Bitcoin Dominance Hits Two-Month High as Crypto Market Declines




The cryptocurrency markets succumbed to another mid-week slump on Wednesday, with the majority of top-tier coins posting minor declines. Meanwhile, Bitcoin dominance rose to a two-month high as investors continued to consolidate their holdings back into the flagship cryptocurrency.



Source: CoinMarketCap

At present, the cryptocurrency market cap is valued at $452.4 billion, down from $459.6 billion on Tuesday. This represents a single-day decline of approximately two percent.


Bitcoin Price Sinks After Brief Rally Past $11,000

The Bitcoin price had entered the day on an upward trajectory, and it continued to ride this bullish wave past the $11,000 barrier, eventually rising as high as $11,065. However, Bitcoin met resistance at that mark, and before long, the Bitcoin price began to retrace. Ultimately, the Bitcoin price plunged more than $400 on Bitfinex and is currently trading at $10,599. This represents a single-day decline of about one percent and leaves Bitcoin with a $181.5 billion market cap.



Bitcoin Price Chart

Despite experiencing a minor pullback against the dollar, though, Bitcoin continued to rise against its peers. On Wednesday morning, Bitcoin dominance — the cryptocurrency’s share of the total market cap — hit 40 percent for the first time since late December, indicating that trader and investor capital is beginning to rotate back into the flagship cryptocurrency.

 

Source: CoinMarketCap


Ethereum Price Tracks the Index

The Ethereum price matched the index on Wednesday, falling two percent to $865 on Bitfinex after briefly testing $900 the previous day. At present, Ethereum has an $85.3 billion market cap, which translates into an 18.6 percent market share.



Ethereum Price Chart


EOS, IOTA Swim Against the Current

The altcoin markets were characterized by widespread declines, but two large-cap tokens managed to swim against the current.



Altcoin Price Chart

Ripple, the third-largest cryptocurrency by circulating market cap, posted a three percent decline, reducing its price to $0.90. Bitcoin Cash, ranked fourth, was hit with a four percent pullback that forced its price down to $1,225.

Litecoin — the only top-tier coin to decline on Tuesday — deepened its retreat on Wednesday. At present, the Litecoin price is valued at $210, representing a daily decline of four percent.

NEO engaged in a similar movement, declining four percent to $134, while Cardano and Stellar each performed slightly worse, posting 24-hour declines of five percent and six percent, respectively.

Two top-tier cryptocurrencies, however, managed to rise against the dollar even amid the general market decline. EOS, ranked seventh, rose three percent to $8.62, while IOTA, ranked 10th, rose one-half-of-one percent to $1.90.


Source: https://www.ccn.com/bitcoin-dominance-hits-two-month-high-as-cryptocurrency-prices-post-minor-declines/

Square Sees Bitcoin as a ‘Transformational Technology,’ Could Launch Cryptocurrency Exchange




Digital payments firm Square views Bitcoin as a “transformational technology,” and analysts predict that the company could one day launch a cryptocurrency exchange.

Bitcoin a ‘Transformational Technology,’ Says Square CEO, Jack Dorsey

The company made waves last year when it announced that it was launching a Bitcoin trading pilot program through Cash App, the firm’s peer-to-peer transaction platform. A month ago, Square released the feature to virtually all of its US-based users, providing them with one of the most seamless Bitcoin purchasing experiences currently available.

Square executives discussed the feature following the release of its first-quarter earnings report Tuesday, stating that while Bitcoin trading is “still not material to our results,” the firm views cryptocurrency as “transformational” and intends to build out more products and services that leverage it.

    “Bitcoin, for us, is not stopping at buying and selling,” Square CEO Jack Dorsey said on a conference call Tuesday, according to a MarketWatch report. “We do believe that this is a transformational technology for our industry, and we want to learn as quickly as possible.”

Dorsey has issued similar statements in the past. When Square officially released Bitcoin trading to its Cash App customers, Dorsey said that the firm views Bitcoin as a “long-term path towards greater financial access for all.”


Square Could Launch Cryptocurrency Exchange

Consequently, it would not be surprising if Square expanded its cryptocurrency-related product line in the near- to mid-term future.

The MarketWatch report indicated that company “wants to build out an app that accepts Bitcoin,” suggesting that Square — which continues to bank most of its revenue on its payment processing services — may either launch an app that helps merchants to accept Bitcoin or roll this functionality to its current point-of-sale (PoS) products.

Meanwhile, Guggenheim analyst Jeff Cantwell predicted in a Tuesday note to clients that Square may eventually transform its Cash App into a “Coinbase-like exchange,” according to a report from Bloomberg journalist Lily Katz.

If Square did launch a full-scale cryptocurrency exchange, it would immediately be competitive with Coinbase, which is currently the dominant force in the US cryptocurrency brokerage market. As of December, the company’s Cash App seven million users, which is roughly half the number registered at Coinbase.


Source: https://www.ccn.com/square-sees-bitcoin-transformational-technology-launch-cryptocurrency-exchange/

Bitcoin is a revolution that gives freedom back to the people because bitcoin is a peer-to-peer digital currency that is fast, secure, decentralized and yet acceptable worldwide. Using bitcoin everybody has the power to control his money/asset. The fiat 'paper money' was yesterday, the future is bitcoin.   

CFTC Gives Employees Green Light to Trade Cryptocurrencies




The US Commodity Futures Trading Commission (CFTC) has given its employees the green light to trade cryptocurrencies, a decision that came in response to “numerous” inquiries from agency staff.

The policy, which Bloomberg reports was announced in a Feb. 5 memo written by CFTC general counsel Daniel Davis, said that because the agency has determined that cryptocurrencies are commodities, employees can trade them like they would precious metals, barrels of oil, and other commodities.

However, this policy has several caveats. CFTC employees may not trade cryptocurrencies on margin, nor may they take advantage of any insider information they acquire in the course of their work at the regulatory agency.

    “In this environment, the situation is ripe for the public to question the personal ethics of employees engaging in cryptocurrency transactions,” Davis wrote. “Please keep in mind that you must endeavor to avoid any actions creating the appearance that you are violating the law or government and commission ethical standards.”

Additionally, CFTC employees are prohibited from investing in Bitcoin futures contracts because they fall under the purview of the regulatory agency.

    “The chairman has made it clear that staff members who own Bitcoin should not participate in matters related to Bitcoin, as it presents a conflict of interest,” said Erica Richardson, a spokeswoman for CFTC Chairman J. Christopher Giancarlo.

The CFTC first determined that cryptocurrencies are commodities in 2014, giving the agency a modicum of oversight on cryptocurrency trading. While the agency does not have the authority to supervise cryptocurrency exchanges — which are currently regulated at the state level under money transmitter laws — it has direct oversight of US cryptocurrency futures markets, the first of which launched in December on Chicago-based exchanges CBOE and CME. CFTC regulators may also investigate fraud and manipulation in the spot markets, and the agency has brought suits against several alleged cryptocurrency investment scams.

While the agency has been criticized for its “relaxed” approach to cryptocurrency regulation, Chairman Giancarlo has earned the respect of many cryptocurrency investors, largely due to comments he made in a recent US Senate committee hearing.

“It strikes me that we owe it to this new generation to respect their enthusiasm to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one,” he said, adding that distributed ledger technology (DLT) would not exist if Bitcoin had not been invented.


Source: https://www.ccn.com/cftc-gives-employees-green-light-to-trade-cryptocurrencies/

Is Bitcoin The New Gold?




Bitcoin’s role as the new gold – a safe haven for investors – continues to hold merit.

A correlation emerged between gold and cryptocurrency prices late last year as investors began trading gold for bitcoin. Analysts expect the trend to continue, despite the recent decline in bitcoin’s price.


Precious Metal Capital Diverts To Bitcoin

Thomson Reuters analysts, in their 2017 Gold Survey released in January, noted the rising cryptocurrency prices in December diverted significant amounts of capital from precious metals. The report said retail investors have a shorter investment horizon nowadays, and many were unable to resist the temptation to get on board with cryptocurrency.

Christopher Louney, RBC Capital Markets strategist, said the development – a potential correlation between gold’s value and cryptocurrency prices – is fairly recent, reports Fortune. He said he has noticed a potential correlation between gold’s value and cryptocurrency prices.

While there was no relationship previously, Louney said the trend emerged late in 2017 and continued into early 2018—indicating that as bitcoin’s price soared in quadruple digits, investors could have been offloading gold to buy cryptocurrencies.

Louney stressed the correlation is minor—not enough to move gold prices, and not enough to say that investors are presently considering bitcoin as gold’s replacement. The macroeconomic factors that have traditionally impacted gold prices continue to dominate the playing field, such as stock market performance.

Louney said he expects gold prices to end the year lower than they started, around $1,303 on average for the year, mainly due to rising equity returns.


A Long Road Ahead

Bitcoin, besides being volatile, is still a relatively unknown asset compared to other investment assets. Gold, by comparison, is well established with institutional investors and has plenty of liquidity.

While bitcoin trading volumes totaled to just over $3 billion in daily trading recently, gold trading volumes hit $250 billion a day, according to the World Gold Council.

The bitcoin-gold correlation could increase over time, said Looney. The evolving relationship also means the converse could occur, whereby bitcoin investors cash in their cryptocurrency in hard times for gold as a less volatile asset.

In a report sent to the bank’s clients in January, Goldman Sachs analyst Zach Pandl wrote that the rapid increase in demand for bitcoin has been triggered by the growing dissatisfaction with regulated monetary systems and the current banking infrastructures.

In the long-term, as cryptocurrencies mature and evolve into a major asset class, Pandl said digital currencies like bitcoin will pose lower returns but demonstrate a high level of stability, like gold and other safe-haven assets.


Source: https://www.ccn.com/bitcoin-new-gold/

China to Target Domestic Crypto Traders on Overseas Platforms: Report




Chinese regulators are reportedly gearing to scrutinize domestic cryptocurrency traders further by threatening to have their assets frozen.

In what could cement China’s final crackdown on cryptocurrencies, regulators are targeting domestic investors who continue to partake in crypto trading via offshore cryptocurrency platforms, Bloomberg reports. Citing discreet sources, the report claims that authorities could scrutinize bank and online-payment accounts belonging to individuals and businesses who have circumvented China’s ban on domestic crypto exchanges by tapping into overseas exchanges.

The report added:

    “The accounts’ owners could have their assets frozen or be blocked from the domestic financial system.”

The reported move comes within weeks of a report by a newspaper run by China’s central bank that called for an effective ban and blockade of foreign cryptocurrency exchange websites to keep investors from participating in trading and ICOs.

China was previously the world’s largest trading market for cryptocurrencies up to turn of 2017 before Chinese authorities led a crackdown beginning with on-site inspections of exchanges that ultimately led to their shuttering in September 2017. The global trading volume of cryptocurrencies in Chinese renminbi (RMB) fell from over 90% at China’s peak dominance to less than 1%, the PBOC-affiliated earlier stated this month.

The crippling curbs have led to an exodus of Chinese cryptocurrency industry, particularly miners, who have relocated to friendlier jurisdictions in Canada and Switzerland.

By targeting Chinese citizens continuing to purchase and trade cryptocurrencies, China’s crackdown is perhaps nearing its final gong. The country’s influence on global crypto markets, however, are irrelevant at this juncture. Global cryptocurrency markets at the turn of 2017, prior to China’s hostile moves, were valued just under $20 billion. A year later in January this year, the overall crypto market cap reached an all-time high of $795 billion.





Source: https://www.ccn.com/china-targets-domestic-crypto-investors-trading-overseas-platforms-report/

Chinese regulators are reportedly gearing to scrutinize domestic cryptocurrency traders further by threatening to have their assets frozen.

In what could cement China’s final crackdown on cryptocurrencies, regulators are targeting domestic investors who continue to partake in crypto trading via offshore cryptocurrency platforms, Bloomberg reports. Citing discreet sources, the report claims that authorities could scrutinize bank and online-payment accounts belonging to individuals and businesses who have circumvented China’s ban on domestic crypto exchanges by tapping into overseas exchanges.

The report added:

    “The accounts’ owners could have their assets frozen or be blocked from the domestic financial system.”

The reported move comes within weeks of a report by a newspaper run by China’s central bank that called for an effective ban and blockade of foreign cryptocurrency exchange websites to keep investors from participating in trading and ICOs.

https://www.ccn.com/china-targets-domestic-crypto-investors-trading-overseas-platforms-report/

Cryptocurrency Market Stable at $450 Billion, Bitcoin Price Remains Above $10,500




Over the past 24 hours, the cryptocurrency market has remained relatively stable in the $450 billion region, after recording a $30 billion increase in market valuation on February 27. Bitcoin has remained above the $10,500 mark, despite a major sell volume that led the cryptocurrency to decline from $11,000 to $10,300.


Bitcoin and Ethereum

Earlier today, on February 28, a large sell volume across most major cryptocurrency exchanges including Bitfinex led the price of bitcoin to drop by more than $700 within a span of three hours. Since then, bitcoin has rebounded to $10,500, but volumes remain low on many exchanges.





More importantly, the daily trading volume of Tether, a cryptocurrency that is backed at 1:1 ratio with the US dollar, has spiked to $2.5 billion, indicating that cryptocurrency traders are using Tether to hedge the value of major cryptocurrencies. It is unlikely that traders are selling Tether and allocating their funds into other cryptocurrencies, because the market valuation of the market has fallen by over $18 billion since February 27.

Based on the price trend of bitcoin, Ethereum and other major cryptocurrencies throughout the past week, it is unlikely that the market will enter a strong bull market in the short-term. It is more likely that the market will remain highly volatile in the $450 billion region both in the upside and downside, before it leads a strong rally to its previous levels in January.

In late 2017, when the price of cryptocurrencies achieved all-time highs, extremely optimistic media coverage coaxed investors outside of the cryptocurrency market, especially in the finance sector, to invest heavily in the cryptocurrency market. As the price of major cryptocurrencies plunged, many casual investors and newcomers suffered major losses.

As such, analysts expected the market to experience a long-term bear market, similar to that of 2014, due to the abrupt fall in the value of bitcoin and many other cryptocurrencies in the market, including tokens.

However, the market has bounced back reasonably fast, and at this juncture, it is possible that the market could begin a swift recovery process throughout March and April, potentially back to the $600 billion region. Throughout the recovery, as evidently portrayed in the daily transaction volumes of bitcoin and Ethereum, large dips and minor corrections will occur frequently, and the market will continue to be highly volatile.

Ethereum for instance, which peaked at $979 this month, remains below $860, and has been outperformed by bitcoin this month. Although it has only fallen by around 40 percent from its all-time high, it is struggling to sustain strong momentum for a short-term spike in value.


Bill Gates

The controversial claims and false statements of influential figures like Bill Gates are also affecting the public’s viewpoint on cryptocurrencies.

This week, Gates stated that cryptocurrencies are anonymous, only used for drugs, and are linked to deaths, three claims that are factually incorrect. Bitcoin is transparent and not anonymous by nature and 95 percent of drug purchases are made by fiat money like the US dollar.


Source: https://www.ccn.com/cryptocurrency-market-stable-at-450-billion-bitcoin-remains-above-10500/

Bitcoin SegWit Transactions Now Hitting All-Time Highs




As a result of the latest Bitcoin Core 0.16 update, the usage levels of Bitcoin SegWit have been taking off. This significant uptick in usage levels can also be attributed to a number of major exchanges and wallet providers such as Coinbase and Bittrex finally implementing this technology into their platforms. This uptick means that there could be a significant decrease in global bitcoin transaction fees and times.





The Advantage

Segregated Witness (SegWit) is a way of bundling transaction together into blocks, which is a much more efficient way for transactions to be processed.

The Bitcoin network has experienced high levels of congestion since its popularity exploded in 2017, with issues abound as to how to scale the network. This led to higher fees and slower transaction times which were turning a lot of people away from using Bitcoin.

The adoption of SegWit is aimed at drastically reducing this level of congestion.

The main issue that has been holding back the widespread adoption of SegWit across the space is that it has to be specifically enabled on wallets and exchanges. This means you need to have specific SegWit wallet addresses and these cannot be used to bridge non-SegWit and SegWit transactions.


Growing Adoption

Thankfully, the adoption levels of this technology have been growing rapidly in recent days due to the new update and the adoption by exchanges.

The use of SegWit as a percentage of total daily bitcoin transaction had been averaging around the 15% mark for some time up until last week when these events have caused a steady uptick in adoption levels.

In the past 24 hours alone, SegWit usage levels have hit peak levels of adoption at the 30% of total Bitcoin transactions mark.

Monday the 26th of February saw the release of the latest Bitcoin Core update labeled v0 16.0 and this provided full support to SegWit scaling technology.

There are other improvements that have been made as part of this update, but SegWit support and adoption is the major aspect that most people are focusing on. Since SegWit was initially released in August 2017, widespread adoption of this technology has been something that Bitcoin users have been constantly requesting.

While a lot of the significant wallet provides and exchanges have taken their time implementing this technology, eventually growing pressure from their users as a result of slow transaction times and high fees pushed them to do something.

This adoption will also lead to further significant improvements to Bitcoin in the future, such as the implementation of the Lightning Network which might allow transaction times and fees to trend close to zero.

This is an exciting time for Bitcoin and cryptocurrencies as a whole as a breath of fresh air has been blown into the markets, with prices reacting positively to this news.


Source: https://www.ccn.com/segwit-transactions-now-hitting-all-time-highs/

E-Commerce Giant Rakuten Is Launching Its Own Crypto




Japanese e-commerce giant Rakuten is launching a cryptocurrency.

Rakuten CEO Hiroshi Mikitani unveiled the "Rakuten Coin" initiative - which will be used as part of the company's points-based loyalty rewards system - during this week's Mobile World Congress event in Barcelona. Speaking Tuesday, Mikitani pitched the project as a way to help the company expand its international customer base.

It's not clear at this time when the cryptocurrency will be launched, according to a report from TechCrunch. Still, the firm intends to eventually make Rakuten Coin available for use within all of its businesses, which in addition to its global marketplace includes a travel company, an on-demand video service and mobile messaging service Viber, among others.

It also hopes to use the cryptocurrency to attract more international customers by positioning it as a "borderless" payment method that could mitigate exchange rate fees. The company has said that it already sees international demand on this front.

Rakuten - often compared to Amazon - has long been associated with cryptocurrencies, dating back to 2015 when it moved to accept bitcoin through payment processor Bitnet. It subsequently invested in Bitnet and then tapped two of the startup's former employees to create a Belfast-based blockchain lab following a 2016 acqui-hire.

With the Rakuten-branded cryptocurrency, the e-commerce company is taking some of that work and advancing it to its global customer base.

The idea is to mobilize the interest around cryptocurrencies in a bid to attract new customers to its loyalty program, which has awarded more than $9 billion worth of points since it first debuted in 2003, TechCrunch reports.


Source: https://www.coindesk.com/e-commerce-giant-rakuten-launching-cryptocurrency/

StarbucksCoin? Exec Says Coffee Seller Will 'Probably' Use Blockchain




Starbucks is likely to utilize blockchain technology as part of a new payments app, executive chairman Howard Shultz said Tuesday.

Speaking with Maria Bartiromo during a Fox Business segment, Schultz discussed the use of a "proprietary digital currency" in conjunction with the payments app. When asked whether the coffee retailer would use blockchain in conjunction with the initiative - as opposed to a more centralized system of accounting - Schultz said that the company "probably" would move in that direction.

"I think blockchain technology is probably the rails in which an integrated app at Starbucks will be sitting on top of," he commented.

His comments come roughly a month after the former chief executive spoke broadly during an earnings call about the chain's plans to utilize the tech, especially on the payments front (although he dismissed the idea that the company would use bitcoin in some way).

At the time, Schultz suggested that the tech may play a role in how Starbucks works to "expand digital customer relationships," though it remains to be seen how blockchain is ultimately used in practice by the company.

"I believe that we are heading into a new age, in which blockchain technology is going to provide a significant level of a digital currency that is going to have a consumer application," he remarked during the earnings call.


Source: https://www.coindesk.com/starbuckscoin-exec-says-coffee-seller-will-probably-use-blockchain/

Oh my, three more years for LN to be end-user ready? that is a very long time. Come on, there must be a way to make things fast.

As we all know the bitcoin has suffered a lot in the past as a result of bitcoin slow transaction speed and high transaction fees. Thanks to bitcoin core developers for supporting the SetWit protocol to enhance bitcoin security and speed up the bitcoin network transactions with lower fees. Even with SegWit protocol we still need the Lightning Network to make the bitcoin transactions super fast with almost zero transaction fees.

The Lighting Network = Bitcoin to the moon
So, when is the Lightning Network update coming? We all need this, guys! Share your thoughts, thanks  

Digital Currency Group Invests in Bitcoin-Friendly Silvergate Bank




Cryptocurrency venture capital firm Digital Currency Group (DCG) has confirmed an investment in Silvergate Capital Corporation, the holding company of the bitcoin startup-friendly Silvergate Bank.

According to an announcement from Silvergate, the firm said Monday that it sold 9.5 million shares through a private placement generating $114 million in total - funds that will be used to further support the bank's fintech deposit initiatives.

Although the announcement did not disclose any investors, Barry Silbert, founder of DCG, confirmed the firm's participation in the sale via an email to CoinDesk, following an official tweet.

"We are thrilled to welcome Silvergate Bank to the DCG family of companies http://www.4-traders.com/news/Silvergate-Capital-Corporation-Completes-114-Million-Common-Stock-Sale--26057299/ … "

 - @DCGco | https://twitter.com/DCGco/status/968268384684183558

While the amount of investment remains unknown, the move by DCG is notable given Silvergate's known stance in supporting cryptocurrency startups.

As early as in 2014, the cryptocurrency industry has encountered challenges in receiving banking services from traditional financial institutions, with many banks refusing to open accounts for crypto firms, or abruptly closing accounts without explanation.

Silvergate Bank, however, offered bank accounts to bitcoin startups, even while others shied away from bitcoin-related clients due to risk concerns.

According to a previous CoinDesk article, Silvergate Bank was supporting 15 cryptocurrency startups as of May 2016.

Source: https://www.coindesk.com/digital-currency-group-invests-in-crypto-friendly-silvergate-bank/

Self-Proclaimed ‘Satoshi’ Craig Wright Sued For $5 Billion




Chief scientist of nChain and self-proclaimed mind behind the Satoshi Nakamoto pseudonym, Craig Wright, is being sued for $5 billion. The suit is brought to the United States District Court of the Southern District of Florida by the estate of David Kleiman.

David Kleiman was a computer scientist and cyber-security expert, whom many suspect to have been one of the developers behind Bitcoin and the Blockchain technology.

In documents which surfaced on Reddit, the plaintiff claims that Wright stole hundreds of thousands of BTC, worth over $5 bln dollars at today’s rate, from David Kleiman’s estate. The statement by the plaintiff alleges that Wright recognized that Kleiman’s friends and family were initially unaware of the wealth he accumulated.

The official complaint states that Wright took advantage of this and “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”

The plaintiff continues in the document, stating that following David Kleiman’s death on April 26, 2013, Wright contacted Kleiman’s estate and disclosed that he and David had worked together to develop Blockchain and Bitcoin.

According to the estate, Wright claimed that David had signed away any rights to resulting wealth or intellectual property in exchange for a non-controlling and non-operational share in an Australian company. According to the plaintiff, Wright estimated the share to be worth “millions”., and informed the Kleiman estate that he’d be able to sell the share on the estate’s behalf within a few months.

Apparently, this was a lie, as the company went bankrupt after Wright misled the Australian Taxation Office (ATO). In late 2015, Australian police raided Wright’s home, and Wright fled to the UK from Australia.

To date, the plaintiff states that Wright hasn’t returned any of the bitcoins or the intellectual property rights to the Kleiman estate. The lawsuit is “brought to rectify that injustice.”

Kleiman is seeking compensation for the intellectual property in addition to the $5 billion BTC fortune.

While Wright no longer claims he is Satoshi Nakamoto, and the lawsuit does not seek to discover or define the identity of that individual, the proceedings may require that identity to be established in order to find a definite ruling.

Wright has issued a one-word statement regarding the lawsuit via Twitter:

"Greed"
 - @ProfFaustus | https://twitter.com/ProfFaustus/status/968197704936550400


The case is Ira Kleiman v. Craig Wright, No. 18-cv-80176, U.S. District Court for the Southern District of Florida, according to Bloomberg.


Source: https://cointelegraph.com/news/self-proclaimed-satoshi-craig-wright-sued-for-10-billion

Why Is the Cryptocurrency Market So Volatile: Expert Take




Last year was the least volatile in stock market history of decades. Traders who historically have profited off of pricing swings have given their jobs to high-frequency trading algorithms run by computers that act on the millisecond. On Wall Street, humans are a commodity being replaced by machines, and yet four years of volatility in the stock market can be covered in a month of pricing movements in the cryptocurrency markets.

Veteran cryptocurrency investors know this to be a fact, but exactly why is this asset class more volatile than any other liquid asset in the market?


1. No intrinsic value

Despite company sized valuations, cryptocurrencies don’t sell a product, earn revenue or employ thousands of people. They generally don’t return dividends, and just a tiny amount of the total value of the currency goes into evolving it. Because of this, it is hard to value. How do we know if it is overbought or oversold? When is it a good value or overpriced? Without any fundamentals to base this information off of, we can only rely on market sentiment, often dictated by the media that makes money on viewership.


2. Lack of regulatory oversight

Cryptocurrency is a worldwide phenomenon, and while governments are clamping down on the industry, regulation is still in its early days. Such limited regulation allows for market manipulation which, in turn, introduces volatility, and discourages institutional investment, since a large fund has no assurances that their capital is truly secure or at least protected against such bad actors.


3. Lack of institutional capital

While it is undeniable that some pretty impressive venture capital companies, hedge funds and high net-worth individuals are both fans of and investors in crypto, as a segment, most of the institutional capital is still on the sidelines. As of this writing, we have limited momentum on a crypto ETF or mutual fund. Most banking heads admit that there’s some validity in the space, but have yet to commit significant capital or participation publicly. Institutional capital comes in a variety of forms, such as a large trading desk that has the potential to introduce efficiency and soften market volatility, or a mutual fund buying on behalf of their investors for the long term.


4. Thin order books

Crypto investors are taught to never keep coins on an exchange, which can be hacked. As a result, most of the tradable supply is not on an exchange order book but in off-exchange wallets. In contrast, nearly all of the tradable stock of a publicly listed company is transacted on a single exchange. A large market order can eat into an exchanges order book on the way up or down, causing something called “slippage.” We saw an exaggerated example of this in GDAX Ether flash crash, but less extreme versions of this occur on a daily basis. Because of the capacity for large traders to move the market in either direction and employ tactics to encourage this, volatility goes up.


5. Long term vs. short term

If you invest into something that you don’t expect to take out until you’re 60 years old, then you are probably less concerned about it’s daily or even yearly price movements, thus you’re less likely to trade it. Cryptocurrencies, for the most part, can’t be bought in retirement accounts, and are generally inaccessible to retail brokers and financial advisors, so an entire ecosystem of investors is left out. This leaves us with early adopters that are comfortable with the technology hurdle of dealing with wallets, and web-based trading platforms, the same ones that are refreshing Blockfolio every 10 minutes, high-fiving each other when the coins moon, or sweating in a panic when the price drops. These are the same kind of people who don’t have the discipline to just buy and hold for the long run, and therefore contribute to the panic sells or FOMO buys.


6. Herd mentality

Crypto is largely a phenomenon of millennials, who distrust government, are early adopters in tech, and have been mainly shunned out of investment wins earned in the last decade of rising real estate and stock market prices. But most millennials do not have the long-term investment experience of their more mature generational counterparts. They also tend to have less disposable income as a result of historically poor job economics, and less time in the workforce. This combination of factors results in a few things; an appetite for risk in the hopes of landing a windfall of cash and utilizing a larger share of whatever capital they have to invest in risky instruments, including purchasing such investments on credit. When the market goes down, this is money that they literally cannot afford to lose, so will dump at the first sign of trouble. Since this is a reactionary behavior, they will generally lose money before getting out of the market. When the market starts surging up, they will buy with the money they don’t have. As a group, this appears to be coordinated en masse, but it is just the motivations of many single entities that propagate into a herd mentality. If you pair this behavior with the swings caused by large ‘whales’ in a thinly traded market, you have a synergistic effect.


When will volatility decrease

Over time, we can expect more regulation, a greater diversity of investors, and a more mature outlook on the crypto market. We can also expect higher utility value as merchants find more accessible ways of accepting cryptocurrency, and the technology behind transactions also improves. While volatility may decrease, we can also expect a gradual but steady surge in the value of the cryptocurrency market as a whole. Just as the stock market has given way to long-term holders, so too will the cryptocurrency markets. At the very least, it appears to be something that is going to be here for the long run.


Source: https://cointelegraph.com/news/why-is-the-cryptocurrency-market-so-volatile-expert-take

Making Peace with Crypto's Capacity for Evil




If Venezuela's oil-backed cryptocurrency succeeds - and that's still a big if - it could portend a whole new use case for the technology: fundraising for rogue states.

The world may just have to live with that.

One of the defining aspects of cryptocurrency is neutrality. Bitcoin, ethereum and the like are open networks. They don't discriminate.

A public blockchain doesn't care if you're a Boy Scout or a convicted ax murderer. As long as you control the private keys to a bitcoin wallet, you control the funds in it, no passport required. (Setting up an account at a crypto exchange is a different matter.)

That is financial inclusion, in the truest sense, though it's not exactly what policy wonks have in mind when they use the term.

Similarly, as long as you know how to code, you can contribute or build applications on top of bitcoin or ethereum, no Ivy League degree needed.

That is permissionless innovation. It's what allowed Sir Tim Berners-Lee to create the world wide web and Satoshi Nakamoto to invent bitcoin.

And now it may allow Venezuela's strongman president, Nicolas Maduro, to eat many more empanadas at his desk, and do who knows what else, as his nation reels from an economic crisis.


A nebulous plan

Stepping back, last week Maduro's government claimed it had raised $735 million on the first day of a pre-sale of its cryptographic token, known as the petro, and revealed a number of other details about the project. Much remains unclear, including which network the coin will run on top of - some public documents say it's NEM, others say ethereum.

The coins are ostensibly backed by the country's oil reserves, with their value somehow pegged to the previous day's price per barrel in bolivars (so much for real-time). They'll be legal tender and accepted for tax payments in Venezuela, according to the government, so in theory there's a use case for local residents.

Still, it's hard to see any value proposition for outside investors in a token that's controlled by a dictatorship. You could even argue that such a centralized set-up disqualifies the petro from being called a cryptocurrency in the first place.

But, imagine for a moment that this scheme works. It could be an encouraging sign for other authoritarian regimes that have been cut off from the global financial system by economic sanctions. Already, Venezuelan officials have met with their Russian counterparts to discuss the petro, and, late last week, Iran revealed its own cryptocurrency plans.

Now, it's one thing for individuals or small business owners to use cryptocurrency to circumvent international sanctions. In such cases, it's easy to root for the underdog, even when members of the Washington foreign policy establishment clutch their pearls. God forbid an Iranian shoemaker should be able to sell handmade footwear on the internet! Who's in charge of this "bitcoin" anyway? Don't they know financial intermediaries have a Responsibility to Society to make sure the shoemaker's children starve? Why, for all we know, that merchant could be funding terrorism ... one pair of wingtips at a time!

The recent sanctions-skirting crypto projects, however, would enrich, not the citizens of these countries, but the repressive governments responsible for their pariah status. Which, as crypto critic Preston Byrne wryly noted on Twitter, doesn't match up with the tech's early libertarian rhetoric.

- @prestonjbyrne | https://twitter.com/prestonjbyrne/status/966308776289685504

That's the thing about open-source technology and permissionless networks, though. Not only can the tools fall into the wrong hands - the very idea of "wrong hands" is foreign.


Choke points

For an illustration, let's take a quick detour to the U.S., where the latest mass shooting has made firearms a hot-button political issue. In a recent op-ed in the New York Times, Andrew Ross Sorkin argues that if Washington won't put stricter controls on gun sellers, the nation's financial institutions should do so, for instance by refusing to do business with retailers that sell assault weapons.

This paternalistic idea would set a dangerous precedent, as my former colleague, American Banker editor-in-chief Rob Blackwell, warned in a response to Sorkin. But it's also a helpful reminder of what sets apart cryptocurrency from the legacy financial system.

Bitcoin doesn't know or care what the purpose of a transaction is. Nodes and miners, blind to the identities behind alphanumeric addresses, can't be shamed by the Andrew Ross Sorkins of the world into trying to control human behavior. That's one of the main reasons bitcoin has value.

Is this good or bad? You tell me, is fire good or bad? This much is clear: if banks took Sorkin's advice and tried to choke off gun sales, bitcoin would probably rally.

Then there's the alleged "Nazi problem." You've probably read about how extremist platforms like the Daily Stormer, shunned by mainstream payment processors, have turned to cryptocurrency as an alternative means to accept donations, and apparently got rich in the recent run-up.

It goes without saying that these organizations' words and ideas are despicable. But as long as they're just words and ideas, not violent or criminal actions, what purpose did it serve to cut off their access to credit card payments?

As free-speech advocates will tell you, the antidote to bad speech is not suppression, but more speech. Blackballing speakers you or I find offensive from financial services opens the door for banking to be weaponized against others that you or I may support.

Fortunately, the existence of cryptocurrency blunts this weapon. Today it's the neo-Nazis taking advantage of bitcoin's neutrality, but tomorrow it may be [insert a publisher dear to your heart] who needs it. You'll thank Satoshi when that happens.

Returning to Venezuela, western governments could try to thwart the petro, or its Russian or Iranian equivalents, by, say, forbidding licensed exchanges to list the tokens or by blacklisting ethereum ERC-20 addresses that receive the tokens. (No airdrops, please!) But to the extent these projects really do function like cryptocurrencies, shutting them down may be impossible.

That's the hyperconnected world we live in today. Buckle up, buckaroos.


Source: https://www.coindesk.com/making-peace-cryptos-capacity-evil/

Bull Return? Bitcoin Eyes $11K Following Upside Break




As bullish indicators strengthen, bitcoin now looks set to extend gains to $11,000 or higher, chart analysis indicates.

Having defended $9,300 over the weekend amid low volumes, the cryptocurrency picked up bids and rose to a high of $10,443 yesterday, according to CoinDesk's Bitcoin Price Index (BPI). The uptick was backed by a 28 percent rise in trading volumes, as per CoinMarketCap.

A high volume break above key psychological resistance indicates strong hands are at play, so it's not surprising that the price is on the up. As of writing, bitcoin (BTC) is trading at $10,707, having clocked a session high of $10,714.47 earlier today.

Activity in the individual markets reveals that investors continue to use tether to accumulate bitcoins. Trading volume in BTC/USDT (bitcoin-tether exchange rate) on OKEx has gone up by 6.96 percent in the last 24 hours. Meanwhile, U.S. dollar trading volume on Bitfinex (BTC/USD) has increased by 6.61 percent.

The cryptocurrency is up 14 percent from the lows seen over the weekend and has gained almost 12 percent in the last 24 hours, according to CoinMarketCap.

Looking ahead, the cryptocurrency looks set to extend gains to the 10-week moving average (MA) of $11,385 in the next 24 hours.


1-hour chart



The above chart (prices as per Bitfinex) shows:

    * Bullish continuation pattern: the upside break of the sideways channel signals continuation of the rally from the low of $9,280 seen over the weekend. Further, the upside break is backed by an uptick in volumes. So, BTC could extend the rally to $11,000, according to measured height method.
    * The relative strength index (RSI) shows overbought conditions, thus BTC may consolidate over the next couple of hours before extending the rally.


Daily chart



    * The daily chart shows BTC could be creating a bullish reversal pattern known as an inverse head-and-shoulders.
    * The neckline resistance of the inverse head-and-shoulders pattern is seen at $11,704. Meanwhile, the descending trendline (drawn from the Dec. 17 high and Jan. 6 high) resistance is located around $11,930 today and is seen sloping downwards to $11,650 by the weekend.
    * A daily close (as per UTC) above the trendline would signal a long-term bullish reversal.
    * A convincing move above the trendline resistance would push the weekly RSI above the key resistance of 53.00, signaling a long-term bullish trend revival.


View

    * Bitcoin looks set to test $11,000 today and could extend gains to $11,385 (weekly 10-MA). A violation there would shift attention to key resistance levels: the inverse head-and-shoulders neckline and the descending trendline.
    * A daily close above the descending trendline would allow for a stronger rally to $17,400 (inverse head and shoulders breakout target as per the measured height method).
    * Bearish scenario: Rejection at the weekly 10-MA, followed by a quick drop below $9,280 (Feb. 25 low) would add credence to the bearish weekly RSI and trigger a sell-off to $8,000-$7,800.


Source: https://www.coindesk.com/bull-return-bitcoin-eyes-11000-following-upside-break/

China's Crypto Exchanges Didn't Just Survive – They're Thriving




It began like this: officials from the People's Bank of China stepped into the offices of the largest crypto exchanges in the country and sat down with their executives.

From the financial regulator's Shanghai and Beijing bureaus, the officials told the exchanges they were interested in identifying whether anti-money laundering and capital control mandates were being met.

But according to Robin Zhu, chief operating officer at Huobi, the regulators had an ulterior motive that January day.

"The regulator wanted to grab a big picture of how significant cryptocurrency trading was in China - how does bitcoin work; where does the money come from; where does it go to; how do people make and lose money?" Zhu said.

The PBoC also requested information on the exchange's trading volume and user numbers. In addition to the platform's data, Huobi had been regularly submitting information and reports about worldwide government policy in an effort to help the PBoC understand the industry.

Zhu definitely thought something was up. To him, it seemed like the PBoC was gathering information in an order to create a framework for regulating the industry, something many exchanges wouldn't have necessarily been worried about.

But then September came and with it the announcement that the PBoC was banning initial coin offerings (ICOs) and shutting down domestic fiat-to-crypto order book trading.

It seems the inquiries paved the way for the ultimate clampdown, one that severely affected cryptocurrency exchanges in the country.

In a previous interview with CoinDesk, Huobi's founder and CEO Leo Li reported trading volumes followed suit. On November 1, 2017, these figures were just 5 percent of what they were on Sept. 15, the last day before the close of order-book trading.

Yet, not to be deterred, exchanges such as Huobi have continued to thrive, finding new ways to grow their business.

Zhu told CoinDesk:

    "Whatever the policy may be, we will comply with the rules and are here to say. The [bitcoin] trend is irresistible. And down the road it is very likely China will lift its ban on cryptocurrency trading."


Westward and eastward expansion

In fact, two of China's largest exchanges at the time, Huobi and OKCoin, already have offerings that again rank within the top 10 in the world by trading volume - Huobi Pro and OKEx, two platforms that now trade cryptocurrencies only.

And Zhu told CoinDesk that Huobi Group has more than doubled its staff to over 400 since September, signaling a strong commitment even facing a tightened regulatory landscape.

"The shift to over-the-counter trading is an unexpected pivot to us. We had never anticipated that to be one of our business strategies," said Zhu.

But until some of the pressure is lifted, Huobi is proceeding with an aggressive expansion plan.

Over the past few months, the exchange has opened offices in Hong Kong, Singapore, South Korea and the U.S.

Through partnerships with Japan's SBI Group and an unnamed partner in South Korea, Huobi is expecting its new exchanges in those countries to be running by March of this year. And in San Francisco, the company's new office is focusing on research and fostering blockchain startups, but Huobi has also employed compliance experts that as well, hinting at a possible crypto service launch in the U.S. too.

"Once we have fully understood the legal issue in the U.S., opening a new exchange remains to be the next phase of the plan," Zhu said.

While Zhu claimed that opening up operations overseas has always been a part of Huobi's long-term strategy, the PBoC's actions undoubtedly forced the platform to expedite its pivot.

All in all, the pivot has been good to Huobi, which is already seeing a more diverse user base, according to Zhu. For instance, Huobi Pro currently has about 3 million users and less than half of them are from mainland China today.


Loyalty, and revenue, token

Yet, Huobi is still focused on its adding services for its existing user base.

Toward that goal, Huobi even launched its own token, HT, which runs on the ethereum blockchain, as a way to create user loyalty (and bring in some additional revenue).

Instead of following the ICO model that most startups do, whereby tokens are sold to interested investors, Huobi is giving the tokens away as a free gift to users that purchase service fee packages on its platform.

Over the course of 14 days, the announcement of the HT tokens resulted in investors rushing to buy some $300 million as pre-paid service fees, which Huobi Pro is able to collect in advance.

Following the launch of its own token, Huobi Pro announced a new exchange named HADAX, which allows investors to vote with HT on which new cryptocurrency assets they want listed for trading on the platform.

"We can't evaluate every new cryptocurrency because there are simply too many of them," Zhu explained. "HADAX gives investors the choice to vote for tokens they believe are worth trading."

According to Huobi's data, as of Feb. 24, the HADAX platform has collected 8.5 million HT from 104,308 users who have cast a total of 85 million votes for 75 different crypto assets.

And with this, Zhu said:

    "In the long term, we think crypto-to-crypto trading has more potential than fiat currencies because of the large number of trading choices that can be available."


The rise of Binance

But the PBoC's ruling didn't only add hurdles, it also seemed to lift up a new crypto exchange which has a significant connection to the country.

Binance was launched in July of last year (just two months prior to the PBoC's ruling) by former top executives from OKCoin, Zhao Changpeng and He Yi. At the time, Binance also disclosed that its first round of funding came from two Chinese venture capital firms - Blackhole and Funcity.

Yet, because its base was outside of mainland China, Binance was in the right place at the right time. When uncertainty prevailed in the domestic market, Chinese investors began withdrawing crypto assets and shifting them onto overseas platforms, according to Zhu.

He said:

    "The timing was perfect for Binance."

Six months after its launch, Binance has now grown into one of the top cryptocurrency exchanges, having seen $2 billion in trading activity in the past 24 hours, according to CoinMarketCap.

"Although Huobi already launched Huobi Pro at the time, we didn't have as many tokens available for trading as Binance did," Zhu said, adding that the service is now recording more than $1 billion in daily trading volume.

And even though Binance has previously announced it would limit the access for users from inside China, Zhu said, "One can always surf the internet 'scientifically'" - referring to the use of Virtual Private Networks (VPNs), which mask user's IP addresses.

Zhu continued:

    "If you have assets in an exchange and now you are prohibited from accessing it through a normal process, you definitely will rack your brain to get in there."


Source: https://www.coindesk.com/chinas-crypto-exchanges-didnt-just-survive-theyre-thriving/

Bitcoin Price Leads $30 Billion Market Rally




The cryptocurrency market cap gained $30 billion on Tuesday, bolstered by a comprehensive advance that saw more than 80 of the 100 largest coins and tokens rise against the value of the US dollar. The Bitcoin price was the day’s headliner, soaring 10 percent to threaten the $11,000 threshold, but a number of other cryptocurrencies posted strong showings as well.



Source: CoinMarketCap


The bullish pivot enabled the cryptocurrency market cap to climb to $461 billion, representing a 24-hour increase of seven percent.


Bitcoin Price Rises in Wake of Poloniex Acquisition

The Bitcoin price outperformed the index on Tuesday, rising 10 percent to $10,716 on Bitfinex. This represented a five-day high for the flagship cryptocurrency. Bitcoin now has a $181.7 billion market cap, which translates into a 39.4 percent market share.



Bitcoin Price Chart

The Bitcoin price rally correlated with the announcement that fintech startup Circle had acquired cryptocurrency exchange Poloniex in a deal reportedly worth $400 million. In addition to ranking among the largest acquisitions in the industry’s history, the acquisition also increases the exposure of cryptocurrency-skeptics such as Goldman Sachs to the industry’s supply chain, as the investment banking giant was one of Circle’s earliest investors.

While it is not clear to what extent the acquisition factored in the market’s single-day advance, the move clearly represents a step forward in making cryptocurrency-related investments palatable to mainstream firms.


Ethereum Price Tests $900

The Ethereum price lagged the index on Tuesday but still managed to return a two percent increase to $882. At one point, Ethereum made a run at the $900 barrier, but the second-largest cryptocurrency ran out of steam at $895 and subsequently ebbed to its present level. Ethereum currently has an $86.6 billion market cap, leaving it with an 18.8 percent share of the index.



Ethereum Price Chart


Altcoins Advance, But Litecoin Gets Left Behind

Large-cap altcoins made a near-comprehensive advance on Tuesday, but there was one notable cryptocurrency — Litecoin — that sat out the rally.



Altcoin Price Chart

The Ripple price rose four percent for the day, lagging the index but climbing back to $0.93. Bitcoin Cash, meanwhile, made an eight percent advance, raising its price to $1,272 and market cap to $21.6 billion.

Litecoin, ranked fifth, was the lone top 10-cryptocurrency to fall against the dollar. The Litecoin price declined by three percent, reducing it to a present value of $219.

NEO, on the other hand, nearly doubled the index return with a 13 percent surge. NEO is now valued above $140, providing the token with a $9.1 billion market cap.

EOS was the only other top 10-altcoin to beat the index, rising eight percent to $8.39, while Cardano, Stellar, and IOTA rounded out the market’s top tier with gains of about four percent.


Source: https://www.ccn.com/bitcoin-price-leads-30-billion-market-rally/