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We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!
This week, our 6 Questions go to Dominik Schiener, a co-founder of the Iota Foundation, a nonprofit organization, and the creator of the Tangle, a permissionless, multi-dimensional distributed ledger designed as a foundation of a global protocol for all things connected.
Dominik Schiener is a co-founder and the chairman of the Iota Foundation, one of the largest and greenest cryptocurrency ecosystems in the world. The Iota Foundation’s mission is to support the research and development of new distributed ledger technologies, including the Iota Tangle. Raised in Italy, Dominik oversees partnerships and the overall realization of the project’s vision toward the machine economy. He is a strong advocate for research-based, community-vetted, transparent developments in the cryptocurrency sector.
I’d go all-in on startups focused on the intersection of Web2 and Web3. We’re in a transitional period that’s going to last for a long time, and embracing this ongoing transition is smart from both a financial and technical point of view. Companies helping the centralized world move into the decentralized one — and vice versa — are the present and the future. This includes crypto banking, fiat gateways, NFT marketplaces, and so on. The biggest barriers to adoption are user experience, not scaling. Focusing on and investing in UX is the road to mass adoption and to the new world of Web3.
I’m drawn to people who have endured and risen above hardship in their personal and professional lives and have become more capable leaders as a result. Naturally, I’m inspired by people like Vitalik Buterin within the crypto space, but I also admire Ray Dalio, whose innovations — and thinking — transformed traditional finance long before crypto even existed.
I’m increasingly enthusiastic about algorithmic stablecoins. I’m fascinated by their mechanics and their possibilities. They are, of course, highly experimental, and some may just fail, causing investors to lose millions. Even so, these stablecoins have enormous potential to onboard retail investors and offer a new way to transact. I believe they are crucial to mainstream adoption, so I certainly hope they’re likely to succeed.
I’m a mountain guy. I grew up in the Alps, so I’m probably a little biased. My favorite places are remote areas in the mountains, where you’re far from civilization and can really take a moment to step back, reflect, and appreciate the beauty of our world. That kind of tranquility is the best way to take a break from the crypto madness. I love being in a place where the only reminder of the modern world is the occasional airplane overhead. I love Südtirol [in northern Italy] in particular.
I’m going to go with Avatar. It’s such a stunningly gorgeous and fully realized world. I love the look of that movie and the deep importance it places on the interconnectedness of nature. If I’m a nature guy on Earth, I figure I’m a nature guy on other planets, too. Living in an alternate reality and becoming part of the Na’vi tribe sounds like an amazing exploration adventure.
Financial literacy still isn’t the priority — it should be within education, and the sooner that changes, the better. I also think there needs to be a bigger emphasis on philosophy and, more specifically, ethics. Science and technology are developing more rapidly than ever before in human history, and we simply can’t have a generation that is unable to think critically about the human element of these developments. We know about the dangers of technical advancement without ethical boundaries — there are countless dystopian movies about exactly this! — and its importance cannot be understated.
That we never forget why we’re here. It’s not about getting rich quick. It’s about removing centralization and abuses of power to lead billions of people to prosperity and abundance through decentralized technologies.
Bitcoin hit a 2022 low at $17,580 on June 18 and many traders are hopeful that this was the bottom, but (BTC) has been unable to produce a daily close above $21,000 for the past six days. For this reason, traders are uncomfortable with the current price action and the threat of many CeFi and DeFi companies dealing with the loss of user funds and possible insolvency is weighing on sentiment.
The blowback from venture capital Three Arrows Capital (3AC) failing to meet its financial obligations on June 14 and Asia-based lending platform Babel Finance citing liquidity pressure as a reason for pausing withdrawals are just two of the most recent examples.
This news has caught the eyes of regulators, especially after Celsius, a crypto lending firm, suspended user withdrawals on June 12. On June 16, securities regulators from five states in the United States of America reportedly opened investigations into crypto lending platforms.
There is no way to know when the sentiment will change and trigger a Bitcoin bull run, but for traders who believe BTC will reach $28,000 by August, there is a low-risk options strategy that yields a decent return with limited risk.
Sometimes throwing a “hail Mary” pays off by leveraging ten times via futures contracts. However, most traders are looking for ways to maximize gains while limiting losses. For example, the skewed “Iron Condor” maximizes profits near $28,000 by the end of August, but limits losses if the expiry is below $22,000.
The call option gives its holder the right to acquire an asset at a fixed price in the future. For this privilege, the buyer pays an upfront fee known as a premium.
Meanwhile, the put option provides its holder the privilege to sell an asset at a fixed price in the future, which is a downside protection strategy. On the other hand, selling this instrument (put) offers exposure to the price upside.
The Iron Condor consists of selling the call and put options at the same expiry price and date. The above example has been set using the August 26 contracts, but it can be adapted for other timeframes.
To initiate the trade, the investor needs to short 3.4 contracts of the $26,000 call option and 3.5 contracts of the $26,000 put option. Then, the buyer needs to repeat the procedure for the $30,000 options, using the same expiry month.
Buying 7.9 contracts of the $23,000 put option to protect from an eventual downside is also required. At another purchase of 3.3 contracts of the $38,000 call option to limit losses above the level.
This strategy yields a net gain if Bitcoin trades between $23,850 and $35,250 on August 26. Net profits peak at 0.63 BTC ($13,230 at current prices) between $26,000 and at $30,000, but they remain above 0.28 BTC ($5,880 at current prices) if Bitcoin trades in the $24,750 and $32,700 range.
The investment required to open this strategy is the maximum loss, hence 0.28 BTC or $5,880, which will happen if Bitcoin trades below $23,000 or above $38,000 on August 26. The benefit of this trade is that a reasonable target area is covered, while providing a 125% return versus the potential loss.
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.
Bitcoin (BTC) miners may have already sparked a “capitulation event,” fresh analysis has concluded.
In an update on June 24, Julio Moreno, senior analyst at on-chain data firm CryptoQuant, hinted that the BTC price bottom could now be due.
Miners have seen a dramatic change in circumstances since March 2020, going from unprecedented profitability to seeing their margins squeezed.
This, CryptoQuant suggests, precedes the final stages of the Bitcoin sell-off more broadly in line with historical precedent.
“Our data demonstrate a miner capitulation event that has occurred, which has typically preceded market bottoms in previous cycles,” Moreno summarized.
Miner sales have been keenly tracked this month, with the Bitcoin Twitter account even describing the situation as miners “being drained of their coins.”
— Bitcoin (@Bitcoin) June 18, 2022
“For miners, it’s time to decide to stay or leave,” CryptoQuant CEO, Ki Young Ju, added in a Twitter thread last week.
When it comes to other large BTC holders, however, the picture appears less clear.
After whales bought up liquidity near $19,000, CryptoQuant’s Ki this week heralded the arrival of “new” large-volume entities.
Outflows from major United States exchange Coinbase, he noted, reached their highest since 2013.
Time to welcome new #Bitcoin whales.
— Ki Young Ju (@ki_young_ju) June 23, 2022
Trader and analyst Rekt Capital, nonetheless, reiterated doubts about the strength of overall buyer volume, arguing that sellers were conversely still directing market movements.
Bitcoin’s 200-week moving average (MA), a key support level during previous bear markets, has yet to see significant interest from buyers despite the spot price being around $2,000 below it.
“Current BTC buy-side volume following the extreme sell volume spike is still lower than the 2018 Bear Market buyer follow-through volume levels at the 200-week MA. Let alone March 2020 buy-side follow-through,” he told Twitter followers.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Recently, bad news has abounded, and the resulting fear is real. DeFi is looking dead, altcoins completed their lifecycle by returning back to $0 (I guess that’s a joke), and Bitcoin’s (BTC) price fell lower than even the smartest brains in the room expected.
A unifying theme of the most recent bull market appears to have been greed. Everyone got too confident and too greedy, and it shows by the amount of debt and leverage that is being unwound as 3AC, Celsius, BlockFi and Voyager contend with the real threat of going belly up.
It seems Bitcoin miners and BTC mining companies also were not immune to the sentiment of over-exuberance and the belief that “up only” was a fact until Bitcoin’s price hit the long-awaited $100,000 target most analysts stuck to.
Historically, Bitcoin miners are an elusive species that are quiet and unwilling to spill the sauce to the public, but Cointelegraph had some success in securing a moment with HashWorks CEO and founder Todd Esse to discuss the current state of the mining industry and his predictions on where the market might head over the next year.
Cointelegraph: Bitcoin is trading below the realized price, and it is also below the miners’ cost of production. The price is also below the previous all-time high and the hash rate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational purchasing opportunity, thoughts?
Todd Esse: I do believe that current prices represent an investment opportunity as current prices likely don’t reflect profitable mining margins as the industry is currently structured. In our opinion though, prices may continue to remain under pressure as the mining industry and associated leverage around it is reset or re-configured.
CT: What is the state of the BTC mining industry right now? We’ve heard that leveraged miners are going bust, sub-optimal, inefficient miners are turning off, gear could be in the process of being seized or liquidated at firesale. Listed miners’ stock price and cash flow is also looking pretty bad right now. What’s happening behind the scenes and how do you see this impacting the industry of the next six months to a year?
TE: In our opinion, mining still offers an attractive investment yield for those who are selective about approach and have long term goals. Much of the mining capacity currently installed is with ASICs in the sub 85 TH/s range and with energy contracts that haven’t been managed as a traditional large scale energy consumer would.
We’ve seen this movie before, right? Easy money + poor discipline = unbalanced risks. We could easily see a protracted period here where the mining industry consolidates and allows different investment capital to enter into the market.
CT: Exactly why is now a good or bad time to start mining? Are there particular on-chain metrics or profitability metrics that you’re looking at or is it just your gut feeling?
TE: Typically periods of distress and shifts in the accepted paradigm will offer advantages to new entrants. Our sole focus is to take advantage of these emerging opportunities.
CT: If I have $1 million in cash, is it a good time to set up an operation and start mining? What about $300,000, $100,000, $10,000? At the $40,000 to $10,000 seed fund range, why might it not be a good time to set up an at home or industrial-sized mining farm?
TE: If you had $1 million cash, it might be a good time to opportunistically pick up some BTC. Fully loaded production prices for the major miners aren’t far from these levels. I see it as difficult to maintain these levels until ASICs drop further in value. I think the time for home mining has largely passed as a result of new dynamics in the energy industry.
I would encourage those looking for yield to seek mining opportunities with companies like Compass Mining or other “cloud” miners whose equipment and energy contracts may yield an attractive investment as these dynamics change.
We believe as a result of current and expected disruptions in the market as well as greater acceptance of immersion solutions, there will continue to be attractive opportunities to build mining operations at scale.
CT: Does Bitcoin price dropping below its previous all-time high for the first time ever have any significant future ramification on the fundamentals of the asset and industry?
TE: In our opinion, no. Historical comparisons are difficult to rely on when dealing with an emerging commodity, and transformative technical asset such as BTC. Miners are producing BTC, given a set of inputs (computing power, access to capital, and energy) and the output price doesn’t always reflect the cost of production at all.
Mining BTC at scale, fundamentally, isn’t very different from producing oil and gas or other commodities. Improvements in drilling technology transformed North America’s position in global energy markets.
When oil and gas prices crashed during the early stages of the pandemic, no one questioned whether or not we needed to drive cars or heat our homes anymore. Mining supports the blockchain, and proof-of-work computing will prove to offer our grid the ability to transition to a renewable energy future.
We are committed to being an innovative and constructive participant in this industry as it continues to mature.
Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
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