

Back in the crazy run of 2017, most of crypto’s major moves originated in the Asian markets.

So if you were UK based, the biggest moves happened while you were asleep, and you’d wake up to some crazy price swings.

And if those price swings didn’t happen overnight, another time of big moves was over the weekend. As I recall, Ethereum made some of its biggest moves (up and down) on Saturdays.

Today, it’s a different story, as this piece in Coin Telegraph shows:

At present, around 4 pm UTC marks the most intense time of day for Bitcoin trading.

Again using Coinbase, in addition to Binance, Skew finds that midweek is also more intense than the start or end of the working week. Weekends, as is often noted, are quieter still.

As an example, over the past 30 days, Coinbase saw an average of $6.5 million in volume between 3 pm and 4 pm UTC. The quietest hour, 9 am, saw just $2 million.

Those times correspond to around 12 pm EST, or 2.5 hours after NY markets officially open.

The reason why, as Coin Telegraph points out is that there is a lot more institutional trading happening in today’s crypto markets than there was in the past – when most demand was from ordinary people.

Institutions like Grayscale now own a colossal amount of Bitcoin and other cryptos, as I reported earlier this year. And other, more traditional, investment houses have been getting in on the action, too.

Which means that crypto markets are now starting to resemble stock markets more and more… and vice versa, as Ethereum co-creator Vitalik Buterin pointed out last week:

Source: Twitter

And speaking of Vitalik. He’s caused quite a stir this week, revealing…

Ethereum 2.0 will process 100,000 TPS –around 35,000 more than VISA’s maximum

A lot of the Ethereum 2.0 coverage has been focused on its switch from Proof of Work (POW) like Bitcoin to Proof of Stake (POS) more like Tezos.

And for good reason, POS means you will be able to get rewarded in Ethereum just for holding Ethereum.

(You’ll actually have to do some set-up to earn those rewards. But companies like Coinbase are preparing to make that set up as easy as just a few clicks of your mouse… as is already the case with Tezos)

Basically, you’ll be able to earn interest on your Ethereum like an Ethereum savings account.

However, before all the hype about POS, the main topic of debate in the crypto community was scaling.

How many TPS can it do?

For a long time, TPS was the be-all and end-all of a crypto’s perceived worth.

Then along came cryptos that could perform thousands of TPS, but that achieved this massive speed by sacrificing decentralisation or security.

The crypto “trilemma” as it’s called, is speed, security, decentralisation.

For a recap on trilemmas, here’s something from a piece I wrote on IOTA’s coordicide back in June 2019:

Trilemmas come up in many areas of life.

It is basically a choice between three important things, of which you can only ever choose two.

The most common one is the “good, fast, cheap” trilemma.

This one is common because it comes up time and again in working relationships and project management. In most situations, you can only pick two of the three.

But as I said, trilemmas come up in many areas of life and work. And crypto has its own.

Crypto’s trilemma is: scalability, security, decentralisation. It was first expressed by Ethereum co-founder Vitalik Buterin, and up until now no crypto has solved it.

And while it’s true IOTA is well on the way to beating the trilemma (more on that in just a minute) Ethereum is also making moves.

When Ethereum 2.0 finally launches, it will be able to process 100,000 TPS, as Vitalik wrote in a tweet a few days ago:

Source: Twitter

The question is, however, when will Ethereum 2.0 actually go live?

You may remember it was scheduled for this January and later pushed back to this summer. The latest from the community is that it’s now set for release at the end of this year or even early next year.

From The daily Hodl:

In May, ETH 2.0 testnet coordinator Afri Schoedon said that based on the current progress of the project, phase 0 will likely happen at the end of this year or early next year. The initial phase will launch the beacon chain that will implement proof of stake.

You may remember that Ethereum 2.0 was rumoured to be launching this month. And after Vitalik confirmed the July launch at a conference, the crypto world went crazy.

However, he later clarified that he misheard the question and quashed all hope of a July launch.

From Coin Desk:

When reached by CoinDesk on Tuesday, Buterin offered a statement:

“I re-listened to the interview. The question indeed contained ‘July’, I don’t recall hearing ‘July’ so it sounds like it’s my fault for mishearing. Apologies for that,” Buterin said via email. “My actual stance is that eth2 is ‘on track’ in that there aren’t any unexpected bumps in the road, testnets are coming along, etc, but I defer to the client devs on timelines and if they are now saying ‘Q3’ more broadly then I believe them.”

So now the best information we have points to Ethereum 2.0 launching late this year or early next year.

Which, as usual with crypto, has led to some great memes:

Meanwhile…

IOTA 2.0 testnet “pollen” goes live

Never one to downplay a development, here’s what IOTA co-founder David Sonstebo had to say about IOTA’s “pollen” testnet going live:

Source: Twitter

Fellow co-founder Dominik Schiener had a slightly less hypey, but similarly powerful way of putting it:

Source: Twitter

So what exactly is pollen, and why has it got the IOTA founders so excited?

Basically, as I wrote last week, it’s the public testnet for IOTA 2.0. Or as IOTA puts it in its official blog:

Pollen marks the beginning of the world’s first truly decentralized, scalable, and fee-less Distributed Ledger, which has been IOTA’s promise since day one. Pollen is the first phase in IOTA’s three-part release strategy that will culminate in our coordinator-less, production-ready network: IOTA 2.0. Pollen is a rapidly developing research testbed where the community, researchers and engineers can test and validate the concepts of IOTA 2.0.

It continues (emphasis mine):

Today’s release includes the following main feature updates:

• Fast Probabilistic Consensus — IOTA’s new consensus algorithm for a decentralized network. You can read the research paper here.
• Value Transactions — network participants can now use an automated faucet to receive tokens, send value transactions (via a wallet) and test conflict resolution on the network.
• Tokenized Assets — individuals can now ‘color’ IOTA tokens with different attributes that represent real-world assets such as buildings, IoT devices, or even company equity.
• Prometheus and Grafana integration — node operators can now monitor several metrics by enabling a Grafana dashboard.
• Feeless dApps — this release includes a future capability for the IOTA ecosystem: the development of feeless decentralized applications.

As you can see from the above, this release opens up the possibility for feeless dApps and coloured coins on IOTA, which if you read my article from a few weeks ago, you’ll know could lead to some very big things.

However, it’s worth remembering this is just a testnet, not a full release. Which is why David’s extremely dramatic announcement was met with some criticism.

I mean, you’d have thought the launch of the current public mainnet was a bigger day than this, but not according to David.

To be fair, I guess he’s just excited the IOTA vision is actually being realised. The theory put into practice. So it’s easy to see why he’s so excited about it.

As for the rest of the world, I think most of them will reserve judgement until IOTA 2.0 officially goes live… which is planned for early next year… probably around the same time as Ethereum 2.0. What a coincidence.

Tezos goes all Eminem on its lawsuits

The Tezos launch ICO and token launch did not go smoothly.

There were power struggles, major delays and a number of lawsuits.

Eventually, the team was reshuffled, people were fired and the token launched in mid-2018… around eight months later than promised.

Because of this, it took a long time for Tezos to gain traction. At first people simply didn’t trust the project.

But as Tezos began to prove itself over the course of the next two years, its price went up and as its price increased, so too did its fan base.

Today, it’s one of the most popular projects in the whole cryptosphere.

And many getting into it probably have no idea about the shambolic start Tezos had.

But those lawsuits never went away…

Then last month, news emerged Tezos had moved to settle all its lawsuits, and in the process gain immunity from any future SEC investigations into its ICO.

From Coin Telegraph:

SEC immunity for $25 million

At the start of May, Cointelegraph reported that the court had granted preliminary approval for a $25-million settlement in the Tezos ICO class-action lawsuit. In an email to Cointelegraph, a spokesperson for the Tezos Foundation commented on the decision to settle the case, stating:

“The Tezos Foundation chose to settle all claims because the Foundation believes it is in the best interest of the Tezos project and community as a whole to resolve all pending lawsuits. The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing. But lawsuits are expensive and time-consuming, and the Tezos Foundation decided that the one-time financial cost of a settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts. The Tezos Foundation can now focus on its mission to support the long-term success of the Tezos protocol and ecosystem.”

…

Aside from putting an end to the consolidated class-action lawsuits, the $25-million settlement could also prevent any future enforcement action by the SEC. Quentin Herbrecht, CEO of blockchain marketing platform Markchain, offered a similar argument in conversation with Cointelegraph.

According to Herbrecht:

“The plaintiffs such as the general belief think that Tezos agreed to settle this fine to prevent the SEC from re-characterizing their ICO as illegal securities offering, and this could have been a fatal blow to the project. I sincerely believe that if the agreement is accepted, it will be a lesser evil for the foundation and the Tezos team, which currently holds more than $635 million in various assets.”

So, in theory at least, it should be plain sailing for the Tezos project from now on.

And finally… “not your vault, not your gold,” Bank of England tells Venezuela

“Not your keys, not your coins” is a common saying in crypto.

Basically, it means, if you let a company store your crypto for you, instead of storing it on your own hardware wallet, it’s not really your crypto – it’s the company’s.

(For more on why this is so important, see “the three golden rules of crypto trading” towards the end of this feature.)

Well, it seems it isn’t just the world of crypto that works like this either, the world of geopolitics does too.

According to Reuters:

Since 2018, the Bank of England has delayed the transfer of 31 tonnes of Venezuelan gold stored there to Maduro, who Britain does not recognize as the country’s legitimate leader.

But now President Maduro is playing the Coronavirus card and claiming he needs the roughly $1 billion of gold for his coronavirus relief effort.

Again, from Reuters:

Venezuela’s central bank has made a legal claim to try to force the Bank of England to hand over €930 million ($1.02 billion) of gold so President Nicolas Maduro’s government can fund its coronavirus response, according to the document submitted in a London court.

The claim follows a request Venezuela made to the Bank of England in April to sell part of its gold reserves there and send the proceeds to the United Nations to help with the country’s coronavirus-fighting efforts.

If you’re familiar with the story of Maduro’s Venezuela over the last few years, you’ll know that it’s in a very bad way, with hyperinflation of over 53 million percent since 2016.

As a result, many citizens have turned to cryptocurrency, which in comparison to the country’s official currency is extremely stable.

As Coin Telegraph reported in May:

Over 20,000 shops and enterprises in Venezuela will reportedly start accepting crypto by June 1. This news was made available as part of an effort to drive crypto adoption in the hyperinflation-stricken country.

So given just how much reliance there now is by ordinary people in Venezuela on cryptocurrency, it’s kind of ironic the man who got the country into this mess is now being told the banking equivalent of “not your keys, not your coins” by the Bank of England.

Is it morally right to refuse to return a country’s gold to a dictator who’s running his country into the ground?

Okay, that’s all for this week.

Next week, we’ll probably look at the strange goings on in the world of DeFi and the new practice people are using to make money called “yield farming”.

Thanks for reading.

Harry