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Is Crypto Staking Viable In A Crypto Winter?

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Is Crypto Staking Viable In A Crypto Winter?
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It took a while but that crypto winter crypto natives were scared of when digital assets reached all time highs in 2021 is now here. When a coin shilled by Kim Kardashian got dumped so quickly that its holders sued her, people got the first signal that the market was on the edge. However, if that crypto winter memo wasn’t received then, it certainly happened when giants like Celsius, Babel finance, and Three Arrows all got sizable chinks in their armor. The rapidly falling price of Bitcoin is also a sure signal that things could get worse. If you’re a spot trader, these trends are rather worrying.  

Sadly, it’s not only crypto prices that are taking a beating. Right now, many cornerstone Web3 startups are illiquid, and others have simply been hacked into oblivion. The long and short of it is this; things are not looking too good in the cryptoverse. 

Of course, this raises an even more important question. What does one do in a crypto winter? For many, the solution is to cut their losses and lock their wounds. For others, the solution is to go even more in and wait for a crypto summer, as it were. 

But there might be another solution. A solution that’s halfway between selling all your crypto to avoid going into more losses and buying coins that may or may not appreciate. 

Staking, The Hero Crypto Needs

Staking your coins is probably the least adventurous thing you can do in a bull market. Staking your coins during a bull market is tantamount to taking out a huge ad in a national daily and announcing that you aren’t interested in record profits for a while. 

Even in normal market conditions, staking isn’t something investors find attractive. That’s because most of them prefer to have their financial destinies in their hands, and staking takes away that power. By staking coins for a while, they are also taking a huge risk. If the market suffers a shock and the value of the coins suffer a huge drop, the loss in value may outweigh whatever interest they earn on them. 

Given these conditions, it’s not difficult to see why staking is not popular among Institutions and traders. But all these conditions are only valid in a bull market. 

In a bear market, the promise of profits gets so slim that it changes everything. In that sort of market, even the so-called meager returns from staking may prove to be better than any other financial adventure. 

If an investor were to stake their coin throughout the crypto winter, they would have earned at least 10% more than investors who didn’t. Of course, this is contingent on a few factors. The fact, though, is that staking can be a useful middle path to thread for investors. 

Another important problem that may stop people from staking is the capital lockup. As everyone must have known by now, the crypto ecosystem is so optimized for innovation that incredible things can happen within a moment’s notice. If a quick avenue to earn even higher than that profit opens up, the funds will still be trapped because of staking. This powerlessness that staking gives investors is one of the reasons why, even in a crypto winter, many do not consider it. 

Thankfully, the ecosystem has found a way around it through something called liquid staking. Liquid staking leveled the playing field and made staking a viable way to not just invest, but to invest in a crypto winter and possibly come out the other side better off. 

When you liquid-stake a particular token of a coin, the organization you’re staking with offers a derivative of the staked amount. Those derivatives can be used for other DeFi projects on the same network. With this solution, both the investor and team processing the staked funds are satisfied. 

Now, this isn’t to say that liquid staking is perfect. It even has some imperfections. For example, there is the criticism that it completely defeats the purpose of staking. But the good liquid staking does to the ecosystem is a lot more important than any perceived bad. 

Unfortunately, only a few companies have cracked the protocol, and only outliers like Ankr provide both staking and liquid staking. Ankr staking is, in many ways, a first mover in this emerging part of crypto staking. They are one of the very first organizations that allow both retail investors and institutions to stake their funds in a way that is sustainable for business. By providing seamless liquid staking, the company ensures that staking doesn’t have to mean tied down assets. 

It is really easy to stake with Ankr too. All you need to do is pick which asset you’d want to stake from seven leading proof-of-stake networks. That includes Ethereum, Polygon, Binance, Fantom, Avalanche, Polkadot, and Kusama. Next, you enter the amount you want to stake, and which liquid staking derivative you’d like to receive. These derivatives represent your staked tokens and are essentially like receipts that you turn in when you want to unstake your assets. The derivatives will automatically be sent to your wallet, and once you confirm the transaction it’s done. Once you’re done, you can start earning as high as 15.5% APY on your tokens. Yes, even during the crypto winter.

Ankr’s percentage yield on coins is probably the best you’re going to get on the market right now too. For example, Ankr offers as high as 4.13% APY on Ethereum when liquid staking potions like Synthetix offer only 4.08% APY  — which is the best of its class. It’s the same for BNB, where Ankr offers 4.96% APY and the best of the rest offer only 4.26% APY 

But the percentage yield of Ankr’s liquid staking is not even the best thing about it. The best thing is the fact that you can use the derivatives in different ways. For example, you could provide liquidity to DEXs, get farming rewards, and increase your yield by depositing in a vault or borrowing against your liquid staked tokens. 

Perhaps the most reassuring thing about Ankr having this solution is the certainty that your staked funds are completely safe. Ankr deposits them with the best-suited nodes and reduces any risk of slashing. The company’s history and reputation in providing sustainable Web3 solutions precede it, and there’s probably no liquid staking option that is more reliable. 

We are still in early days. As more people discover liquid staking, we’ll eventually come to realize that it’s the most innovative way to not only lock assets but also to survive a crypto winter. 

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Bitcoin Leverage Ratio Hits New ATH, Market In For A Rough Ride?

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On-chain data shows the Bitcoin leverage ratio has surged up to a new all-time high, suggesting the market could be heading towards high volatility.

Bitcoin All Exchanges Estimated Leverage Ratio Sets New ATH

As pointed out by a CryptoQuant post, the funding rate has remained neutral while the leverage has increased in the market.

The “all exchanges estimated leverage ratio” is an indicator that measures the ratio between the Bitcoin open interest and the derivative exchange reserve.

What this metric tells us is the average amount of leverage currently being used by investors in the BTC futures market.

When the value of this indicator is high, it means users are taking a lot of leverage right now. Historically, such values have led to higher volatility in the price of the crypto.

On the other hand, the value of the metric being low suggests investors aren’t taking high risk at the moment, as they haven’t used much leverage.

Now, here is a chart that shows the trend in the Bitcoin leverage ratio over the last few years:

Looks like the value of the metric has been rising up during the last few months | Source: CryptoQuant

As you can see in the above graph, the Bitcoin estimated leverage ratio has shot up recently and has attained a new ATH. This means that investors are taking a high amount of leverage on average.

The reason overleveraged markets have usually turned highly volatile in the past lies in the fact that such conditions lead to mass liquidations becoming more probable.

Any sudden swings in the price during periods of high leverage can lead to a lot of contracts getting liquidated at once. But it doesn’t end there; these liquidations further amplify the price move that created them, and hence cause even more liquidations.

Liquidations cascading together in such a way is called a “squeeze.” Such events can involve either longs or shorts.

The Bitcoin funding rates (the periodic fee exchanged between long and short traders) can give us an idea about which direction a possible squeeze may go in.

CryptoQuant notes that this metric has a neutral value currently, implying the market is equally divided between shorts and longs. As such, it’s hard to say anything about the direction a possible squeeze in the near future might lean towards.

The Bitcoin volatility has in fact been very low in recent weeks, but with such high accumulation of leverage, it may be a matter of time before a volatile price takes over.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.6k, up 2% in the past week.

Bitcoin Price Chart

The BTC value continues to trend sideways | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Discounted Tariff For Crypto Mining To Be Eliminated in Norway

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The finance minister of Norway, Trygve Slagsvold Vedum, has proposed that the government do away with a programme that gives crypto data centers a discounted cost on power.

The Norwegian government made a proposal on Oct. 6 that might affect Bitcoin miners by making data centers in the nation pay the same power tax rates as other sectors. The government determined that the discounted tariff should be gradually eliminated due to increased power consumption in certain regions.

The finance minister said:

“We are in a completely different situation in the power market now than when the reduced rate for data centers was introduced in 2016. In many places, the power supply is now under pressure, which causes prices to rise. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community.”

A proposal to outlaw cryptocurrency mining was first proposed by the Norwegian Red Party in May, but it was ultimately shot down by the Norwegian Parliament. At the time, Arcane Research analyst Jaran Mellerud predicted that Norwegian political parties “likely make one more attempt at increasing the power tax specifically for miners.”

Moreover, according to the Cambridge Bitcoin Electricity Consumption Index, several BTC mining enterprises are now active in Norway, using 100% renewable energy sources and contributing 0.74 percent to the worldwide Bitcoin hash rate. Furthermore, many Sortland inhabitants in the north, meanwhile, have voiced worries about miners environmental hazards, mirroring the views of American legislators.

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Reef Finance (REEF) Continues With Green Days; How Long With This Last?

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Reef Finance (Reef) Continues With Green Days; How Long With This Last?
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  • REEF price continues to show the market how it is done as price trends in the green zone for two straight days. 
  • REEF trades above key resistance as price breaks out of range holding above 8 and 20-day EMA.
  • The price of REEF eyes a recapture of $0.01 as key resistance was flipped into support. 

The price of Reef Finance has continued to show its strength as price trends with double-digit gains against tether (USDT) on two separate days in a row. With the crypto market cap bouncing from its weekly low as the market continued to look promising, the price of Reef Finance was not left out as the price broke out of its long weekly range, with the price trending to a higher height. (Data from Binance)

Reef Finance (REEF) Price Analysis On The Weekly Chart.

The crypto market got relief, as anticipated for most crypto altcoins. However, some altcoins have continued in a range-bound movement with the recent surge in price among most crypto assets. 

The price of REEF in previous months has been stocked in a range box as the price could not break out with real volume. REEF’s price continued to move between the region of $0.004 and $0.003 in a bid to break out and trend higher. 

After a long-range movement, with the month looking good for most altcoins, as many call it the month of Uptober, the price of REEF broke out with good volume from its range as price rallied to a high of $0.065 

REEF has a very good use case and no doubt was a catalyst as the price hit an all-time high of $0.3 before seeing its price rejected to a low of $0.003 as the price bounced off this region for a minor relief.

With the current structure, the price of REEF has been maintained; we could see the price going to a high of $0.01 if the relief state of the market remains for a longer time.

Weekly resistance for the price of REEF – $0.01.

Weekly support for the price of REEF – $0.004.

Price Analysis Of REEF On The Daily (1D) Chart

Daily REEF Price chart | Source: REEFUSDT On Tradingview.com

On the daily timeframe, the price of REEF continues to show strength as the price pulled over a 20% gain despite the market looking to have stalled in price movement; after hitting a daily low of $0.003, the price of REEF rallied to a high of $0.005 where the price was rejected into a range of $0.004-0.003 as price struggled to break out.

On a successful breakout, the price of REEF rallied with much aggression as bulls were in control of the price, pushing the price to a high of $0.0067.

The price of REEF currently trades at $0.0053, just above the 8 and 20-day Exponential Moving Average (EMA). The price at $0.0050 and $0.0048 corresponds to the prices at 8 and 20-day EMA for REEF on the daily timeframe. With the price of REEF holding strong and a possible price continuation, we could see a retest of $0.01 in no time.

Daily resistance for the REEF price – $0.00650.

Daily support for the REEF price – $0.005.

Featured Image From Zipmex, Charts From Tradingview

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Dapper Labs Announces Launch Date of NFT Marketplace

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The Fate Of Nfts In The Crypto Winter
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  • Dapper’s Flow blockchain will manufacture NFT collectibles based on video highlights.
  • The partnership between Dapper and LaLiga was initially announced in September 2021.

Dapper Labs’ LaLiga-themed NFT platform will enter closed beta later this month, following in the footsteps of NBA Top Shot and NFL All Day.

Starting on October 27th, a curated user base will have access to LaLiga Golazos, a digital marketplace where the first pack will be released. Over the course of many months, both Top Shot and All Day conducted closed beta testing with a growing number of users before releasing to the general public.

To compete with other similar sports services, Dapper’s Flow blockchain will manufacture NFT collectibles based on video highlights from LaLiga Golazos games, which will subsequently be sold and exchanged like trading cards.

Spectacular Goal 

The partnership between Dapper and LaLiga was initially announced in September 2021, and the platform was supposed to launch this past summer.

Bilingual NFTs with play-by-play commentary, player performance information, and match statistics will be sold by LaLiga Golazos (“golazos” meaning “spectacular goal” in Spanish). This is the first NFT product that provide multilingual support from Dapper. The era of the league covered by the platform’s collectibles extends all the way back to 2005.

El Clásico (FC Barcelona vs. Real Madrid CF), the Madrid Derby (Real Madrid CF vs. Atlético de Madrid), the Basque Derby (Real Sociedad vs. Athletic Club), and El Gran Derbi (Real Betis vs Sevilla FC) are just a few of the LaLiga rivalries whose moments will be featured in the first digital pack of NFT collectibles, set to release on October 27. 

Promoting the LaLiga Golazos launch are players such as FC Barcelona’s Ansu Fati and Marc-André ter Stegen, and Atlético de Madrid’s Joao Félix and Luka Modri.

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Marathon Digital Reveals $81.3M Exposure To Compute North

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Establishment Of Bitdao’s Layer 1 (L1) Proposed By Bitdao Development Team Headed By Bybit
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