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Network Congestion and More: Why this Wall Street Firm is Shorting Ethereum (ETH)

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Ethereum

The Ethereum (ETH) platform was the pioneer of smart contracts that enabled the crypto-verse to enjoy decentralized applications as well as ICOs. This aspect of the platform is the reason the digital asset skyrocketed from obscure levels of $8 only last year in January, to $1,400 around January 17th this year. This is a percentage increase of 17,400% in 12 months. ETH has since declined to current levels of $478. Some crypto enthusiasts have even started considering Ethereum Classic (ETC) as a possible investment option.

Scalability issues

This is due to the fact that the ETH platform is yet to solve critical scalability issues that have peaked due to network congestion whenever a new decentralized application is launched. Cryptokitties is the best-known DApp that congested the ETH network. There is also Shrimp farm and Pepe the farmer.

The issue of network congestion is the reason the New York-based Tetras Capital, has shorted Ethererum (ETH). Shorting an asset usually involves borrowing a certain amount of it, selling it and waiting for it to tank in the markets. Once it does so, you rebuy the borrowed amount at a cheaper rate, and you keep the difference.

The firm has even released a 41-page ‘thesis’ as to why Ethereum might stumble along the way and not continue gaining as many crypto-traders and enthusiasts had believed. Key to why ETH will struggle, is the persistence of technical issues, decentralization issues and possible regulation on surrounding ICOs that will be deemed as securities offering. Tetras believes the hype around the digital asset known as Ethereum, is not justified.

Timothy Young, a former entrepreneur who is shorting ETH through his San Francisco family office, Hidden Hand Capital, had this to say about his decision with respect to ETH:

“In the long term, I think they’ll solve a lot of scaling challenges. But in the short term, there’s a disconnect between the price and underlying technology. Just because something is a good idea doesn’t mean it’s a good investment.”

For those who have been keen followers of Global Coin Report, we have put forth the idea that Ethereum faces steep competition from coins belonging to projects that have solved the scalability and smart contract vulnerabilities evident on its platform.

To begin with, there is Tron (TRX) which has a new mainnet that was developed using Java programming language and is in the process of launching a Virtual Machine that will be compatible with that of Ethereum as well as other blockchain platforms in the near future. TRON can currently handle 2,000 transactions per second. The project plans on decentralizing the web 100%.

There is also Zilliqa (ZIL) that was created specifically to solve the security vulnerabilities on the Ethereum platform using a new programming language called Scilla on its own mainnet. ZIL currently handles 2,828 transactions per second with only 6 shards. The mainnet that is yet to be launched aims at increasing the shards.

In conclusion, the Ethereum platform needs to evolve with the times and solve the two problems on its platform as outlined above. Such issues are the reason why institutional investors and individual investors are shorting the digital asset.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Naoki Nakashima via Flickr

Altcoins

My Crypto Heroes Announces Issuance of MCH Governance Token

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Tokyo, Japan, 24th November, 2020, // ChainWire //

My Crypto Heroes is happy to announce the issuance of MCH Coin as an incentive to players in the My Crypto Heroes ecosystem, aiming to allow them to craft a “User-oriented world”. The MCH coin is available on Uniswap with a newly created pool with ETH. 

My Crypto Heroes is a blockchain-based game for PC and Mobile. It allows users to collect historic heroes and raise them for battle in a Crypto World. Officially released on November 30th, 2018, MCH has recorded the most transactions and daily active users than any other blockchain game in the world.

What is MCH Coin?

MCH Coin is being issued as an ERC-20 Standard Governance Token. The issuance began on November 9th, 2020, with 50 million tokens issued.

Of the funds issued, 40% are allocated to a pay for on-going development and as rewards for advisors and early investors. 10% are allocated to marketing and the growth of the ecosystem, and 50% are allocated to the community. The Distribution Ratio of the MCH Coin is subject to change via a governance decision.

The MCH coin will be used as a voting right as part of the ecosystem’s governance, with 1 coin being 1 vote. It will also be used for in-game utilities and payments. Additional information can be found here:

https://medium.com/mycryptoheroes/new-ecosystem-with-mchcoin-en-a6a82494894f

During December 2020 the first governance…

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Altcoins

Rewards Platform StormX Offers 50% Crypto Cashback Bonus for Thanksgiving

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Singapore, Singapore, 23rd November, 2020, // ChainWire //

Blockchain-based rewards platform StormX has released a seasonal promotion for its award-winning Crypto Cash Back App. The promotion will allow app users to earn a 50% bonus on top of their cashback between Thanksgiving Day and Cyber Monday (November 26-30).

StormX has also introduced a brand-new staking service, allowing users to earn an additional 50% per year when they stake STMX tokens. The native ERC20 token of the StormX ecosystem, STMX has a total supply of 10 billion and is available to trade at many of the world’s top exchanges, including Binance and Bittrex.

“With Bitcoin’s price approaching its all-time high, interest in cryptocurrencies has renewed, though some people believe it’s now too expensive to buy in,” said StormX CEO and Co-Founder Simon Yu. “What we have done is create an easy way for such individuals to accumulate bitcoin, ethereum and other cryptocurrencies via everyday shopping.

“We’re also excited to provide users with the ability to earn greater rewards simply by staking their tokens.”

Since the StormX mobile app launched its Shop feature with over 700 stores in February 2020, some 400,000 unique users have been added to the rewards platform. StormX has also witnessed over 50% month-on-month growth for sales. The app is available for download on the App and Google Play Stores, and can be downloaded as a browser add-on from the Chrome Web…

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Altcoins

BITTREX GLOBAL CONFIRMS FREE TRADING AND LISTING FOR TOP DEFI TOKEN

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Valduz, Liechtenstein, 17th November, 2020, // ChainWire //

International cryptocurrency exchange promotes free trading and no gas fees for leading DeFi tokens

17th November 2020 — Bittrex Global GmbH. announced today 8 new DeFi tokens will be listed this week including:

  • UMA (UMA)
  • Aave (AAVE)
  • Balancer (BAL)
  • REN (REN & renBTC)
  • Kyber Network (KNC)
  • Band Protocol (BAND)
  • YF Link – (YFL)

Bittrex Global’s users can trade all of their DeFi  tokens with no trading or gas fees until 2021. The decision to enable free trading on Bittrex Global for DeFi tokens  follows on from the 1,000% growth of the DeFi asset class over the course of 2020.

The decision to enable free transactions will see more investors enter the Blockchain Act’s digital asset regulatory system, supervised by the Financial Market Authority in Liechtenstein (FMA) under the Due Diligence Act which requires traders to comply with the KYC/AML/CFT standards.

“The last year has seen huge growth in DeFi as an asset class and a number of significant milestones completed,” said Bittrex Global’s CEO Tom Albright. “As the asset class matures and more institutional and professional investors look at the fundamentals, we are likely to see increased demand and higher trading volumes for DeFi in 2021.

We’re really excited about what we’re seeing in the space and want to see these DeFi projects grow and help them build stronger platforms through increased adoption. Offering free trading fees…

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