Binance double feature on Hackernoon

Two Years In, Binance Shows No Signs of Slowing Down

It seems hard to believe Binance is only just turning two years old. The rise of the world’s biggest cryptocurrency exchange has been nothing short of stratospheric. Barely a day goes by when some new Binance innovation doesn’t make the news. No other exchange can claim to be so prolific in releasing new features.  

Most recently, two pretty significant new developments have emerged. 

Extending Fiat-to-Crypto On-ramping

For much of its history, Binance has made its name as a pure crypto-to-crypto exchange with one of the biggest range of altcoin pairings available. However, perhaps in a bid to compete with Coinbase, it’s now stepping up its game in the fiat-to-crypto on-ramping. 

Most recently, the company announced the public launch of Binance Singapore, which allows users to buy into BTC, ETH, or the platforms native BNB token, using Singapore dollars. This came after the initial soft launch in April. The press release also alluded to Binance’s plan to “grow the Singapore blockchain ecosystem” together with Vertex, it’s local partner in the launch. 

This launch comes hot on the heels of the news that Binance is planning to open a regulated US exchange together with FinCEN-regulated BAM services as a local partner. At the same time, Binance took steps to geo-block US users from its platform, which surely indicates that the exchange is exercising caution towards the US regulators. 

Long-Awaited Margin Trading

Another of this week’s announcements is the public launch of Binance’s Margin Trading platform. Margin trading enables traders to take short positions on assets, as well as realize gains at multiples above market fluctuations. The margin trading feature will be accessible through a newly optimized interface, and users will be able to move funds between their primary Binance wallet and their margin wallet without any transaction fees. 

Margin trading was already in the pipeline after it emerged in beta on an invitation-only basis back in May. Although it only appeared to be available on Binance’s spot markets, a derivatives offering seemed to be the inevitable next step. Binance CEO Changing Zhao (CZ) confirmed this at the recent Asian Blockchain Summit in Taipei, telling the crowds that they would soon have access to long and short positions with 20x leverage. 

Could the Latest Binance News Buck the Markets? 

The launch of margin trading, and soon a futures platform, offers up some interesting scenarios for the crypto markets overall. Given the size of Binance’s user base, it could cause a surge on Bitcoin if traders decide to speculate on the length of the current bull run. However, the opposite could also happen. In May 2018, the Federal Reserve Bank of San Francisco published a letter pointing out that the start of the 2018 Bitcoin bear market coincided with the CME/CboE launch of Bitcoin futures to institutional investors. The letter implied that enabling these investors to take short positions caused the market to crash. Therefore, could Binance’s margin trading launch end up having a similar effect? 

It would be bad news for the crypto markets if so, and not just because of it would put an end to the current bull run. Overall, it seems like bad news for an industry based around decentralization that one exchange could end up having a disproportionate effect on the crypto markets overall. Some corners of the crypto universe are already in discussion about whether or not Binance is too powerful, so bringing about a downturn could cement that view. 

Regardless of the market impact on BTC, it seems that these two latest developments will be only good news for the BNB token, which defied market trends in 2018 and has only increased further in 2019. Market sentiment seems largely positive, even despite a temporary dip caused by the news that Binance was closing its doors to US clients. 

Future Outlook

Even with the rapid pace of development so far in 2019, there is still plenty for Binance’s supporters to look forward to. The launch of the Binance blockchain and decentralized exchange DEX offers plenty of scope for further expansion into more dApps and token listings. The futures platform could potentially add more trading pairs over the coming months. 

Perhaps most intriguingly, Binance’s Strategy Officer Gin Chao confirmed that the company is also in discussions with Facebook about potentially listing the Libra cryptocurrency. He further elaborated that Binance is considering becoming a validator node on the Libra network. 

Assuming the regulators allow Zuckerberg’s plans to come to fruition, this would be a massive coup for Binance, as the current list of blockchain and crypto participants is thin, to say the least. Furthermore, it would put Binance in the position of one of the few firms bridging the gap between blockchain and big tech. 

Overall, the rapid pace of development in 2019 has cemented Binance’s position as the world’s top cryptocurrency exchange. “Top’ in this case doesn’t necessarily have to mean volume. It refers to the company’s ability to continue innovating and expanding, making headlines week after week. At just two years old, it seems that Binance is well and truly into its stride. 

Get further news and analysis on www.globalintelhub.com 

Is Bitcoin’s rise a testament to its credibility?

You have probably seen the news that Bitcoin has made a comeback.  For the Bitcoin Bears, this is a sign that Bitcoin is here to stay.  Some are deep rooted in their opinions and will never change.  Others simply want to wait and watch and their opinion depends on the price.  The higher the price, the higher the credibility of Bitcoin.  The price of Bitcoin certainly has gone up based on demand.

While many of the ICOs have fizzled and the SEC has cracked down on frauds, the Crypto “Majors” have seen a resurgence in recent months, with Bitcoin leading the way.  Also many stablecoins have been launched, once again proving that Crypto may be included in the money of the future. 

While no one knows who created Bitcoin, some have speculated with solid evidence that it was a faction inside the US Government.  The implications of this are far reaching, as it is also the US Government that implicitly backs the US Dollar which is the Global Reserve Currency used in the entire world, even in US enemy states like North Korea and Iran.

We also need to remember that as most Crypto Currencies are denominated in Bitcoin, when Bitcoin rises so does Ripple, Ethereum and other BTC denominated pairs.  The most prominent Bitcoin news agency is Coindesk, who mentions that:

Bitcoin’s break above a key price hurdle looks to have set the tone for a retest of recent highs above $13,800.  The top cryptocurrency bu market cap printed a UTC close above $12,061 on Monday, invalidating a bearish lower highs pattern created on July 4, according to Bitstamp data.  Further, with Monday’s close, BTC cemented the bullish view put forward by the strong dip demand below $10,000 observed a week ago.  More importantly, the latest breakout looks sustainable, as bitcoin’s dominance rate (percentage of the market in relation to other cryptocurrencies) has ticked up to 64 percent, the highest level since April 2017, according to data source CoinMarketCap.

Another point to note about Bitcoin is that because it is traded at a number of venues the price may vary from exchange to exchange, and trading data is provided ‘as is’ on a voluntary basis.  This isn’t necessarily a detriment, but this has been a sticking point on the SEC when denying applications for Bitcoin ETFs, due to the impossibility of market surveillance. 

But is this move up in Bitcoin proof of the credibility of the anonymous Crypto Currency or is it a flight to safety, a perception by a new generation of investors (Millennials) who have lost the trust of Wall St. ?  Or is it simply an indication that actually the US Dollar is just going down? 

Here’s a point that only Forex traders will understand, when one currency goes up another goes down.  The US Dollar has the tendency to go down due to the Federal Reserve constantly creating new electronic money.  Bitcoin goes up only by US Dollar purchases, as other fiat currencies are denominated in US Dollars (including the Euro).  So perhaps this is a flight out of fiats away from Forex and into Crypto?  That’s a likely scenario.

In any event, Global Intel Hub will be monitoring this situation closely, and as always we will continue to report on the latest analysis whenever a significant market change happens.

What we are going to be looking at in the coming months is FIX trading of Crypto which we believe will greatly impact Crypto liquidity.

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The Trump Paradigm Shift

Whatever your bias or special interest, it’s important to understand what’s going on here which is beyond markets and politics.  The world is changing at a pace so fast few can understand what’s really going on.  Taking into account the fact that the world is not presented in real form (fake news) it becomes even more confusing to the average reader.  We have touched on this in our book Splitting Pennies and want to dive deeper here.

Trump is a good example because he’s the first politician that’s not a politician.  He’s not the first, Ross Perot made a stab in 1992 and there have been others.  It’s not about Trump – it’s about paradigm shift.  This term was popularized in Thomas Kuhn’s must read book “The Structure of Scientific Revolutions” which is the basis of the thinking of Silicon Valley.  The proof of his hypothesis was Apple Computer (AAPL).  Recently, we have disruptive unicorns displacing traditional industries, such as the Uber’s and the Lyft’s.

Uber has changed New York City and changed the taxi business forever, for better or worse.  Perhaps Uber has changed the idea of what is transportation.  And just like Bitcoin, this isn’t about tackling the Establishment it’s about technological change and its impact on society.

Going back to politics, the political establishment failed, just like the Taxi industry failed to innovate.  Their last ditch attempt to appease the masses, Obama, was an intelligent attempt but failed short to capture real ‘change’.  Obama proved to be no better than all of his white brothers, or in fact worse. 

Post Trump, politics will never be the same.  Here’s a simple 2020 prediction for you all.  My insurance agent told me ‘no one has a crystal ball’ which was his pitch saying the Democrats are talking about Socialism and are going to raise taxes so here’s my 2020 prognosis:

Trump is going to win in a landslide, and the Republicans are going to take both houses.  They may lose a few battles but overall in 2020 they are going to win the war, and cause the Democratic Party to permanently fracture from the loss.  Democrats still don’t understand that they have disenfranchised themselves from the majority.  They still think that “Well, we’re half the country” and haven’t adopted to the new times.  They may control the media and much of our society but they’ve proven to be associated with wacky conspiracy theories like the Russia Hoax for example.

Democrats are like Taxi drivers 10 years ago saying that Uber will never work because they aren’t professionals.  Trump isn’t a professional politician.  You know what?  They’re right!  That’s why he’s so popular.  And he’s not for sale to the highest bidder, like a Clinton.  But Democrats still have hope, and in 2020 they are going to lose that.  No one knows what that means but a likely scenario means a significant reduction of the party and an upsurge in new upstart parties.  My guess is that the next President is going to be either Arnold Schwarzenegger or a business magnate to emerge such as an Elon Musk (not Elon Musk, just sayin’ – some business innovator, perhaps the founder of an Uber of the future).  What we can say for sure, for the next few generations we aren’t going to have any more Clintons or Bush-types in the White House. 

They failed to evolve and adapt paradigm shift.  Trump seized the moment.  This may all sound far-fetched.  But if you told me during Obama the next President would be Trump I would have thought you were nuts.  If you would have told me in 10 years there wouldn’t be a single Yellow Cab in New York City I would have said you’d be nuts.  I remember staying on high floors at various hotels like the Plaza looking down on the yellow cabs thinking they looked like little ants.  There were almost no street cars in New York City during the 80’s, it was mostly cabs.

So what is a Paradigm Shift, according to Kuhn:

Kuhn challenged the then prevailing view of progress in "normal science". Normal scientific progress was viewed as "development-by-accumulation" of accepted facts and theories. Kuhn argued for an episodic model in which periods of such conceptual continuity in normal science were interrupted by periods of revolutionary science. The discovery of "anomalies" during revolutions in science leads to new paradigms. New paradigms then ask new questions of old data, move beyond the mere "puzzle-solving" of the previous paradigm, change the rules of the game and the "map" directing new research.^[1]  For example, Kuhn's analysis of the Copernican Revolution emphasized that, in its beginning, it did not offer more accurate predictions of celestial events, such as planetary positions, than the Ptolemaic system, but instead appealed to some practitioners based on a promise of better, simpler solutions that might be developed at some point in the future. Kuhn called the core concepts of an ascendant revolution its "paradigms" and thereby launched this word into widespread analogical use in the second half of the 20th century.

The modern description is ‘going viral’ where society reaches a critical mass, and changes.  It’s the difference between MySpace and Fakebook.

The world is changing so fast, many entrenched industries are failing to adapt, like the political system.  Some are evolving.  If you look at the trend of Organic Foods, you can see big Ag adapting as much as they can.  FinTech is adapting rapidly.  And about politics, Big Tech gets it, in fact Facebook admits that it was used to manipulate an election:

In keeping with their spectacular reputation of violating privacy and rigging elections, Facebook has said that it removed "hundreds of accounts" from Facebook and Instagram that were used to influence elections in Africa, according to CNN. Only it wasn't Russia who was behind this latest intervention, but Israel.

Disruptive tech is changing the way we live and do business.  We Work is changing the way we think about office space.  Hyperloop is building a transportation system so fast you can get from LA to Silicon Valley in less than an hour (some estimates as low as 30 minutes).

A lot of the tech coming out seems like science fiction, but again if you look at where we are today compared to where we were only 10 years ago, things don’t seem so fantastic.  And the best example is Trump – who is the last person anyone would have guessed to be President of the United States of America.

So next time one of the Trump haters starts crying and twitching or in desperate need of counseling, remind them that it’s not about Trump it’s about Paradigm Shift, and that the Political Class failed to deliver any candidate other than corrupt grafters and killers.  The political system as setup by the founding fathers is actually working – as it allows for evolution; just like Wall St. is working. 

Capitalism is an evolutionary ecosystem by nature, if you have a poor model you fail.  Amazon, Google, Microsoft, and others have created wealth and thousands of jobs, and not to mention enable millions of other businesses to achieve productivity with the simple tools they offer.  What did the government offer to us lately?  More rules, regulating people out of business, raising taxes, sponsoring foreign wars we don’t need, etc. etc.

The political establishment simply failed to adapt.  It’s hard to lie to people now, even with ‘fake news’ and ‘deep fakes’ there’s this little problem called the internet, where facts can be seen as facts.  It’s not a court and that’s the great part about it – people decide on their own. 

Stupidity is the strongest human characteristic.  I believe if the Director of the CIA got on TV and told the public all the truth’s they’ve been hiding 99% of the population wouldn’t buy it.  They would think it’s a prank, or a lie, or a “Russian Spy”.  People tend to see what they believe in and what they want to see, not what’s real.  This has been proven by Quantum Physics, which is individually known as the observer phenomenon:

In physics, the observer effect is the theory that the mere observation of a phenomenon inevitably changes that phenomenon^[1]. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner. A common example is checking the pressure in an automobile tire; this is difficult to do without letting out some of the air, thus changing the pressure. Similarly, it is not possible to see any object without light hitting the object, and causing it to reflect that light. While the effects of observation are often negligible, the object still experiences a change. This effect can be found in many domains of physics, but can usually be reduced to insignificance by using different instruments or observation techniques.  An especially unusual version of the observer effect occurs in quantum mechanics, as best demonstrated by the double-slit experiment. Physicists have found that even passive observation of quantum phenomena (by changing the test apparatus and passively 'ruling out' all but one possibility), can actually change the measured result. A particularly famous example is the 1998 Weizmann experiment.^[2] Despite the "observer" in this experiment being an electronic detector—possibly due to the assumption that the word "observer" implies a person—its results have led to the popular belief that a conscious mind can directly affect reality.^[3] The need for the "observer" to be conscious is not supported by scientific research, and has been pointed out as a misconception rooted in a poor understanding of the quantum wave function ψ and the quantum measurement process,^[4][5][6] apparently being the generation of information at its most basic level that produces the effect.

The interesting characteristic about politics is that these phenomenon are palpable and changing society in real time.  To fully understand what’s going on in our society, don’t study current events – study Philosophy, Epistemology, History, and Hard Science.

We will conclude with one of the greatest quotes ever:

Enjoy the ride!

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80% of the stock market is now on autopilot

• From CNBC June 2019:
• Passive investments control about 60% of the equity assets, while quantitative funds -- those relying on trend-following models instead of fundamental research -- now account for 20% of the market share, according to estimates from J.P. Morgan.
• Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, the bank said.

Traders work on the floor at the New York Stock Exchange, May 23, 2019.

Brendan McDermid | Reuters

It’s no secret that machines are taking up a bigger and bigger share of investing, but the extent of their influence is approaching shocking proportions. It is as high as 80%, according to one major investing firm.

Passive investments such as index funds and exchange-traded funds control about 60% of the equity assets, while quantitative funds, those which rely on trend-following models instead of fundamental research from humans, now account for 20% of the market share, according to estimates from J.P. Morgan.

This means so much of stock trading is now in the hands of automated buyers and sellers that the market is increasingly sensitive to headlines and more prone to sharp price swings, many notable investors believe.

Omega Advisors founder Leon Cooperman previously said computer trading is creating a  “Wild West” with the markets, calling for an investigation by the Securities and Exchange Commission.

DoubleLine Capital CEO Jeffrey Gundlach has taken a shot at passive investing, saying it is causing widespread problems in global stock markets. He called it a “herding behavior.”

“I’m not at all a fan of passive investing. In fact, I think passive investing ... has reached mania status as we went into the peak of the global stock market,” Gundlach said in December.

While algorithmic models have gained popularity on Wall Street, low-cost passive vehicles keep raking in assets from Main Street. Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, according to J.P. Morgan.

“The pace of outflows from Active is at a cycle high while the pace of passive equity inflows has bottomed and [is] beginning to reaccelerate,” Dubravko Lakos-Bujas, J.P. Morgan’s chief U.S. equity strategist, said in a note on Friday.

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