There are things out of the U.S. Federal Reserve’s control. The central bank has a dual congressional mandate to maintain the U.S. dollar’s long-term value and achieve maximum employment, but it’s dealing with a mix of uncertainties as it pursues those goals.

Yesterday, Federal Reserve Chair Jerome Powell announced the monetary body will begin scaling back its historic asset purchasing program, one of the key levers it pulled to support and stimulate the economy during the worst of the coronavirus pandemic.

This article is excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

Beginning in November, the Fed will purchase $10 billion fewer Treasury bonds and $5 billion fewer mortgage-backed securities (MBS) each month until the $120 billion program is depleted sometime in mid-2022.

The Fed left itself some wiggle room to pause or accelerate this “taper” depending on extenuating circumstances. It also won’t consider raising interest rates while still buying bonds – more flexibility.

It cannot be overstated how experimental this monetary outlay is, especially as it begins to wind down. Known as “quantitative easing,” or QE, the bond buying program has more than doubled the Fed’s balance sheet (now valued above $8.6 trillion). It has had broad effects on the labor market, asset prices and the dollars in your pocket.

Inflation is running hotter than at any point over the past 30 years, and consumer prices have climbed 4.4% in aggregate, double the 2% target the Fed has long targeted. Conflicting signals point to both a super-tight and super-loose labor market simultaneously. The quits rate, number of job openings, and salary and benefits paddings are all atypically high (pointing to a tight labor market). Yet, there are 5 million fewer people working than in February 2020.

“We have high inflation and we have to balance that with what’s going on in the employment market,” Powell said. “It’s a complicated situation.”

Considering the extent to which market watchers hang onto Fed-speak, Powell deserves credit for his consistent messaging. His magic voice is essentially the one thing completely under his control. Although the taper signals an end to easy money, markets weren’t spooked yesterday: the S&P 500, Dow Jones Industrial Average, Nasdaq 100 and Russell 2000 all closed trading at all-time highs.

Powell has been consistent on letting the economy “run hot,” and has made good on giving markets advance warning of policy changes. His colleagues at the Fed were unanimous in parking the benchmark interest rate between zero to 0.25% (though that, too, is subject to change, “depending”). Where Powell has changed perspective is only in a matter of degree – instead of saying elevated inflation is “transitory,” or a matter of specific coronavirus-related bottlenecks, he said mitigating factors were – shipping constraints aren’t forever.

Read more: Federal Reserve to Taper Money Printing That Fueled Bitcoin Bets

Indeed, supply-chain logjams, superconductor shortages and strong buying demand from American consumers are all things Powell watches without having much say in the matter. Same with COVID-19 caseloads, lockdowns and market psychology.

So when it comes to tapering, or when or by how much to lift interest rates, it’s important to remember we’re watching a human being. You can disagree with his policies – and, boy, many do – but that’s an issue whenever we invest any one person with such authority.

Two sides of the coin

Bitcoin, as an alternative monetary base layer, stands apart from this human drama. A grand experiment born from the 2008 recession that was supercharged by the pandemic, most policy decisions for Bitcoin have already been made and hardcoded. It is hard where the dollar is soft. Subject to reason, where the dollar is man.

But it’s also fully integrated into the global economy and the bitcoin currency’s price is also subject to Fed decisions. Bitcoin has benefited over the past several months of QE from the belief that it is an inflation hedge. Smart money – the Ray Dalios of the world – bought into it and profited.

However, it’s unclear how the Fed will manage inflation going forward. For now, Powell has signaled that he’s choosing full employment over risks of elevated prices.

“We don’t think it is a good time to raise interest rates because we want to see the labor market heal further,” Powell said. “The level of inflation we have right now is not at all consistent with price stability.”

When the Fed starts to raise interest rates to cool the economy it could have a negative impact on bitcoin’s price. “To the extent BTC is a hedge like gold, I think it could suffer,” the economist Claudia Sahm told me in a private message.

Then again, there’s also a belief that the Fed has already let inflation run too far and has limited means to cap it. In the short term, if Powell is to remain true to his word and finish buying bonds before raising rates, the agency doesn’t have a tool to pull in inflation until at least Q2 2022. A hyperinflationary environment, or even just fears of that happening, could drive money into bitcoin.

“On the other hand, the effects of the largest QE in history may lead to the largest inflation in history, regardless of the Fed attempting to scale back. If this happens, we expect demand, and prices, for bitcoin to rise to new all-time highs,” Joe DiPasquale, CEO of the cryptocurrency hedge fund BitBull Capital, told CoinDesk yesterday.

It remains to be seen how transitory inflation is and will be.

Transitory

It’s worth noting as well that Powell’s term as Fed chairman is ending in February 2022 (though his term as a Fed governor ends in 2028), and the Biden administration hasn’t given a clear signal as to whether he’ll stay on at the job. While Fed officials were in lock-step to begin phasing out asset purchases, many have contradictory views about how to manage (and even measure) inflation.

So will Powell’s mandate continue? Will bitcoin succeed in a world where the U.S. isn’t buying bonds? It’s just another human uncertainty.

Incoming New York City Mayor Eric Adams said on Thursday that he will take his first three paychecks in bitcoin when he takes office in January.

• “In New York, we always go big, so I’m going to take my first THREE paychecks in bitcoin when I become mayor. NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!” Adams wrote in a tweet on Thursday.
• The tweet was in response to one from Miami Mayor Francis Suarez, who on Tuesday pledged to take his next paycheck in bitcoin. Suarez won reelection earlier this week by a wide margin.
• Adams, a retired New York Police Department captain, was pro-crypto throughout his campaign that culminated with a victory at the polls earlier this week. The support is notable because New York City, despite being a major financial center, has some of the nation’s toughest cryptocurrency rules that require licenses for most types of crypto transactions.

In New York we always go big, so I’m going to take my first THREE paychecks in Bitcoin when I become mayor. NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!

— Eric Adams (@ericadamsfornyc) November 4, 2021

New York City Mayor-Elect Eric Adams said today that he plans to take his first three mayoral paychecks in Bitcoin. 

Adams announced his intention in a tweeted reply to Miami Mayor Francis Suarez. Suarez has taken significant steps to incorporate crypto into his administration, including implementing the use of the CityCoins protocol in Miami. He tweeted that he planned to take his next paycheck in “100% bitcoin.”

Adams, not to be outdone, replied he would take his first three paychecks in the cryptocurrency.

“In New York we always go big, so I’m going to take my first THREE paychecks in Bitcoin when I become mayor. NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!” he said in a tweet.

In his post-election interview with Bloomberg, Adams committed to making the city “crypto-friendly.” This could mean reevaluating high barriers to entry and regulatory attitudes for businesses in the state. He said he’s examining “what’s preventing the growth of Bitcoin and cryptocurrency” in New York.

Adams also told Bloomberg he intended to have a sense “friendly competition” between himself and the Miami mayor when it comes to crypto policy. He also teased that his staff has been looking into implementing the CityCoins protocol in New York. Suarez is bullish on the project’s future in Miami, estimating it could bring in $60 million for the city over a year’s time.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Mythical Games, a game development company based in Los Angeles, announced that it raised $150 million in Series C funding, bringing the startup’s total valuation to $1.25 billion. 

The American venture firm Andressen Horowitz led the funding round, which also saw participation from D1 Capital, RedBird Capital, The Raine Group, Binance, FTX, 32 Equity, the venture arm of the National Football League, The Chainsmokers’s Mantis and others. 

Prior investors in Mythical Games, including Galaxy Interactive, WestCap, 01 Advisors, Javelin Partners, Struck Capital, Alumni Ventures and Signum Growth Investments, also participated in Mythical Gaming’s most recent funding round. 

In all, Mythical Games raised more than $270 million in funding, earning the majority of it — $225 million — in 2021, according to a company release. The startup intends to use the funding to continue expanding its team and building NFT-based, play-to-earn games. 

“Mythical Games played a formative role in the development of play-to-earn concepts, and has clearly established itself as a top player among gaming technology studios, attracting mainstream players with its distinctive design and quality gameplay,” said Arianna Simpson, general partner with Andreessen Horowitz, in a statement. “We’re thrilled to partner with them to bring NFT gaming to an even larger stage.”

Interest in NFT-based games occurred during the summer of 2021 following the success of the NFT-based play-to-earn game Axie Infinity, which The Block’s data shows earned $215 million in weekly trade volume at its peak in August. 

As a result, venture firms poured more attention to companies with similar projects, such as the Solana-based play-to-earn game MonkeyBall, the NFT gaming platform Sandbox and the blockchain-based virtual property game Upland.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

This week, “Opinionated” hosts Ben Schiller, Anna Baydakova and Danny Nelson are talking to PaperImperium, the first and only pseudonymous crypto advocate, lobbying on behalf of MakerDAO in the corridors of power.

PaperImperium, or Paper, or Chris (his real name, but he’s not keen to publicize his full name), is advocating for a clear regulation for DAOs, or decentralized autonomous organisations.

DAOs are a brainchild of the crypto-anarchist culture, and the concept implies that communities can make decisions and solve problems by common voting, using their crypto tokens as voting mandates.

Interestingly, Chris is not a huge fan of this idea itself, and he’s still on the fence on whether the concept is viable. Also, not everybody shares a belief that decentralized finance (DeFi) needs regulation at all, and recently the DAO members voted down the proposal to compensate Chris for his work.

Why then is he so passionate about educating congressmen and regulators about MakerDAO and everything around it? What got him into crypto in the first place, and why is he so excited about Maker?

Listen to Anna, Ben and Danny talk to Chris about his observations about the moods towards crypto in Washington, D.C., his hopes for DeFi and other things.

PaperImperium’s handle on Twitter is @ImperiumPaper.

Mentioned in this podcast:

Meet the DeFi Delegate Knocking on the Doors of Congress

What Is a DAO?

This episode was produced, announced and edited by Michele Musso. Our theme song is by Elision.

Shiba inu (SHIB), the popular meme token powered by a strong internet community, remained in deep red after its biggest daily sell-off since September.

On the daily chart, SHIB’s price had fallen by more than 15% on Thursday, according to data from Coinbase and TradingView. The token ended Wednesday down 22% – the biggest drop since Sept. 10 when it declined a whopping 87.6%.

The canine-themed token has logged losses for three consecutive days, after a SHIB whale (large holder of the token) made a move on their 40 trillion SHIB (worth roughly $2.8 billion at the time) holdings. The move triggered speculation on where the SHIB trillions would end up.

At the time of publication, the whale had relocated the SHIB to four addresses, where the tokens remain, according to Etherscan There was no other indication that the SHIB whale was moving the tokens to the open market.

While the SHIB whale’s motivation for moving the tokens is unclear, the market reacted strongly: SHIB’s price has been dropping since then, as SHIB flows to centralized exchanges spiked, according to data from Santiment.

“There…seems to be an increase in SHIB sell-offs,” Dino Ibisbegovic, market analyst at Santiment, told CoinDesk.

Roughly 1.36 trillion more SHIB flowed to centralized exchanges than from them in the past 24 hours, while the amount of deposit addresses of SHIB reached 1,641 on Wednesday, a 142% uptick since Nov. 1, according to Ibisbegovic.

According to Santiment, a spike in a token’s deposit addresses to centralized exchanges may indicate a rise in short-term selling pressure, as more tokens become available on the exchanges.

Meanwhile, the number of unique addresses interacting with SHIB token have fallen by 66.1% since peaking around 107,000 on Oct. 28, according to Santiment. On Oct. 28, there were 53,546 addresses interacting with SHIB for the first time, but the new addresses holding SHIB today have dropped by more than 64%.

“The hype has certainly died down in the past week,” Ibisbegovic said.

Santiment’s data also shows that more than one SHIB whale has moved their SHIB holdings: SHIB transactions worth at least $100,000 also started increasing on Wednesday.

On social media platforms including Twitter and Telegram channels, the SHIBArmy blamed Kraken for the latest sell-off: The San Francisco-based crypto exchange failed to list SHIB on its platform as it promised in a Monday Tweet.

Crypto arbitrage is a type of trading strategy where investors capitalize on slight price discrepancies of a digital asset across multiple markets or exchanges. In its simplest form, crypto arbitrage trading is the process of buying a digital asset on one exchange and selling it (just about) simultaneously on another where the price is higher.

Doing so means making profits through a process that involves little or no risks. The other great thing about this strategy is you don’t have to be a professional investor with an expensive set up in order to begin arbitrage trading.

What is arbitrage trading?

Arbitrage has been a mainstay of traditional financial markets long before the emergence of the crypto market. And yet, there seems to be more hype surrounding the potential of arbitrage opportunities in the crypto scene.

This is most likely because the crypto market is renowned for being highly volatile compared to other financial markets. This means crypto asset prices tend to deviate significantly over a certain time period. Since crypto assets are traded globally across hundreds of exchanges 24/7, there are far more opportunities for arbitrage traders to find profitable price discrepancies.

All a trader would need to do is spot a difference in the pricing of a digital asset across two or more exchanges and execute a series of transactions to take advantage of the difference.

For example, let’s assume the price of bitcoin is $60,000 on Coinbase and $60,200 on Kraken. In this scenario, crypto arbitrageurs might spot this disparity and buy bitcoin on Coinbase and sell it on Kraken to pocket the $200 price difference. This is a typical example of a crypto arbitrage trade.

Why are crypto exchange prices different?

Centralized exchanges

The first thing you need to be aware of is the pricing of assets on centralized exchanges depends on the most recent bid-ask matched order on the exchange order book. In other words, the most recent price at which a trader buys or sells a digital asset on an exchange is considered the real-time price of that asset on the exchange.

For instance, if the order to buy bitcoin for $60,000 is the most recently matched order on an exchange, this price becomes the latest price of bitcoin on the platform. The next matched order after this will also determine the next price of the digital asset. Therefore, price discovery on exchanges is a continuous process of stipulating the market price of a digital asset based on its most recent selling price.

Note that the price also tends to vary because investor demand for an asset is slightly different on each exchange.

Decentralized exchanges

On decentralized crypto exchanges, however, they use a different method for pricing crypto assets. Known as an “automated market maker” system, this directly relies on crypto arbitrage traders to keep prices in line with those shown across other exchanges.

Here, instead of an order book system where buyers and sellers are matched together to trade crypto assets at a certain price and amount, decentralized exchanges rely on liquidity pools. For every trading pair, a separate pool must be created. For example, if someone wished to trade ether (ETH) for link (LINK) they would need to locate an ETH/LINK liquidity pool on the exchange.

Each pool is funded by voluntary contributors who deposit their own crypto assets to provide liquidity that others trade against in exchange for a proportionate share of the pool’s transaction fees. The main benefit of this system is that traders don’t have to wait for a counterparty (an opposite trader) to buy or sell assets at a certain price. Trading can be executed at any time.

Across most popular decentralized exchanges, the prices of both assets in the pool (A and B) are maintained by a mathematical formula. This formula keeps the ratio of assets in the pool balanced.

What this means is, when a trader wishes to buy ether from the ETH/LINK pool, he would have to add LINK tokens to the pool in order to remove ETH tokens from it. When this happens, it causes the ratio of assets to change (more LINK tokens in the pool and less ETH.) In order to restore balance, the protocol automatically lowers the price of LINK and increases the price of ETH. This encourages traders to remove the cheaper LINK and add ETH until the prices realign with the rest of the market.

In circumstances where a trader changes the ratio significantly in a pool (executes a large trade), it can create big differences in the prices of the assets in the pool compared to their market value (the average price reflected across all other exchanges).

Types of crypto arbitrage strategies

There are several ways crypto arbitrageurs can profit off of market inefficiencies. Some of them are:

• Cross-exchange arbitrage: This is the basic form of arbitrage trading where a trader tries to generate profit by buying crypto on one exchange and selling it on another exchange.
• Spatial arbitrage: This is another form of cross-exchange arbitrage trading. The only difference is that the exchanges are located in different regions. For example, you could capitalize on the difference in the demand and supply of bitcoin in America and South Korea using the spatial arbitrage method.
• Triangular arbitrage: This is the process of moving funds between three or more digital assets on a single exchange to capitalize on the price discrepancy of one or two cryptocurrencies. For example, a trader can create a trading loop that starts with bitcoin and ends with bitcoin.

A trader could exchange bitcoin for ether, then trade the ether for ADA and, lastly, convert the ADA back to bitcoin. In this example, the trader moved their fund between three trading pairs – BTC/ETH → ETH/ADA → ADA/BTC. If there are discrepancies in any of the prices of the three trading pairs, the trader will end up with more bitcoin than they had at the beginning of the trade. Here, all the transactions are executed on one exchange. Therefore, the trader does not need to withdraw or deposit funds across multiple exchanges.

• Decentralized arbitrage: This arbitrage opportunity is common on decentralized exchanges or automated market makers (AMMs), which discover the price of trading pairs with the help of automated and decentralized programs called smart contracts. If the prices of crypto trading pairs are significantly different from their spot prices on centralized exchanges, arbitrage traders can swoop in and execute cross-exchange trades involving the decentralized exchange and a centralized exchange.
• Statistical arbitrage: This combines econometric, statistical and computational techniques to execute arbitrage trades at scale. Traders that use this method often rely on mathematical models and trading bots to execute high-frequency arbitrage trades and maximize profit. Trading bots are automated trading mechanisms that execute a high volume of trades at record time based on predefined trading strategies.

Why is crypto arbitrage considered a low-risk strategy?

You might have noticed that, unlike day traders, crypto arbitrage traders do not have to predict the future prices of bitcoin nor enter trades that could take hours or days before they start generating profits.

By spotting arbitrage opportunities and capitalizing on them, traders base their decision on the expectation of generating fixed profit without necessarily analyzing market sentiments or relying on other predictive pricing strategies. Also, depending on the resources available to traders, it is possible to enter and exit an arbitrage trade in seconds or minutes. Bearing these in mind, we can therefore conclude the following:

1. The risk involved in crypto arbitrage trading is somewhat lower than other trading strategies because it generally does not require predictive analysis.
2. Since arbitrage traders only have to execute trades that last for minutes at most, the exposure to trading risk is significantly reduced.

However, this does not necessarily mean that crypto arbitrageurs are completely free from risks.

Crypto arbitrage trading risks

Certain factors could diminish an arbitrageur’s chances of generating profit. The low-risk nature of arbitrage opportunities has an impact on their profitability; less risk tends to yield low profits. This is why crypto arbitrageurs must execute high volumes of trades to generate substantial gains. What’s more, arbitrage trades aren’t exactly free.

Fees

Remember that trading across two exchanges may incur withdrawal, deposit and trading fees. These fees may accumulate and eat into your profits. Using our original example as a case study, let us assume that the withdrawal fees of Coinbase, deposit fees of Kraken and the trading fees of Kraken add up to an extra 2%. The total cost of executing this trade is $45,000 + (2% * $45,000) = $45,900. In other words, the crypto arbitrage trader must have incurred a loss since the potential profit is only $200.

To mitigate the risks of incurring losses due to exorbitant fees, arbitrageurs could choose to limit their activities to exchanges with competitive fees. They could also deposit funds on multiple exchanges and reshuffle their portfolios to take advantage of market inefficiencies.

For example, Bob spots the price disparities between bitcoin on Coinbase and Kraken and decides to go all in. However, instead of moving funds between the two exchanges, Bob already has funds denominated in USDT on Coinbase and 1 BTC on Kraken. So, all he has to do is sell his 1 BTC on Kraken for $45,200 and buy 1 BTC on Coinbase with $45,000 USDT. At the end of this trade, he still generates the $200 profit and avoids paying withdrawal and deposit fees. Here, the only fee that Bob has to worry about is the trading fee. It is worth mentioning that trading fees are relatively low for traders executing high volumes of trades.

Timing

Crypto arbitrage is time-sensitive. As more traders capitalize on a particular arbitrage opportunity, the price disparity between the two exchanges tends to disappear.

Let us consider the difference in the profitability of Bob and Sarah due to the timing of their trades. In this scenario, Bob is the first to spot and capitalize on the arbitrage opportunity from our original example. This was followed by an attempt by Sarah to do the same.

• When Bob buys bitcoin at $45,000 on Coinbase and sells at $45,020 on Kraken, Sarah may no longer execute this trade at this exact price. Due to the market’s competitive nature, Sarah might have to buy bitcoin on Coinbase for $45,005 and sell on Kraken for $45,015. The convergence of the prices of bitcoin on Coinbase and Kraken will continue until there is no more price disparity to profit off of.

Below are some of the factors that could adversely affect the time it takes to execute crypto arbitrage trades:

1. The transaction speed of the blockchain: Since you might have to execute cross-exchange transactions, the time it takes to validate such transitions on the blockchain could impact the efficacy of your arbitrage trading strategy. For instance, it takes 10 minutes to 1 hour to confirm transactions on the Bitcoin blockchain. In that time, the market might have moved against you. Therefore, arbitrageurs should stick to blockchains with high transaction speed; or those that are not susceptible to network congestion.
2. The AML checks of exchanges: It is common for exchanges to undertake anti-money laundering (AML) checks whenever large sums are being moved by a trader. In some cases, such checks could last for weeks. Therefore, you ought to consider the propensity of crypto exchanges to impose extra checks at the point of withdrawal before going ahead with cross-exchange arbitrage trades.
3. Offline exchange servers: It is not uncommon for crypto exchanges to experience outages (go offline.) In some cases, crypto exchanges may even limit the withdrawal and deposit of specific digital assets for one reason or the other. When this happens, the possibility of capitalizing on arbitrage opportunities instantly diminishes.

Security

Since arbitrage traders have to deposit lots of funds on exchange wallets, they are susceptible to security risks associated with exchange hacks and exit scams. Exit scams occur when a company suddenly halts its operations and carts away with users’ funds. In light of this, it is advisable to carry out due diligence and stick to reputable crypto exchanges.

How to start arbitrage trading

Whether you’re a beginner trader or a veteran investor, the great thing about crypto arbitrage trading is there are a number of platforms available today which automate the process of finding and trading price discrepancies across multiple exchanges. These “set it and forget it” platforms can offer a great passive income opportunity for traders who are looking for a low-risk, hands-off trading solution, and include:

• Arbismart
• Pionex
• Cryptohopper

Mythical Games has raised $150 million in a Series C round led by Andreessen Horowitz (a16z) at a $1.25 billion valuation, the company announced Thursday. The firm will use the funds to expand its team, scale operations and bring new game developers to its non-fungible token (NFT) platform.

Mythical has now raised over $270 million, with $225 million of that total raised in 2021. The startup closed its $75 million Series B round in early June.

Other participants in the Series C round included Binance, FTX, D1 Capital, RedBird Capital and The Raine Group. Galaxy Interactive was among the returning investors.

A number of entertainment brands and personalities also joined the funding, including the investment vehicles of the National Football League, the band The Chainsmokers and OneRepublic frontman Ryan Tedder.

Mythical Games opened early access for its Blankos Block Party game earlier this year. Blankos Block Party is an open-world multiplayer game focused on custom art and design, building and exploration, and curating a collection of Blankos, which are digital vinyl toys. Each Blanko is a NFT that players can sell to each other for real money on the Mythical Marketplace.

Mythical also plans to license its Mythical Marketplace and Mythical Economic Engine to other developers. Earlier this week, Mythical announced its first developer partners. The company will help fund three new play-to-earn projects for its platform: an action strategy game from publisher Abstraction Games; a racing game from Creative Mobile, the studio behind the popular Nitro Nation franchise; and a digital trading card game developed by CCG Lab.

“Players spend billions of dollars on digital assets each year, but the value of their collections has been locked away from them. Utilizing NFTs in gaming creates a whole new set of game design principles built around scarcity vs. inflationary free-to-play economies,” said John Linden, co-founder and CEO of Mythical Games, in the company’s press release.

“Mythical Games played a formative role in the development of play-to-earn concepts, and has clearly established itself as a top player among gaming technology studios, attracting mainstream players with its distinctive design and quality gameplay,” said a16z general partner Arianna Simpson in the release.

Bitcoin has traded in a tight range between $60,000 support and $64,000 resistance over the past week. Short-term buyers have been active on pullbacks, which suggests downside could be limited into Asia trading hours.

Upside momentum is slowing after BTC made an all-time high around $66,900 last month. It appears that buyers were quick to take profits around the price high, especially given short-term overbought signals on the charts.

BTC was trading around $61,500 at press time and is down about 1% over the past 24 hours.

The relative strength index (RSI) on the four-hour chart is not yet oversold, which suggests BTC could see further downside toward the $58,000-$60,000 support zone.

If buyers fail to hold $60,000, the next level of support is seen around $53,000-$54,000 (a near-10% decline from current levels), which is also at the 50-day moving average.

The weekly RSI is approaching overbought territory, similar to April and September, which preceded a downturn in BTC’s price. However, given a series of price breakouts over the past few weeks, BTC remains poised for a breakout above $60,000 based on positive historical returns in the fourth quarter.

Bitcoin mining hardware manufacturer Canaan has filed a lawsuit in China against HighSharp, the chip design partner of AGM Holdings, a new Bitcoin ASIC chip manufacturer in the market.

According to court filings, Canaan is suing Shenzhen HighSharp and Sichuan Yinbimei for making and selling Bitcoin mining chips and hardware allegedly based on designs previously patented by Canaan.

The Nasdaq-listed manufacturer is demanding that the defendants to cease the production of their machines and to pay damages of 90 million yuan, or $14 million. HighSharp couldn’t be reached for comment at press time.

HighSharp was founded in 2016 with a focus on integrated circuit design by Li Chenjun and Wangxing, who debuted a Bitcoin ASIC chip in 2013 called the Clam Miner but failed to materialize the business.

As The Block reported previously, AGM was, until September, an accounting and enterprise resource planning software company listed on Nasdaq with no prior experience in the cryptocurrency space. It announced a pivot into making Bitcoin ASIC miners over the summer and hired Li from HighSharp to be its co-CEO and chairman.

AGM further struck a partnership deal with HighSharp whereby HighSharp will prioritize its Bitcoin ASIC chip design to AGM, which, in return, will source buyers for orders worth at least $100 million by March next year. 

Last month, AGM announced the pre-order sales of over 50,000 units of its KOI C16 Bitcoin ASIC chips to Canada-based hardware maker MinerVA, which is then bound to ship at least 45,000 units of its latest generation of equipment to U.S Bitcoin mining firms Stronghold Digital and Terawulf.

On Wednesday, AGM further announced a pre-order sale for another 10,000 units to U.S-listed Chinese Bitcoin mining firm CCNC worth $65 million.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.