Bitcoin, ETH, XRP, and LTC prices, will be on a roller coaster for a long time. Traders and investors will make and lose fortunes in record time, betting on them. In the end, say some analysts, these cryptocurrencies will either die on their own, or be killed by the ‘establishment’ — big governments and big banks around the world that defend sovereign currencies.
Take the case for Bitcoin.
The “people’s currency” holds a great promise: to become the first true global currency, free of the control of central banks that print money and big banks that generate credit. But to do that, Bitcoin must gain the trust of the “general public.“ This means it must be adopted as a medium of exchange, standard of value, and store of value, replacing national currencies.That isn’t easy, given the many obstacles Bitcoin has to overcome. Like lack of awareness, familiarity, and stability, etc. And that makes some experts bearish about the future of Bitcoin.
Bitcoin Price YTD
Lars Seier Christensen, Chairman of Concordium, the next-generation decentralized world computer, is one of them. “In the longer term, I am bearish on bitcoin as I believe it does not have the necessary characteristics of a longer-term valuable asset and, eventually, that reality will catch up” says Christensen.“But in the short term, price movements will likely be random as Bitcoin is affected by low liquidity and unpredictable bigger trades.”
Unpredictability will make it hard for Bitcoin to gain broad adoption as a medium of exchange. And without broad adoption, Bitcoin will remain a play for speculators and true believers, and eventually die on its own.
But even if Bitcoin overcomes all these obstacles and gains broad adoption by the general public, and was in a position to replace national currencies — ie, become the new currency — what would happen then?
Bears argue that the “establishment” cannot afford to let that happen.
For a couple of reasons, including the loss of Seigniorage” — simply put, the profit made by the national governments by printing currency. Then there’s the profit made by banks helping circulate that money and create credit.
The establishment will do whatever it takes to defend these profits from Bitcoin and any other cryptocurrency that seeks to replace it.
Recent Congressional hearings on Libra attests to the determination of the establishment to protect the dollar from competing cryptocurrencies. In a rare display of unity, Democrats and Republicans opposed Libra, and had many unkind words for Bitcoin.
“Cryptocurrencies that are ONLY there as a currency substitute, however, have no real long-term future,” says Christensen.“They will be outlawed by governments wanting to control the money supply and taxation, and in any case, cryptocurrencies have no intrinsic long-term value of significance. Hence, Bitcoin will only survive as a fringe activity.”
Not everyone agrees with this gloomy assessment, however. Dave Hodgson, Director and Co-Founder of NEM Ventures, is one of them.
“In my opinion, Bitcoin will never die nor be killed by the establishment, despite some people’s efforts to the contrary,” says Hodgson. “The recent drop we have seen in Bitcoin is within the boundaries of what our analysts were expecting from technical analysis. However, the timescale has been slightly skewed in light of recent announcements, primarily from US government representatives.”
Corentin Denoeud, CEO and Co-founder of Blockchain Studio, is another .
“The fact that governments around the world are even talking about crypto is a sign of progress for the blockchain industry in general,” says Denoeud. “While countries such as India have called for the outlawing of cryptocurrencies, representatives from Germany’s Central Bank have responded favourably and advanced the view that cryptocurrencies are not a threat to global monetary stability. Even China, who has previously banned ICOs and cryptocurrency trading, has called bitcoin a ‘safe-haven asset’ (via its state-run media agency) and is now reportedly stepping up its own efforts to create its own cryptocurrency, following Facebook’s unveiling of Libra.”
While it’s still unclear which side is right, one thing is clear: Bitcoin (and ETH, XRP, LTC, etc) true believers who think that cryptocurrency will eventually replace national currencies, need a 101 lesson in Money and Banking.
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Source: A Stark Prediction For The Future Of Bitcoin, ETH, XRP, And LTC
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Bitcoin, which has been swinging wildly over recent weeks, has crashed under $8,000—suddenly losing almost $1,000 per bitcoin in a matter of minutes last night.
The bitcoin price, down around 8% over the last 24 hour trading period, is still up around double where it began this year after a terrible 2018 that saw many of the world’s biggest cryptocurrencies including bitcoin lose around 80% of their value.
It’s been suggested the latest sudden bitcoin sell-off, which sent the wider cryptocurrency market sharply lower, was caused by a so-called bitcoin whale selling a large amount of bitcoin then buying it back after the market has dropped due to the influx of supply—potentially earning millions of dollars in the process.
Last night a large bitcoin holder moved some 25,000 bitcoin, worth more than $200 million, from an off-exchange wallet to the San Francisco-based Coinbase bitcoin and cryptocurrency exchange, as reported by a bitcoin and cryptocurrency whale tracking Twitter bot.
Shortly after that, 14,000 bitcoin, worth $112 million, was moved from Coinbase to another wallet, then a further 11,000 bitcoin, worth $88 million.
“If you do a little math and follow the timeline, it’s not hard to see that someone dumped 25,000 bitcoin for $215 million and bought it back shortly after for $200 million,” wrote Reddit user u/makoveli in a post to popular cryptocurrency forum r/cryptocurrency. “In doing so, they pocketed $15 million and walked away with the same amount of bitcoin as they started with.”
Bitcoin, despite being the most widely traded cryptocurrency with trading volume into the billions of dollars every day, still struggles with wild price swings due to large holders moving significant volumes of bitcoin.
The bitcoin price has risen and fallen sharply multiple times over recent weeks.
Following the sharp bitcoin price plunge, other major cryptocurrencies including ethereum, Ripple’s XRP, litecoin, EOS, and bitcoin cash all fell with EOS leading the field lower, down over 10% on yesterday’s price, according to CoinMarketCap data.
Bitcoin SV, a variant of bitcoin cash, itself a fork of bitcoin, was the only top 10 cryptocurrency largely unaffected by the sudden sell-off—something that will likely further speculation the controversial token suffers from low liquidity and high price manipulation.
Source: Bitcoin Plunged Below $8,000–Did This Cause The Sudden Price Drop?
Bitcoin has outperformed stocks and gold, so far, in 2019.
The digital currency has gained close to 68% YTD, the NASDAQ QQQ Invesco ETF shares have gained 18.09%, the Russel 2000 iShares ETF has gained 15.04%, while SPDR Gold shares have lost 0.08%.
Stocks, Gold, and Bitcoin YTD
Meanwhile, the rest of the cryptocurrency was mixed, with 30 out of the top 100 advancing, and 70 falling over the last seven days.
Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks
Source: Coinmarketcap.com 5/10/19 at 10 a.m
“The worst of the bitcoin bear market is behind us,” says Ian King, senior research analyst at Banyan Hill Publishing, who specializes in cryptocurrencies.
He sees a number of factors driving the Bitcoin rally this time around. One of them is resilience. “In 2017-2018, Bitcoin had a boom and bust, but it’s still here,” adds King.“The November 2018 capitulation was a mirror image of the panic buying of December 2017.”
Market capitulations usually follow bad news, but are signals of strong turnarounds. “All markets bottom when they stop selling off on bad news,” says King. “Two weeks ago, the NYAG claimed Bitfinex was missing $850mm in customer funds. The market sold off and then rallied.”
That’s the 4th boom and bust cycle since Bitcoin’s creation 10 years ago, observes King. “I’m more confident of this recovery than I was of the last, as there are more institutions and retail investors looking at bitcoin as a digital store of value,” adds King.
Meanwhile, Fidelity, Ameritrade, and ETrade are planning to launch institutional trading platforms within the next few weeks, raising market participation.
That’s a bullish sign for Bitcoin, according to King.
But will Bitcoin ever reach $20,000 again? Not in 2019, according to Farrukh Shaikh, Co-Founder and CFO
-Gath3r, LTD. “In the coming few months, it is not very likely at all to go near the all-time high of $20,000. However, 2020 is when the halving occurs for BTC, where mining rewards get cut in half ie reducing future supply,” says Shaikh. “This would be the 3rd halving for BTC since inception, and previous ones have been catalysts for huge price increases for BTC.”
And that could help Bitcoin reach $20,000 by 2021, according to Shaikh. “Speaking from a technical analysis perspective. there are several scenarios where it can reach and surpass the $20,000 price point within the next couple of years,” adds Shaikh.“On a fundamental basis, real world use, adoption and acceptance of BTC is increasing with each passing month, which are also positives for its future price expectations.”
While, it’s hard to predict where the digital currency will be in a couple of years from now, one thing is clear: volatility will continue in cryptocurrency markets.
[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don’t own any Bitcoin.]
My recent book The Ten Golden Rules Of Leadership is published by AMACOM, and can be found here.
Source: Bitcoin Holds Over $6,000, Beats Stocks And Gold In 2019, Will It Ever Get Back To $20,000?
Turns out 88-year-old Warren Buffett isn’t warming up to crypto after all. Speaking at what’s been dubbed the “Woodstock of Capitalism”, the billionaire investor told shareholders in Berkshire Hathaway how he really feels about bitcoin. His company’s annual shareholder event is being held in Omaha today, and he just couldn’t resist lamenting the digital currency that he just doesn’t understand. Buffett reportedly stated:
“It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.”
At least Buffett didn’t call it “rat poison squared” like he did last year. His partner in crime, Charlie Munger, reportedly once compared crypto trading to “dementia.” Buffett’s shareholders probably come to Omaha just to hear what he’ll say next about the crypto revolution taking the economy by storm.
The bitcoin price is barreling for $5,700. | Source: CoinMarketCap
BITCOIN ‘ISN’T AN INVESTMENT’
Buffett didn’t stop there. He went on to insult investors who not only have benefitted from the peer-to-peer nature of bitcoin but he also suggested that it’s not an investment at all. Tell that to the 100-million strong crypto community, many of whom have seen their portfolios balloon since the bitcoin price hit a new 2019 high this week. Buffett is digging his own grave, so to speak, saying:
“It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me.”
Bitcoin’s market cap is now $101 billion; it’s increased from $89 billion in the past two weeks or so. If that’s a seashell, then take us to the beach so we can start collecting them.
Berkshire Hathaway shares are underperforming the S&P 500 year-to-date. | Source: Yahoo Finance
WARREN BUFFETT’S BUTTON ICO
He went on to seemingly poke fun at ICOs next because he couldn’t possibly mean bitcoin when he says:
“I’ll tear off a button here. What I’ll have here is a little token…I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day… But the button has one use and it’s a very limited use.”
Hmm, let’s see. Bitcoin is a store of value that rivals gold. It is a peer-to-peer digital currency that gives migrants a way to send money to their families faster and cheaper than any money-transfer service without the blockchain can do. And it’s decentralized, so it’s not subject to the whims of any central bank or government that turns on the printing press and causes inflation.
Whether he realizes it or not, Buffett is spreading FUD about bitcoin and the blockchain, saying:
“Blockchain…is very big, but it didn’t need bitcoin. J.P. Morgan, of course, came out with their own cryptocurrency.”
Blockchain pioneer Wences Casares once said that people who fail to recognize the value of bitcoin but believe in blockchain tech demonstrate an “ignorance for how the system works.” We’ll leave Warren with Wences’ words of wisdom:
“Blockchain doesn’t exist without bitcoin…If you were to remove the bitcoin, miners would disappear and so would the blockchain.”
Source: Warren Buffett: ‘Gambling Device Bitcoin Hasn’t Produced Anything’
In what is emerging to be an interesting trend on the bitcoin network, Germany is fast growing as a hub for bitcoin nodes, as it is now responsible for 20% of all public nodes, inching closer to the United States, which accounts for 25% of bitcoin nodes.
Rounding off the top 5 for bitcoin nodes is France, Netherlands, and Canada. China may be experiencing a drop in mining after China’s strict approach to the cryptocurrency industry in recent times, and it is possible that miners may configured nodes to be publicly unreachable.
Similarly, it is also growing in terms of the number of Ethereum nodes, coming second again to United States, with 13% as opposed to the latter’s 28%. Data on the number of Ethereum nodes is conflicting, depending on the source. Here, China, France and Singapore complete the top 5.
Whatever the exact figure, it is clear that Germany is emerging as a hub for crypto activity. The nation’s authorities themselves are looking into the matter of crypto regulation.
Source: Germany Is The European Leader Of Bitcoin & Ethereum Nodes
Bakkt – the cryptocurrency startup launched by New York Stock Exchange (NYSE) owner Intercontinental Exchange – just yanked the lid off the full range of its blockchain ambitions.
The firm announced today that it has acquired Digital Asset Custody Company (DACC) as part of its efforts to gain regulatory approval for its crypto products.
Reportedly, Bakkt is less concerned with merely building a Bitcoin exchange than they are with offering institutional custody and payment platform services, all of which still requires regulatory approval.
Bakkt Acquires Crypto Custodian DACC
Bitcoin startup Bakkt acquired a crypto custodian to help bring its regulated platform to market. | Source: Shutterstock
The company recently announced its application for a BitLicense, and it is also pushing to become a trust company in New York. The company’s efforts have been repeatedly stalled by regulatory delays, despite positive news around its partnerships with Starbucks, Microsoft, and others.
Coinbase previously acquired a trust charter with the New York Department of Financial Services. Becoming a trust can be a faster process than becoming a BitLicense recipient, which can take several years. Bakkt says in a new blog post that it’s applied for a charter, and recently we reported that they’re also seeking a BitLicense.
Bakkt wants to offer Bitcoin futures contracts that pay out in cryptocurrency, which would set them apart from other Bitcoin futures offerings. Bakkt has several other ambitious projects in mind, but it must get through several layers of red tape before it finally launches.
Adam White wrote in Bakkt’s blog today:
“To provide regulated custody, we have filed with the New York Department of Financial Services for approval to become a trust company and in this capacity serve as a Qualified Custodian for digital assets. […] It is with that same commitment to setting a new standard for securely storing digital assets that we’re excited to announce that we have acquired Digital Asset Custody Company (DACC). DACC shares our security-first mindset and brings extensive experience offering secure, scalable custody solutions to institutional clients. The team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line.”
Bakkt CEO Kelly Loeffler told Fortune:
“From the ground up what ICE has been building for two years is the safest version of a custody solution for digital assets.”
Custody: The Key to Mass Bitcoin Adoption?
A lack of regulated custodians has kept many crypto-curious institutions out of the burgeoning asset class. | Source: Shutterstock
Bakkt and Coinbase have both claimed that offering secure, modern custodial solutions for cryptocurrency will encourage institutional investors to expand their portfolios to include the speculative asset class. Thus far, Coinbase and Circle’s offerings have yet to make a significant dent in the overall market.
Fidelity, a traditional assets management company, also nears completion of its custodial solution. A range of options doesn’t necessarily equate to investor interest, but their availability may play a vital role during any future bull run. Institutional investors will, at a minimum, have several popular options to choose from if they consider getting into the market, opportunities that didn’t exist in previous times.
Bakkt’s current push is three-pronged:
- They’ve acquired a company already engaged in playing custodian to digital assets.
- They’ve applied for a BitLicense.
- They’re working to become a registered trust.
There are other avenues they might still pursue, such as operating without New York as an available market at first. What is clear is that the company is anxious to get into the game, and the recent bull market activity is probably not far from their mind.
Source: NYSE-Linked Bitcoin Exchange Bakkt Just Unveiled a Major Acquisition
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The European Central Bank (ECB), the central bank for the Eurozone, is unwittingly boosting the case for cryptocurrency adoption, the community believes – and that’s exactly the last thing they want to be doing. This comes after they said they could always create money, and the crypto community was quick to reply with accusations of scamming.
The bank had started a Twitter thread under the hashtag #AskECB, and Twitter user @Gianluca844 took the chance to ask, “Where did you get the money for the [quantitative easing]?” The bank replied:
Quantitative easing (QE), also known as large-scale asset purchases, is an expansionary monetary policy whereby a central bank, which is the ECB in this case, buys predetermined amounts of government bonds or other financial assets in order to stimulate the economy and increase liquidity.
This operation started in 2015 and was finished by the end of 2018, during which the ECB has spent EUR 2.6 trillion (USD 3 trillion), buying up mostly government but also corporate debt, asset-backed securities and covered bonds, at a pace of EUR 1.3 million a minute, according to Reuters. That equates to roughly 7,600 euros (BTC 2.23) for every person in the currency bloc.
The cryptocurrency community took issue with the reply, with many tweeting gifs of the Bitconnect Ponzi scheme, which has since its downfall become synonymous with shady doings.
“Central banks are marketing bitcoin better than we can,” replied Twitter user @zackvoell, while user @wiz has more to say: “The world is now opening their eyes to your scam of robbing people of their purchasing power by endlessly printing bank notes on worthless paper. The global economy will implement a new Bitcoin standard to opt-out of your scam and prevent further theft by central banks.”
Source: European Central Bank Just Showed Why Bitcoin is Better
In the last week, the amount of Bitcoin traded by Venezuelans via the LocalBitcoins peer-to-peer platform exploded by 30%, to reach an all-time high. The trading by residents of the financially troubled country, whose native Bolivar has been devalued by long-term hyper-inflation, amounted to the equivalent of $8.9m over the seven days up to February 8th. The news comes in the wake of the weekend announcement of new restrictions on the trading of cryptocurrencies for residents of Venezuela by its government, with the South American country’s authorities………….