Bitcoin
The Race Is On To Frontrun The U.S. Government
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2 days agoon
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adminWith the 2024 election all but final, it’s clear Donald Trump, the soon-to-be 47th President of the United States, will be the most pro-Bitcoin leader in U.S. history
The big question remains, however: How effective will he be in operationalizing his strategy?
At Bitcoin 2024, Trump – as well as Robert F. Kennedy Jr. and Republican Senator Cynthia Lummis – made clear that they want the United States government to buy Bitcoin. All would seem to be in a better position to enact this following the election, as the Republican Party increased its representation in government considerably.
Yet, as for how quickly the U.S. could become active in the market, that’s more murky. Since announcing the bill, Bitcoin has surged from $60,000 to a high of $86,000, and with the U.S. government soon to be buying, there’s even more incentive for the price to escalate.
Herein lies the problem: The United States has essentially telegraphed to the world that it intends to buy an asset that’s in scarce supply, without the concrete ability to do so.
Even with a majority in the House of Representatives and Senate, passing the Strategic Bitcoin Reserve Legislation 2024 will still require an act of Congress, and the agreement of lawmakers. It would seem foolish to expect this won’t be complex or time-consuming.
For example, the bill proposes revaluing the Federal Reserve’s gold holdings, as well as integrating Bitcoin into government financial systems. Questions will likely abound, as will operational challenges. Let’s remember it took all of three years for SEC Staff Bulletins to be adjusted just to value Michael Saylor’s public markets Bitcoin buying spree correctly.
This is the nature of government — slow and bureaucratic. Even with Trump, RFK, and other Bitcoin backers in positions of power, the chances that the U.S. government begins to acquire Bitcoin on January 20, 2025 seem infinitesimal. This is not saying that it won’t happen at all, just that it won’t be timely.
This is even to omit that there could be a prioritization challenge. Maybe the crypto lobby wants to move quickly on the long delayed market infrastructure bill. If so, Congress could become more consumed with the guardrails for exchanges, and redefining securities laws than the question of the strategic reserve. After all, they helped bankroll Trump’s win.
How much could Bitcoin rise in the meantime? With the bull market in full force, I’d argue that institutions and governments have every reason to become active in the market. There are many regimes around the world where the executive branch has enough power to begin accumulating Bitcoin today. They’d be foolish not to frontrun the U.S. government.
El Salvador started this process in 2021, and it has amassed over 5,900 Bitcoin. Yet, it faced 2-3 years of market headwinds, as traders countered its entries. Lest we forget El Salvador bought hundreds of Bitcoin at $60,000, a move that for years was fuel for its enemies.
Trump may yet do his part to boost Bitcoin. Yet, in telegraphing his intentions, he’s almost certainly created conditions that can be exploited by savvy traders.
Time will tell them if, among them, we’ll see other nation states.
Today, I received confirmation that another nation state is currently discussing
– a Bitcoin strategic reserve
– drafting Bitcoin mining regulations so they can improve their electrical grid and better monetize stranded energyIt's happening
— Daniel Batten (@DSBatten) November 11, 2024
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Scaling Bitcoin Practically With Ark Labs
Company Name: Ark Labs
Founders: Marco Argentieri and Simone Giacomelli
Date Founded: June 2024
Location of Headquarters: Europe
Number of Employees: Six full time
Website: https://arklabs.to/
Public or Private? Private
Ten years ago, just after graduating from high school, Marco Argentieri began his career in Bitcoin.
Some of his earliest work in the industry included helping people make remittance payments using bitcoin. From those early days, Argentieri looked at bitcoin more like a currency and less like an investment, and he helped to make it easier for others to use.
“I had many people that were using Bitcoin because it was like a Western Union without the KYC hurdles, and it was much cheaper back then,” Argentieri told Bitcoin Magazine.
“They were not even interested in bitcoin price or volatility. They were just using it to send money overseas,” he added.
Fast forward to 2024, and Argentieri is still focused on the same mission: helping people to use bitcoin cheaply, easily and privately. Though these days he does this in a more sophisticated way via his company Ark Labs, through which Argentieri and his team develop the Bitcoin layer 2 Ark.
What is Ark?
Ark is an open-source protocol created to help scale Bitcoin. The protocol enables users to amortize the cost of a single on-chain transaction across many off-chain swaps. These swaps occur on Ark’s servers, and they’re most well-suited for Bitcoin users who already operate Lightning nodes.
Ark servers were created to remedy the liquidity constraints of Lightning by allowing users to receive funds off-chain in what are called vTXOs (Virtual Transaction Outputs), which alleviates the need to open a channel and/or receive inbound liquidity. The off-chain system runs on Ark servers, which also enable unilateral withdrawals on-chain.
Ark provides and sources the liquidity for the transactions it facilitates via its servers (instead of relying on peers for liquidity the way that Lightning does). Argentieri embraced Ark as a solution after acknowledging Lightning’s shortcomings.
“Looking at a current scaling solution like Lightning, the developers were idealistic in the sense that they were saying ‘Okay, people should hold the keys, which is a big, big, big step. And plus they also run server and plus they also became very expert in liquidity management and whatnot,” explained Argentieri. “I think that hasn’t been a very realistic assumption for how people operate.”
Argentieri founded Ark Labs under the pretext that just as most people didn’t want to deal with using bitcoin on their own for remittance payments 10 years ago, they don’t want to become experts in running Lightning nodes to make payment these days.
“Ark tries to build on top of this assumption that there will be specialized people or specialized enterprises that know how to handle liquidity, and that’s what we call Ark servers,” he explained.
“Then you have like the clients — people that only want to send or receive a payment and use bitcoin. They don’t really want to get into all the complexity,” he added.
“Ark starts by assuming that not everyone is a peer, so there will be a liquidity provider on one side and a user on the other side. We acknowledge that this is the natural course of things — even though we may not like it.”
Argentieri, a pragmatist, acknowledges that while the centralized design of Ark might not be philosophically flawless, it is effective.
“The goal again was to have a protocol that starts working backwards from the user perspective and not from an ideal scenario,” explained Argentieri.
“If you think from the user perspective, they really just want to have a user experience that looks like Bitcoin on-chain. With Bitcoin on-chain, you just have a key pair. You just create a simple key and, boom, you can receive,” he added, detailing how Ark works.
A Bitcoin Interest Rate
UTXO owners can serve as liquidity providers for Ark, which Argentieri sees as an opportunity, especially for those in the West.
“In the Western world, we know people really are attached to this concept of yield,” said Argentieri.
“Westerners cannot just hold sats in cold storage and be good with it. They really feel that they’re missing something,” he added with a laugh.
To both obtain liquidity for Ark servers as well as to quench Westerners’ thirst for yield, those willing can become liquidity providers to Ark in exchange for a small fee.
“Ark is really like a way to introduce a bitcoin interest rate,” posited Argentieri. “Ark can be a discovery mechanism for a real true native interest rate for Bitcoin.”
Argentieri described how liquidity providers can share a small percentage of their bitcoin holdings via what he terms a “warm wallet,” a wallet that enables users to hold the keys but that Ark still has access to.
The yield would come in the form of transaction fees via the VTXO model. While Argentieri said that some may look at this as “financializing bitcoin,” he simply sees it as a win-win, a way to help scale while providing a small reward to those who provide the liquidity to help do so.
Scaling Horizontally
While a layer 2 solution like Lightning helps Bitcoin scale vertically, Ark helps Bitcoin scale horizontally, according to Argentieri.
“With Lightning, we set up one address and then two people can do an infinite amount of transactions between each other — but that doesn’t scale,” he said.
With Ark, a UTXO can provide liquidity for an exponential number of transactions compared to the amount of funds in the UTXO. Argentieri gave the example that 100 BTC can provide liquidity for tens of thousands of virtual transactions.
Not only does Ark enable more transactions, but it’s also usable in many of the ways that Bitcoin itself is usable.
“People are very focused on Ark for payments, but the beauty of Ark is that you retain most of the UTXO capability, which means that you can do 95% of things you can do in Bitcoin right now on ARK,” said Argentieri. “You can do multisig and you can open multiple channels with a single address.”
Argentieri also shared that using Ark is nearly as trustless as using Bitcoin, because even if Ark shuts its servers down, you can still get your sats back on-chain.
“If for any reason the server goes away, censors me or goes offline, the whole virtual transactions tree goes on-chain,” explained Argentieri. “This is what we call unilateral exit.”
The Future of Ark
Argentieri said that Ark is hard at work in preparing to bring Ark Node to market, a B2B enterprise-grade offering that Argentieri described as a “plugin for your LND node” that will help businesses with rebalancing liquidity.
At Bitcoin Amsterdam last month, Ark Labs announced a partnership with Boltz to enable off-chain Lightning liquidity management, with the intention of making swaps faster, cheaper and easier via the Ark Node.
Other than that, it seems Argentieri and the team at Ark Labs have a seemingly countless number of new advancements in the works, though, it will take the company some time to roll these out.
“I’m living inside the action, so I wish to release things every week, but engineering takes time, especially when you are the first one doing these things,” he said.
The plan for now is to remain on mission — the latest state of the mission he embarked on ten years ago.
“We can really have a tangible result within the Bitcoin ecosystem,” concluded Argentieri. “People will see Bitcoin payments get better, and we hope to be part of the reason why that will happen.”
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Bitcoin
Bitcoin FOMO Starting To Peak As BTC Witnesses Massive Spike in Profit-Taking Transactions: Santiment
Published
10 hours agoon
November 13, 2024By
adminA prominent analytics firm says FOMO (fear of missing out)-driven crypto investors are diving head first into Bitcoin just as crypto traders unload their BTC stacks.
Santiment says on the social media platform X that Bitcoin’s rise of close to $90,000 in the last few days has rekindled the optimism of BTC holders.
According to the analytics firm, FOMO for BTC is starting to peak as market participants anticipate a potential Bitcoin surge to a six-figure price level.
“Bitcoin’s rise has been so rapid that traders are now speculating how quickly we see a $100,000 market value. Though this price was beyond comprehension just two-three months ago, the community has quickly changed its tune after a +70% surge since the August 5th crash.”
As Bitcoin prints a new all-time high, Santiment notes that traders who positioned before the upside burst are using the rally to offload their coins.
“Bitcoin is seeing a massive spike in profit-taking transactions as traders attempt to sell at the top. Meanwhile, funding rates on Binance and Bitmex indicate aggressive margin and leverage longs looking to capitalize on further rises.”
Even amid the market exuberance, Santiment notes that Bitcoin can still push to much higher levels as long as deep-pocketed investors continue to add to their BTC stacks.
“In the past year, whale and shark wallets with at least 10 BTC have accumulated a total of 234,150 (now worth $19.76B).
Cryptocurrency’s ascension can largely be attributed to the continued confidence and accumulation of these large key stakeholders. However, the crowd’s consistent FUD (fear, uncertainty and doubt), capitulation, and inconsistent faith in crypto (allowing whales to buy cheap) have also contributed to this historic run.
Currently, euphoria is high (though not nearly at the levels of mid-March when Bitcoin was in its previous all-time high cycle). Expect that prices can climb as long as whales continue buying more and the retail crowd keeps selling them their cheap coins during small dips.”
At time of writing, Bitcoin is trading for $87,964, down over 1% on the day.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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Bitcoin
Bitcoin trading volume hits new all-time driven by retail demand
Published
10 hours agoon
November 13, 2024By
adminBitcoin, the world’s largest crypto asset, hit a record-high trading volume after the cryptocurrency reached a new all-time high of $89,956 on Nov. 12.
According to a Matrixport report, Bitcoin’s trading volume soared above $145 billion in the past 24 hours, marking a new all-time peak that stands roughly 50% above previous highs observed in August and March this year.
In later trading hours, the volume continued to climb, briefly surpassing $170 billion according to Coingecko data.
Analysts at Matrixport noted that the surge in Bitcoin’s volume was driven largely by growing retail investor interest following Donald Trump’s recent victory in the U.S. presidential election.
Trump has vowed to foster a crypto-friendly environment in the U.S., with promises to make it the “crypto capital of the planet,” establish a Strategic Bitcoin Reserve, and replace SEC Chair Gary Gensler—a stance the crypto sector views as a strong bullish catalyst.
Google searches for Bitcoin have also significantly increased, reaching the highest level in five years, with a 78% rise, also confirming the growing public interest in the flagship cryptocurrency.
Further, spot Bitcoin ETFs have also recorded a major uptick following Trump’s victory, bringing in over $4.2 billion, which has helped fuel Bitcoin’s rally to its recent all-time high.
Matrixport’s analysis noted that, based on historical trends, growing retail trading activity often sustains for several weeks, sometimes even months, during market upswings. As such, it is likely that BTC will maintain its bullish momentum in the coming weeks, the report added.
When writing, Bitcoin (BTC) was down 2.61% from its all-time high, as the cryptocurrency appeared to be undergoing a typical correction following its recent rally.
However, BTC proponents, like Michael Saylor, Arthur Hayes, and much of the crypto community, remain optimistic, projecting prices will climb higher, with targets of $100,000 and beyond.
Previously, analysts at Berstein noted that they remain confident in their price target of $200,000, owing to a crypto-friendlier regulatory environment under Trump, and the hopes of a pro-crypto SEC.
On X, one crypto trader pointed to a potential bullish pennant pattern forming on Bitcoin’s four-hour chart, noting a possible target of $103,000 in the near term.
Meanwhile, banking giant Standard Chartered expects BTC will reach $125,000 by January 2025.
However, before its next leg up, pseudo-anonymous analyst Rekt Capital expects Bitcoin’s price to correct further. According to the analyst, Bitcoin has only reached about 50% of its potential gains this bull cycle and expects the peak to be hit sometime around October next year.
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