U.S. Treasury Secretary Janet Yellen warns crypto is a “very risky investment,” adding that she would not recommend it to most people who are saving for retirement. However, Yellen noted that Congress could restrict the type of investments allowed in retirement accounts, including 401(k) plans. Janet Yellen on Investing in Cryptocurrencies for Retirement The topic of whether Americans should be able to put retirement savings in cryptocurrencies continues to be hotly debated. U.S. Treasury Secretary Janet Yellen was asked Thursday at an event organized by the New York Times about Fidelity’s announcement to allow bitcoin as an investment option in 401(k) plans. Yellen replied: It’s not something that I would recommend to most people who are saving for their retirement … To me it’s very risky investment. Fidelity’s announcement followed a guidance issued by the Labor Department (DOL) warning 401(k) plan administrators about allowing cryptocurrencies in retirement plans. Fidelity is one of the biggest 401(k) plan administrators. Ali Khawar, Acting Assistant Secretary of the DOL’s Employee Benefits Security Administration, said the Labor Department has “grave concerns with what Fidelity has done.” He stressed, “cryptocurrencies can present serious risks to retirement savings.” Treasury Secretary Yellen also noted Thursday that Congress could regulate what assets could be included in retirement plans like 401(k). Commenting on whether Congress should take action, Yellen clarified: I’m not saying I recommend it, but that to my mind would be a reasonable thing. The Labor Department’s efforts to restrict Americans from putting crypto in retirement accounts have upset some lawmakers. In response, U.S. Senator Tommy Tuberville (R-AL) introduced the Financial Freedom Act to prohibit the DOL “from issuing a regulation or guidance that limits the type of investments that self-directed 401(k) account investors can choose through a brokerage window.” Furthermore, the Labor Department has been sued over its crypto guidance.
The World Bank has warned of a possible global recession. “For many countries, recession will be hard to avoid,” said World Bank President David Malpass. “This is the sharpest slowdown in 80 years.” World Bank on Global Recession, Stagflation The World Bank warned about the rising risk of stagflation and global recession Tuesday. World Bank President David Malpass said: The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid. “Markets look forward, so it is urgent to encourage production and avoid trade restrictions. Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality,” he explained. The World Bank president clarified on Bloomberg Tuesday that we are not in a global recession yet. However, “The downside risk is that it could be a global recession,” he opined. “One of the key variables is whether supply comes back online in order to add growth and slow down the inflation rate,” Malpass continued. He emphasized: This is the sharpest slowdown in 80 years. “That’s from the 2021 rate which was high because of the recovery from Covid to what we are looking at now, 2.9%, in 2022,” he detailed. “That’s a very sharp slowdown and it’s really hitting the poorer countries hard.” In a report issued Tuesday, the Bank described: “Global growth is expected to slump from 5.7% in 2021 to 2.9% in 2022 — significantly lower than 4.1% that was anticipated in January.” The Bank also warned about stagflation, stating that the danger of stagflation is considerable. In addition, inflation and slow growth may persist for years, the World Bank noted. Commenting on the Bank’s stagflation warning, Malpass stressed: It’s global but it particularly hits the developing countries. “There’s a lot of inequality in the world so the advanced economies and particularly the people at the top in the advanced economies have done very well over the last decade,” he noted. Malpass elaborated: “The reason that this is a prolonged risk for the world is that we are coming off of a very exceptionally low period of interest rates. Last year, I called it uncharted territory on both fiscal policy … and monetary policy.”
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, has given his take regarding the future of Bitcoin’s usage. Bankman-Fried stated he doesn’t believe that Bitcoin will work as a payments network, due to its limited capability for scaling to fulfill this task. However, he believes it might become “an asset, a commodity, and a store of value.” Sam Banksman-Fried on Bitcoin as a Payments Network FTX founder Sam Bank man-Fried has given his opinion about where bitcoin is going and the real value of its structure in the future. In an interview published by the Financial Times, Banksman-Fried criticized the implementation of Bitcoin as a payments network. To him, the Bitcoin block chain system will never work as a day-to-day payments system for several reasons. A perceived lack of scalability of the Bitcoin block chain is one of them, and the second reason presented by the executive has to do with the energy and environmental implications of this hypothetical growth compared to other alternatives. To Banksman-Fried, bitcoin for payments is akin to gold, in that it would be impractical to use. He stated: "Why don’t we go to a store and pay with physical gold bars? First of all, it would be ridiculous and absurd. It would be unbelievably expensive. And I’m sure it’d be bad for the climate." He also declared that proof-of-stake (PoS) networks would be more efficient to complete these tasks, explaining: "Things that you’re doing millions of transactions a second with (will) have to be extremely efficient and lightweight and lower energy cost. Proof of stake networks are." Banksman-Fried believes that Bitcoin has other unique properties that make it good as “an asset, a commodity, and a store of value.” Differing Opinions However, some views differ from Bankman-Fried’s opinions. The inception of the Bitcoin Lightning Network (LN), the second layer (L2) expansion protocol for Bitcoin that proposes very low transaction costs, might be a solution to the scaling problems that first-generation block chains like Bitcoin face when congested. This is the opinion of Paolo Ardoino, CTO of Bitfinex, who believes Lightning has the potential to turn Bitcoin into a feasible payment rail. He stated: "Bitcoin’s Lightning Network is quietly emerging to make manifest Satoshi Nakamoto’s prophecy of a decentralized, peer-to-peer payment network. A case in point is El Salvador where the country’s adoption of bitcoin as legal tender has made the nation a laboratory for Lightning usage with global corporations integrating the technology." David Marcus, former crypto chief at Meta, recently launched Lightspark, a VC-backed company that will explore the capabilities of the Lightning Network for payments. The protocol, which was proposed in 2015, has still not managed to gain mainstream support, and it sits at number 32 on the list of decentralized protocols with the most value locked, according to Defi Pulse, a decentralized finance index. what your opinion should bitcoin have good future as payment solution or not let us know your opinion send it here [email protected] and have chance to win some Bitcoin mining contracts
The Luna Foundation Guard, the entity in charge of safeguarding the peg of UST, the stablecoin of the Terra ecosystem, has revealed how it used the available Bitcoin reserve before the recent debacle involving the Terra ecosystem. The organization sold part of the bitcoins owned directly, while another part was traded on different dates to try and stabilize the value of UST. The reserve was comprised of more than 80,000 BTC. Luna Foundation Guard Clarifies Reserve Movements The Luna Foundation Guard (LFG), the organization tasked with safeguarding the dollar peg of UST, the algorithmic stablecoin of the Terra ecosystem, has broken its silence to explain the use of the assets it had under its custody. The institution had amassed more than 80K BTC, which was to be used in case of market imbalances affecting the value of terrausd (UST). According to reports on social media, the foundation spent almost all of its BTC reserves in a failed attempt to save UST. This was made in three different operations. In the first one, LFG sold 26,281,671 USDT & 23,555,590 USDC for an aggregate of 50,200,071 UST, in what was the first defensive transaction against the depeg incident. Also, the LFG stated it: Transferred 52,189 BTC to trade with a counterparty, net of an excess of 5,313 BTC that they have returned, for an aggregate of 1,515,689,462 $UST. However, the company did not identify the counterparty involved in this transaction. Last Measures Even with the intervention of the LFG, the peg was not restored. LFG declares that Terraform Labs exchanged the last of the BTC reserve on May 10, when UST’s market price had touched $0.75. This transaction involved the sale of 33,206 BTC for an aggregate of 1,164,018,521 UST. The Luna reserve is now comprised of only 313 BTC, meaning that most of the BTC owned by the organization were deployed in the defense effort. Other cryptocurrencies in the reserve, including 39,914 BNB and 1,973,554 AVAX were not used and still are in the possession of the organization. However, there is no clear answer as to how these will be used in the future. The statements from LFG help to clarify how the Terra depeg incident happened, and how these funds were used. An analysis of the transactions conducted earlier by Elliptic, a blockchain analytics and compliance company, found that the majority of the funds were sent to two exchanges: Binance and Gemini. However, the company declared that it was “not possible to trace the assets further or identify whether they were sold to support the UST price.” TAGS IN THIS STORY did you still believe in recover send to your admin your opinion at [email protected]
During the last few days, the crypto economy has been tumultuous as billions have fled the market in search of safety. The issues with LUNA sparked a significant sell-off as Terra’s native digital asset dropped 97% in value against the U.S. dollar in 24 hours. Terrausd has slipped 67% lower than the $1 parity and was trading at a low of $0.299 per unit at 9:00 a.m. (ET). Terra’s Native Token LUNA Loses 97%, While UST Loses 67% in 24 Hours The Terra blockchain ecosystem has been ravaged by the events that took place over the last few days, when the network’s algorithmic stablecoin terrausd (UST) started to lose its U.S. dollar peg. Project founder Do Kwon and the Luna Foundation Guard (LFG) also explained that the team was lending $1.5 billion in bitcoin (BTC) and terrausd (UST) to help defend the peg. The effort was a fruitless endeavor and UST slipped to $0.66 per coin but then, for most of the day on Tuesday, UST managed to climb back above the $0.90 region. On Tuesday evening, UST started to plummet again and it has continued to slide to its most recent lows at $0.299 per unit. The native token LUNA suffered even more than UST, as it has lost 97% in value during the past 24 hours. LUNA has had a 24-hour price range between $33.93 per unit and $0.810 per coin. Furthermore, after Do Kwon said to stay strong and a plan was on the way, the Terra co-founder addressed the public on Twitter. “Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before UST can start to repeg,” Kwon said. “There is no way around it. We propose several remedial measures to aid the peg mechanism to absorb supply. First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18 This will increase minting capacity from $293M to ~$1200M,” the Terra co-founder added. Kwon also said that Terra could rebound from the collapse and noted that the project was not going anywhere. “Terra’s return to form will be a sight to behold,” Kwon tweeted. The Terra founder added: ""We’re here to stay. And we’re gonna keep making noise."" ‘Worse Than Bitconnect’ Of course, under the circumstances of many individuals losing money and some of them losing everything, many people criticized the response from the Terra founder. The podcast host Peter McCormack asked Kwon “What % chance to you give it that the same won’t happen again?” Bitcoin supporter Hasu said the UST event was “worse than Bitconnect.” “At least Bitconnect didn’t masquerade as a stablecoin,” Hasu added. “When your ponzi targets people’s savings (not investment) portfolio, there is a special place in hell reserved for you.” In addition to the criticism, people have been trying to buy the dip because they believe a strong comeback will happen. However, while doing so, many crypto traders are getting wrecked by the price volatility. Additionally, crypto Twitter (CT) influencers are deleting tweets that discuss UST and LUNA in a positive light. Furthermore, the crypto liquidity provided Genesis explained that the company has “no direct exposure to UST and LUNA.” Individuals are also claiming that the downfall of LUNA and UST was a “coordinated attack.” “Market manipulation at its finest,” one individual tweeted. Other Terra supporters have been watching bots on Twitter and have stated they are certain Terra’s issues were the result of a blatant attack. There have been odd sightings of bots or Twitter accounts repeating the same statement, which can be found here, here, here, here, and here. While LUNA and UST have not yet plummeted to zero, people are either betting that they will or they believe Do Kwon and think a massive reversal is in the cards. By 10:45 a.m. (ET), UST was trading for $0.504 per unit. CEO of Sator Says Luna Foundation and Do Kwon May Still Hold Bitcoin Reserves Isla Perfito, the CEO of Sator, a community-first Web3 content engagement platform, said that there may be a chance the Luna Foundation Guard (LFG) still holds bitcoin. “People assume LFG already sold their BTC,” Perfito told Bitcoin.com News in a statement. “That’s why UST is pricing at .40 on the dollar. In the event that they have the BTC, their backing is better. Do Kwon should provide a balance snapshot of his BTC to save UST. The CPI numbers came in higher than expected today.” The CEO of Sator added: "In my opinion, inflation has peaked. Investors are now waiting for the stock market to bottom. With UST, 1 LUNA could be exchanged for 1 UST and vice versa. This is why we observed the Luna crash — when they decided to not keep the peg, they were selling Luna coins. With that said, there’s a chance that they have reserves to save UST." Alex Tapscott, the managing director of the digital asset group at Ninepoint Partners, explained to Bitcoin.com News on Wednesday that Terra’s issue is similar to a hedge fund exploding. “This is not unlike what happens when a large hedge fund ‘blows up’ and is forced to unwind its positions,” Tapscott explained in an email. “It becomes a price taker causing the assets its own to suffer (though often just temporarily).” Tapscott continued: "Long term the thesis on Bitcoin and crypto remains intact. Bitcoin is the first digitally native money for the internet and crypto assets as a whole represent a 2nd era of the internet – an internet of value- that will continue to transform and rethink many industries." if you need any help asking [email protected]
This is a community post written by the Celer Network team and published on BNB Chain blog. A new era for inter-chain dApps has come! We are excited to announce that the Celer Inter-chain Message (Celer IM) framework has launched on mainnet. Through Celer IM, developers can build inter-chain dApps using the Celer Inter-chain Message SDK with efficient liquidity utilization, coherent application logic, and shared states across multiple blockchains. Users of Celer-enabled dApps will enjoy the benefits of a diverse multi-blockchain ecosystem with the simplicity of a single-transaction UX from a single chain. Celer IM has been celebrated and immediately adopted by multiple dApps. Many of the envisioned use cases are being built by our community developers. For example, ChainHop, a composable inter-chain liquidity protocol built using Celer IM, has also launched on mainnet today. Using ChainHop, users and developers can easily convert token X on chain A into token Y on chain B with just a single transaction. In addition to ChainHop, we have 8 other launch partners: SynFutures, Mystiko, Swing, FutureSwap, Ooki, Rubic, Solace, and Aperture. They are building inter-chain native dApps in the spaces of cross-chain governance, cross-chain yield aggregators, cross-chain synthetic asset trading, cross-chain privacy and other innovative use cases. The Celer IM framework is very easy-to-use and allows a “plug’n’play” upgrade that often requires no modifications with already deployed code. Developers can easily try out Celer IM by going through the documentation, smart contract framework, and sample application code. If you are interested in building inter-chain dApps and participating in our upcoming ecosystem developer grant program, please reach out to us! A Wide Range Of Use Cases on Celer IM Since we announced Celer IM on testnet, we have received an overwhelming amount of interest from the developer community to build inter-chain dApps. A wide range of different use cases of the Celer IM framework is being adopted by prominent protocols to expand both their utilities and to enlarge their user bases. We want to introduce them as Celer IM’s launch partners! Click here for the Chainhop tutorial video. First of all, we want to highlight that ChainHop, a composable cross-chain liquidity protocol built on top of Celer Network, has also launched on mainnet today. ChainHop takes the complex multi-step process of swapping tokens across different chains and simplifies it into an easy single transaction user experience (UX). Using ChainHop, users can easily convert token X on chain A into token Y on chain B with just a single transaction. Additionally, ChainHop is highly composable with other dApps allowing developers to easily access the cross-chain liquidity protocol in order to build other inter-chain dApps. Similarly, Rubic, a multi-chain swap protocol, is also enabling this one-click functionality across multiple blockchains. Key cross-chain interoperability infrastructure, Swing, is simplifying the cross-chain transaction process by eliminating the need to make several manual commands on multiple networks when communicating with other Celer IM dApps with a single transaction. Celer IM is widely applicable to build inter-chain DeFi applications as well. The decentralized derivatives protocol SynFutures is using Celer’s IM framework to support multi-blockchain futures trading, allowing users to leverage liquidity from any blockchain. Ooki, a powerful and fully decentralized margin trading, borrowing, and lending platform, is leveraging Celer IM to enable fee bridging among all of Ooki’s different blockchain deployments. Aperture, a cross-chain, community-driven marketplace for DeFi strategies, is leveraging Celer IM to enable one-click access to supported strategies for users from any blockchain. Solace, a decentralized insurance protocol that allows users to insure positions for over 180 DeFi protocols with one policy, is also integrating Celer IM for cross-chain insurance functionality. Of course, Celer IM can be used in many other use cases besides DeFi applications. FutureSwap, the first decentralized, AMM-based trading protocol to offer leverage on any AMM-backed pair, is enabling cross-chain governance functionality; and to scale its non-custodial crypto margin trading. Mystiko Network, the base layer of web3 that provides both connectivity and confidentiality to all blockchain data, transactions and applications, uses Celer IM to enable privacy protection against unwanted cross-chain data tracking and exploits. With the Celer IM framework’s mainnet release, we look forward to more exciting use cases to be created by our amazing developer community such as cross-chain NFT marketplaces and omnichain NFT. How To Get Started With Celer IM Getting started with Celer IM is easy. To understand the kind of applications and design patterns made possible, you can read the Celer IM introduction or watch this presentation. To go through a hands-on integration process, you can either watch the above video tutorial or run through this integration guide with a simple batch transfer example. If you encounter any issues during integration, please feel free to go to the #celer-interchain-message channel in our discord and let our developer support team know! We will be more than happy to help! If you are interested in working on some use cases and would like to get our support, please fill out this form to get priority consideration for our upcoming developer grant program! With the Celer IM mainnet launch, we look forward to a vibrant inter-chain dApp ecosystem building on top of Celer and can’t wait to see what kinds of exciting use cases get built! What do you think is Celer Network good investment Chance let us know your opinion at [email protected]
A panel of crypto industry experts has predicted that the price of ether will reach $5,783 this year, before rising to $11,764 by 2025 and $23,372 by 2030. Most of the experts on the panel are bullish on ether, with 61% saying now is the time to buy and a further 32% saying you should hodl. Industry Experts Share Ether Forecasts Price comparison portal Finder updated its price predictions for ether (ETH) with its latest quarterly survey last week. The company measures expert predictions for the future price of ether using weekly and quarterly surveys. The latest quarterly survey, conducted in April, “asks a panel of 36 industry experts for their thoughts on how ethereum will perform over the next decade,” Finder described. The expert panel expects ETH to be worth $5,783 by the end of 2022. At the time of writing, ETH is trading at $2,816, down 3.6% over the last seven days and almost 18.3% over the past 30 days. Citing the expert panel’s predictions, Finder detailed: Ethereum will jump from its current price of US$2,810 to US$5,783 by the end of 2022 … the price is expected to continue to rise going forward, hitting $11,764 by 2025 and $23,372 by 2030. “Compared to the results of the previous survey conducted in late 2021, our panel is now far more bearish on Ethereum long-term future, which may have a lot to do with its dip in value between now and the previous survey,” the company noted. “In January 2022 the panel had given an average prediction of $6,500 for the end of this year, 12% higher than their new prediction of $5,783.” Keegan Francis, Finder’s global cryptocurrency editor, commented: Ethereum is at a very uncertain place in its journey at the moment. It is currently losing Defi [decentralized finance] market share to its competitors. “Until Ethereum upgrades its systems and fulfills its promises to scale, I do not have long-term confidence in the network. That being said, I still think people will buy the token out of hype/promise/potential,” he added. Joseph Raczynski, technologist and futurist at Thomson Reuters, opined: “The Merge, an upgrade to Ethereum, should happen this summer. This could have an explosive effect on the token. People have been waiting for this for years. It should be far more secure, 99% more energy-efficient, and deflationary. If that isn’t the trifecta of potential, as a leading blockchain, I don’t know what would be.” Moreover, when asked about whether now is time to buy, hold, or sell ether, 61% said it is the time to buy and a further 32% said you should hodl. Just 6% said now is the time to sell. The experts on the panel include the COO of Okcoin, the co-founder of Coinmama, the CEO of Btblock, head economist of Consensys, the CEO of Delta Investment Tracker, the head of funds of Digitalx Asset Management, the founder of Origin Protocol, the CEO of Coinjar, a senior lecturer at the University of Canberra, an associate professor at Nottingham Trent University, and a director at the University of East London. TAGS IN THIS STORY Bitcoin, Crypto, Cryptocurrency, ETH Price, eth price forecast, eth price prediction, ether price, ether price forecast, Ethereum Price, ethereum price prediction, Finder What do you think about this ETH price prediction? Let us know send to [email protected]
Bitcoin moved closer to $40,000 during Thursday’s session, as traders continued to react to yesterday’s Fed rate hike. The FOMC opted to increase interest rates by 0.5% during May’s meeting, which is the largest hike in over twenty years. Bitcoin Bitcoin rose for a second consecutive session on Thursday, as bulls were buoyed by the Fed’s decision to increase interest rates. Following yesterday’s surge, BTC/USD climbed even higher during today’s session, as it moved closer to the $40,000 level. BTC hit an intraday high of $39,902.95 earlier today, which is the highest point prices have reached since last Thursday. BTC/USD – Daily Chart Today’s rally was halted by a key resistance point of $39,800, which has historically been the main obstacle preventing prices entering $40,000. Looking at the chart, this resistance coincided with another ceiling within the RSI indicator, as price strength was unable to move past 48.70. As we identified yesterday, this level of resistance would be an area of contention for both bulls and bears, and it seems that bears have so far won this battle. Ethereum ETH was also higher during today’s session, as the uncertainty surrounding the Federal Open Market Committee (FOMC) meeting finally passed. As this cloud passed, bulls seemed to be tentatively returning to crypto markets, with ETH hitting a one-week high as a result. This high was the $2,956.69 point which ETH/USD hit earlier today, and comes following a low of $2,829.99 yesterday. ETH/USD – Daily Chart Thursday’s move saw ethereum marginally pass its long-term resistance level of $2,950, climbing over 2% from yesterday’s low in the process. Despite this upwards momentum, some bulls have backed away as we hit resistance, with earlier gains easing, likely as a result of positions being closed. Momentum however continues to be bullish, as the 14-day RSI is tracking at 48.50, which is above its own ceiling. TAGS IN THIS STORY Analysis, Bitcoin, BTC, ETH, Ethereum Once we enter the $3,000 level, will we see a sustained rise in prices? Leave your thoughts in the comments below. till us your opinion send mail to [email protected] market will rise or down again :).
Bitcoin’s hashrate has once again reached an all-time high (ATH) this year, as the network’s processing power reached 275.01 exahash per second (EH/s) on May 2, 2022. The recent ATH follows a significant difficulty jump on April 27, and bitcoin’s value lost 6.2% against the U.S. dollar over the last two weeks. Bitcoin Hashrate Taps 275 Exahash Just recently, Bitcoin’s mining difficulty tapped an ATH at 29.79 trillion and it’s currently the most difficult it has ever been to find a BTC block reward. On April 27, after coasting along at 28.2 trillion for two weeks prior, the network’s difficulty jumped 5.56% higher. Bitcoin miners have continued to keep the high-speed tempo going despite the difficulty rising. Moreover, over the last two weeks, BTC has shed 6.2% in value against the U.S. dollar. The price drop has also made it less profitable for bitcoin miners during the two-week downturn. At the time of writing, Bitcoin’s hashrate is coasting along at 238.22 EH/s. Two days ago, the network tapped an ATH on May 2, 2022, at block height 734,577. Despite those two setbacks, bitcoin miners have pushed the hashrate up to a new all-time high in terms of computational processing power. The hashrate reached the highest it’s ever been at 275.01 EH/s on May 2, 2022, at block height 734,577. The network previously reached an ATH 1,380 blocks prior to the 275 EH/s high at block height 733,197, on April 23. At that time, the ATH recorded was approximately 271.19 EH/s. Data shows that since block height 733,197, the overall hashrate increased 1.40% in seven days. Soon-to-Be Deployed Next-Generation Miners Seven-day statistics indicate that Foundry USA was the top mining pool after capturing 233 out of the 1,071 BTC blocks found last week. Foundry USA has 21.76% of the network hashpower with a 49.29 EH/s average over the last seven days. The second-largest mining pool this past week was Antpool, as it captured 145 block subsidy rewards last week. Antpool has held 13.54% of the global hashrate in the one-week timeframe with 30.68 EH/s. Today, 12 known pools are dedicating hashpower to the BTC network and 0.93% of the global hashrate, or 2.12 EH/s, is operated by unknown bitcoin miners. With Bitcoin’s hashrate reaching an all-time high before bitcoin mining rig manufacturers have shipped the latest next-generation machines, the hashrate could very well go much higher from here. Next-generation miners from Bitmain and Microbt, which pack a lot more hashrate, are due to ship next month. Moreover, Bitmain’s hydro bitcoin mining rig, the Antminer S19 Pro+ Hyd., commands 198 TH/s and has been released this month. Depending on lead times, miners could be deploying these high powered, next-generation miners and upping the network’s overall hashrate a great deal. Your Opinion Should BTC Close high this year or will down.
KEY POINTS A multitude of catalysts helped Shiba Inu deliver record-breaking gains last year. However, five factors could make 2022 a lot more challenging for the world's hottest cryptocurrency. Is another year of outperformance in the cards for SHIB after it gained 46,000,000% in 2021? If you think stock market gains have been impressive since the pandemic bottom of March 2020, take a closer look at cryptocurrencies. Whereas the broad-based S&P 500 doubled in value, the total market cap of all digital currencies grew more than 1,450% between March 2020 and the end of 2021. The crypto market has made investors rich in a very short amount of time. This is especially true for investors in meme coin Shiba Inu (SHIB -0.75%). SHIBA INU-THEMED COINS WERE INCREDIBLY HOT AMONG CRYPTO INVESTORS IN 2021. IMAGE SOURCE: GETTY IMAGES. The blueprint for historic gains in Shiba Inu In more than two decades of investing, I've seen some jaw-dropping single-year gains. But while five-digit percentage gains over 12 months are quite rare in the stock market, among cryptocurrencies, gains of 25,000% -- even as high as 1,200,000% -- have occurred in a relatively short time frame. But the roughly 46,000,000% that SHIB tokens gained in 2021 are astounding. The coin rose in value from $0.000000000073 to around $0.000034. An investment of just over $2 at midnight on Jan. 1, 2021 would have made a Shiba Inu investor a millionaire by year's end. Multiple factors worked in Shiba Inu's favor last year to deliver such enormous gains in a short period. Increased visibility of SHIB has certainly provided one of the biggest boosts. Even though Shiba Inu isn't yet listed on Robinhood, it's found a home on numerous other popular crypto exchanges. The launch of decentralized exchange ShibaSwap has helped too. New exchange listings and ShibaSwap have helped improve liquidity. Further, ShibaSwap has encouraged SHIB holders to stake their coins in order to earn passive income. Staking encourages holders to hang onto their tokens for a longer period of time. No discussion of Shiba Inu's historic 2021 can overlook the role the fear of missing out (FOMO) has played. At its peak in the fourth quarter, Bitcoin had gained 8,000,000,000% from its July 2010 debut price. With evidence that life-altering gains are possible, SHIB buyers haven't been scared off by the possibility of a price reversion. In fact, some have used social media as a means to hype up the prospects of Shiba Inu heading higher. Excitement over increased utility is palpable as well. Last year, Shiba Inu landed two major merchants: movie theater chain AMC Entertainment and tech-focused online retailer Newegg Commerce. Lastly, Shiba Inu investors have exhibited clear excitement about the future. In 2022, developers should deploy the layer-2 blockchain upgrade known as Shibarium, which is designed to lower transaction fees. Eventually, non-fungible token (NFT)-based gaming is expected, too. IMAGE SOURCE: GETTY IMAGES. Can Shiba Inu hit $0.001 in 2022? What's crystal clear is that Shiba Inu optimists are mostly inelastic buyers. They believe significant upside awaits, even following a 46,000,000% gain last year. But can Shiba Inu really eat up additional zeroes after its decimal point in 2022? In other words, is a price target of, say, $0.001 really achievable this year? The answer? Highly unlikely. Although Shiba Inu seemingly outpaced all expectations in 2021, there are five core reasons its chances of hitting $0.001 in 2022 are extremely low. To begin with, Shiba Inu doesn't offer any genuine competitive advantage or differentiation. It's an ERC-20 token build on the Ethereum blockchain that's subject to the same processing lags and high transaction fees that occasionally plague the Ethereum network. While Shibarium may alleviate its transaction cost disadvantage, Shiba Inu still wouldn't have any defining characteristics that would make it or its proposed ecosystem the preferred choice for merchants and persons wanting to pay with digital currencies. A second issue is that Shiba Inu is being constantly diluted in the crypto space -- not by new SHIB tokens, but rather by new blockchain-based projects. Cryptocurrencies that lack a competitive edge are constantly under attack by new projects that offer faster processing times and/or low transaction fees. Although many blockchain projects won't amount to anything, at least some will provide operating advantages over Shiba Inu. IMAGE SOURCE: GETTY IMAGES. A third persistent problem for SHIB, which I've previously touched on, is its lack of real-world utility. Having already mentioned that it lacks a competitive edge, we can also see from real-world adoption that few merchants are accepting it as a form of payment. Online business directory Cryptwerk shows that only around 600 global merchants accept SHIB as a payment, with 44 of these "merchants" being nothing more than crypto exchanges. That's only a little over 550 mostly obscure online businesses accepting SHIB, when there are over 500 million entrepreneurs worldwide. Its utility outside of a crypto exchange is almost nonexistent. A fourth reason to be highly skeptical of Shiba Inu hitting $0.001 is the role (or should I say lack thereof) coin burn will play. Last year, Ethereum co-founder Vitalik Buterin, who was gifted around half of the circulating supply of SHIB, sent more than 410 trillion tokens to a dead blockchain address. With these coins now removed from circulation (i.e., burned), each remaining token is perceived to be worth more. The issue is that 1) coin burn won't be anywhere near 410 trillion tokens in 2022, or at any point in the future, and 2) having fewer SHIB in circulation doesn't improve the effectiveness of the network in terms of transaction fees or block finality. Coin burn isn't providing any tangible positive for investors. Fifth and finally, history is simply not on Shiba Inu's side. In previous instances where payment coins and payment-network protocol tokens rallied anywhere from 24,000% to 461,000% in a relatively short time frame, they subsequently retraced by 93% to 99% over a two-year period. Given that Shiba Inu gained 46,000,000% in 12 months, history would suggest that an equally epic retracement awaits. While anything is possible in the cryptocurrency space, there's no reason to believe Shiba Inu will come anywhere close to $0.001 (a $549 billion market value) in 2022. Should you invest $1,000 in Shiba Inu right now? Before you consider Shiba Inu, you'll want to hear this. 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