Crypto Highlights Week #35 – United States SEC Updates “Accredited Investor” Term

Crypto Highlights: DeFi surpasses $7B in locked funds, 3 key factors driving Bitcoin price, Binance launches DeFi Futures, Ether volatility surges: These and more in this week’s crypto highlights. 

Top Headlines Of The Week

• DeFi continues to blow hot as the protocol surpasses $7B in locked funds, however only the top six projects hold 90% of the total value locked. 
• On August 26, the South Korean Police raided and seized the offices of Coinbit, the country’s third-largest crypto exchange, over allegations it faked 99% of its trading volume.
• It is anticipated that Ether will be more volatile than Bitcoin with the measure of risk at a six-month high amid a boom in DeFi.

Top Stories Of The Week

DeFi surpasses $7B in locked funds, but just six projects hold 90% of capital

While just six projects hold 90% of capital, the entire DeFi system surpasses $7B in locked funds.

According to DeFiPulse, the total value of capital locked in decentralized finance protocols has increased by 271% in less than two months to surpass $7 billion for the first time. At this rate, DeFi is projected to hit $27 billion by the end of 2020.

Aave currently comprises the largest DeFi project, with $1.51 billion locked, followed by MakerDAO with $1.42 billion, Curve Finance with $1.15 billion, yEarn Finance with $845 million, Synthetic with $851 million and Compound representing $797 million.

It is apparent that only a few out of the numerous DeFi projects have been able to establish themselves as long-term leaders within the sector so industry leaders have warned of over-exuberant bullishness in the DeFi sector.

Korean Police Seize Crypto Exchange Coinbit Over Allegations of $84 Million in Wash Trades

On August 26, the South Korean Police raided and seized the offices of Coinbit, the country’s third-largest crypto exchange, over allegations it faked 99% of its trading volume. They also accused the exchange’s owner Choi Mo and other managers of “wash trading” and gaining 100 billion won ($84 million) in profit fraudulently.

In the case of Coinbit, the exchange was functionally split into two operational accounts containing all user funds. Fraud within the first account involved major cryptocurrencies which Coinbit staff moved internally between “ghost accounts”. 

The firm prevented transactions with outside exchanges so that the owner and management were able to control the supply of coins. The authorities then examined Coinbit’s books before alerting the police and investigations found discrepancies in the deposits and withdrawals of 99% of the trading volumes. 

First Mover: Binance’s New DeFi Futures Let Crypto Traders Bet on Decentralization

Big centralized crypto exchanges are finding a way to cash in on the fast-growing realm of DeFi. Semi-autonomous exchanges and lenders erected from interconnected systems of digital tokens and coding atop the Ethereum blockchain -with $7 billion of value locked. 

This new development introduces indexes tied to the fate of “DeFi” tokens and new futures contracts and other types of derivatives. For traders, these indexes provide a way to speculate on decentralized finance without going all in on any single project.

Binance has introduced “DeFi Index Perpetual Contracts,” listed on Binance Futures, the contracts will be denominated in the dollar-linked stablecoin tether and offer traders leverage up to 50 times their money. 

Binance’s DeFi index consists of 10 tokens associated with DeFi, which include Chainlink’s LINK, Compound’s COMP, Kyber’s KNC, Aave’s LEND, ZRX’s 0x and MakerDAO’s MKR. 

More News Updates

United States SEC Updates “Accredited Investor” Term

Prior to this time, investors that do not meet the income requirements were turned down from the option of investing in SEC’s wide-ranged private markets, but the US SEC has adopted changes to the requirements of being an “accredited investor”. 

The changes in this update improve the accredited investor term to include institutional and individual investors.

The SEC’s chairman noted that:

“For the first time, individuals will be permitted to participate in our private capital markets not only based on their income or net worth but also based on established, clear measures of financial sophistication.  I am also pleased that we have expanded and updated the list of entities, including tribal governments and other organizations that may qualify to participate in certain private offerings.”  

With these changes, investors will be able to qualify as accredited investors based on defined measures of professional knowledge or experience. 

Ether Volatility Now Highest in Six Months Compared With Bitcoin’s

It is anticipated that Ether will be more volatile than Bitcoin with the measure of risk at a six-month high amid a boom in DeFi. Skew explains that the three-month spread between ether’s volatility and Bitcoin’s has risen to 29%. 

The metric, which tracks the difference in implied volatility for at-the-money options in both cryptocurrencies, has risen from -2.4% to 29% in two months. Surge in the volatility spread suggests investors are pricing bigger percentage moves in ether than Bitcoin over the next quarter. 

Conversely, traders are warned against interpreting the rise in Ether-Bitcoin volatility spread as a bullish price signal. The three-month ether-Bitcoin realized volatility spread bottomed out at 5.7% on July 20 and was last seen at 19%. Since this year, Bitcoin’s price is up 64% on a year-to-date basis, while ether has gained over 200%. Thus it has secured a top spot in this week’s crypto highlights.

SaTT Token listed on Etherscan.io

SaTT is set to launch on exchanges next month and users are welcome to verify the SaTT token which recently listed on Etherscan. This marks a big step toward SaTT’s project development. 

Over $4 trillion in household wealth has been wiped out in the US public markets due to the coronavirus pandemic. To this end, the Harvard Business Review predicts that the current economic situation around the virus will “hasten the progress to more decentralized global value chains.”

Experts have explained five anticipated decentralization trends in 2020 to witness.  Among them are Privacy and security, Decentralized cloud storage and Decentralized marketing & advertising solutions. SaTT has been identified as a market leader in blockchain for the advertising space.

As decentralization trends grow, SaTT remains committed to helping businesses and brands to promote decentralization. It creates a transparent process that eliminates intermediaries by relying on technology. Using smart contracts and oracles, SaTT enables automatic payments to influencers based on transparent and accurate results. 

This Week’s Market Sentiment

BTC to end 2020 in style: 3 key factors predict Bitcoin price surge

Since late June, the price of Bitcoin has seen a huge rally by nearly 30% from about $8,905 to just under $11,500. 3 macro factors point at an optimistic medium-term trend. The first is the decline of the USD. The second is the expectations of higher inflation rates. Also, Federal Reserve Chairman Jerome Powell’s speech had strengthened the image of BTC as a store of value. 

There is little resistance between $13,000 and BTC’s $20,000. BTC might see a new trading range between $10,000 and $13,000. Cathy Wood, CEO of Ark Invest, explained that: “$13,000 [level] is important because if we were to get through that… there would be very little resistance and we would probably be on our way back to the peaks we saw in late 2017 — $20,000…” 

The third is a metric that suggests that Bitcoin is seeing an extended accumulation phase. Right now, investors are purchasing BTC with the intent of holding. 

This Week’s Crypto Meme 

We hope you enjoyed this week’s edition of crypto highlights. For a peek at our last edition of crypto highlights & blockchain news, click here.