3 reasons why Ethereum price might not hit $5,000 anytime soon

3 reasons why Ethereum price might not hit $5,000 anytime soon

Ethereum price might be bullish in the short term but there are a handful of factors that could keep the price pinned in its current range.

Ether (ETH) price has been in a downward spiral ever since the Ethereum co-founder Vitalik Buterin presented at the StartmeupHK Festival 2021. In a fireside chat session on May 27, Vitalik stated that several internal team conflicts caused the Proof-of-Stake migration to delay its launch.

As reported by Cointelegraph, ‘Phase One,’ which introduces scalability through sharding, has been postponed to 2022. Furthermore, DeFi’s inherently decentralized nature might not be entirely beneficial because the sharding-style processing would need to run transactions through a relay chain.

Ether price in USD at Coinbase. Source: TradingView

It’s impossible to pinpoint the reason behind Ether’s sharp fall from its all-time high, but the surging gas fees certainly impacted investors’ expectations. Not only did it made evident how limited the network was, but it also incentivized traders to experiment with alternative networks like the Binance Smart Chain (BSC) and Polygon’s layer-2 solution.

Ethereum 7-day average gas fees in USD. Source: CoinMetrics

The chart above shows that the $45 average gas fee took place a whole month after the Berlin upgrade went live on April 15. The consensus in the Ethereum community was that Berlin was less impactful in the short term but  paved the way for the awaited London hard fork’s EIP-1559 protocol on Aug. 4.

This takes us to one of the 3 factors that could negatively impact Ether's price in the short term. 

London Fork delay

The Ethereum London hard fork is part of the roadmap to the final Eth2 release in 2022. The long-awaited update is scheduled for Aug. 4 but has been delayed already as the previous schedule mentioned late July.

Miners will be the most affected by the EIP-1159 proposal, which aims to burn part of the fees generated on the Ethereum blockchain, hence reducing their revenue. Furthermore, EIP-3554 introduces an incremental difficulty adjustment that incentivizes the migration to the new Proof-of-Stake blockchain.

Ethereum developers' delivery track record also does not inspire confidence. If a partial upgrade were to take place and the more controversial changes were delayed, Ether price could slide as a portion of the current rally is build on the hype surrounding the hardfork.

Miner exodus

This time around, the main concern isn’t technical but social. Once it becomes clear for Ethereum miners that their revenue source will be gradually cut off, it is a matter of time until some competing network benefits.

Even though most smart contract blockchains have been designed for the proof of stake consensus model, some lesser-known projects could change their algorithm to support Ethash mining.

Analysts should not discard the possibility that Binance Chain or Solana could implement an additional security layer using the extra hashing power caused by an Ethereum miner exodus. Although this scenario is distant, these movements would undoubtedly put pressure on Ether price.

Multi-chain dApps

The longer it takes for Eth2 to be fully implemented and for dApps to upgrade their code to support parallel processing (shardin) capabilities, the higher the incentives for adding multi-chain support.

Curve and AAVE, the two leading DeFi protocols by total value locked, have both added support for blockchains other than Ethereum. Meanwhile, Polygon holds $550 million worth of Curve contracts and AAVE another $1.8 billion, according to data from DeFi Llama.

In the end, the most likely “Ethereum killer” would be the network itself because postponing the scaling solution would push users and dApps to alternative solutions. At the same time, the migration to PoS opens room to strengthen competing blockchains.

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.

Pro traders look for this classic pattern to spot Bitcoin price reversals

Pro traders look for this classic pattern to spot Bitcoin price reversals

Crypto and stock traders view the inverse head-and-shoulders pattern as an early signal that a bullish trend reversal is in the making.

Every trader aims to buy low and sell high, but only a few are able to muster the courage to go against the herd and purchase when the downtrend reverses direction. 

When prices are falling, the sentiment is negative and fear is at extreme levels, but it's at times like these that the inverse head and shoulders (IHS) pattern can appear.

The (IHS) pattern is similar in construction to the regular H&S top pattern, but the formation is inverted. On completion, the (IHS) pattern signals an end of the downtrend and the start of a new uptrend.

Inverse head and shoulders basics

The (IHS) pattern is a reversal setup that forms after a downtrend. It has a head, a left shoulder and a right shoulder that are upside down and placed below a neckline. A breakout and close above the neckline completes the setup, indicating that the downtrend has reversed.

Head-and-shoulders bottom pattern. Source: TradingView

As shown above, the asset is in a downtrend but after a significant decline, value buyers believe the price has reached attractive levels and will start bottom fishing. When demand exceeds supply, the asset forms the first trough from the left shoulder and the price starts a relief rally.

In a downtrend, traders sell on rallies. The bears sell aggressively after the pullback and the price dips below the first trough, making a lower low. However, bears are unable to capitalize on this weakness and resume the downtrend. The bulls buy this dip and start a relief rally, forming the head of the pattern. As the price nears the previous peak where the rally had stalled, the bears again step in.

That starts the decline, culminating in the formation of the third trough, which is arrested almost in line with the first trough as buyers anticipate a turnaround and purchase aggressively. This forms the right shoulder of the setup. The price turns up and this time, the bulls manage to push the price above the neckline, completing the pattern.

The neckline thereafter becomes the new floor as traders buy the dip to this support. This signals the start of a new uptrend.

Identifying a new uptrend with the (IHS) pattern

BTC/USDT daily chart. Source: TradingView

Bitcoin (BTC) had been in a downtrend since forming a local top at $13,970 on June 26, 2019. The buyers stepped in and arrested the decline in the $7,000 to $6,500 support zone, forming the left shoulder of the (IHS) pattern. This started a relief rally that pushed the price to $10,450. At this level, short-term bulls booked profits and bears initiated short positions, aiming to resume the downtrend.

Aggressive selling broke the support at $6,500 and the Bitcoin/Tether (USDT) pair plunged to $3,782.13 on March 13, 2020. The bulls viewed this fall as a buying opportunity and that started a strong relief rally, which reached close to $10,450. This second trough formed the head of the setup.

The right shoulder was shallow because the selling pressure was reduced and bulls did not wait for a deeper correction to buy. Finally, the bulls pushed the price above the neckline on July 27, completing the (IHS) pattern.

The bears tried to trap the bulls and they pulled the price back to the neckline. Although the price dipped just below the neckline, traders did not allow the pair to sustain below $10,000. This suggested a change in sentiment. The bullish momentum picked up as buyers pushed the price above $12,500.

How to calculate the pattern target of a IHS setup

BTC/USDT daily chart. Source: TradingView

To calculate the minimum target objective of the (IHS) pattern, calculate the depth from the neckline to the lowest point, forming the head. In the above example, the neckline is around $10,450, and subtracting the lowest point at $3,782.13 gives a depth of $6,667.87.

This value is then added to the breakout level, which in the above example, is near $10,550. This gives a target objective at $17,217.87. When a trend changes from down to up, it may fall short or exceed the target objective. Therefore, traders should use the target as a guide and not dump their positions just because the level has been reached.

Patience pays o because sometimes the pattern fails

No pattern succeeds at every breakout and traders should wait for the setup to complete before initiating the trades. Sometimes, the pattern structure forms but the breakout does not happen. Traders who preempt the completion of the pattern and initiate trades get trapped.

LINK/USDT daily chart. Source: TradingView

For example, Chainlink’s LINK topped out at $4.58 on June 29, 2019, and started a correction. The buyers attempted to stall the decline in the $2.20 to $2.00 zone. This formed an (IHS) pattern with a head and two shoulders as can be seen in the chart above.

Although the price reached the neckline on Aug. 19, 2019, the buyers could not push the price above it. Due to this, the pattern did not complete and the buy signal did not trigger.

The LINK/USDT pair turned down from the neckline and broke below the head of the setup at $1.96, invalidating the pattern. This trapped traders who may have purchased in anticipation of a trend reversal.

Key takeaways

The (IHS) pattern could be a useful tool for traders to jump on a new uptrend as it is getting started. There are a few important points to remember while using this setup.

Traders should wait for the pattern to complete, which happens after the price breaks and closes above the neckline, before initiating any long positions. A breakout of the neckline, which is on above-average volume, is more likely to result in a new uptrend compared to a breakout that happens on low volumes.

When a trend reverses, it generally continues for a long time. Therefore, traders should not be in a hurry to dump positions only because the pattern target has been met. At other times, the pattern completes but quickly reverses direction and the price plummets. Traders should closely watch the other indicators and price action before squaring up a position.

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

Amazon rumored to be accepting Bitcoin, MicoStrategy pledges to buy more BTC despite losses, Bitcoin struggles at $40K: Hodler’s Digest, July 25-31

Amazon rumored to be accepting Bitcoin, MicoStrategy pledges to buy more BTC despite losses, Bitcoin struggles at $40K: Hodler’s Digest, July 25-31

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.

Top Stories This Week


Amazon plans to accept Bitcoin payments this year, claims insider

The crypto community was going wild at the beginning of this week after rumors circulated that Amazon was planning to accept Bitcoin payments.

The rumors started after Amazon posted a job opening for a digital currency and blockchain product lead on July 22. Four days later, an anonymous source within Amazon reportedly told London business newspaper City A.M. that the e-commerce giant was planning to start accepting Bitcoin (BTC) payments by the end of 2021.

This isnt just going through the motions to set up cryptocurrency payment solutions at some point in the future this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work, the source told City A.M., according to a report published on Sunday.

Chinese crypto journalist Colin Wu attributed Mondays surging market action, during which Bitcoin gained roughly 15% in less than three hours, to Amazons rumored plans.

How wrong that very self-assured sounding quote from an unnamed source turned out to be after the multinational giant refuted the speculation two days later.

Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true, a spokesperson said.


Bitcoin struggles at $40K after most confusing Jerome Powell press conference

Bitcoin rose above $40,000 on July 29, a day after the Federal Reserve hinted that it was getting closer to winding down its asset purchasing program that has boosted the economic recovery of the United States.

The digital gold previously approached $41,000 ahead of the critical Fed update. Unsurprisingly, it started losing upward momentum after the Federal Open Market Committee released its policy statement, followed by a press conference helmed by the Fed’s chairman, Jerome Powell.

Powell had previously said that the Fed’s asset purchases would continue until it sees substantial further progress in the U.S. economic recovery. However, for a while, it was unspecified as to what that actually meant, and Powell finally cleared that up after being questioned in a July 28 press conference.

Turns out that substantial further progress means strong labor numbers and gains towards maximum employment.

Maximum employment refers to the highest level of achievable employment that the economy can sustain while maintaining a stable inflation rate. Given the rise of inflation and the decline of jobs due to the pandemic, the Feds maximum employment targets may need further clarification.

BTC investors have been closely monitoring how soon the central bank might unwind its $120-billion-per-month bond-buying program due to its role in aiding the Bitcoin bull market.


Binance cuts withdrawal limits, rolls out tax reporting tool

Following increased scrutiny aimed at Binance from governments and financial institutions across the globe, the worlds biggest crypto exchange has been working on regulatory compliance.

In the latest attempt to maintain dialogue with global regulators, Binance introduced withdrawal limits and a new tax reporting system.

The company officially announced on July 27 a major update to its Know Your Customer policies, significantly reducing maximum withdrawal amounts for users who have not completed full identity verification.

Effective from the date of the announcement, new Binance accounts whose users have completed only basic account verifications will be unable to withdraw more than 0.06 Bitcoin per day, worth roughly $2,329 at the time of writing. Previously, the maximum daily withdrawal amount was capped at 2 BTC, or about $77,661.

On July 30, the platform also announced that it will be shutting down its crypto derivatives trading for customers across Europe, first starting with Germany, Italy and the Netherlands.

This week, Changpeng Zhao, the CEO and founder of Binance, said he wanted the crypto exchange to work with local regulators as it establishes regional headquarters.

Zhao, also known as CZ, hinted that Binance would depart from its decentralized approach to finance and that wanted the exchange to coordinate with regulators as the company expands.

We want to be licensed everywhere, CZ said. From now on, were going to be a financial institution.


MicroStrategy pledges to buy more BTC despite paper loss on its holdings of $424.8M in Q2

MicroStrategy pledged to buy more Bitcoin despite reporting impairment losses of $424.8 million in Q2, after it stated that it was pleased by the results of its digital asset strategy in its July 29 Q2 report.

At a first glance, it appeared that MicroStrategy had lost the plot, as the Q2 report showed that as of June 30, MicroStrategy held an approximate 105,085 BTC with a carrying value of $2.051 billion, at an impairment loss of $689.6 million since acquisition. The average carrying amount per Bitcoin was an estimated $19,518.

Earlier this week Elon Musks Tesla also published a Q2 report which showed a $23 million impairment loss on its Bitcoin holdings.

As both firms categorize Bitcoin as an intangible asset, accounting rules mandate that they must report an impairment loss when the assets price drops below its cost basis. However, they are not required to report price appreciation in the specified asset until the position is realized through a sale.

The digital asset figures were calculated using Generally Accepted Accounting Principles (GAAP) a collection of commonly accepted accounting rules used for financial reporting. The firm also provided non-GAAP calculations, which in this report exclude the impact of share-based compensation expense and impairment losses and gains on sale from intangible assets.

The non-GAAP figures paint a different picture for MicroStrategys digital asset holdings, with the BTC cost basis at $2.741 billion but its market value is $3.653 billion, which reflects an average cost per BTC at $26,080 and a market price of $34,763 as of June 30.

This may be the reason why MicroStrategy CEO Michael Saylor continues to double down on BTC and pursue the hodl modl.


PayPal set to launch crypto trading in the UK and may embrace DeFi

On July 30, it was revealed that global payments platform PayPal is looking to expand its crypto trading services to the U.K. market, with the firm also revealing that it is looking at embracing DeFi.

According to the companys second-quarter earnings call on July 28, PayPal was very keen to pat itself on the back after the firm noted how well it performed during Q2 with its crypto trading services. CEO Dan Schulman stated that the U.K. is likely to be the next country where crypto trading is offered, and maybe even next month.

Speaking on DeFi, Schulman suggested that PayPal was looking into what the next generation of the financial system looks like and how to integrate smart contracts and decentralized apps into the platform:

How can we use smart contracts more efficiently? How can we digitize assets and open those up to consumers that may not have had access to that before? There are some interesting DeFi applications as well. And so we are working really hard.

Schulman also revealed that revenues of PayPal-owned mobile payment service Venmo grew by 183% year-over-year and that there has been strong adoption and trading of crypto on Venmo as well. Venmo launched crypto trading services to an estimated 70 million users in mid-April.

Paypals 2020 entrance into crypto was widely cited as one of the early catalysts for last years meteoric bull run, with the firm first announcing it would introduce U.S. crypto trading service in November.

Winners and Losers



At the end of the week, Bitcoin is at $38,906 Ether at $2,357 and XRP at $0.72 The total market cap is at $1.53 trillion, based on CoinMarketCap data.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Quant (QNT) at 70.71%, Amp (AMP) at 55.88%, and Terra(LUNA) at 43.75%.

The top three altcoin losers of the week are Compound (COMP) at -5.79%, Mdex (MDX) at -5.35%, and Shiba Inu (SHIB) at -5.19%.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.



Most Memorable Quotations


I think central bank digital currencies were concocted in hell by Satan himself.

Rich Checkan, president of Asset Strategies International


You even have some in the House that sit not too far from me on the House Financial Services Committee that would call blockchain basically a financial 9/11.

Representative Ted Budd of North Carolina, member of the House Financial Services Committee and Congressional Blockchain Caucus


They claim to enable transparency. Their backers talk about the democratization of banking. Theres nothing democratic or transparent about a shady, diffuse network of online funny money.

Sherrod Brown, United States Democratic Senator


Spending America deeper into a hole is a stupid, inflationary & altogether undesirable way to drive ppl to digital assets. I want USD to continue as the world’s reserve currency. We need to reign in spending & support financial innovation on US soil.

Cynthia Lummis, United States Republican Senator


When the scourge of the COVID-19 pandemic hit and forced many economies into partial and total lockdowns, it reinforced the need to pursue digitization.

Mahamudu Bawumia, Vice President of Ghana


There has been an enormous failure by the big banks to reach consumers all across the country. Digital currency and central bank digital currency may be an answer there.

Elizabeth Warren, United States Senator and former presidential candidate


We continue to be pleased by the results of the implementation of our digital asset strategy. Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.

Michael Saylor, MicroStrategy CEO


Bitcoin Mining is the most ESG friendly business in the world. Bitcoin miners are 24/7 consumers of energy that can be placed near wasted power assets. Bitcoin miners help energy companies plan/control their demand this brings in revenue to divest from coal and invest in renewable energy assets.

Will Szamosszegi, CEO and founder of Sazmining Inc., from Markets Pro Q&A

Prediction of the Week


Ethereum price can hit $14K if the March 2020 chart fractal holds

Now that it looks like the cryptomarkets are picking back up, numerous bullish predictions are beginning to resurface. The recent flip in sentiment makes one wonder whether the highly coveted moon may once again be in sight.

Earlier this week TradingView user TradingShot spotted an extremely bullish fractal on the Ethereum chart which indicated that ETH may close 2021 above $14,000.

The Ethereum fractal involves three technical indicators: a 50-day simple moving average (SMA), a Fibonacci channel and a relative strength index.

Ether closed above its 50-day SMA in July 2021, the first time since the May 2021 bearish buzzkill market correction. As TradingShot pointed out, breaking above the 50-day SMA has historically predicted bull runs. For instance, a run-up above the 50-day SMA in April 2020 took the ETH/USD exchange rate from around $170 to over $500 in September 2020 in only 137 days.

A word of caution, however, based on this authors 20-second analysis: The last time ETH hit all-time highs around the $4,000 to $4,300 price range in mid-May, it stayed there for roughly five days before crashing sharply and forcing the bulls into hibernation.

FUD of the Week


Warren urges Treasury Secretary Yellen to combat rising crypto threats

Earlier this week, U.S. Democratic Senator and anti-crypto proponent Elizabeth Warren called on Treasury Secretary Janet Yellen and other regulators to develop a comprehensive and coordinated framework for addressing risks in the cryptocurrency market.

As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment, and our financial system are under growing threats, Warren said in a letter to Yellen.

According to Warren, an under-regulated cryptocurrency market poses a significant risk to major financial players, such as hedge funds and banks. What Warren is forgetting, however, is that hedge funds and banks are usually bailed out with taxpayer money in times of financial crises, so they really have nothing to worry about.

The senator is renowned for pushing back against cryptic currencies or whatever they are called, and has described assets like Dogecoin as a fourth-rate alternative to real currency.

It appears she hasnt seen enough memes from the DOGE community to be swayed on the value of Dogecoin as of yet.


IMF issues veiled warning against El Salvadors Bitcoin Law

The International Monetary Fund, or IMF, warned this week that the consequences of a country adopting Bitcoin as a national currency could be dire.

The IMF didnt specify which country it was talking about, but one thinks it may be El Salvador the first nation to adopt Bitcoin as a national currency.

According to assertions from IMF marketing department financial counselor and director Tobias Adrian and legal department general counsel and director Rhoda Weeks-Brown,

countries adopting cryptocurrencies as national currencies or granting crypto assets legal tender status risks domestic prices becoming highly unstable.

They also emphasized that the assets could be used contrary to Anti-Money Laundering and financing of terrorism measures, in addition to having issues surrounding macroeconomic stability and the environment.


Law professor calls for crypto mining regulation during US Senate hearing

Just as everyone was getting excited about the majority of the global BTC hash rate migrating out of China to the U.S., one little-known law expert has to come to ruin it all.

Professor Angela Walch of the St. Marys University School of Law attended the July 27 crypto hearing before the U.S. Senate Committee on Banking, Housing and Urban Affairs to call for stricter regulations on people who keep the crypto sector moving smoothly.

Thankfully, she wasnt asking for a China-esque ban and, in addressing the committee, Walch claimed that miners held meaningful power over the way blockchain networks operate. She asserted that they can potentially exploit the role of transaction ordering, which could become a major issue for cryptocurrencies.

In stressing the point, professor Walch likened the miner extractable value paradigm where miners earn more profits from ordering transactions in a certain way as being akin to a bribe.

She may have a point, though sometimes it does feel like youre bribing someone to get an Ethereum transaction through the books when tokenized cats clog up the network and send gas fees to the moon.


Best Cointelegraph Features

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Traders anticipate ‘DeFi Summer 2.0 after TVL and token prices rise

A rally in blue-chip DeFi tokens and the sectors rising total value locked has traders hopeful that a prolonged rally will take place.

German law allowing institutional funds to hold crypto comes into effect Aug. 2

German law allowing institutional funds to hold crypto comes into effect Aug. 2

As much as $415 billion worth of investments could flow into cryptocurrencies as new laws governing German Spezialfonds go into effect.

Beginning on August 2, 2021, German institutional funds will be able to hold up to 20% of their assets in cryptocurrencies, possibly setting the stage for wider mainstream acceptance of Bitcoin (BTC) and other crypto assets by the nation’s pension funds. 

As Bloomberg reports, the new law alters fixed investment rules governing Spezialfonds, also known as special funds, which are only accessible to institutional investors such as pension funds and insurers. Spezialfonds currently manage about $2.1 trillion, or 1.8 trillion euros, worth of assets.

Related: Hedge funds see the crypto market decline as an investment opportunity

Tim Kreutzmann, who works for German investment fund association BVI, told Bloomberg that most funds will likely stay well below the 20% mark initially, explaining:

“On the one hand, institutional investors such as insurers have strict regulatory requirements for their investment strategies. And on the other hand, they must also want to invest in crypto.”

The new rule, which was passed in early July, represents an important evolution in how German lawmakers govern digital assets. Germany’s Federal Financial Supervisory Authority, better known as BaFin, continues to urge caution with respect to digital-asset investing. At the same time, the financial watchdog encourages blockchain innovation in the country.

Germany first embarked on a comprehensive blockchain strategy in 2019, promoting 44 adoption measures that are set to be realized by the end of 2021. The new approach to blockchain and crypto also introduced measures that would make it easier for investors to access digital investments. 

The nation has also become a leading market for cryptocurrency exchange-traded products, or ETPs. As Cointelegraph reported, investment product issuer 21Shares has partnered with German brokerage comdirect to provide crypto-focused ETPs to nearly 3 million customers.

Related: Binance to shut down crypto derivatives trading in Europe

Bitcoin 'supercycle' sets up Q4 BTC price top as illiquid supply hits all-time high

Bitcoin 'supercycle' sets up Q4 BTC price top as illiquid supply hits all-time high

Recent events mean that a Q4 "blow-off top" is now back on the menu as BTC price recovery clings to its 23% weekly gains.

Bitcoin (BTC) is gearing up for a comeback which should lead it to repeat classic bull run years 2013 and 2017, analysts are arguing.

As $42,400 local highs appeared on July 31, narratives around the market are flipping back to a bullish Bitcoin "supercycle."

Bulls come out for 2021 close

Bitcoin has been busy repairing the impact of the China miner rout since mid May, but last week's price advances were stronger than most anticipated

Related: Bitcoin open interest mimics Q4 2020 as new report ‘cautiously optimistic’ on BTC rally

Rather than suffer a serious dip, BTC price action has held onto its gains, which at the time of writing total 23% in a week.

What seemed all but impossible just seven days ago is now flavor of the month among an increasing portion of the analytical community.

"Following a troubling three months of news and price action, bitcoin went on to print five green monthly candles in a row and went up ~10x in the second half of 2013," Jeff Ross, founder and CEO of Vailshire Capital, said in Twitter comments Saturday.

"I still contend that 2021 will behave in similar fashion."
BTC/USD 1-month annotated candle chart. Source: Jeff Ross/ Twitter

With its latest uptick, meanwhile, BTC/USD broke through its 21-week exponential moving average, something which analyst Rekt Capital described as a "time-tested bull market indicator."

The supply shock is back

While Ross added that such a prediction was "just a guess," he has an increasing number of on-chain indicators to support him.

Hash rate is back above 100 exahashes per second (EH/s) after bottoming at 83 EH/s, while difficulty saw its first positive readjustment since the May price crash on Saturday.

Investor behavior further mimics the change in sentiment. Strong hodlers with little to no history of selling their BTC are now back in control at levels never seen before andabsent since Bitcoin's current all-time high of $64,500 in April.

"This is very bullish," Lex Moskovski, chief investment officer of Moskovski Capital, summarized alongside an accompanying chart from Glassnode. It showed hodler conviction in terms of an increasing amount of the BTC supply becoming illiquid — taken off the market.

Bitcoin illiquid supply annotated chart. Source: Lex Moskovski/ Twitter

"Bitcoin 'supply shock' is now at levels that previously priced Bitcoin at $53K," fellow analyst William Clemente commented on the same data.

"Consolidation after 10 straight green days is very reasonable but still remain bullish over the coming weeks."

If you have a Bitcoin miner, turn it on

If you have a Bitcoin miner, turn it on

The opportunity in Bitcoin mining has never looked better, and the U.S. has the infrastructure to take the chance.

In the last few weeks, the Bitcoin (BTC) mining market has experienced a black swan event, leading to a lot of uncertainty and confusion surrounding the future of the market. This is why I felt it was right to give the public a quick update and explain why it's a fantastic time for Bitcoin mining in the United States.

Bitcoin miners are rewarded Bitcoin for securing the network and for each block they mine. As more miners participate, the difficulty rate increases and the reward for each individual miner’s security contribution decreases. And vice versa, when fewer miners are participating, the difficulty rate decreases and the reward for each miner’s contribution increases. Understanding this is key as to why this is an exciting time to get into mining.

Related: A trade war misstep? China is vacating crypto battlefield to US banks

Recently, we have experienced a historic decrease in the difficulty rate. This chart shows the initial impact of Chinese miners being forced to shut down and move out of China.

Related: China crackdown shows industrial Bitcoin mining a problem for decentralization

There are many potential reasons why this occurred, but the net result is that an exodus of Chinese miners and their equipment has begun. As of July 2, the rate was adjusted by -27.94 percent. It was the fourth negative adjustment that happened in a row, “with the difficulty rate almost halving since mid-May.”

Let’s take a look at the most recent block time intervals.

Even with record-high Bitcoin prices, we are still anticipating additional rate decreases in the near future.

However, the difficulty decrease wasn’t over at that point, and with the additional drop of over 27% in early July, the volatility is still coming as the network catches up to the effects of all these miners going offline. These events have caused a lot of dramatic and quick changes to the crypto mining market, but their impacts can be boiled down to three major changes:

  • There is a shortage of low-cost electricity mining locations and power infrastructure in the market. There’s simply not enough infrastructure to absorb the demand coming from Chinese miners.
  • Equipment prices are dropping fast and profitability is increasing for miners. We estimate that equipment prices will fall to all-time lows given the flood of equipment, while mining profitability soars. As a result, we estimate mining profitability will increase by 35% after the difficulty adjustment.
  • Cheap power locations can take a year or more to negotiate, contract and develop. Given these circumstances, current operators have a unique opportunity because they already have established resources and partnerships that they can utilize.

The last time that the difficulty rate was around 15 trillion was in January 2020, with Bitcoin being worth only $7,000. Currently, the price of BTC is around $32,000, more than four times higher. With low-priced hardware for mining and the high price of Bitcoin, the opportunity in Bitcoin mining has never looked better. Right now, it's not about the mining equipment, it’s more about the infrastructure.

As all investors know, the time to invest is when costs are heavily discounted. For Bitcoin mining, that’s right now.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

William Szamosszegi is the CEO and founder of Sazmining Inc., a cryptocurrency mining developer and consulting firm, and host of Everything Crypto Mining: The Sazmining Podcast. He is bullish on Bitcoin's future as the dominant global digital reserve asset and believes Bitcoin is the solution for layer-one, sound money. William grew up in Maryland and studied psychology and management at Bucknell University. William spends his spare time working out, seeing friends and reading.

A Bipartisan Case For Bitcoin

A Bipartisan Case For Bitcoin

Bitcoin need not be a politically splitting idea, as there are benefits to be had from progressives and libertarians alike.

As the U.S. Senate approaches the finish line of the upcoming infrastructure deal, Coindesk has reported that congress is considering legislation with an escalating adversarial posture against the nascent digital asset industry. These policy changes need to be thoughtfully scrutinized rather than rushed, as they risk creating unintended consequences.

Physical infrastructure does not need to compete with emerging digital financial infrastructure. Like the early days of the internet, Bitcoin represents a digital infrastructure that can unlock economic opportunities for progressives and libertarians alike.

Approximately 1 in 6 Americans now owns cryptocurrencies, and nearly 80% of millennial consumers are interested in learning about cryptocurrency to understand them better. You do not want to demonize this voting block as “shadowy super coders.” Policy leaders would be well served with a reminder that Bitcoin is a liberating technology that holds appeal across the political spectrum. Here’s a brief reminder of Bitcoin’s bipartisan appeal:

Why Progressives Like Bitcoin:

- Financial inclusion: Bitcoin can bank the underbanked – creating a more inclusive financial services infrastructure where anyone can store and send money, unencumbered by discrimination. Over 14 million Americans are unbanked and nearly 50 million Americans are underbanked even in 2021, and these figures disproportionately impact Black and Hispanic households. Rather than leaving these households to be serviced by predatory lenders, progressives would be well served by embracing a technology which makes access to financial services as easy as access to the internet.

- Incentivize greener energy: Bitcoin’s incentive design rewards cheaper energy production. Climate change advocates would be happy to understand how this design can accelerate the global energy transition to renewable energy, particularly solar and wind energy. This represents an opportunity for Americans to make productive use of excess energy, to create jobs, and to continue to lead with innovations that help the transition to a greener future.

Why Libertarians Like Bitcoin:

- A free market of sound money: Libertarians looking to minimize government intervention should be attracted to the free market nature of Bitcoin. As early as 2021, the European Central Bank recognized Bitcoin as an asset built upon Austrian economic principles – principles which embrace a market based approach to creating financial wealth for the next generation of Americans.

- Strong property rights: The right to own property is enshrined in Article 17 of the Universal Declaration of Human Rights, and similarly emphasized in the United States constitution. Defenders of civil liberties will find that Bitcoin supports the Fifth Amendment (right to private property), and the Fourth Amendment (protection from unreasonable searches and seizures). Private property ownership is the basis for economic prosperity, and digital assets represent a new frontier to extend these modern civil rights.

Accenture: Bitcoin Helps Young Girls In Afghanistan

Regardless of your political beliefs, Bitcoin represents an opportunity to liberate people from authoritarian suppression. As early as 2013, young girls in Afghanistan without access to banking services were able to make money online by accepting Bitcoin. PayPal wasn’t available in the country at the time – but Bitcoin gave them a permissionless path towards prosperity. These are the very human faces of the people we are looking to liberate – you do not want to demonize them.

Yes, we need regulatory clarity and we need to pay our fair share of taxes. But you need to be thoughtful not to destroy an emerging digital financial infrastructure by pitting it against physical infrastructure. This industry enjoys bipartisan support from voters – and lawmakers should be well served by embracing this innovation rather than antagonizing this voting bloc.

This is a guest post by Ammar Naseer. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Bitcoin for cash: Do crypto ATMs make buying BTC easier for the mainstream?

Bitcoin for cash: Do crypto ATMs make buying BTC easier for the mainstream?

Bitcoin ATMs may make it easier for the mainstream and unbanked to access crypto, but will security risks hamper adoption?

Cash may be king when it comes to purchasing Bitcoin (BTC), as recent data states that there has been a spike in crypto ATM installations during 2021, showing a 71.3% increase from Jan. 1, 2021, until the time of reporting. Specifically speaking, there are currently over 24,000 crypto ATMs located across the globe. Data further suggests that crypto ATMs are being installed at a rate of about 52.3 machines per day. 

While growth is clearly underway for the cryptocurrency sector, the reason behind the surge in crypto ATMs may be due to a demand for using cash to buy Bitcoin. Alona Lubovnaya, director of product operations for Bitcoin Depot — a Bitcoin ATM operator — told Cointelegraph that more people from all walks of life are becoming interested in crypto, particularly the underbanked community. “We’ve entered a new era where traditional bank accounts can be replaced with digital wallets, and because of this, more people are choosing to buy crypto with cash.”

Cash is easy and familiar for the mainstream

While there are many reasons as to why certain individuals would want to buy cryptocurrency from an ATM versus an exchange, most of the common use cases seem to be focused on easy and quick access to crypto.

For instance, one piece of research claims that over 50 million Americans are likely to buy cryptocurrency in the next year. Findings also indicate that a lack of understanding is the biggest barrier for new investors. Specifically, 20% of those surveyed said that they still don’t understand how to buy cryptocurrency.

Derek Muhney, director of marketing and strategy at Coinsource — a provider of Bitcoin ATMs — told Cointelegraph that many people looking to get started with crypto value the haptic element of a physical machine, such as an ATM. According to Muhney, Bitcoin ATMs are the best way to buy Bitcoin for an increasing target group of unbanked and underbanked. While this may be obvious, Muhney further pointed out that this has become the case with baby boomers and millennials, noting that these users make up the lion's share of Bitcoin ATM transaction volumes to date.

Echoing Muhney, Ben Weiss, CEO of CoinFlip — a Chicago-based Bitcoin ATM operator — told Cointelegraph that Bitcoin ATMs function primarily to make crypto digestible and attainable to new users who may not understand the intricacies of cryptocurrency or blockchain technology. To demonstrate this point, CoinFlip conducted a Twitter poll to find out how many people on Crypto Twitter have used a Bitcoin ATM. CoinFlip’s survey revealed that 72.2% of individuals never used a Bitcoin ATM, while only 27.8% noted they have.

Weiss explained that he wasn’t surprised by these results, noting that Crypto Twitter is composed of people who are passionate about cryptocurrency and have a relatively deep understanding of the technology. As such, Weiss commented that mainstream users are the primary customers of Bitcoin ATMs:

“Using a crypto ATM is the simplest way of purchasing crypto. You don't have to wait weeks or months for verification and will normally receive your crypto before you get back to your car. People understand ATMs, and crypto ATMs are not too different of a concept.”

Alex Mashinsky, CEO and co-founder of Celsius — a centralized cryptocurrency lending platform — further elaborated on this, noting that there are many groups of customers in the crypto space. For example, Mashinsky explained that hodlers will never sell their crypto, while speculators aim to time the market. Yet, Mashinsky noted that “tourist” users will be the ones to likely leverage a Bitcoin ATM. Mashinsky added:

“For temp workers and the 25% of those who do not have a bank account, a Bitcoin ATM is cheaper than Western Union or a bank wire. This segment will continue to grow and take market share from traditional finance companies that overcharge their clients.”

Bitcoin ATMs will grow, but security concerns remain

Considering the fact that over 6% of United States households, or a total of 14.1 million American adults, are currently unbanked, Bitcoin ATMs will undoubtedly multiply moving forward. The estimate, further supported by Muhney, suggests that “more than 100,000 Bitcoin ATMs will be installed by 2025 and that the industry will grow to beyond $1.7 billion."

While this is notable for the growing cryptocurrency sector, security challenges may hamper adoption. John Jefferies, chief financial analyst of CipherTrace — a cryptocurrency intelligence firm — told Cointelegraph that as recently as last year, Bitcoin ATMs operating in Canada did not require any form of Know Your Customer, or KYC, processes. “None of these Bitcoin ATMs required KYC, making these the wild west,” Jefferies said. As the crypto space matured, Jefferies noted that the majority of Bitcoin ATMs in the U.S. now require KYC from users:

“KYC is critical for these money service businesses to become a part of the traditional financial system. We are now seeing a lot of Bitcoin ATM vendors (those who make the hardware), along with the operators, focused on compliance.”

Jefferies added that this has also become the case due to examinations from entities like the Internal Revenue Service, or IRS: “Similar to traditional money services businesses, Bitcoin ATM providers will get visited by examiners. The IRS does this for the Financial Crimes Enforcement Network.”

Moreover, Jefferies pointed out that CipherTrace is starting to see Bitcoin ATM providers take an interest in a solution to comply with the travel rule. The Financial Action Task Force's (FATF's) Travel Rule came into effect for Virtual Asset Service Providers, or VASPs, in 2020. The Travel Rule requires regulators and VASPs to collect and share customer data during transactions.

According to Jefferies, CipherTrace is working with six Bitcoin ATM operators to apply a travel rule solution called "Traveler" to specifically address the counterparty VASP's due diligence that is demanded by the FATF guidelines. While the Traveler tool was recently implemented by some exchanges like Binance and, Jefferies shared that CipherTrace is making the product more viable for Bitcoin ATM operators to be compliant.

Related: Crypto cowboys: Texas counties welcome Bitcoin miners with open arms

Although this may be, some industry experts believe that Bitcoin ATMs are just as safe as traditional ATMs. Jonathan Ovadia, CEO and co-founder of Ovex — a South Africa cryptocurrency exchange — told Cointelegraph that based on the company’s research, “we don’t believe Bitcoin ATMs will be used for extremely large transactions.” As such, Ovadia noted that there is no need for specialized security compared to regular ATMs, both in terms of physical and cybersecurity.

Eric Grill, CEO of Chainbytes — a Bitcoin ATM manufacturer — told Cointelegraph that the company operates, charging a hefty 17% fee per transaction. Grill shared that the average transaction amount on machines was $1183.92 for July 2021 and $1325.98 for June 2021.

This is an important point to consider in terms of security. Jefferies shared that Bitcoin ATMs processing large transactions may be suspicious. For example, Jefferies referenced that in August 2019, Kunal Kalra, also known as “shecklemayne,” was operating an unlicensed money services business where he exchanged U.S. dollars for Bitcoin and vice versa. According to Jefferies, Kalra worked on commission and only dealt with customers willing to exchange at least $5,000 per transaction.

Despite these concerns, Bitcoin ATM providers remain optimistic. Muhney stated that Coinsource end-users have already invested “several hundreds of millions" into Bitcoin. “This is why we are extremely bullish about the next phase of spike adoption, similar to 2017/2018, which we expect for the second half of 2021.”

Bitcoin records rare 10-day winning streak as BTC price taps $42K ceiling

Bitcoin records rare 10-day winning streak as BTC price taps $42K ceiling

Daily chart data shows the strength of the current rally as a longstanding resistance level finally shows signs of falling.

Bitcoin (BTC) shot to new highs of $42,400 on July 31 in a surprise attack on range resistance which sellers failed to squash.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin seals 10 green candles in first since 2012

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining for a tenth straight day across exchanges, reaching $42,420 on Bitstamp.

A subsequent cooling-off preserved most of the gains, with Bitcoin circling $41,900 at the time of writing, still up over 8% over the past 24 hours.

In trading circles, talk focused on a rare performance for the Bitcoin daily chart — ten green candles in a row, after all, last occurred in 2012.

Even eight days of consecutive gains are a rarity, while nine have been seen only twice. Depending on the exchange, the data can be slightly different — Coinbase saw 12 green candles one after another in May 2017, one Twitter user noted.

Regardless, conspicuous was on one hand Bitcoin's strength, and on the other the lack of bearish selling pressure.

A glance at short activity on major exchange Bitfinex underscored the current mood, with hardly any trader willing to take on the risk of shorting the Bitcoin spot price at current levels.

BTC/USD shorts 1-day candle chart (Bitfinex). Source: TradingView

"BTC just tapped 42k as resistance for the first time since the epic drop in May," popular trader Scott Melker summarized on the day.

"Time to pay attention."

Cracks appear in Bitcoin's ceiling

As Cointelegraph reported, $42,000 represents the final resistance hurdle in Bitcoin's multi-month trading range. Since coming down from all-time highs and falling through the level, which also represents the previous all-time from February, it has acted as a de facto unchallenged price ceiling.

Related: Price analysis 7/30: BTC, ETH, BNB, ADA, XRP, DOGE, DOT, UNI, BCH, LTC

Above, orderbook data shows, little lies in Bitcoin's way — $45,000 or even $47,000 could easily be next, a hypothesis also supported by whale investing behavior.

BTC/USD buy and sell positions (Binance) as of July 31. Source: Material Indicators/ Twitter

According to the popular and historically accurate stock-to-flow Bitcoin price forecasting models, spot price should still be much higher — $94,839 on Saturday.

Nonetheless, its creator, PlanB, has said that a monthly close of at least $47,000 for BTC/USD in August would be enough for progress to remain on track.

The future of DeFi is spread across multiple blockchains

The future of DeFi is spread across multiple blockchains

As the decentralized space is growing at lightning speed, projects need to adapt to the multichain future or risk becoming irrelevant.

Long stuck in the shadows of Bitcoin (BTC), Ethereum (ETH) finally took hold of the market in 2020 during the decentralized finance summer. Designed to recreate traditional financial systems with fewer middlemen, DeFi is now being used across lending, borrowing, and the buying and selling of tokens. The majority of these decentralized applications (DApps) are run on Ethereum, which saw activity on the network increase during 2020. This activity also trended upwards due to yield farming, also known as liquidity mining, which enables holders to generate rewards with their crypto capital.

But as activity on Ethereum increased, so too did the network’s transaction fees. In May, it was reported that Ethereum gas fees were skyrocketing. It’s intuitive that engaging in DeFi is only worthwhile when handling capital that exceeds any network fees. Consequently, it soon became clear to users that the blockchain was verging on unusable.

Related: Where does the future of DeFi belong: Ethereum or Bitcoin? Experts answer

Without a doubt, Ethereum remains the most active and populated blockchain, but other potential players are popping up, providing a viable alternative to Ethereum. For example, layer one protocols such as Binance Smart Chain (BSC) and Solana (SOL) are attracting billions in assets under management, whereas layer two solutions such as Polygon (MATIC) are capturing Ethereum’s disgruntled users’ attention due to their compatibility with Ethereum-based protocols. This is in addition to delivering low fees and quick transaction speeds. However, despite Ethereum gas fees reaching a high over the past year and the growth of faster networks, none of these chains have killed Ethereum yet.

It’s because of this, as we enter the second half of 2021, that the narrative of “Ethereum vs. the rest” is starting to change — developers are realizing the value of a cross-chain future rather than having to pick one blockchain to build on. It’s no longer a case of creating a chain with a competitive edge, but of ensuring all chains can work interchangeably to improve the industry.

Related: A multichain future will accelerate innovators and entrepreneurs

Benefits and drawbacks of a multichain future

Due to its prominence and longstanding presence in the market, Ethereum has the first-mover advantage and remains the most significant blockchain within the DeFi ecosystem as of Q1 2021. But with other chains gaining momentum, it is these alternatives to Ethereum that are providing the benefits of faster transaction speeds and significantly lower fees.

The introduction of other chains isn’t necessarily a bad thing, even for Ethereum fans. After all, a multichain ecosystem brings additional space for new protocols to enter, each with a strong user base. Each new chain also creates a new community, vacancies for services, and an individual identity and culture.

Related: Too little, too late? Ethereum losing DeFi ground to rival blockchains

One possible drawback, depending on how you look at it, is that some blockchains require unique programming languages, such as JavaScript, Rholang, Simplicity, Rust or Solidity, which may present a barrier to entry for developers. At the same time, however, different coding languages can present a new way for developers to solve a problem. And as the blockchain space moves further towards multichain, it may inspire developers to create and innovate as they witness the diversity in viable blockchain projects. It’s for this reason that projects which don’t innovate could be seen as lagging and abandoned by their community.

Not only that, but separated blockchains create innovation silos, presenting challenges to progress and adoption. Joining the multichain future together can be seen as seamlessly connecting these specialized groups. This could be seen as a difficult objective to achieve in the traditional tech world, but cryptocurrency and blockchain are challenging these existing infrastructure monopolies, and this industry has the ability to pioneer an ecosystem that works cohesively rather than competitively.

Related: Life beyond Ethereum: What layer-one blockchains are bringing to DeFi

More blockchains, more value

It’s inevitable that projects will eventually connect multiple blockchains, making the transfer of information from one chain to another seamless. In fact, the cryptocurrency market and multichain adoption is less of a zero-sum game than is often cited. And, as the multichain future becomes more apparent, it will only become clearer that the additional functionality, usability and scalability it brings is contributing to the onboarding of new users.

Related: The great tech exodus: The Ethereum blockchain is the new San Francisco

Rather than viewing the existence of a multichain future with doubt, it should be looked on positively. There are plenty of different smart contract platforms in the crypto ecosystem, all of which impact the blockchain space in terms of accessibility, economic viability and innovation. Blockchains may be separated right now, but everything will come together in the end, creating an interoperable and fast network of protocols that fulfils our daily needs. The beauty of this is that we won’t have to worry about how we’re transacting or what we’re transacting on, as it won’t matter.

We’re still far from achieving the end goal of interoperability, but once it’s achieved mass adoption, the crypto industry will be unstoppable. And, as the sector continues to grow, projects are finding that they have to adapt to a multichain future soon or risk getting left behind.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Michael O’Rourke is the co-founder and CEO of Pocket Network. Michael is a self-taught iOS and Solidity developer. He was also on the ground level of Tampa Bay’s Bitcoin/crypto meetup and consultancy, Blockspaces, with a focus on teaching developers Solidity. He graduated from the University of South Florida.

Traders forecast $3K Ethereum price but derivatives data suggests otherwise

Traders forecast $3K Ethereum price but derivatives data suggests otherwise

ETH might have rallied 35% off its $1,750 low but derivatives data shows pro traders are not so bullish.

Ether (ETH) rallied 35% over the past ten days and reclaimed the critical $2,300 support, but the crucial $2,450 local top hasn't been tested since June 17. Part of the recent recovery can be attributed to the London hard fork, which is expected to go live on Aug. 4. 

Traders and investors view the EIP-1559 launch as a bullish factor for Ether price because it is expected to reduce gas fees. However, Ether miners are not thrilled with the proposal because the proof-of-work model will no longer be necessary after ETH2.0 goes live.

The network fees will automatically be set, although users can choose to pay extra for faster confirmation. Miners (or validators in the future) will receive this additional fee, but the base fee will be burned. In a nutshell, Ether is expected to become deflationary.

Ether price in USD at Bitstamp. Source: TradingView

While it's difficult to identify the main drivers of the recent rally, it is possible to gauge professional traders' sentiment by analyzing derivatives metrics.

If the recent price move was enough to instill confidence, the futures contracts premium and options skew should clearly reflect this change.

Bullish sentiment is missing even after futures contracts entered contango

By analyzing the price difference between futures contracts and regular spot markets, one can better understand the prevalent sentiment among professional traders.

The 3-month futures should trade with a 6% to 14% annualized premium on neutral to bullish markets, which is in line with stablecoins' lending rate. By postponing settlement, sellers demand a higher price, and this causes the premium.

Whenever the futures premium fades or turns negative, it raises an alarming red flag. This situation is also known as backwardation and indicates that there is bearish sentiment.

September Ether futures premium at OKEx. Source: TradingView

The above chart shows that the Ether futures premium flipped negative on July 20 as Ether tested the $1,750 support. However, even the massive rally up to $2,450 wasn't enough to bring the September contract premium above 1.3%, equivalent to 8% annualized.

Had there been some excitement, the annualized futures premium would have been at 12% or higher. Therefore, the stance of professional traders seems neutral right now and is flirting with bearishness.

To exclude externalities exclusive to the futures instrument, traders should also analyze options markets.

Options markets confirm that pro traders are not bullish

Whenever market makers and whales lean bullish, they will demand a higher premium on call (buy) options. This move will cause the 25% delta skew indicator to shift negatively.

On the other hand, whenever the downside protection (put option) is more costly, the 25% delta skew indicator will become positive.

Ether 1-month options 25% delta skew. Source:

Readings between negative 10% and positive 10% are usually deemed neutral. The indicator had been signaling 'fear' between May 20 and July 19 but quickly improved after the $1,750 support held.

Despite this, the current 25% delta skew at negative 4 isn't enough to configure a 'greed' indicator. Options markets pricing is currently well balanced between call (buy) and put (sell) options.

Both derivatives metrics suggest that professional traders gradually exited the 'fear mode' on July 20, but they are nowhere near bullish.

Currently, there is little confidence in the recent rally from these metrics' perspective, which is understandable considering the risks presented by the upcoming hard fork and the uncertainty caused by unsatisfied miners.

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.

5 easy ways crypto investors can make money without needing to trade

5 easy ways crypto investors can make money without needing to trade

Want to get paid to HODL? Here are five easy ways crypto investors make money without trading.

Large price jumps and 100x gains get a lot of attention from pundits and influencers in the cryptocurrency community because they offer the hope of overnight riches.

In reality, these opportunities are few and far between. Not to mention, only a handful of traders actually manage to catch these waves and cash out in time to lock in life-changing money. 

Fortunately, catching a large price surge is far from being the only way for crypto investors to make a buck, and the recent rise of decentralized finance (DeFi), nonfungible tokens (NFTs) and the slow march of mainstream crypto adoption provides a near endless stream of investment opportunities.

Let’s have a look at five different ways crypto holders can make an easy buck without actually having to trade.


Staking, which rewards users for locking tokens on a protocol as collateral for transaction validation, is one of the best ways to earn a yield on assets held in a crypto-based portfolio.

In August, the Ethereum network will switch from a proof-of-work (PoW) consensus model to a proof-of-stake (POS) model, and Ether (ETH) holders who stake in the Eth2 contract can earn up to 5.83%.

Under this new PoS system, token holders actively participate in transaction validation by locking their coins in nodes on the network that then vie for a chance to verify transactions, create new blocks and receive the rewards that come along with it.

Data from Staking Rewards shows that a stake of 10 Ether currently results in a weekly earning of 0.0075 ETH, worth $17.96 at current prices, and a yearly earning of 0.3876 ETH which is currently worth $933.69.

Calculated staking rewards for Ether. Source: Staking Rewards

The percentage yield for Ether decreases as more tokens are locked on the network so the final earnings may change.

Currently, the top five crypto assets by staked value are Cardano’s ADA, Ether, Solana (SOL), USD Coin (USDC) and Polkadot (DOT).

Top 5 crypto assets by staked value. Source: Staking Rewards

All things considered, staking provides one of the best low-risk opportunities in crypto to gain a bigger stack regardless of market sentiment or performance, while also helping to support the network through transaction validation.

Lend crypto for low-risk yields

The growth of the DeFi sector led to the development of a diverse crypto lending ecosystem, where users can deposit their cryptocurrencies to various lending protocols in exchange for rewards in the underlying token or in different assets like Bitcoin (BTC), Ether and various altcoins.

Aave is the top lending protocol at the moment and the platform offers yield opportunities for tokens on the Ethereum and Polygon network with its native coin MATIC.

Top 7 Aave lending pools on the Polygon network. Source: Aave

The chart above shows the top seven lending pools available through the AAVE protocol on Polygon and rewards are paid in Wrapped MATIC (WMATIC), with the current deposit annual percentage yield (APY) being 1.92% and a yearly estimated APY of 6.1%.

Other top lending protocols include Curve (CRV), Compound (COMP), MakerDAO (MKR) and (YFI).

Lending offers another low-risk way to earn a decent yield, in both bull and bear markets, on tokens that don’t offer user-controlled rewards like staking.

Earn fees and tokens from providing liquidity

Liquidity provision is one of the primary components of a DeFi platform, and investors who choose to provide funds to emerging platforms are often rewarded with high percentage returns on the amount staked, as well as a percentage of the fees generated by transactions within the pool.

Rewards for ETH-USDC liquidity pool on QuickSwap. Source: QuickSwap

As seen in the image above, providing liquidity to an Ether/USDC pool on QuickSwap will entitle an investor with a percentage of the $23,098 in total daily distributed rewards and a fee APY of 33.81%.

Ideally, long term investors would be wise to research the available pools on the market, and if a liquidity pair comprised of solid projects or even a stablecoin pair such as USDC/Tether (USDT) looks appealing, it has the potential to be the blockchain version of a savings account that offers far better yields than can currently be found in any bank or legacy financial institution.

Maximize returns by yield farming

Yield farming is the concept of putting crypto assets to work in a way that generates the highest yield possible while minimizing risk.

As new platforms and protocols emerge, they offer high incentives to depositors as a way of mining for liquidity and increasing the total value locked (TVL) on the protocol.

Rewards for STKGHST-WETH LP deposits on DinoSwap. Source: DinoSwap

The high yields offered are generally paid out in the native token of the platform as seen above, where a user has deposited a liquidity pool token for an STKGHS-WETH pair which has an APR of 189.2% and has so far generated a reward of 3.312 DINO.

For long investors who hold a portfolio filled with an assortment of tokens, yield farming is a way to gain exposure to new projects and obtain new tokens without having to spend new funds

Related: Here’s why DinoSwap’s (DINO) TVL rose above $330M a week after launch

NFT and blockchain gaming make ‘play-to-earn’ a reality

Blockchain gaming and NFT collecting is another way to produce a return on a crypto portfolio without spending new funds.

Axie Infinity is the most popular example at the moment, and the in-game play involves trading, battling, collecting and breeding NFT-based creatures known as Axies.

Playing Axie Infinity generates rewards in the form of Smooth Love Potion (SLP), an in-game token that is used in the Axie breeding process and also trades on major cryptocurrency exchanges. Users can swap SLP for dollar-based stablecoins or other large-cap cryptocurrencies.

According to data from Your Crypto Library, “Today, the average player earns between 150 to 200 SLP per day,” which, at current market value, is worth between $40 and $53.50.

In some parts of the world, that amounts to the income provided by a full-time job. For this reason, Axie Infinity has seen a massive uptick in user activity and new accounts in countries like Venezuela and Malaysia.

Crypto investing, lending, staking and play-to-earn blockchain games provide a much higher return on investment than traditional banks offer on savings and checking accounts. As the blockchain sector grows, it’s likely that investors will continue to flock to platforms that offer high yields for engaging with the protocol.

Want more information about trading and investing in crypto markets?

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