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Global Cryptocurrency Volume Down 75% from January High

As global cryptocurrency markets continue to slide from elusive January highs, it’s becoming increasingly evident that the next “boom” may be further away than many had anticipated. Bitcoin’s price is down nearly 50% from its local January 7 high of US$17,000, and other altcoins have seen average losses of about 60% in that same time frame.

While these numbers are not encouraging indicators, what may be even more significant is the change in trading volume between then and now. Days before the January 7 high, the global trading volume of all cryptocurrencies reached a record US$71.6 billion. In the past few days, 24-hour volume has fluctuated around $15 billion. This drop-off represents an almost 80% reduction in trading activity.

This massive loss of volume suggests two realities. The first is that active traders, who may have accrued massive profits during the bull market, were shaken out due to significant losses and/or newfound patience. It’s no secret that inexperienced or otherwise unsuccessful day traders can take the biggest hits in turbulent markets, and the volume loss indicates that some of these frequent contributors saw crippling blows to their positions. This, of course, is natural, and while it’s not a generally positive influence on markets, it’s nothing to get too concerned with.

The second, much more serious reality is that general interest and conversation about cryptocurrency is down. All the new investors who found out about this great new technology over the holidays are no longer looking to purchase Bitcoin and Ethereum. It’s likely that they, too, have largely been shaken out with the extended downtrend. Google Trends supports this conclusion. Bitcoin saw its largest interest at its all-time high value of US$20,000 in December, and has since seen a drop in search interest of 80%. The term “cryptocurrency” has fared slightly better, but peak interest at the time of the global January 7 high was still 4 times what it is now, which equates to a similarly massive drop in interest of 75%.

General search interest has fallen to the same level as was seen in late October, when the global cryptocurrency market cap was less than half of what it is now. If the relationship between volume and price movements holds true – that is, if volume falls at a rate greater than value does, this does not necessarily suggest coins will similarly drop back to pre-November prices. However, it still suggests that unless interest sees a trend reversal, the bear market could potentially continue for quite some time.

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Andreessen Horowitz’s $300m Crypto Fund Buys Stakes in Stablecoin Project

An upcoming stable coin project featuring a loaning system has bagged a $15 million investment from Andreessen Horowitz. VC Firm to Govern MakerDAO The venture capital firm, with a history of high profile investments into crypto projects, bought 6 percent of the total MKR supply through its $300m crypto fund, a16z crypto. By doing so, the US firm has got the rights to govern the Maker network, which includes MakerDAO, the stable coin firm, and the Dai Credit System as it becomes the first DAO-enabled stable coin project. The investment also marks a16z’s very first strategic purchase in the crypto industry. Katie Haun, general partner at a16z, believes MakerDAO will provide a compelling opportunity to their fund in the crypto-space. The former federal prosecutor, who is also renowned for having led the investigation against Mt Gox and Silk Road, said in her press statement: “MakerDAO’s technology, ecosystem and talent have put theory into action to deliver a decentralized stablecoin that we believe will help drive the future of the crypto economy.” For MakerDAO, a $15 million investment means more funds to develop their Dai Credit System. Not to be confused with MKR, which is a proof-of-stake token, the Dai Credit System uses a specialized stablecoin called Dai. The Dai token is soft-pegged to the US Dollar and is created during a seemingly unique loaning process. “Dai is created when asset owners deposit collateral to secure a loan, which is denominated in Dai stablecoin […] This allows owners of illiquid or unstable assets that wish to retain those assets over the long term to gain short-term liquidity, i.e., an ability to spend value otherwise locked in those assets while still retaining those assets,” stated Haun. For now, borrowers will be able to use ETH token as collateral to secure a loan from MakerDAO. The team has also launched a multi-collateral DAI system on the Kovan Testnet. It would allow borrowers to collateralize a diverse basket of crypto-assets in addition to ETH. The Maker network, in general, makes use of a set of autonomous smart contracts to coordinate the loan system. That said, anybody with an internet connection and with some collateral to spare can create Dai stablecoins, without needing an intermediary. “With an exciting fall full of announcements, MakerDAO is making its mark as a vanguard of blockchain technology. The team looks forward to continued product excellence and rapid Dai adoption in the coming months,” the Maker team said as it signed off. Image from Shutterstock The post Andreessen Horowitz’s $300m Crypto Fund Buys Stakes in Stablecoin Project appeared first on NewsBTC.

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