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Matic, xDai (STAKE) and Loopring (LRC) rally as Ethereum gas fees rise

The start of a new month has brought renewed fervor from the cryptocurrency market as Bitcoin’s (BTC) price steadily climbed from a low of $43,537 on Feb. 28 to a high of $49,200 during Monday’s early trading hours. 

As traders get excited about positive moves in the market and look to reenter positions, the increasing use of decentralized finance (DeFi) continues to drive fees on the Ethereum network higher, shining the spotlight on the top layer-two protocols that offer working solutions.

Three protocols that have emerged as top layer-two contenders with working platforms are Polygon, xDai and Loopring. Each offers its own unique layer-two approaches to helping ease high traffic on the Ethereum network. 

MATIC/USDT

Polygon, previously known as Matic, officially launched as a layer-two aggregator for Ethereum on Feb. 9 as a way to offer an interoperability protocol for the network.

Since excitement for the rebrand began, MATIC’s price has increased by 400% from $0.05 to an all-time high of $0.245 on March 1. Growing excitement for the Aavegotchi mainnet launch on March 2 has also brought a boost of attention and trading volume to MATIC.

MATIC/USDT 4-hour chart. Source: TradingView

Aavegotchi was one of the first projects to bridge over to the Polygon network, and it will likely be joined by other projects if its mainnet launch on the network goes smoothly.

MATIC also received a boost on Feb. 26 when it was announced that gaming giant Atari would be integrating Polygon in order to “bring their NFT & token products to Layer 2,” along with the launch of “the first EOS-Polygon cross-chain bridge,” which was done in partnership with pNetwork.

XDAI/USDT

 xDai is another layer-two solution that has caught the attention of investors over the past few weeks. The xDai chain is a stable payment blockchain created by the POA Network, an Ethereum open-source public sidechain that offers a framework for smart contracts.

The blockchain’s STAKE token is designed to be a multichain staking token that validators and delegators offer as collateral in order to participate in the consensus mechanism and receive staking incentives for block production. The goal of the xDai platform is to offer fast and inexpensive transactions on the Ethereum network.

Since trading at a low of $7.50 on Jan. 2, STAKE price increased 500% to a new all-time high of $43 on Feb. 21 before falling under pressure alongside the wider cryptocurrency market.

XDAI/USDT 4-hour chart. Source: TradingView

A scroll through the project’s Twitter feed shows multiple recent partnerships and integration announcements that have helped propel STAKE higher in recent weeks.

Notable mentions include an integration with the Binance Smart Chain (BSC) that allows users to move funds from Binance to xDai using a BSC-to-xDai bridge along with the announced migration of the up-and-coming Bao Finance to the xDai network.

LRC/USDT

Loopring is a layer-two solution that specifically focuses on the creation of decentralized cryptocurrency exchanges (DEXes).

One of the major sources of congestion on the Ethereum network is the ever-growing activity of popular DEXes like Uniswap and SushiSwap.  A separate sidechain made specifically for exchange trading could help alleviate congestion on the network, and this is what Loopring aspires to provide.

The overall goal of the Loopring protocol is to combine the advantages of decentralized exchanges with the liquidity and order book management offered by centralized exchanges to help increase the efficiency of order execution and enhance the liquidity of the DEX ecosystem.

Since Jan. 2, Loopring’s LRC token has increased 430% from $0.165 to a high of $0.88 on Feb. 12 .

LRC/USDT 4-hour chart. Source: TradingView

After falling to a low of $0.46 on Feb. 28, LRC price rallied 30% after it was announced that the Loopring exchange added multiple Wrapped Bitcoin (WBTC)/stablecoin pairs, offering “6 new ways to trade WBTC on Ethereum L2.”

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for LRC on Feb. 28, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. LRC price. Source: Cointelegraph Markets Pro

As seen on the chart above, the VORTECS™ score for LRC reached a high of 73 on Feb. 28, just as the price was beginning it’s 30% rally to $0.59.

Continued increases in the price of Ether (ETH), which rose back above $1,500 on March 1, will only exacerbate the pain felt by traders attempting to use popular DeFi protocols on the network.

The amount of gas needed to conduct basic transactions, along with the price of these fees, will continue to drive users to trial the alternatives be offered by layer-two solutions, and Polygon, xDai and Loopring are three protocols well positioned to capitalize on this trend.

Matic, xDai (STAKE) and Loopring (LRC) rally as Ethereum gas fees rise

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Bitcoin Price Prediction: BTC/USD Recovers Above $49,000; Bullish Confirmation?

Bitcoin (BTC) Price Prediction – March 1

Bitcoin is currently trading towards the moving averages after the first digital asset took a dip from the resistance level of $58,000.

BTC/USD Long-term Trend: Bullish (Daily Chart)

Key levels:

Resistance Levels: $54,000, $56,000, $58,000

Support Levels: $40,000, $38,000, $36,000

BTCUSD – Daily Chart

Once again, BTC/USD bulls are back in action today after staying under solid pressure over the last weekend. However, Bitcoin’s (BTC) price is up 9% as of writing this and is currently hovering above the $49,000 level. The cryptocurrency had been in a downtrend for the previous week as it dropped by over 25% to reach its weekly low yesterday at $43,000 support.

Where is BTC Price Going Next?

At the time of writing, BTC/USD is trading at $49,312 with a gain of 9.02% on the day. The trading is likely to cross above the 9-day and 21-day moving averages as the technical indicator RSI (14) moves above the 50-level. It is important that the bulls reclaim this barrier as this would allow them to focus on higher levels towards $52,000. On the other side, any declines below the lower boundary of the channel could easily open the way to the south.

Meanwhile, the breakdown towards $44,000 is not out of the picture because the losses in the last few days show that BTC/USD may not be technically ready for the breakout above $52,000. Looking at the daily chart, BTC/USD is making an attempt to regain ground by moving the market price to the next level. Moreover, any bullish movement above the moving averages may push the price to the resistance level of $54,000, $56,000, and $58,000 while the supports are located at $40,000, $38,000, and $36,000 respectively.

BTC/USD Medium – Term Trend: Bearish (4H Chart)

Looking at the 4-hour chart, the Bitcoin price crosses above the 9-day and 21-day moving averages within 24 hours. If the price continues to rise further and move above the upper boundary of the channel, it could reach the nearest resistance levels at $53,000, $55,000, and $57,000 respectively.

BTCUSD – 4 Hour Chart

Moreover, if the bears push the coin below the 9-day and 21-day moving averages, the price of Bitcoin may likely reach the closest supports at $45,000, $43,000, and $41,000. Presently, the technical indicator RSI (14) is seen moving below the 60-level, crossing above it may confirm the bullish trend for the market.

Bitcoin Price Prediction: BTC/USD Recovers Above $49,000; Bullish Confirmation?

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Here’s how the Purpose Bitcoin ETF differs from Grayscale’s GBTC Trust

Since 2017, investors have been anxiously awaiting a Bitcoin ETF approval as the existence of such a fund was an important symbol of mass adoption and acceptance from the realm of traditional finance. 

On Feb. 18, the Toronto Stock Exchange hosted the official launch of the Purpose Bitcoin ETF and the fund quickly absorbed more than $333 million in market capitalization in just two days.

Now that the long-awaited Bitcoin ETF is here, investors are curious about how it will compete with Grayscale Investments GBTC fund. On Feb. 17, Ark Investment Management founder and CEO Cathie Wood said the likelihood that U.S. regulators will approve a Bitcoin exchange-traded fund has gone up.

Although exchange-traded funds (ETF) and exchange-traded notes (ETN) sound quite similar, there are fundamental differences in trading, risks, and taxation.

What is an exchange-traded fund?

An ETF is a security type that holds underlying investments such as commodities, stocks, or bonds. It often resembles a mutual fund, as it is pooled and managed by its issuer.

ETFs have become a $7.7 trillion industry, growing by 65% in the last two years alone.

The most recognizable example is the SPY, a fund that tracks the S&P 500 index, currently managed by State Street. Invesco’s QQQ is another EFT that tracks U.S.-based large-capitalization technology companies.

More exotic structures are available, such as the ProShares UltraShort Bloomberg Crude Oil ($SCO). Using derivatives products, this fund aims to offer two times the daily short leverage on oil prices.

What is an exchange-traded note?

Exchange-traded notes (ETN) are similar to an ETF in that trading occurs using traditional brokers. Still, the difference is an ETN is a debt instrument issued by a financial institution. Even if the fund has a redemption program, the credit risk relies entirely on its issuer.

For example, after Lehman Brothers imploded in 2008, it took ETN investors more than a decade to recoup the investment.

On the other hand, buying an ETF gives one direct ownership of its contents, creating different taxation events when holding futures contracts and leveraging positions. Meanwhile, ETNs are taxed exclusively upon sale.

GBTC does not offer conversion or redemption

Grayscale’s Bitcoin Trust Fund (GBTC) is the absolute leader in the cryptocurrency market, with $35 billion in assets under management.

Investment trusts are structured as companies — at least in regulatory form — and are ‘closed-end funds.’ Thus, the number of shares available is limited and the supply and demand for them largely determines their price.

Investment trust funds are regulated by the U.S. Office of the Comptroller of the Currency (OCC), therefore outside the Securities and Exchange Commission (SEC) authority.

GBTC shares cannot easily be created, neither is there an active redemption program in place. This tends to generate significant price discrepancies from its Net Asset Value, which is the underlying BTC fraction represented.

An ETF, on the other hand, allows the market maker to create and redeem shares at will. Therefore, a premium or discount is usually unlikely if enough liquidity is in place.

An ETF instrument is far more acceptable to mutual fund managers and pension funds as it carries much less risk than a closed-ended trust like GBTC. Retail investors may not have been aware of the possibility that GBTC trades below net assets value. Thus the recent event might further pressure investors to move their position to the Canadian ETF.

To sum up, an ETF product carries a significantly less risk due to greater transparency and the possibility to redeem shares in the case of shares trading at a discount.

Nevertheless, the impressive GBTC market capitalization clearly states that institutional investors are already on board.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Here’s how the Purpose Bitcoin ETF differs from Grayscale’s GBTC Trust

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Ripple Price Prediction: XRP/USD Price Slide Continues as it Consolidates Around $0.41

XRP Price Prediction – February 28

XRP/USD, at the time of penning down this, is seen hovering around $0.414 Support.

XRP/USD Market

Key Levels:

Resistance levels: $0.55, $0.60, $0.65

Support levels: $0.30, $0.25, $0.20

XRPUSD – Daily Chart

XRP/USD price is seen correcting downwards after having hit the resistance at $0.44. Meanwhile, Bitcoin is also seen trading below $44,000 and has an impact on the overall trading volume and market cap as well. Currently, the coin is exhibiting an intraday dip and bearish move, alongside, lack of support.

Where is Ripple Price Going Next?

However, the daily chart reveals that the coin is seen correcting downwards, trading near the lower boundary of the channel. Unable to hit the resistance, the coin is moving towards the major support at $0.40. But once the coin rightly gains the required momentum, it is ought to bounce back and retest the formed resistance.

At the moment, the technical indicator RSI (14) faces the south with its signal line moving below the 45-level. Should the bulls prevail over the bears by moving the price back above the moving averages, XRP/USD pair may rally towards the $0.55, $0.60, and $0.65 resistance levels; but if the bears continue to push the price below the channel; the price could find its low at the support levels of $0.30, $0.25, and $0.20 respectively.

When compares with Bitcoin, the Ripple market price is ranging and trading within the channel since the beginning of this year. For now, it is trading at 918 SAT and expecting a break below the lower boundary of the channel. Looking at the chart, both the bulls and the bears are struggling with who will dominate the market.

XRPBTC – Daily Chart

However, should the market make attempt to fall below the channel, the next key supports could be 500 SAT and below. Meanwhile, on the bullish side, a possible rise could take the market to the resistance level of 1500 SAT and above. According to the technical indicator RSI (14), the market is indecisive as the price is still moving sideways.

Ripple Price Prediction: XRP/USD Price Slide Continues as it Consolidates Around $0.41

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Inverse Finance seizes tokens, ships code: Launches stablecoin lending protocol

Shortly after culling its community of inactive members, one of decentralized finance’s (DeFi) strangest experiments is launching a new stablecoin lending product.

On Wednesday Inverse Finance revealed the Anchor Protocol, a money market built around DOLA, a protocol-native synthetic stablecoin. Based on “a modified fork of Compound,” in a blog post Inverse Finance founder Nour Haridy compares Anchor to Synthetix, which issues credit in the form of synthetic assets back by overleveraged collateral, and Compound, which issues credit in the form of crypto asset loans also backed by overleveraged collateral.

Ultimately, Haridy sees these models as providing the same utility.

“Lending and synthetic protocols both offer the same service: credit. Anchor brings the gap between them by combining them into a unified borrowing protocol.”

Anchor aims to accomplish this with a unique architecture that always treats the DOLA token as “$1 collateral that can be used to borrow other assets regardless of DOLA’s market conditions or peg.” Users deposit collateral, mint DOLA, and then can use DOLA to take out loans in other crypto assets or simply earn yield on DOLA. 

“For over-collateralized borrowers and leveraged traders, we offer them a one stop shop where they can share their collaterals across their synthetic and token borrowing positions, allowing higher capital efficiency and higher leverage,” says Haridy.

Haridy envisions Anchor will use DOLA for protocol-to-protocol lending similar to Cream’s Iron Bank, for undercollateralized lending (long a prize in DeFi), and for the protocol to “lend itself” credit to pursue yield farming opportunities.

No dead weight

Perhaps more interesting than Inverse’s development at the protocol layer are the moves they made earlier in the week at the governance layer. 

In what may be a DeFi governance first, On Saturday Feb. 20, Inverse community members put forth two governance proposals to seize INV — Inverse’s currently non-transferrable governance token — from inactive community members. On Thursday Feb. 25, the proposals passed, and not everyone was happy with the result.

Haridy says that the timing was intentional — right as Anchor, a protocol that might generate revenue for the DAO, prepares to launch, the community sheds freeloaders. 

“We needed to weed out our dead weight to reclaim some tokens for re-distribution to new active members soon. We also created an INV grants committee with the power to reward contributors and add new members to the DAO. Additionally, when free riders are removed, active members become more incentivized to contribute because they get a larger piece of the pie.”

While the unprecedented move may seem harsh, it’s also simply applying to governance the kind of aggressive style that put Inverse Finance on the map in the first place. By forcing token holders to participate under the threat of seized tokens, it’s helped with the development of Anchor as well. 

“This is a collaborative effort among many DAO members starting from ideation to development to internal reviews and testing,” says Haridy.

The next step for Inverse will be getting Anchor off the ground, and preparing for a world in which INV becomes tradable. Haridy says there’s a growing consensus in the community for tradability. This would mean that the DAO would give up the power to seize tokens, which could alter Inverse’s community landscape.

Haridy, however, seems unfazed by the looming shifts, already preparing the next innovation.

“This will significantly change the existing incentives and may reduce participation. Fortunately, there’s some work on a new alternative governance model that’s been happening internally to address this problem.”

Inverse Finance seizes tokens, ships code: Launches stablecoin lending protocol

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