Fundstrat: Bitfinex, 1 Billion US Dollar Increase in IEO Could Reduce Pressure on Bitcoin (BTC)

by



[ad_1]

On Saturday, reports revealed that Bitfinex, one of the largest existing cryptographic exchanges, unveiled the official plan to divest for a billion dollars worth of assets called LEO. While this sounds trivial, a senior analyst warns that this could hurt Bitcoin (BTC).

Related reading: Bitfinex Premium continues to "rally" even after bitcoin (BTC) has stabilized, undernourishment fears the basement

Bitfinex sells $ 1 billion worth of LEO

According to NewsBTC, Dovey Wan, a founding partner of Primitive Ventures, revealed last week that Bitfinex was planning to raise $ 1 billion through the sale of the company's branded encryption chips via an initial offer of parts on platform, more commonly referred to as an IEO. Some, however, took this news as a joke, pointing out that there was no way that the Hong Kong-based stock exchange would adopt such a strategy, especially after last week's news that its legal and financial status was precarious.

By a published document by the Chinese investor Zhao Dong in cryptocurrency, reported for the first time by The Block, however, the IEO is quite legitimate. As Wan revealed, Bitfinex intends to sell $ 1 billion worth of cryptocurrency. Surprisingly, though, The Block's Larry Cermak said that $ 600 million of this round of funding had already been allocated to private investors, who would be industry insiders, Bitcoin whales, and venture capitalists. Asian risk.

Regarding the token itself, the paper suggested that the use of LEO could be very similar to that of Binance Coin (BNB). Specifically, Bitfinex would spend up to 27% of its monthly profits to buy LEO chips, thus playing a dividend role for the holders. It has also been said that if the exchange recovers the $ 850 million that came back from the capital Crypto, a Panamanian crypto-centric payment processor currently in the midst of an intense legal debacle, and thousands of Bitcoin lost in a historical piracy, Bitfinex will be able to buy back LEO with most of this capital.

In terms of utility, LEO can be used to reduce the rates they pay on the crypto-stock market. The lessee fees for crypto-crypto pairs, loan rates and withdrawal fees will all be allegedly subsidized for LEO holders.

Negative Bitcoin price action catalyst

While this news seems independent of the larger cryptocurrency market, Fundstrat researcher Tom Lee postulated that the $ 1 billion increase could actually be a price action catalyst for Bitcoin. . The prominent commentator says the new $ 1 billion chips will have a negative impact on BTC and other digital assets as the market must "absorb" an influx of LEO chips.

As Lee notes, "Bitcoin miners sell $ 7 million a day, so a $ 1 billion IEO equals 142 days of miners' sales in a day."

Lee, however, seems to be optimistic overall, despite the news about LEO. According to previous reports from this outlet, Fundstrat's co-founder stated that the fact that the BTC rallied despite the "FUD" Tether may well be an early sign of the "end of winter crypto". ". He adds that if Bitcoin continues to hold on, not reacting to constant flooding of information about Tether for two more weeks, he "would be inclined to argue that it [another] reason [why] The crypto-winter is over. This is not the only development that makes the analyst optimistic.

During a recent segment of CNBC, Lee took a look at blockchain statistics, particularly those of Bitcoin. He estimated that the transaction value of chain transfers has become positive over twelve months, which means that BTC continues to consistently use the intended purpose, despite the brutal market conditions. Even more positive is that the daily average transactions processed on the Bitcoin chain are at unprecedented highs, but the transaction cost market has not exploded yet.

Secondly, the long-time cryptocurrency optimist was interested in the fact that BTC rose above the 200-day simple moving average. Throughout Bitcoin's history and that of other tradable liquid assets, the technical level mentioned above has been considered a sort of "decisive point", since above this mark indicates that bulls have the upper hand. Combine this with the fact that Bitcoin's daily chart has recently printed a gold cross, which means that the 50-day simple moving average has been crossed over a 200-day period. This is another reason, according to Lee, that "spring" could finally be integrated with digital resources. through the council.

Finally, and this is undoubtedly the most important point, the growth of trading activity in cryptocurrency markets, especially over-the-counter counters. Citing in camera conversations, Lee explained:

"We interviewed OTC brokers, who play a very important role in facilitating institutional investments. They all talked about a 60% to 70% increase in activity / number of customers and trading volume per customer. Fundamentals are improving; the techniques improve and the activity of HODLers too. "

Featured image of Shutterstock



[ad_2]

Source link