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Cryptocurrency exchange Bybit shuts up shop in UK in compliance with FCA ban

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Singapore-based cryptocurrency derivatives exchange Bybit announced on Friday that it would be suspending services for its customers n the United Kingdom. Bybit offers a range of high-end trading products for cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC) and more.

The move follows a blanket ban on all retail cryptocurrency derivatives trading by the Financial Conduct Authority, and U.K. customers will be given until March 31 to close out positions and withdraw their funds from the platform, a company announcement stated.

The post also affirmed the company’s intention to continue dialogue with regulators in the hope of opening up shop in the U.K. once more.

“We request your immediate cooperation in this matter. We regret this situation, and will seek dialogue with regulators to explore options. We hope to be able to earn the privilege to serve you again in the future,” stated the announcement.

Going forward, new sign-ups to the exchange using U.K.-based mobile phone numbers or IP addresses will be rejected automatically.

In October 2020, the FCA issued an announcement declaring that all retail cryptocurrency derivatives trading, encompassing products such as options, futures and exchange-traded notes, would be banned. The ban went into effect in early January 2021.

Remarkably, the FCA’s decision to ban these products flew in the face of feedback received from industry consultants. The FCA canvassed the opinions of trade bodies, national authorities, exchanges and legal representatives, with 97% of respondents arguing against the prospect of a ban.

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Litecoin briefly flips XRP as 4th largest crypto amid Ripple–SEC spat

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Litecoin (LTC) and XRP briefly traded places in market capitalization rankings over the weekend, highlighting the impact of the recent lawsuit against Ripple filed by the United States Securities and Exchange Commission.

The so-called “flippening” happened early Sunday when Litecoin’s market cap hit $9.95 billion following a more than 12% surge in price. XRP, meanwhile, had declined in excess of 25% over a 24-hour trading period. 

LITECOIN JUST FLIPPED XRP pic.twitter.com/yjBq15JtpV

— HODLGeorge (@BitfuryGeorge) January 3, 2021

At press time, XRP was back in the fourth position with a market cap of $10.5 billion. Litecoin, meanwhile, was worth just over $9.9 billion. In the last seven days, Litecoin’s price has gained roughly 14% while XRP has tumbled nearly 20%.

Litecoin’s price has more than doubled since mid-December, highlighting Bitcoin’s gravitational pull on the broader market. XRP was also on a tear before the SEC announced a lawsuit against Ripple for allegedly violating securities laws. Peak to trough, XRP price tumbled more than 73%, according to CoinMarketCap data.

XRP’s road to recovery is likely to be a bumpy one as investors await the outcome of the litigation — a process that could take several years to play out. Without a settlement with the SEC, the value of XRP could struggle to regain momentum. A wave of delistings at major exchanges also threatens XRP’s rebound potential.

Meanwhile, Litecoin’s ascendancy likely has more to do with Bitcoin than any change in the project’s underlying fundamentals. Cointelegraph highlighted an apparent surge in altcoin volume in December as Bitcoin’s price zipped past $20,000.

The total market cap of all cryptocurrencies rose to all-time highs over the weekend, peaking at around $907 billion.

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Four cryptocurrency block reward halvings to look out for in 2021

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Block reward halvings cut the rate at which new coins are generated on a given blockchain by 50%. Such events, known jokingly as “halvenings,” have long been anticipated by cryptocurrency traders as catalysts for pushing up the price of their cryptocurrency holdings.

Past attempts to predict when Bitcoin’s (BTC) price would increase in relation to halvings have proved inconsistent at best. However, few would be willing to quickly discount the mechanisms described in the law of supply and demand. All things being equal, as the number of coins available on the market decreases, the demand for those coins — and thus, the price of each — increases.

With that in mind, here are four cryptocurrency projects that are due to undergo block reward halvings in the coming year, when their issuance rate will be cut in half.

Verge (XGV)

Verge (XVG) is set to undergo a halving on Jan. 25 when its chain reaches a block height of 4,700,000. At this point, the current reward of 200 XVG which is issued to miners every 30 seconds will be cut to 100 XVG.

With just over 11 days to go before the halving, it may be assumed that the opportunity to get ahead of the reduction in Verge’s supply has already passed. However, capitalizing on block reward halvings has never been an exact science, and often times a coin fails to react to the event until after the fact.

The XVG price hit an all-time high of $0.30 back in December 2017, before suffering a near three-year slide down to the $0.001 mark by 2020. Since the winter surge that sent Bitcoin to a new all-time high, however, Verge’s fortunes have reversed. The coin recorded growth of 219% between November and the time of writing.

Tomochain (TOMO)

Tomochain’s (TOMO) halving will occur on Feb. 7, when the number of TOMO coins issued yearly will be reduced from 2 million to 1 million.

The Tomochain blockchain features block times of two seconds, and every 900 blocks make up an epoch. For each epoch, a total of 250 coins are issued to miners at the current time. This figure will be halved to 125 coins in February.

Launched in 2017, Tomochain uses a proof-of-stake consensus mechanism and is compatible with the Ethereum Virtual Machine. The upcoming halving will be only the second in the coin’s history, and also its last. From here on, the TOMO issuance rate will remain the same until the coin’s total supply of 100,000,000 has been reached.

Vertcoin (VTC)

Vertcoin’s (VTC) block reward halving is scheduled for Dec. 8, at which point the number of VTC issued to miners will be reduced from 25 to 12.5 per block.

Vertcoin was forked from Litecoin (LTC)  — itself a Bitcoin fork — in 2014 as a response to the application-specific integrated circuit, or ASIC, machines that were invented for Litecoin mining the same year. Vertcoin aims to remain ASIC-resistant and can be mined with a GPU.

Once a feature of the top 100 coins by market capitalization, Vertcoin now finds itself ranked in the mid-500s after a 98% decline from its all-time high in December 2017.

Ravencoin (RVN)

Although not technically scheduled to take place until January 2022, Ravencoin’s (RVN) first block reward halving is just 12 calendar months away and will see the issuance rate cut from 5,000 RVN to 2,500 RVN per block.

Launched in 2018, Ravencoin is geared toward the registration and trade of real-world assets on the blockchain. In 2018, the then little-known project received a surprise investment of “millions of dollars” from online American retail giant Overstock.

Ravencoin reached an all-time high in the $0.08 range in June 2019. Today, the coin trades at a price of $0.016 — a 48% increase since recent lows in November 2020.

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Record $584M Litecoin futures open interest signals institutional inflow

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Litecoin (LTC) might be 60% below its December 2017 all-time high at $420, but that hasn’t stopped its futures contracts open interest from reaching a record $584 million. This makes LTC the seventh-largest cryptocurrency by market capitalization and it ranks third in derivatives, behind Bitcoin (BTC) and Ether (ETH).

Litecoin futures aggregate open interest. Source: Bybt.com

As shown above, LTC futures aggregate open interest increased by 285% over the past three months. One should keep in mind that such an event is not necessarily positive since futures contracts require both a buyer (long) and a seller (short). Nevertheless, this increasing interest allows even more substantial players to participate.

Another interesting development is the recent Chicago Mercantile Exchange (CME) Ether futures contract listing serving as indication that other cryptocurrencies might follow suit soon.

Litecoin is the third-largest holding on the Bitwise 10 Crypto Index Fund (BITW), and the assets under management in this fund recently surpassed $780 million.

Grayscale investment funds holdings. Source: Grayscale

Grayscale Litecoin Trust (LTCN) also adds another $210 million worth of assets under management issued initially to institutional investors. These growing figures provide clear evidence of Litecoin’s potential.

Longs are still underwater

By looking at daily liquidations, investors can better assess how traders have been using leverage. Unexpected price swings will tend to cause higher liquidations than those ongoing trends, such as the recent Litecoin 15% rally to $174.

LTC futures aggregate daily liquidations. Source: Bybt.com

In the chart above the largest green candle represents longs having their positions forcefully terminated on Jan. 10 as LTC price dropped 32% in 18 hours.

On the other hand, the Feb. 5 rally to $164 liquidated $56 million worth of shorts, but this is still no match to the January’s $128 million bearish movement.

Volume failed to sustain the most recent rally

Litecoin’s failure to break the $186 peak from Jan. 10 was followed by a downturn in volume, which indicates a lack of interest at the current levels. LTC’s total trading volume decreased by 12% over the last thirty days.

LTC spot exchanges volume, USD. Source: Coinalyze.net

The current $584 million in futures interest open interest is substantial when matched against LTC’s $980 million daily average trading volume on spot exchanges.

From a price analysis point of view, both Litecoin and Bitcoin Cash’s price action appear to lag bearish and bullish moves from Bitcoin. Retail and institutional traders are likely aware of this relationship.

Traders should also consider given Etheruem’s high gas fees and Bitcoin’s rising transaction costs, an extended Litecoin rally could be driven by investors looking for faster transfers and cheaper fees.

If Litecoin’s privacy features are eventually implemented, this could finally give the altcoin the much needed push to break $200 and targets near $300 aren’t outrageous.

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.

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