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    Recent Posts

    Exciting New Developments in Blockchain Technology
    Exciting New Developments in Blockchain Technology

    Exciting New Developments in Blockchain Technology

    Ruth Kise 10 min read
    Day to day we hear different news about blockchain technology, crypto, and new projects in this area. The fast-growing high-tech industry offers new solutions to its community in an effort to protect its users and create the most favorable conditions. In the article below, we will take a look at interesting current events. Visa Has Developed a Solution for Auto Payments on the Ethereum Blockchain This year, payment companies from the traditional financial industry actively began to develop projects related to blockchain and cryptocurrency.  Visa has developed a solution for auto payments on the blockchain. The new concept is based on Account Abstraction (AA) technology from Ethereum designers. (Details can be found in the document published by the company.) This solution will enable users to automatically make pre-planned payments using smart contracts in noncustodial wallets of users. Account Abstraction technology was proposed back in 2016. With Ethereum's core network not yet supporting AA, the payment company has implemented its solution in StarkNet, a second-tier blockchain built on top of the Ethereum blockchain. In contrast with regular accounts, which check whether a transaction is signed correctly for a specific address, on StarkNet it’s enough to simply check that the transaction comes from a given address. In addition, the introduction of the Visa concept in this blockchain allowed not only to deploy a new auto payment function, but also to increase transaction throughput. Visa notes that it sees auto payments as a core functionality that lacks existing blockchain infrastructure, and invites interested companies working in the field to collaborate on programmable payment projects. Huobi Partners with Visa On December 22, Huobi announced a joint event with Visa: the launch of the Huobi Visa card to promote the virtual asset industry. Initially, the Huobi Visa card will be offered in the European market. Subsequently, the map will be distributed in other regions. Justin Sun argues that the launch of the Huobi Visa card is a milestone for both the company and the crypto community. He tweeted: "In future. Every Huobi user will automatically obtain a citizen of the Dominica universe, and visa card enjoying the freedom of identity, financial freedom. Travel around the world with one card in hand!” The launch will help promote virtual assets around the world. In addition, it will provide access to virtual asset services for all and expand access to global financial services. “We are thrilled to partner with an innovative platform like Huobi and look forward to Visa being able to serve as a bridge between the crypto ecosystem and our global network of merchants and financial institutions,” said Kay Sheffield, Head of Cryptocurrency at Visa. The Huobi Visa card will be linked to the Huobi user account. The Huobi account's virtual asset balance can be used to make payments to more than 80 million Visa-enabled outlets worldwide. Also, the card offers advantages such as cashback in Huobi Token ( HT ), discounts and drop-off coupons, as well as investment privileges in Huobi Earn products, etc. MetaMask Swaps Get Sidechain Support MetaMask wallet-based swaps now support Arbitrum and Optimism sidechains. This was reported on the official website of the wallet. The new features are also available in the MetaMask Portfolio DApp service. Before supporting sidechains, MetaMask users could convert tokens based on Ethereum, BNB Chain networks (formerly Binance Smart Chain), Polygon , and Avalanche . MetaMask will collect sidechains data on decentralized exchanges , according to the announcement. In November, MetaMask's owner company — ConsenSys — updated its privacy policy, saying it collects IP and wallet addresses when they use Infura's infrastructure service. Infura is the standard way to connect MetaMask users to the Ethereum blockchain. Amid criticism from the cryptocurrency community, ConsenSys was quick to clarify that they would only store data for seven days. In early December, MetaMask co-founder Daniel Finlay threatened to withdraw the app from the App Store due to Apple's non-replaceable token ( NFT ) policy. Apple's 30% commission on payments within the iOS ecosystem is an "abuse of monopoly," Finlay said. He also warned that Apple is likely to take on all cryptocurrency wallets to maximize its profits from activity in the crypto market. To stop Apple's monopolistic manners, the co-founder of MetaMask proposed using a third-party service that would relay on-chain transactions for prepayment. Such a decision would make cryptocurrency applications "free" for users of Apple devices, saving them from commission cheating by the Cupertino company, Finlay said. Cardano Update Developers of the Cardano cryptocurrency ecosystem spoke about the key innovations: updates will include both the blockchain itself and decentralized applications built on its basis. One of the key developments was developed in conjunction with Cardano's co-founder, Charles Hoskinson, and represents a network control mechanism. The innovation is outlined in the CIP-1694 proposal (Cardano Improvement Proposal). This will be an important stage in the transition to the Voltaire phase (Voltaire). The proposal, put forward by Hoskins' colleague Jared Corduan in late November 2022, is currently going through the voting process. The Voltaire era itself is intended to be the last stage in the development of the Cardano network. It should be an example for the entire crypto industry in terms of how decentralized platform management is carried out. Another major innovation is the development of the Cardano native token price index . An independent dcSpark team is standing behind its creation. The idea is that the index can be deployed locally and for free without using the API or involving a third party. At the moment, the number of tokens based on Cardano exceeds 7 million. This index is already supported by the three largest decentralized exchanges by total value locked (TVL): Minswap, WingRiders, and SundaeSwap. Polygon Launches Second zkEVM Test Network Before Core Network Deployment Over the past couple of years, Polygon has made several acquisitions and in-house zero-disclosure evidence developments, a relatively new technology that can improve network scalability and privacy — and what Vitalik Buterin says can be used for Ethereum long-term improvement. Now the test network experiences a new update called "recursion", which, as it claimed, can lead to exponential scaling of Ethereum. Polygon does not disclose the scheduled time of the main network launch. ZkEVM is a new technology for scaling Ethereum, which gained popularity last year. While it has not yet been proven, it’s thought to be able to significantly reduce the cost and increase the speed of Ethereum transactions — and ultimately ensure online privacy — all of which will make it easier for developers to build applications. This could open the door to a host of new online applications, bridging the gap between off-grid data and real assets in cryptocurrency. Last month, Matter Labs raised $200 million to develop the zkSync ecosystem in a Series C funding round. The funds are intended to develop the network's ecosystem. Privacy Protocol Web3 Aztec Network Raised $100 Million Aztec aims to fully encrypt the Ethereum blockchain to increase privacy and reduce computational redundancy. The firm will use the new boost to develop an encrypted architecture that allows people to use blockchains correctly without revealing identifying information.  “What we are building is a revolutionary technology that is changing the way we interact with each other online, where the end user is the customer, not the product,” said Zack Williamson, CEO of Aztec Network. “Blockchains with end-to-end encryption protect people by eliminating the need for centralized financial systems.” A Capital, King River, Variant, SV Angel, Hash Key, Fenbushi, and AVG also participate in the round, according to the company's blog post. The company plans to use the capital mainly to hire more engineers around the world to build the network. Over the past year, Aztec's team has increased from seven people to about 40, but it hopes to double that number soon. Overall, public blockchains lack the "missing part" of encryption, which could provide more use cases by ensuring privacy on a case-by-case basis, Andrews said. Adding encryption to blockchain technology could "spawn an entire wave of personal consumer finance," he said. While there are several encrypted blockchains, such as the Zcash network and Iron Fish , Aztec differs from them in that it can be programmed, Williamson said. “They are a bit like Bitcoin — what you can do with these networks is determined by who created them.” Until recently, programmable encrypted blockchain technology did not exist, Williamson said. “One of the reasons we were able to raise $100 million is because our internal R &D made it a reality,” he said. The firm aims to launch the test network within 12 months. Aztec Connect will launch online as its first app, Williamson said. Glupteba Blockchain Botnet Threatens Again Glupteba malware infects computers again despite Google's attempts to stop the spread of the virus. The Bitcoin-based Glupteba botnet attacks computers again to steal sensitive data. This is reported by researchers of the IT company Nozomi. Malicious software began to spread again in the summer of 2022 despite Google's successful attempts to sue Glupteba developers Dmitry Starovikov and Alexander Filippov. According to Nozomi, at least five swappers and crypto exchanges have been sponsoring the virus since 2019. What kind of sites are in question is unclear. The Glupteba botnet was first spotted by ESET experts back in 2011. The virus is spread through torrent platforms in the form of pirated software. By infecting the victim's computer, the virus steals sensitive data, including cookies. The main difference between Glupteba and other viruses lies in remote control through the Bitcoin blockchain network. Attackers transmit server data to the virus to steal data using the addresses of bitcoin wallets that store encrypted information in their transaction history. At the end of September, IT researchers found a new virus called Erbium, which spreads under the guise of cheats for video games. The virus first appeared in July 2022. However, it is still unclear who exactly created the malicious software. Among attackers, the virus spreads according to the subscription model. At the start of its existence, the virus cost $9 a week, and at the end of August the price jumped to $100. An annual subscription costs $1,000. QuadrigaCX Wallets "Woke Up," Access to Which the Head of the Exchange Took to the Grave Real miracles began to happen before the New Year holidays. At once, five wallets tied to the long-defunct Canadian cryptocurrency exchange QuadrigaCX, previously considered forever lost, suddenly "woke up." On December 17 the movement of BTC worth $1.7 million was detected in these wallets. Crypto-researcher ZachXBT alerted the crypto community in a Dec. 19 tweet, pointing to five wallets that had transferred about 104 BTCs two days earlier. “Five wallets attributed to QuadrigaCX unexpectedly moved ~104 BTC on Dec 17 for the first time in years”. Blockchain records show that wallets have not sent BTC since at least April 2018. Canada's once largest crypto exchange, QuadrigaCX, filed for bankruptcy in April 2019, following the December 2018 death of its founder, Gerald Cotten. As CEO, he was solely responsible for the private keys of the exchange's wallets. About 155,000 users of the exchange lost a total of $200 million in cryptocurrency at the time of its bankruptcy. In February 2019, a report by Ernst & Young — the Big Four accounting firm that controls the exchange's property — said that on February 6, 2019, QuadrigaCX accidentally transferred about 103 BTCs to cold wallets, access to which only the late Cotten had. The amount is almost identical to the BTC amount that was just moved. At the time, the company said it would work with management to extract the cryptocurrency from cold wallets. The mysterious death of QuadrigaCX's founder and CEO, followed by the collapse of the exchange, sparked theories that the founder faked his death to appropriate millions of client funds. The story has received such resonance that it even became the subject of a 2022 Netflix documentary. It is not yet clear whether the BTC movement is linked to Ernst & Young's rebuilding efforts.
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    What Is a Tilt in Cryptocurrency Trading: How to Deal with It And Avoid It?
    What Is a Tilt in Cryptocurrency Trading: How to Deal with It And Avoid It?

    What Is a Tilt in Cryptocurrency Trading: How to Deal with It And Avoid It?

    John Martin 8 min read
    Understanding emotions is one of the components of success not only in trading crypto but also in life. And the problem is that many people know about the negative aspects of excessive emotionality, but continue shooting themselves in the foot. The mistake is that in a calm state, a person underestimates the harm that uncontrolled emotions can do. He does not notice the signs of getting out of the state of psychological balance. And when an emotional breakdown occurs, then it’s already time to eliminate the consequences. What Is Tilt? Tilt is a human condition in which a person is susceptible to emotions and takes rash actions. The term is often used in gaming practice. For example, in poker, a person in a state of tilt experiences disappointment and dissatisfaction with the situation, begins to choose suboptimal strategies, and loses, which ultimately leads to aggressive behavior. Tilt in the game is a state of anger caused by failure or a series of defeats. Emotions characteristic of a person in tilt: Aggression and dissatisfaction. Unwillingness to accept the outcome of the event, a sense of injustice of what is happening. Anger, rage. Mostly about others, and not themselves. A desire for revenge. Sometimes the desire to use physical violence towards both a person and an inanimate subject. Despair. Apathy. Tilt in trading crypto is a condition in which a person is in an excited emotional state and cannot or does not want to control his actions, completely being in the grip of emotions. There are two causes for tilt in trading: Negative emotions. Irritation, anger caused by failure, loss, etc. Instead of analyzing the situation, a person fixates on emotions and begins to make even more mistakes. Positive emotions. The euphoria is caused by a quick achievement of the result, a successful deal, etc. Under the influence of emotions, the trader overestimates his strength, relaxes, and takes a greater risk, hoping that he will be lucky again. There are also hidden and obvious tilts. The obvious manifests itself instantly: the transaction closed at a loss, an in its footsteps, an emotional reaction immediately arrived. Hidden tilt: every day the efficiency of trade is worse and worse, and depression comes slowly but surely. Susceptibility to tilt depends on the type of the person’s nervous system and mental state. Phlegmatics and sanguines are the least susceptible. They perceive everything that happens with indifference or a smile. Cholerics and melancholics are most susceptible to tilt.  The former reacts aggressively, the latter engages in self-healing. The degree of emotional perception is also different for everyone. Someone will return to normal within a few minutes, and another person in a state of affect will be breaking plates for an hour. Why Does Tilt Occur in Trading? Causes of tilt: Psychological causes. Related to the internal, emotional state of the trader, his character. For example, a tendency to experiment or gamble, a splash of emotions, fatigue, self-doubt, etc. Market causes. Do not depend on the character and the state of the nervous system of the trader. Trading situations that "do not go according to plan" and knock the trader out of track. Consider them in more detail. Treating Trading as a Gamble A person treats trading as a game: Not analyzing the situation, takes rash action. Relies on luck. Does not use technical and fundamental analysis. Relies on someone else's opinion. Does not have a clear plan of action. Does not use risk management rules. In other words, it is guided by emotion, not reason. This situation falls under the definition of tilt and its consequence is loss and negative emotions. On the other hand, such a perception of trading is not always bad — the question lies in the trader's purpose. If a person has the goal of enjoying the game process itself, regardless of its result, then treating trading as a game is permissible. The main thing is that emotions stay positive. But you can forget about earnings in this case. Fear of Losing a Deposit Uncertainty and, as a result, fear of loss. Closed circle: there are all the prerequisites for opening a deal, but an internal voice says: "What if I make a mistake?" The signal remains unrealized, the price goes towards the forecast, and the trader begins to torment his conscience for an unrealized chance. Desire to Compensate for Lost Profits Or compensate for the loss. The desire to achieve the goal at any cost leads to the fact that a person begins to perform rash actions on emotions. And rash actions are like opening deals, guided by the theory of probability. Lucky or not — 50/50. Poor Psychological State Caused by External Factors Often, along with tilt, there is another negative condition — FOMO, loss of profit syndrome. It is common for a person to compare himself with others. And as a result of the comparison, there is an illusion that others are doing better — they are more successful, they have better results, greater income, etc. And instead of concentrating directly on trading, a person begins to engage in self-analysis. He begins to doubt the correctness of his actions (because others are doing better!), which reduces his self-esteem, and internal uncertainty appears. Poor Physical Health Feeling distracted: the problem of concentration can be the result of lack of sleep, or illness. A person begins to make mistakes due to inattention, which leads to a loss of money and time. The consequence is negative emotions. And there are several other reasons for tilt in trading crypto as well: Market injustice. Crypto whales sometimes manipulate the market as they need it. But the trader is the one who takes losses from this. When the obvious trend suddenly unfolds and turns on its head, there is an insurmountable desire to launch something into the monitor. Unwillingness or inability to lose. Defeat is common not only in trading. But the question is how to perceive it. Someone will work on mistakes, and someone will be overwhelmed by emotions. Error. And the more stupid it is, the more offensive it is to realize. The most offensive mistake is a mistake by inattention. In second place is the refusal to open a deal at a signal that could be accurate. The easiest way to move on is to accept a mistake and try not to think about it. But this is easy only in words. Despair. "Yes, let it all burn" — a censored version of this emotional state of tilt. It is preceded by unfulfilled goals, unrealized opportunities, and loss. At some point, the trader gives up, ceases to think (because, in his opinion, it is still irrelevant), begins to make spontaneous decisions, completely loses all the money, and decides not to return to trading. All these reasons ultimately lead to the fact that a person makes decisions under the influence of emotions. Most often negative. But in trading, the cold sober calculation is important. Tilt is Dangerous! What Should the Trader Be Afraid Of? The more logic and sequential actions in trade, the more effective it is. But a person cannot live completely without emotions: interest in trading, and joy from achieving the goal are also emotions. The question is what is the degree of emotionality and where is the critical level after which tilt begins — decision-making under the influence of emotions? Statistics show that traders aged 20 to 30 years and over 50 are the most emotional. This is due to the fact that the middle generation, thanks to experience, is cooler and knows how to manage their emotions. Young people still have "growing pains," and the older generation loses its grip. The effects of tilt, like the causes, can be divided into two groups. Market Effects Making easily avoidable errors: early or late opening of transactions, incorrectly calculated resistance/support levels, errors in calculating foot lengths, ignoring fundamental analysis, etc. The reason may be both aggression and euphoria from the result. Violation of risk management rules. Over-sitting, early closing, increased risk per deal. A habit of emotional reaction to any unusual situation. Most often, emotions get out of control after unprofitable transactions. Instead of analyzing errors, the trader begins to doubt the correctness of his actions and begins to randomly open transactions in opposite directions. Chaotic actions run counter to the algorithm of the trading system. And after a while, the trader loses control of the situation. Possible consequences: loss or lost profit. Psychological Effects Stress, oppressed state. Stress is also transferred to the real world — a person ceases to see positive moments and rejoice in life. Underestimated self-esteem. A person loses confidence in himself and his abilities, productivity, and desire to achieve goals are reduced. Pessimism. Uncertainty in your powers. Opening a new deal, the trader is sure in advance of his mistake. If in the first case, the worst thing that can happen is the loss of money within the amount of the deposit, then in the second case tilt can lead to problems in personal life and health problems. Sometimes tilt manifests itself in positive emotions. In moderate numbers, they are useful — a good mood adds optimism and pushes to set new goals. But euphoria from success can cause harm. It is believed that euphoria is the point of maximum risk. Conversely, a state of despondency and depression is the best point for a new start. The idea is that sooner or later everyone falls, but only spirit-strong people have the strength to rise again. In Conclusion: Restoration The best advice that can be given to those who have ever experienced tilt (and this is most traders) is that being vigilant about their feelings and actions can be key to preventing its consequences. Once captured by a tilt, it is quite difficult to get out of it, so identifying its signs and possessing a mechanism to block its consequences can give you incredible help. It can be a break from working at a computer, breathing exercises, short intense physical charging, or setting a hard daily loss limit. However, frankly speaking, it is easier to try to avoid tilt in principle. This involves identifying your susceptibility to tilt at a particular point in time, identifying an option for a trade scenario that can serve as its trigger, as well as being vigilant if triggers are triggered, and tracking the emotional signs of the tilt state approach. Preventing tilt is much easier if you are ready for it than then trying to get out of it.
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    SwapSpace is Happy to Announce the Launch of the Invaders Club!
    SwapSpace is Happy to Announce the Launch of the Invaders Club!

    SwapSpace is Happy to Announce the Launch of the Invaders Club!

    June Katz 1 min read
    Hi guys! We believe that the bear market is not a bad thing but instead is a perfect opportunity to prepare for the inevitable bull market. After all, when you’re just getting into an asset at its peak, you’re already late.  With that thought, we’ve decided that now is the best time to launch our very own SwapSpace Invaders Club! We’re minting 9999 genesis tokens that will serve as a foundation for the Invaders Club. And right now, you can get your tokens for free after completing any exchange on SwapSpace — as simple as that! Or, for something even more special, watch our social media and sign up for airdrops. You can find out all about getting those tokens on the Invaders Club page . In the next stages, we’ll expand the functionality of your Invaders, giving you: Reveal & Customization Loyalty Features We aim to make your Invaders more than NFTs : they’ll have all the NFT features that we know and love — but the holders will also be able to get cashbacks and other pleasant surprises at SwapSpace, depending on their token configuration. So, what are you waiting for? Join our community and stay tuned — in other words, get in early while it’s still easy!
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    3 Most Unsuccessful Authors of Cryptocurrency Price Predictions
    3 Most Unsuccessful Authors of Cryptocurrency Price Predictions

    3 Most Unsuccessful Authors of Cryptocurrency Price Predictions

    John Martin 4 min read
    Predicting the behavior of digital assets is not as easy as it may seem. The behavior of cryptocurrencies is influenced by many factors, some of which cannot be predicted. Even though it is almost impossible to predict the exact trajectory of the course of an asset, new forecasts appear on the internet every day. Often their authors are people popular in the crypto community . At the same time, the practice has shown that the caliber of the name is not a guarantee that the prediction will come true. In this material, we collected the top 3 most unsuccessful, but at the same time popular in cryptographic space authors of crypto price predictions. Co-founder of Fundstrat Global Advisors, Wall Street Analyst Tom Lee The analyst, who took first place in the ranking of the most unsuccessful authors of predictions, became famous for his overly optimistic, and at the same time baseless predictions of the further movement of the Bitcoin exchange rate ( BTC ). For example, at the beginning of 2018, Tom Lee expressed the opinion that during the year the coin will be able to rise to $25 thousand. It is noteworthy that the analyst gave a prediction against the background of an active correction of the cryptocurrency exchange rate after reaching a maximum in December 2017 near the level of $20 thousand. Later, in an interview for Bloomberg, Tom Lee doubled down on his forecast. He explained the prediction of the growth of the digital asset by the prospect of the coin entering a positive movement against the background of the annual Consensus conference of 2018. Traditionally, the event attracts public attention to digital assets, which positively affects their prices. On the eve of Consensus 2018, Tom Lee turned to the crypto community with an even brighter statement. The analyst predicted bitcoin at $64 thousand by the end of 2019. In 2020, in his opinion, the coin should reach $91 thousand. Contrary to the expectations of Tom Lee, by the end of the 2018 conference, the cryptocurrency rate decreased by 3.25% (to $8250). Subsequently, the coin continued to fall to a local minimum, which was recorded near the level of $3 thousand. In 2019, Bitcoin still realized growth. However, its maximum ($13 800) was far from the crypto analyst's forecast. It is noteworthy that during 2018, Tom Lee repeatedly adjusted his crypto forecast. In July 2018, as part of an interview for CNBC, he clarified that against the background of the circumstances, he sees the possibility of growing Bitcoin to only $22 thousand (instead of the previously promised $25 thousand). Subsequently, in the fall of that year, he lowered the bar to $15 thousand. His crypto analysis explained the failure of his theory about the growth of the digital asset against the background of the conference as an uncertain situation in the regulatory market. In 2020, against the backdrop of the potential for positive movement of the BTC course after halving implemented in May, cryptocurrency had still been far from the levels named by Tom Lee. The analyst's fresh forecasts, according to which Bitcoin could reach $28 thousand by August of that year, as it becomes clear when looking at the digital asset schedule, did not come true. Founder of MGT Capital Investments, Entrepreneur, and Ex-US Presidential Candidate John McAfee McAfee is known for his prediction of a Bitcoin price of $1 million by the end of 2020. Initially, the rate was twice as much, but in the end, McAfee decided to increase it. It is noteworthy that the entrepreneur accompanied the prediction with a promise to eat his male dignity on national television if his assumption turns out to be incorrect. Even though later McAfee repeatedly tried to reduce everything to a joke, network users still remind him of the forecast. John McAfee was recently arrested and was later found hanging in his cell, according to Reuters, so he won’t be able to fulfill his promise anymore anyway. Billionaire, head of Galaxy Digital Mike Novogratz In one of the autumn interviews of 2017 for CNBC, Mike Novogratz said that by the end of 2018, Bitcoin would be able to grow to $40 thousand. Unfortunately, this did not happen. It is noteworthy that against the background of an active depreciation of the digital asset during 2018, Mike Novogratz, following the example of his colleague - Tom Lee - adjusted the prediction to $9 thousand. Contrary to predictions, during the period indicated by the billionaire, cryptocurrency showed negative dynamics. In addition, at the end of 2018, the BTC dropped to a local low of $3 thousand. Later, in August 2019, Mike Novogratz shared his opinion that Bitcoin would never return to the level of $5 thousand. In March 2020, amid the coronavirus pandemic, the cryptocurrency dropped to $3,800, but Mike Novogratz did not comment on his unfulfilled forecasts and continued to give new predictions. As he said in April 2022, after the Reserve stops raising the key rate, the price of Bitcoin will be set between $500 000 and $1 million. At the same time, the venture investor is convinced that Bitcoin will ultimately be used to preserve capital, and not for payments. Galaxy Digital analysts predict that both BTC and ETH will double in price until mid-2023. Summing Up The opinions of experts are often subjective and significantly different, which is reflected in the breadth of the range of predicted prices. Therefore, any predictions should be taken carefully. The level of fame of the authors of predictions in the crypto space does not need to be perceived as a guarantee that the prediction will necessarily come true. Practice shows that even the most confident statements and assumptions about a particular scenario of the cryptocurrency exchange rate often do not coincide with reality. At the same time, effective work without studying the opinions of participants in the crypto community is almost impossible.
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    Yet Another Crypto Collapse: When Will the Dominos Stop Falling
    Yet Another Crypto Collapse: When Will the Dominos Stop Falling

    Yet Another Crypto Collapse: When Will the Dominos Stop Falling

    Ruth Kise 10 min read
    On November 11, 2022, the third largest cryptocurrency exchange FTX declared itself bankrupt. Over the short period of its existence, FTX has been able to penetrate many areas of the market like a spray and build close relations with many companies and projects that everyone has heard about. Many of them will find it difficult to get out of the situation, and not go to the bottom due to the FTX black hole, which is gradually increasing and attracting more and more crypto projects (some of them more, some less). Many are already announcing the damage and problems that have arisen, while some are trying to delay recognition as much as possible and stay in the ranks. Next, we will look at several cases of large affected players and expert forecasts for the future of crypto. BlockFi Cryptocurrency company BlockFi (and eight affiliated organizations) has filed for voluntary bankruptcy under Chapter 11 of the relevant US code. This is stated in a message on the company's website. The procedure in this article allows the reorganization of the indebted business. BlockFi directly linked its problems to the FTX crash. In July, the companies agreed to provide a revolving credit line worth $400 million and an option to buy it for up to $240 million, Reuters reports. The credit company is in debt to more than 100,000 lenders, the agency said. At the same time, the second largest creditor is FTX. BlockFi owes FTX $275 million, although its largest debt is to Ankura Trust ($729 million), which represents creditors in difficult situations. BlockFi said it would focus on recovering all liabilities to it from its counterparts, which include FTX and related entities. BlockFi previously stopped the work of its platform, and this pause will be extended for now: until what time, the company did not specify. BlockFi has $256.9 million in cash in its accounts — management hopes that this liquidity will be enough to provide operations during the restructuring process. Genesis Cryptocurrency broker Genesis has begun actively seeking funding following a liquidity crisis caused by the collapse of the FTX cryptocurrency exchange. On November 16, the broker suspended withdrawals on its platform because it could not satisfy the requests of customers who began to sharply withdraw money. Shortly before that, Genesis revealed that $175 million was blocked in its FTX trading account. "We have no plans to file for bankruptcy any time soon. Our goal is to resolve the current situation by consensus without filing for bankruptcy. Genesis continues to negotiate constructively with creditors, " a company spokesman told Bloomberg. A spokesman for Binance declined to comment. Genesis is having difficulty raising funding for its credit division, Bloomberg writes, citing knowledgeable sources. According to them, the company warned investors that if it fails, it may have to file for bankruptcy. According to the agency's interlocutors, in recent years Genesis has been trying to attract at least $1 billion in new capital. The company, in particular, was negotiating with the Binance crypto exchange, but has not yet received additional investments, Bloomberg points out. Gemini A cryptocurrency exchange Gemini Trust, run by twin brothers, one of the world's first crypto-billionaires Tyler and Cameron Winklevoss, has announced a temporary halt to the payments to revenue program customers. The platform made such a decision after its main partner in income payments — crypto creditor Genesis Global — suspended withdrawals on its platform amid a liquidity crisis caused by the collapse of FTX led by Sam Bankman-Fried, Bloomberg reports citing company statements. Gemini is working with Genesis so its users can use the funds earned by retail investors as quickly as possible. Genesis is the main partner of the crypto exchange for these payments, according to the data on the Gemini Earn website (investor earnings program). The New York-based company said the delay in payments does not affect any other Gemini products and services. The crypto exchange is disappointed that the agreement to service the investor earnings program will not be met, but is counting on Genesis and its parent company, Digital Currency Group, to "do everything in their power to fulfill their obligations to customers under the program," the statement said. Genesis suspended the withdrawals due to the effects of the FTX collapse on the crypto industry — the company lacked the funds to meet soaring requests to withdraw them. The crypto firm said it would provide a plan to reshape its lending business after Nov. 20 and had already hired consultants to explore all possible options, including new funding. The rest of the company's service continues to work. Genesis' credit business was affected earlier this year by the collapse of the cryptocurrency hedge fund Three Arrows Capital. Job Cuts: Kraken As a result of the fall of the FTX, the general situation of the market has also worsened. Everyone is saving their businesses as best they can. This is how many companies resort to staff reductions. Kraken, the world's third-largest cryptocurrency exchange, will lay off about 30% of its employees. The company attributed the upcoming cuts to weakening crypto markets after the FTX crash. This was announced in the company's corporate blog by its co-founder and CEO Jesse Powell. The layoffs were required for the company to be able to "adapt to current market conditions," Powell said. "We have had to grow rapidly, more than tripling our workforce to provide customers with the quality and service they expect from us. This job cut returns the size of our team to what it was only 12 months ago", said the head of one of the largest crypto exchanges in the world. Powell wrote that the slowdown caused by "macroeconomic and geopolitical factors" led to lower buying demand, lower trading volumes, and a decrease in the number of crypto exchange customers. "I remain extremely optimistic about cryptocurrencies and Kraken," added Kraken CEO. The company said it would offer compensation for 16 weeks of work as severance and extend the working period of affected employees. During the coronavirus pandemic, the number of people employed in technology has increased sharply, and in recent months it has sharply decreased — rising interest rates reduce consumer demand and investor confidence. Proof-of-Reserves Trend As a result of all the above, a new trend was born on the market — Proof-of-Reserves. A kind of attempt by platforms to protect their users and prove their honesty, it was started by the Binance exchange. "All crypto exchanges must confirm their reserves [using] the Merkle tree. […] Binance will soon begin confirming reserves. Full transparency", Zhao wrote. He also compiled a list of the most important, in his opinion, requirements for centralized exchanges. The initiative was supported by KuCoin CEO Johnny Liu. According to him, the company will release the corresponding document "in about a month." A similar decision was made in OKX, Gate.io, and Huobi. Just the day after Zhao's statement, a page appeared on the Binance website listing the exchange cryptocurrency reserves. Crypto.com also published relevant information. It turned out that the SHIB meme token accounts for 20% of the platform's reserves. What are they doing with it? The estimated cost of crypto assets on Huobi wallets was $3.5 billion. At Bitfinex, this figure exceeded $5 billion, and at Bybit — amounted to about $1.9 billion. Ethereum founder Vitalik Buterin proposed using zk-SNARKs to check data on the reserves of cryptocurrency exchanges. In his opinion, the technology will increase the effectiveness of the Proof-of-Reserve procedure. Buterin expressed the hope that someday there will be a system that will not allow the exchange to operate customer funds without their consent. In addition to confirming reserves, there has been a tendency among exchanges to create industry recovery funds to help projects facing a liquidity crisis — a kind of a bailout. The trend was led by the same Binance, and soon OKX announced the creation of a similar structure with assets of $100 million. Opinions Many experts agreed that what happened would extend the bear phase of the market and the "bottom" would not be reached soon. For example, the author of the Telegram channel CryptoEssay Stepan Gershuni is convinced that crypto winter "will wash out all people who found themself in the crypt for the wrong reasons." Ethereum founder Vitalik Buterin believes the FTX collapse could serve as a lesson for the entire cryptocurrency industry.  "What happened at FTX was of course a huge tragedy. That said, many in the Ethereum community also see the situation as a validation of the things they believed in all along: centralized anything is by default suspect,” Buterin said in a conversation with Bloomberg. The situation with the crypto exchange and its founder Sam Bankman-Fried also proves that it is better to trust "open and transparent code above individual humans ," the creator of Ethereum added. He admitted the FTX crash caused notable upheaval in the cryptocurrency market. Since the exchange filed for bankruptcy, a variety of organizations have come under attack — from the BlockFi crypto landing platform to those that suspended Genesis and Gemini operations, Bloomberg writes. Despite this, blockchain technology, which is at the heart of crypto operations, continues to work "flawlessly," Buterin said. Bloomberg called it unlikely that FTX customers will return their funds, since the reserves of FTX liquid assets amount to only $900 million with liabilities of ~ $9 billion. "You should not even count on a partial refund in the near future. The largest exchange Mt.Gox went bankrupt back in 2014 and only this summer began preparations for payments to creditors, " — Managing Partner of GMT Legal Andrey Tugarin. "Our baseline scenario is that most of the forced sales are over, but investors may not be compensated for market risk in the near term," says Sean Farrell, head of digital asset strategy at Fundstrat investment company. He pointed to continued uncertainty over Digital Currency Group, the parent company of crypto brokerage Genesis. Genesis lenders are looking for options to try to keep the company from going bankrupt. At the same time, Genesis clients are not wasting time, turning to lawyers to file claims against the crypto platform. Its debt to customers is at least $1.8 billion. About 94% of respondents in the Bloomberg MLIV Pulse survey believe that further collapses will follow the FTX bankruptcy, as years of available loans give way to a tougher market environment. Changpeng Zhao warned of upcoming "cascading effects." In his opinion, the current situation in the crypto industry echoes the financial crisis of 2008, and in the coming weeks even more companies may fail. Coinbase predicted crypto winter until the end of 2023, as the FTX collapse undermined investor confidence and caused a massive deleverage and the departure of large buyers. Multicoin Capital experts are also convinced that the consequences of the "infection" of the crypto market will manifest themselves in the future. Many players will cease to exist, which will put pressure on liquidity. However, the management of the venture capital firm expressed confidence in the long-term prospects of cryptocurrency. "As leverage shrinks, we expect to see green shoots next year," Multicoin Capital predicted. Most of the experts surveyed by BDC Consulting are confident in a further decrease in bitcoin quotes. On average, respondents expect the price of the first cryptocurrency to stop the fall of $11,479. A lawyer under the nickname wassielawyer expressed the opinion that SBF should be in prison. “Do Kwon was reckless. Voyager had poor risk management. Celsius was mismanagement. 3AC was incredibly reckless with investor funds. Not that we should forgive any of the above but this… this is straight up criminal.”  The Bottom Line The full extent of the damage the FTX crash caused to the crypto industry remains unknown. Blockchain projects such as Solana , Aptos , and Sui are also directly related to the exchange - and the list of companies associated with it is replenished with new names literally every day. Since everyone is trying as much as possible to avoid bankruptcies and frosts, perhaps later we will hear about someone else's fall. Another issue is the methods by which other companies want to protect (and lobby) themselves. It seems that not all cryptocurrency projects are ready to disclose their own reserves. On the other hand, the Proof-of-Reserves procedure will benefit the market and clear it of scammers. The emergence of crisis support funds, which were initiated by Binance and supported by others, will reveal the possibilities of getting out of a critical state and prepare the platforms for crisis situations. One thing is clear — recovery will not be imminent. But it will definitely happen. Remember the collapse of the Mt.Gox exchange in 2014, after which the market recovered and went through a huge take-off. So there are still a lot of interesting things waiting for us.
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