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Binance releases its proof of reserves system

Binance’s proof of reserves system initially shows results for the flagship cryptocurrency Bitcoin. The crypto exchange will add other tokens and networks as well as implement ZK-SNARKs. Crypto exchanges are looking to show they have the assets they should hold after the shocking collapse of FTX. Binance has published its proof-of-reserve (PoR) system, days after […]

The post Binance releases its proof of reserves system appeared first on CoinJournal.

  • Binance’s proof of reserves system initially shows results for the flagship cryptocurrency Bitcoin.
  • The crypto exchange will add other tokens and networks as well as implement ZK-SNARKs.
  • Crypto exchanges are looking to show they have the assets they should hold after the shocking collapse of FTX.

Binance has published its proof-of-reserve (PoR) system, days after CEO Changpeng Zhao pledged to have the mechanism in place following the collapse of rival FTX.

The bankruptcy and the contagion that followed crashed the market, with Binance Coin price dropping to lows of $250. Bitcoin price also fell below $16,000, hitting its lowest level since 2020.

In response, multiple exchanges had released a snapshot of their asset reserves. But the crypto community largely noted the snapshot of assets alone wasn’t enough – there was a need to have exchanges’ liabilities also available.

Binance’s proof of reserves showed a 101% ratio

In its update on the issue, Binance has noted its users are now able to verify the exchanges holdings. As for what’s possible now, Binance announced the mechanism will initially support Bitcoin. The exchange will look to add other tokens and networks over the next few weeks.

Binance will also allow for the auditing of its proof of reserves results by third-party auditors and implement ZK-SNARKs to help bolster privacy and robustness.

Because Binance offers Margin and Loans services, the audit results will show the Net Balance, Equity and Debt of each user, where the Net Balance = Equity – Debt,” the Binance team wrote.

A snapshot taken on 22 November 2022 at 23:59 (UTC) shows Binance’s on-chain Bitcoin balances stood at 582,485.9302, while customer net balance was 575,742.4228. The reserve ratio from the snapshot was 101%, with the margin at 6,743 BTC.

Binance customers can verify whether the exchange holds their crypto as it should.

The post Binance releases its proof of reserves system appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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4 bearish factors for Bitcoin this week

The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar Bitcoin might give up some of its 2023 gains on a hawkish Fed All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening The Federal Reserve’s monetary policy decision is scheduled this week. It is the […]

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

  • The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar
  • Bitcoin might give up some of its 2023 gains on a hawkish Fed
  • All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening

The Federal Reserve’s monetary policy decision is scheduled this week. It is the first time the FOMC (Federal Open Market Committee) meets in 2023, and the stakes are high for the US dollar.

Bitcoin has strengthened against the US dollar in January so far, in sync with other fiat currencies. Therefore, whatever the Fed decides on Wednesday will affect Bitcoin price too.

A hawkish Fed may turn up being bearish for Bitcoin. These are the four areas where the Fed may express its hawkishness: inflation outlook, growth outlook, interest rates level, and quantitative tightening.

Inflation outlook

The Fed is committed to bringing inflation to its 2% target. This is why it has raised rates so aggressively, so if the Fed says that inflation is embedded and upside risks remain, then the US dollar should move higher.

In this scenario, the market will bet that the Fed sees ongoing rate hikes as appropriate.

Growth outlook

The currency stance is that a sustained period of below-trend growth is likely. If the Fed changed its view and sees recession required to have a material impact on the inflation outlook, that would also trigger a sharp move higher in the dollar.

Interest rates

Ultimately, it is all about the interest rate level. The funds rate range has reached 4.25%-4.50%, and all eyes are on what the Fed does and says on Wednesday.

The base case scenario is that the Fed will hike by 25bp and says that ongoing interest rate increases are appropriate. Therefore, anything more than that should be bullish for the dollar and bearish for Bitcoin.

For example, the Fed might hike 50bp. This is a risk going into the meeting, especially considering that inflation is not backing down as fast as initially thought.

Quantitative tightening

The Fed currently shrinks the balance sheet at a pace of $95 billion/month. A decision to accelerate the balance sheet reduction would be very hawkish for the dollar.

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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