Mercado Bitcoin, the largest Bitcoin exchange in Brazil, announced on Thursday the closure of a BRL 200 million (around $38 million) funding round and revealed its plans for international expansion.
The funding round was led by local private equity firm, GP Investimentos and early-stage venture capital, Parallax Ventures along with the participation from several other parties, mostly from the local market.
Founded in 2013, the exchange built itself into becoming the largest Bitcoin exchange in Brazil. It doubled its customer base in the past two years, reaching 2.2 million, according to the exchange. Additionally, trading volume remained impressive, with BRL 6.4 billion in the entire 2020 and exceeding half of that alone this month.
“We want to develop the crypto ecosystem in Brazil and create a market as developed as that of the United States. To do this, we want to be one of the five largest digital exchanges in the world,” Reinaldo Rabelo, CEO of Mercado Bitcoin, said.
The exchange is now aiming to surpass 3 million users by the end of 2021.
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Expanding into the Latin American Markets
With the growing demand for digital currencies, Mercado Bitcoin is now planning for further expansion in Latin American countries with locally formed entities. It already has some international presence, but those operating are being maintained under the Brazilian company.
Apart from the expansion plans, the exchange will use the fresh proceeds in expanding its products. Further, it will invest in its Bitrust, custodian platform and digital wallet, Meubank, which is seeking central bank approval.
“We are already the largest exchange in Latin America, operating almost exclusively in Brazil,” Rabelo added. “Now, we’re going to look at the other markets, like Chile, Mexico, and Argentina, which have a regulatory culture closer to ours.”
“Our long-term purpose is to participate in the construction of a new infrastructure for the financial market (IMF), based on blockchain, smart contracts and crypto assets.”
Bitcoin (BTC) price could dip to $21,820, which is the 21-EMA on the weekly time frame
Bitcoin’s bad week could get worse if the price dips below $30,000 again to retest intraday lows of $28,800.
At the moment, bulls are looking to bounce right back into the game, which will happen if they break above the previous support-turned-resistance level at $32,000.
A rejection leading to a slip beneath $28,000 could see a potentially bearish scenario to lows of $21k—$18k. This outlook will be likely if a 2017 fractal charts again.
According to technical analyst Ali Martinez, bears could push as far as $18k if BTC’s price trajectory mirrors the 2017 fractal post-ATH. A 70% dump from the all-time high saw BTC bottom out around $5,900 as the 2018 bear market unfolded.
The analyst thinks something similar to that could materialise in the coming days (or weeks). He shared the chart below and added:
“If something similar to what happened in mid-December 2017 repeats, Bitcoin may dive towards $18,000.”
Image showing BTC price action in 2017/2018 and 2020/2021. Source: Ali Martinez on Twitter
An on-chain metric called Spent Output Profit Ratio (SOPR) also suggests BTC price could see further dips. SOPR helps gauge trends by showing whether spent outputs are in profit or loss. If the metric reading is above 1, it indicates output transactions were in profit. Values less than 1 mean that holders were at a loss when the output transaction happened. Sell pressure mounts when the metric suggests most holders are in profit.
According to Rafael Schultze-Kraft, Bitcoin’s dip from highs of $38,000 to support at $28,800 “is not surprising“. Rafael, who is the CTO of Glassnode, says that currently, the SOPR is overextended and moving towards 1. The metric thus suggests that less BTC is moving on-chain as some holders sell at “extreme profits“.
Bitcoin SOPR metric suggests further sell-off pressure. Source: Glassnode
As seen on the 4-hour chart below, BTC/USD has had multiple candle-down closes below the major support level around $32,000. Turning this previous support zone into resistance adds credence to the likelihood of a further breakdown.
If the decline continues, the key price level to watch on a higher time frame is the 21-EMA. Short-near-term price action is likely to include a revisiting of the weekly 21-EMA before another leg higher. The price level of the moving average is around $21,820.
BTC/USD 4-hour chart. Source: TradingView
On the contrary, a daily close above $30k, with highs of $32k in between could preserve the upside outlook. A move towards the $35k threshold will be the short term target if bulls have to consolidate towards a retest of the $42,000 resistance level.
There have been a lot of exciting movements in the crypto space from bullish runs on various tokens to large corporations adopting cryptocurrencies as part of their business strategies.
With so much happening this quarter, we invited Mati Greenspan, Sam Bankman-Fried, and Jason Choi to our Virtual Meetup #8 on Wednesday, November 25 @ 8AM EST to discuss the state of the crypto market in Q4 2020.
Held monthly, CoinGecko’s Virtual Meetup is our live online community event where we explore different key topics in the crypto sphere and invite industry leaders to share their two satoshis.
In our discussion, we talked about what’s happening this quarter, the anticipation of retail companies, and what’s possible in 2021.
Here is a quick breakdown of what we discussed with Mati, Sam, and Jason.
What is happening in the space this quarter?
Jason addressed institutional adoption by saying, “We started the quarter seeing large institutions coming into the space such as MicroStrategy.” He also pointed out that the performance of 2017 ICO coins which are doing well is one of the clear signs of retail coming in.
“Previously in 2017 it was with hype and fanfare but now it’s more to do with stealth. We’ve seen legitimisation by some major players like MicroStrategy and Square adding Bitcoin to their balance sheet,” added Mati.
Sam notes that, “It’s been one of the clearest bull transit that we’ve seen in years but it also seems a lot more concentrated and a lot of people deep in the crypto space itself are feeling very confident.”
What’s the narrative behind the differing prices during Asian and Western trading hours?
Sam highlighted that back in late 2017 and early 2018, the Asian markets were driving the moves. “The recent rally has seen more of a Western focus with billionaires algorithmically buying during the Western trading hours and making the price go up,” he adds.
Is the mass retail market in the crypto space yet?
According to Sam, “Volumes are massively up, buying is massively up, most metrics are massively up except new sign ups which are also up but they’re not increasing as much as the rest.” He adds that, “This is looking like massive activation of people who are already crypto-adjacent or already in crypto.”
Jason continues by saying, “There’s probably an element of funds trying to frontrun the retail.”
Mati concludes with, “I believe that if the narrative of billionaires and hedge funds buying is correct, then other projects such as XRP and XLM are better positioned.”
What do you think will happen in 2021?
“There’s an enormous amount of anticipation and excitement right now in crypto and there’s an open question of what is it anticipating and would it happen?” said Sam before adding, “But what if these institutions never come in? Then it could be very bad.”
Jason simply puts that, “We’re going to see more inflow of capital.”
What are some indicators you look at to see if the market is dumping?
Jason looks at, “A lot of different metrics.” A newer data point he is looking at is MVRV which is market cap to realized value. Other than that, he aso checks on, “Typical things like RSI, stochastic, moving averages, and c-score.”
When it comes to Mati, “Momentum indicators are not as strong with Bitcoin as other markets. Anybody’s guess is just as accurate as my own.”
What are some of the fundamental frameworks that you guys use when valuing tokens, especially DeFi tokens?
For Sam, there are two ways when valuing tokens. Firstly, “Let’s say everyone is unexcited about the coin, what is the price I’m willing to buy it at since the business is worth more than that.” Secondly, “In general, look at some sort of version of cash flow divide by market cap.” He then ends by saying that, “No formula is going to tell you.”
Meanwhile, Jason adds that, “There’s no real way to project a fair value on most tokens. Most promising is DeFi with users who pay millions of dollars in fees. But do most people who trade these tokens care about that? Do people have consensus around this valuation model?”
Mati agrees that, “There are no comprehensive valuation models for utility tokens nor even money tokens.”
Do you think we will see crazy yields on Yield Farming again?
“It was quite a wild summer with DeFi but who knows what the future holds. What the summer showed is that there’s a lot of appetite for DeFi,” said Sam.
“I don’t see yields with 10,000% APYs coming back,” Jason added.
Mati added that, “It’s not realistic and it’s telling of the immaturity of the market and there’s not enough activity to support a normal market flow.”
If you had $1 million, how would you allocate your portfolio if you had to hold it for 3 to 6 months?
Sam clarifies that it is not financial advice before saying, “Some people believe that ‘Trump Stay or Trump Go’ tokens are quite good for the next few months.”
Meanwhile, Jason notes that, “Most of my bags are DeFi bags and they are to do with products that can do things that you typically can’t do in Centralized Finance (CeFi) just yet.”
Mati claims that, “Part of trading for me is about being able to jump in and jump out. If it’s a long term hold it’s going to be Bitcoin at this point but of course there are so many attractive assets out there.”
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Alex Mashinsky, chief executive officer at Celsius Network, discusses the volatility in Bitcoin and where he thinks the cryptocurrency is heading. He speaks on “Bloomberg Daybreak: Asia.” (Source: Blo …
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The Chinese government hasn’t been too kind to cryptocurrencies in the past years. First, initial coin offerings (ICO) were banned in China in September 2017. Then, following the crackdown on ICOs, exchange platforms that traded cryptocurrencies or provided facilitation services were also ordered to be closed. This made the task of purchasing bitcoin almost impossible for investors in China.
However, this was not merely a blanket ban. It was a preparation for things to come.
To understand the harsh attitude of the Chinese government toward cryptocurrencies, we have to look at the big picture of China’s economy and financial market.
While central banks worldwide grapple with the rise of bitcoin and their inability to control it the way they do fiat currencies, China is working toward becoming the first country to implement its own digital currency, also known as the Digital Currency Electronic Payment (DCEP) project.
By forbidding other entities in issuing their own cryptocurrencies through the ICO ban and limiting the exchange of bitcoin, the People’s Bank of China (PBOC) is securing the success of its own forthcoming digital yan. Furthermore, unlike cryptocurrencies such as bitcoin, dealing in the digital yuan won’t protect any presumption of pseudonymity, and its value will be as stable as the physical currency issued by the government.
China Racing Toward A Cashless Society
China wants to become the first nation to issue a digital currency in its push to internationalize the yuan and reduce its dependence on the global dollar payment system.
According to Reuters, an article published in China Finance, a magazine run by the PBOC, stated that the rights to issue and control a digital currency would become a “new battlefield” of competition between governments.
As part of the project, the PBOC defines the yuan as both physical banknotes and digital currency. The idea is to establish a new payment system network in order to break the dollar monopoly.
To this end, digital yuan tests are already underway. Several trials have taken place in four cities, namely Suzhou, Shenzhen, Chengdu and Xionggan, and at the venue for the 2022 Winter Olympic Games in Beijing.
How Is The Digital Yuan Being Tested?
As of September 2020, the PBOC had issued 10 million yuan ($1.5 million) worth of digital currency and distributed it to 50,000 people in the Shenzhen area via a lottery.
The winners were rewarded with digital “red packets” worth about 200 yuan, which they could download and spend at 3,000 different stores. With nearly 2 million people signing up for the contests, the operation was deemed as successful.
At the beginning of November, PBOC’s governor indicated that four billion transactions, accounting for $299 million, had been conducted using the digital yuan.
The DCEP payment network allows selected users to convert between cash and digital money, check their account balances and make payments and remittances. Other experiments include government employees receiving transport subsidies in the form of digital currency, and McDonald’s in Xiong’an accepting payment with digital yuan.
However, there’s still been no official announcement of when the payment network will be made available to all Chinese citizens.
Will The Public Accept PBOC’s Digital Currency?
It’s difficult to make a prediction. The returns from the tests have been quite positive from the public, with people signing up in droves for the lottery.
However, China is already becoming an increasingly cashless society. Even street-food vendors and market stalls in small towns prefer to use payment apps instead of cash.
Mobile wallets such as Alipay and WeChat Pay already have large userbases in China, and it is unlikely that people will switch to the government app overnight. However, it has been reported that, in contrast to these payment processors, there will be no fees involved with the digital yuan.
Digital Yuan Vs. Bitcoin
While the digital yuan has the backing of the PBOC, there are several ways in which it cannot complete, technically, with bitcoin. Chiefly, it is not decentralized (and therefore not much different than the paper version of yuan) and will not leverage a public, immutable blockchain ledger as Blockchain does.
There are two main reasons why the PBOC is not willing to run their digital currency on blockchain: First, experts have doubts that any network could handle the sheer volume of daily transactions of China’s population of 1.4 billion. Second, the decentralization and transparency inherent in blockchain technology are two concepts that go against the Chinese government’s goal to “strike a balance” between anonymity and the need to crack down on financial crimes, according to the central bank’s officials.
The digital yuan could allow the PBOC to control bank lending more closely and to direct funding where it deems appropriate, but a central-bank-controlled digital yuan will never truly compete with the value propositions of Bitcoin.
The economic impact of the forthcoming DCEP is still unclear, and only the future will tell if centralized digital currencies will help or hinder China’s economy. What is clear is that this is a new chapter in the ongoing battle between the fiat currencies controlled by central banks and bitcoin’s peer-to-peer, pseudonymous offering.
This is a guest post by Judy Smith. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
For a new business, a name is everything. A good business name is the first step in attracting clients and growing brand awareness. A name serves as the foundation for branding, so one that’s simple and memorable that creates a strong impression is effective. A name should link to a core principle or idea and clearly define your brand. Unsuccessful names are often difficult to spell or pronounce, generic, too long for social media handles, or limit business scope and expansion.
The repercussions of poorly chosen business names can force companies to rebrand. Subway was known as Pete’s Super Submarines until 1968 when they had to change their name because it was often misheard as “pizza submarine”. WW, formally known as Weight Watchers, chose to rebrand their company name in 2018 to reflect a trend towards body positivity and wellness.
Poor business names can demonstrate a few things about a company. It shows a lack of self-awareness by assuming they made a good choice rather than gathering feedback. It illustrates poor attention to detail; a name that requires a rebrand shows the business rushed through the naming process without being careful. Lastly, it shows a business was not motivated or skilled enough to navigate the naming process.
Not only does rebranding affect company perception, but it also has costs associated with it. Rebranding requires attorney fees to file with the IRS, state, and local government. Updating other legal documents and changing trademarks, patents, and copyrights are also required. New advertising, promotional materials, logos, and updating the company website can also get very pricey.
The steps to creating a strong business name are only five steps away. First, listing keywords and phrases that match your brand. Next, create a long list of name ideas, making sure to ask for feedback from those around you. Stick to words that make sense rather than names that will get a laugh. Third, search the Trademark Electronic Search System and state databases for businesses with the same name or similar names. Avoid using names and trademarks that are already in use. Consider how you will brand your business name. Asking yourself the following questions can help. How does the business name fit within my brand? How will it be represented in a logo design and brand colors? Finally, check for website and social media availability.