Square doubles down on Bitcoin, investing another $170M

Jack Dorsey’s Square now owns roughly 3,318 more BTC.

Financial services outfit Square just announced it has picked up more Bitcoin (BTC). 

Square “has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million,” the company said in a public statement on Tuesday, adding:

“Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately five percent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.”

Bitcoin has fallen significantly this week so far, dropping below the $50,000 mark after tapping a record high past $58,000, based on TradingView.com data. Based on the $170 million sum Square swapped for about 3,318 BTC, the outfit looks to have paid an average of $51,235 per coin on its new investment.

“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future,” Square noted in the statement. “The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.”

Square bought $50 million worth of Bitcoin in 2020, which it announced last fall.

Square’s statement also included an unveiling of its 2020 financial documents. Twitter CEO Jack Dorsey also serves as CEO of Square. Dorsey recently donated 1 Bitcoin to a nonprofit aimed at Bitcoin technical progress.

Twitter CEO donates 1 BTC to Bitcoin core development non-profit

Brink, a fledgling Bitcoin non-profit outfit, got the nod from Jack Dorsey via a BTC donation.

Jack Dorsey, CEO of social media powerhouse Twitter, has donated 1 BTC to Brink, a non-profit group focused on Bitcoin’s technological framework. 

“Honored to have received a 1 BTC donation to our developer funding efforts from none other than @jack!,” Brink’s Twitter account posted on Tuesday. At time of publication, that Bitcoin (BTC) is worth $46,824.

Reporting earlier this month showed the recently established organization getting 503(c)(3) non-profit status from the Internal Revenue Service, giving Brink a break on federal taxation.

The entity looks to further Bitcoin by helping out its developers, as noted on Brink’s website:

“Brink exists to strengthen the Bitcoin protocol and network through fundamental research and development, and to support the Bitcoin developer community through funding, education, and mentoring.”

Dorsey has expressed interest in Bitcoin before. He referred to the asset’s white paper as poetic in 2020. Last fall, Square, another outfit Dorsey leads, also unveiled allocating $50 million to BTC. Dorsey took the 16th spot on Cointelegraph’s list of the top 100 people in the crypto industry this year.

In the eye of the beholder: What gives Bitcoin its value in 2021?

Bitcoin’s value is a complex topic spanning numerous aspects; however, its value could be attributed to several factors.

Notable mainstream attention has shifted toward Bitcoin amid its meteoric rise, with the asset having recently tapped over $52,500 per coin. Bitcoin (BTC) has seen an increasing wave of interest from mainstream companies, gaining status as a hedge, unique from other asset classes. What makes Bitcoin valuable, though? 

Perhaps one of the simplest answers regarding Bitcoin’s value is that it’s “worth what somebody will pay for it,” as stated by billionaire Mark Cuban in 2019. A number of other components factor into the equation, however, making BTC unique over its competition. Although, Bitcoin is still young when compared to assets such as gold and stocks, so it must continue proving itself and gaining traction. The asset’s failure is still possible and is also prone to volatility.

Bitcoin’s history and basic use

Pseudonymous creator Satoshi Nakamoto published the written framework for Bitcoin in 2008. The asset subsequently went into circulation in early 2009, pegged to no specific value. BTC circled around online communities and such through the years, gaining value over time as an online method of payment requiring no involved sensitive user information. Regardless of its historical journey upward in price, Bitcoin is now often seen as a store of value, holding a number of valuable characteristics.

People can buy Bitcoin on a crypto exchange and send it to a wallet they personally control on a device or online. One of Bitcoin’s selling points is that users can send the asset virtually anywhere in the world quickly, at any time, without divulging personal information, as well as control their holdings themselves.

Big-player purchases

Over the past year or so, multiple sizable mainstream companies have added significant exposure to BTC. Tesla, one of the 10 largest companies by market cap according to AssetDash, bought $1.5 billion worth of Bitcoin, announced on Feb. 8, 2021. In addition to others, Square also announced a $50-million move into BTC in October 2020.

Business intelligence outfit MicroStrategy bought over $1 billion of the coin, as led by the company’s CEO, Michael Saylor. A former skeptic, Saylor is now one of the asset’s biggest proponents. He also personally owns more than 17,000 BTC, as of his tweet from October 2020.

The recent Bitcoin purchases have seemingly surfaced amid economic unrest after COVID-19 captured the public’s attention in early 2020. The United States government increased the activity of its cash printer in subsequent months after the pandemic’s onset, through quantitative easing, leaving the future value of the country’s dollar a mystery.

The rationale for Bitcoin’s value

As a borderless, decentralized asset run by a network of computers around the world (called miners), Bitcoin and its price are not technically tied to any governments, markets or currencies. At times, its price travels in line with other markets, while at other times, the asset’s value moves to the beat of its own drum. Some crypto industry leaders, such as Anthony Pompliano, co-founder of Morgan Creek Digital, posit BTC as a non-correlated asset.

Fidelity Digital Assets published a report on Bitcoin in October 2020 that found “almost no relationship between the returns of bitcoin and other assets” between the start of 2015 and September 2020.

Since entering the BTC arena, MicroStrategy’s Saylor, who sits in fourth place on Cointelegraph’s list of the top 100 people in blockchain for 2021, has taken numerous interviews in which he has clearly articulated valuable aspects of Bitcoin. Saylor said in a February 2021 interview posted by Cointelegraph:

“I think the story that needs to be told much more is that Bitcoin is a masterpiece of monetary engineering.”

“It’s the first successfully engineered monetary network in the history of the world,” Saylor said after referencing aspects of science and engineering, as well as his studies at the Massachusetts Institute of Technology.

“Bitcoin is rotating this year from the old insight narrative which is, it’s an uncorrelated speculative asset traded by retail traders on off-shore exchanges with leverage that’s kind of cool,” Saylor said in a December 2020 interview with HyperChange. “It’s rotating to a new insight, which is it’s the world’s best long-duration investment-grade safe-haven treasury asset,” he added.

Saylor continued to mention Bitcoin’s long-term potential as a wealth storage vehicle that sits away from government control, as well as a different mindset that comes with such a use case, leading participants to hold BTC for extended periods of time rather than trading for shorter-term profits.

Further BTC value arguments

Unlike national dollars, gold or other assets, Bitcoin holds a finite supply. Only 21 million BTC will ever exist, based on the digital asset’s code. At the time of publication, Bitcoin’s circulating supply is around 18.6 million. Through mining, more BTC is released from its maximum supply into its circulating supply, but that maximum supply will not change. Meanwhile, the work and expenses put into creating BTC mark the more tangible point from where Bitcoin derives its value from.

With Bitcoin, holders can also store and transfer large sums of money much more easily than other hedge assets, such as gold or real estate. Bitcoin has seen its fair share of comparisons to gold over the years — at times being called digital gold.

“You can’t debase it; it’s not a fiat derivative like a bond or a stock,” Saylor said of Bitcoin during a January 2021 interview with Nomad Capitalist. “If you’re looking to the long-term outlook — 10 years, 20 years, 30 years — then owning Bitcoin is like encrypting your monetary energy in a way that will preserve it without any degradation over the long term,” Saylor explained.

Investors can purchase fractional parts of a Bitcoin, such as 0.001 BTC, for example. Bitcoin can also be viewed as an industry or ecosystem of activity and development, similar to the internet when it took off decades ago, and buying Bitcoin gives the investor financial exposure to that ecosystem, according to Tyler Winklevoss, co-founder of Gemini, a crypto exchange.

“It’s sort of like owning a piece of the race track without having to bet on which horse is going to win,” Winklevoss said during a December 2020 interview with podcaster, YouTuber and entrepreneur Casey Adams. “As long as the races are running, you make some money,” Winklevoss added.

Arguments against Bitcoin

Some have expressed numerous arguments against Bitcoin over the past decade or so. The digital asset has endured multiple volatile cycles, rising dramatically in price followed by subsequent retracement periods — sometimes seeing up to 80% or more of price decline over time before resuming its uptrend.

Gold advocate and financial commentator Peter Schiff has stated his skeptical position on Bitcoin on numerous occasions. “Now that #Bitcoin has hit $50,000 I must admit that a move up to $100,000 can’t be ruled out,” Schiff said in a February 2021 Tweet, adding:

“However a move down to zero can’t be ruled out either. While a temporary move up to $100K is possible, a permanent move down to zero is inevitable. If you don’t want to gamble buy #gold.”

Others have also called Bitcoin a bubble, such as Russian politician Anatoly Aksakov in early 2021. Additionally, Kenneth Rogoff, a professor at Harvard University, proved hesitant on BTC in January 2021. “I’ve been a Bitcoin skeptic, and certainly, the price has gone up, but there’s sort of an ultimate question of what’s the use,” Rogoff told Bloomberg. “Is it just valuable because people think it’s valuable? That is a bubble that would blow up,” he added.

Still, even though Bitcoin is not technically “backed” by anything, it is also not tied to the debt or struggle of any specific country. It is run by the people, is borderless, and allows users to hold and control their own funds, as well as transact globally quickly. The asset has endured its fair share of adversities since its inception, growing in adoption with every cycle.

Bitcoin’s market cap flipped Tencent on its way to $1 Trillion

You’re next, Google.

At approximately $1 trillion, Bitcoin’s market cap has blown past Tencent, which holds a valuation of roughly $917.8 billion at time of publication, according to AssetDash rankings.   

Crypto’s largest digital asset is now sixth on AssetDash's list of top market cap companies across the globe. Google, officially known by its parent entity, Alphabet (GOOGL), holds the fifth spot with a market cap of approximately $1.4 trillion at time of publication.

"After reaching a new all-time high price mark, bitcoin surpassed Chinese tech giant Tencent, moving it up to the #6 spot in the world among publicly traded companies," CoinSmart co-founder and CEO, Justin Hartzman, told Cointelegraph, adding:

"This is a strong indicator of the increased value, trust and adoption of bitcoin and the cryptocurrencies industry. Many analysts are saying this is the year bitcoin will surpass $100k and I don’t think that speculation is too far off.”
Source: CoinSmart

In October, Bitcoin surpassed PayPal, taking the 21st position on the leaderboard with a market cap just shy of $240 billion. The coin has grown substantially since then. Bitcoin has broken past Tencent in market cap rank before, although market caps have changed since then. At time of publication, BTC  ranks above Tencent, Tesla and Facebook

Crypto's pioneering asset has enjoyed a significant rally since falling to $3,600 in March 2020 during a pandemic-related crash. The coin's run picked up speed in the latter half of 2020, during which a number of mainstream financial entities announced their Bitcoin purchases. One of the more notable entrants has been MicroStrategy, whose CEO, Michael Saylor, has advocated significantly for Bitcoin.

What are privacy coins and how do they differ from Bitcoin?

Bitcoin is not as private as people might think, but multiple other assets that come with anonymity-boosting features do exist.

Cryptocurrencies are typically pseudonymous, but not necessarily private. Bitcoin (BTC) and other assets run on blockchains, with each transaction posted publicly online. During a transaction between two or more parties, assets move to different wallets, each represented by a string of characters. 

With these addresses and transactions visible to all, however, a certain level of trackability exists, especially if a wallet transfers funds to an exchange requiring Know Your Customer verification.

Certain crypto assets, which are often referred to as privacy coins, private coins or anonymous coins, attempt to hide information about transactions, giving users more privacy. Why might someone need privacy if they are not doing anything illegal? It could be preference or a view of privacy as a basic human right could be two reasons. Cash is largely private. Every transaction is not recorded somewhere for all to see with the click of a button.

A number of possible methods exist for adding privacy to Bitcoin, including peer-to-peer trading, although multiple crypto assets focus on privacy more directly via their technology. Some familiar privacy assets in the crypto space include Monero (XMR), Zcash (ZEC), Verge (XVG), Beam and Grin. Dash also makes it on the list, as it allows for added anonymity, although the coin is not technically classified as a privacy asset.

Monero

One of the industry’s most well-known privacy-focused assets, Monero came on the scene about seven years ago, having spurred numerous headlines in the years since. Monero prides itself on decentralization, touting origins that back such stated values. “It was a fair, pre-announced launch of the CryptoNote reference code,” Monero’s website says. “There was no premine or instamine, and no portion of the block reward goes to development.”

Monero, a coin based on its own proof-of-work blockchain, touts multiple different privacy technology features, per its website, including stealth addresses and RingCT. Added to XMR in 2017, “RingCT, short for Ring Confidential Transactions, is how transaction amounts are hidden in Monero,” Moneropedia, the explanatory section of the asset’s site, explains.

Monero piqued the interest of the United States government in the latter part of 2020. The Internal Revenue Service put out a bounty on the asset’s head, promising as much as $625,000 in exchange for cracking the coin’s privacy tech. Two blockchain analytics outfits, Integra FEC and Chainalysis, took home the prize just a few weeks after the IRS announced the bounty.

Zcash

Zcash hails as another popular privacy-focused asset in the crypto space. It started in 2016 and was initiated by the Electric Coin Company, which is headed up by cypherpunk Zooko Wilcox. Zcash stems from the same code as Bitcoin, according to the asset’s website. ZEC operates on its own blockchain with PoW mining consensus, separate from Bitcoin.

ZEC allows both private transfers, called shielded transactions, and public transactions. “Zcash gives you the option of confidential transactions and financial privacy through shielded addresses,” Zcash’s website explains, adding: “Zero-knowledge proofs allow transactions to be verified without revealing the sender, receiver or transaction amount. Selective disclosure features within Zcash allow a user to share some transaction details, for purposes of compliance or audit.”

Dash (sort of)

Dash is another well-known cryptocurrency hosting privacy features. The entity managing the coin’s development, the Dash Core Group, however, clarified on several occasions that Dash is not a privacy asset, although it comes with elective characteristics for added anonymity.

“Dash is a payments cryptocurrency with a strong focus on usability, which includes speed, cost, ease of use and user protection through optional privacy,” the group’s chief marketing officer, Fernando Gutierrez, told Cointelegraph previously.

“Dash is not an AEC!” Ryan Taylor, CEO of DashPay, said in a January 2021 tweet referring to anonymity-enhanced cryptocurrencies, or AEC — a term used by U.S. regulating bodies. “As a literal fork of Bitcoin, all Dash transactions are completely transparent,” his tweet added: “All inputs, outputs, addresses, and amounts are recorded on each and every transaction and viewable - by anyone - on its public blockchain.”

XCoin joined the crypto world as a 2014 Bitcoin fork, later rebranding as Darkcoin, and subsequently Dash. The asset is based on its own proof-of-stake blockchain.

The coin lets users transact anonymously, if they so choose, through what is referred to as PrivateSend. “The technology that Dash utilizes in our PrivateSend function is CoinJoin, which is a technique for complicating transactions to the point that they’re more difficult for analytics firms to analyze those,” Gutierrez explained, as previously reported.

Verge

A PoW asset running on its own blockchain, Verge exists as yet another cryptocurrency touting privacy capabilities. Verge started with a different name. “Verge Currency was created in 2014 under the name DogeCoinDark,” the asset’s website states, but was later rebranded into Verge Currency.

An open-source asset, Verge enables private transfers through I2P and Tor tech, which conceal transactors’ locations (IP addresses), according to information from BitDegree, as well as previous Cointelegraph reporting.

Verge gained significant price traction in late 2017, hitting highs around $0.31, based on TradingView data. The asset currently trades at roughly $0.023.

Beam and Grin

Grin and Beam burst onto the crypto market in 2019, touting a different technology called Mimblewimble. A type of blockchain technology, the concept of Mimblewimble went public in 2016 as a PoW variation, according to a community submission article from William M. Peaster on Binance Academy.

Grin and Beam launched based on Mimblewimble, although Litecoin (LTC), a long-time prominent asset in the crypto space, has been working on implementing the technology.

“In a MW blockchain, there are no identifiable or reusable addresses, meaning that all transactions look like random data to an outsider,” the Binance Academy article reads. “A Mimblewimble block looks like one large transaction rather than a combination of many,” the article adds, subsequently diving into other aspects of the technology.

Privacy coins and regulation

Government overwatch on privacy coins has grown in recent years, as shown in part by the IRS’ efforts against Monero’s technology. Privacy coin references also surfaced in the U.S. Financial Crimes Enforcement Network’s proposed regulation on self-hosted crypto wallets in December 2020.

“Several types of AEC (e.g., Monero, Zcash, Dash, Komodo, and Beam) are increasing in popularity and employ various technologies that inhibit investigators’ ability both to identify transaction activity using blockchain data,” the December document said referring to anonymity-enhanced cryptocurrencies. Additionally, South Korea outlawed anonymity assets in November 2020.

Some crypto exchanges have delisted the abovementioned assets. In October 2019, OKEx Korea ceased trading on its platform for Monero, Zcash, Super Bitcoin (SBTC), Dash and Horizen (ZEN). BitBay removed Monero near the beginning of 2020. Bittrex removed Zcash, Dash and Monero from its exchange in January 2021. A number of other crypto platforms have also delisted privacy-enhanced assets over the past year or two, including ShapeShift.

Blockchain mysteries: Biggest crypto transaction fee oddities

Take a look at a few crypto transactions that came with unnecessarily high fees.

Users can send cryptocurrencies virtually anywhere globally via the blockchains on which they are based. By sending crypto assets, however, fees are incurred. Transactions may take longer for certain assets, depending on their related blockchains. Certain crypto wallets and platforms give users the option to choose a transaction fee. Higher fees typically result in faster transactions. 

Over the years, however, some asset holders have put their coin or token values into the wrong fields, resulting in exorbitant, albeit accidental, fee payments. For example, a holder might intend to send 12 Bitcoin (BTC) at a fee of 0.01 BTC, although they might accidentally put 12 BTC into the fee box, spending 12 BTC on fees while sending just 0.01 BTC to the intended destination.

A number of fee mishaps have occurred involving Ether (ETH) and Bitcoin. Here are a few painful fee stories.

Enough Ether to pay out $1,000 per day for a year

In February 2019, one industry participant mistakenly paid a grand sum of 2,730 ETH for fees as part of three Ethereum-based transactions. The sender paid fees of 420, 210 and 2,100 ETH in the triad of transactions. According to ETH prices at the time of reporting in March 2019, the transaction costs totaled approximately $365,800.

Fortunately, this sender received an act of good will from SparkPool, the mining pool on the other end of the transaction. “Thank you SparkPool and your miners for helping us to recover our loss,” the accidental ETH transactor noted as part of a blockchain message. “We are willing to share half of 2100 ETH with the miners to thanks the miners’ integrity,” the transactor added.

Ether is now valued at $1,850 per coin at the time of publication, making this event worth just over $5 million in total.

A fee saga involving millions

In the summer of 2020, three Ethereum transactions surfaced, incurring more than $5 million worth of total combined fees, based on ETH prices at the time. Someone sent 0.55 ETH, valued near $134 total back then, in a transaction on June 10, 2020, spending a whopping $2.6 million worth of ETH on gas — an industry term for the funds paid for transactions on Ethereum’s network.

Following the multi-million-dollar fee event, two more hefty transactions surfaced. One saw another $2.6 million paid to send 350 ETH. The other transferred 3,221 ETH, tallying close to the same amount for gas — 2,310 ETH to be exact. All three moves occurred between June 10 and 11, 2020.

This saga may not have been the summation of a few mistakes, however. Subsequent reporting revealed the third transaction — the one costing 2,310 ETH to move 3,221 ETH — was the result of a “malicious attack” involving a victim’s wallet.

The pair of multi-million-dollar gas transfers remain without conclusive explanation, although theories have included simple user error, hacker-related blackmail efforts, and a suspected Ponzi scheme losing money. However, in today’s market, the three transactions are worth over $43.6 million.

DeFi comes with risks

The decentralized finance boom of 2020 came with stories of significant profit, but also at least one instance of fee turmoil. DeFi took off as another likely crypto industry bubble, complete with surging prices, suspicious project activity and other drama. Largely based on Ethereum’s blockchain, the DeFi sector began seeing high transaction fees.

Even given the high fees, however, one user paid far too much to send one of his trades through on Uniswap, a popular exchange in the DeFi niche. As reported in November 2020, this trader accidentally typed his gas amounts in the wrong places on his MetaMask wallet, pushing through a $120 trade while spending $9,500 on gas.

“I thought that this kind of things happen to others, but I was wrong,” the trader said on Reddit.

“Metamask didn’t populate the ‘Gas Limit’ field with the correct amount in my previous transaction and that transaction failed, so I decided to change it manually in the next transaction,” he explained. “But instead of typing 200000 in ‘Gas Limit’ input field, I wrote it on the ‘Gas Price’ input field, so I payed 200000 GWEI for this transaction and destroyed my life.”

Bitcoin transactions aren’t usually that expensive

Although multiple Ethereum fee bumbles have arisen, crypto participants have also suffered Bitcoin fee woes. One particular painful transaction surfaced on Bitcoin’s blockchain in December 2020. The transaction shows about 3.49 BTC paid to send just 0.00005 BTC — a fee multitudes higher than would have been necessary to send that amount of Bitcoin.

Based on TradingView data, Bitcoin’s price fluctuated between roughly $22,765 and $24,205 on Dec. 19, the day of the transaction, making the fee worth at least $79,000 back then. At the time of publication, such a transaction currently values approximately $170,000.

A seemingly similar transaction hit Bitcoin’s blockchain on Nov. 18, 2020, revealing about 2.66 BTC spent on fees for the transfer of roughly 0.01 BTC. Based on Bitcoin’s price range for Nov. 18, the sender spent at least $45,000 to transfer a comparatively paltry sum of the asset. This fee is now worth around $130,000.

Many of these transaction fee tales were likely mistakes. In crypto, taking caution is important. Rushing and distraction can sometimes lead to costly mistakes. Education is also vital. Lack of knowledge on crypto wallets, transactions and assets can yield harmful consequences when sending funds.

Why some cryptocurrencies are worth $40,000, while others stay at $0.40

Market capitalization and asset supply factor into prices, but could any token be worth $1 million one day?

At the time of publication, one Bitcoin (BTC) values $47,247, while one Dogecoin (DOGE) is worth around $0.068. If you are new to crypto or markets, you may initially think: Hey, DOGE is cheaper than Bitcoin, and if it picks up enough steam, maybe it could catch up to BTC and rise over $20,000, too. This way of thinking, however, is illogical. Why? Market capitalization and asset supply. 

Market cap is the combined dollar value of an asset’s circulating supply. It changes as the value of a given asset rises and falls. Crypto metrics websites, such as CoinMarketCap, rank each cryptocurrency in order of market cap. Bitcoin is the long-standing front runner in this category, holding a market cap of about $879 billion at the time of publication.

Market cap takes each asset’s circulating supply into account. Circulating supply is the amount of any given asset freely moving around the market. Multiply the circulating supply by the asset’s price and you get its market cap.

Assets with more circulating supply often trade at cheaper prices in terms of dollar value per coin or token. BTC currently holds a comparatively low circulating supply of about 18.6 million, and even though this number increases slowly based on mining, its maximum supply is still relatively small at 21 million coins. Meanwhile, Dogecoin has a circulating supply of about 128.3 billion, based on CoinMarketCap numbers.

Given DOGE’s circulating supply, its market cap would hit approximately $800 billion if each coin were priced at roughly $6.23. Meanwhile, Bitcoin is worth more than $40,000 per coin near that same market cap due to its lower circulating supply.

Reaching a price of even $1,500 per DOGE would require the asset to have a market cap of roughly $192.4 trillion. At the time of publication, the entire crypto market has a market cap of about $1.46 trillion.

Generally, assets with low circulating supply can rise higher in price per coin than assets with large supply counts. Yearn.finance’s YFI, for example, holds a very small circulating supply of just 36,635. YFI went from approximately $900 in July 2020 to $40,000 in September 2020. A multitude of other components factor into price rises, but typically, if an asset has a comparatively larger circulating supply, its price per coin cannot be directly compared to the price of coins with a smaller supply.

Crypto assets also often hold a maximum supply programmed into their code. Each asset’s available supply grows continuously through various forms of blockchain network validation — i.e., mining or staking — until it reaches its maximum supply. Prices can dilute as coins or tokens flow into their related circulating supply, as validators tend to sell their rewards for supporting the network to pay off their costs of doing business.

What is the difference between total supply and maximum supply? “Total supply refers to the number of coins or tokens that currently exists and are either in circulation or locked somehow,” writes Henrique Erhardt in an article for Binance Academy, adding: “It is the sum of coins that were already mined (or issued) minus the total of coins that were burned or destroyed.”

Meanwhile, the maximum supply is an asset’s entire all-time supply or, more specifically, the total amount of coins or tokens that have or can be created. This means that once the maximum supply is reached, there would be no way to produce any more coins or tokens.

Understanding the concept of market cap as it relates to any given asset’s price can be important, allowing you to assess the crypto space more realistically. You may look at the price of a single Bitcoin and view it as too expensive, immediately shifting your focus toward something cheaper.

A plethora of information goes into crypto investing. Assets vary in their use cases, adoption, profit potential and associated risks, among other factors. Viewing each asset in light of its particular market cap, price and supply, however, can help in evaluating the market.

Former risk analyst explains why he’s selling his Bitcoin

According to his logic, Bitcoin has been a failure for 11 years.

Bitcoin has gained significant media attention in recent days, in line with its price rise to nearly $50,000, the institutional implications of Tesla’s recent $1.5B purchase. Nassim Nicholas Taleb, who previously worked as a risk analyst and options trader, views Bitcoin (BTC) less than optimistically, however.

“I've been getting rid of my BTC,” Taleb said in a tweet on Friday, as reported by BNN Bloomberg. “Why? A currency is never supposed to be more volatile than what you buy & sell with it,” he explained, also noting:

“You can't price goods in BTC. In that respect, it's a failure (at least for now). It was taken over by Covid denying sociopaths w/the sophistication of amoebas.”

Taleb’s logic keys in on Bitcoin as a currency, not a store of value — though the latter has redefined the digital asset’s role in some ways in recent years, at least according to multiple crypto industry players. Some folks, such as Bitcoin Cash (BCH) advocate Roger Ver, have argued that BTC was meant to serve as a payment method. Ver often posits that Bitcoin’s current framework does not allow for such a transactional role, echoing some of Taleb’s concerns.

Gold advocate and finance commentator Peter Schiff also often speaks out against Bitcoin, although a growing number of mainstream companies obviously think differently, seeing value in the digital asset.

One of Bitcoin’s biggest recent proponents, MicroStrategy CEO Michael Saylor, views Bitcoin as a method of preserving value while other assets and currencies become worth less.

Traders say there aren’t many reasons to be bearish on Bitcoin

Bitcoin is on quite the run, with little sign of stopping, according to traders.

Bitcoin hit just shy of $50,000 in the past 24 hours, following news earlier this week that Tesla had purchased $1.5 billion worth of the asset. Despite Bitcoin (BTC) rising more than 100% past its 2017 high near $20,000 over the course of the past few months, Cheds, a crypto analyst and trader on Twitter, thinks the scene remains bullish. 

“I think many people are looking for a local top here, or perhaps reasons for one because the price has risen so far so fast,” Cheds told Cointelegraph. Cheds is CMT level I certified, which indicates a specific level of expertise in technical analysis.

Bitcoin broke its 2017 all-time high of $19,892 in December 2020. In January 2021, BTC rose to $41,981, based on TradingView data. After a brief pull back, Bitcoin hit $48,911 on February 11.

“In my view bulls are still in complete control, and every day we get more news of institutional adoption and demand, and that more than anything will be the driving force,” Cheds said. The crypto space is in the midst of a wave of mainstream big players allocating capital to Bitcoin. Aside from Tesla, MicroStrategy has put over $1 billion into BTC, while a number of other players have put various, albeit, smaller amounts of capital toward the digital asset.

“If you think the BTC price will go down because of a Canada ETF or Chinese new year, you were just looking for an excuse to sell anyway," Cheds explained. Canada recently greenlit a Bitcoin exchange-traded fund, or ETF.

"Yesterday we witnessed another All-time high Bitcoin day candle close ~$49K,” crypto trader and analyst on Twitter, CryptoWendyO, told Cointelegraph. “However, we are currently struggling a bit to kiss $50K,” she said, adding:

“$50K is inevitable, but I would be cautious of the $44.7 area as we head into the weekend - unless we get a #bitcoin tweet by Elon and in that case I would look to $54K.”

Tesla’s CEO, Elon Musk, has tweeted about crypto a number of times in recent days, giving particular attention to Dogecoin (DOGE).

Bitcoin is not a bubble anymore, Amber Group CEO says

Bitcoin will still have notable value fluctuations, but it's out of bubble territory, according to Michael Wu.

A number of entities have called Bitcoin (BTC) a bubble since its inception roughly 12 years ago. Michael Wu, CEO of digital asset financial services outfit Amber Group, thinks otherwise, however. 

“I think it’s always like this when people come into a new paradigm shift,” Wu said in a CNBC interview on Thursday, referring to the concept of Bitcoin as a bubble. “People start with doubts, with skepticism — it’s very natural because they will have to take time to understand what’s new there, is it sustainable,” he said, adding:

“In the early stage, that kind of understanding, that kind of skepticism, always comes with a lot of price volatility. However, I don’t think you can call Bitcoin a bubble anymore, because, like I mentioned earlier, you have all these institutions, all these billionaires, multi multi-billion-dollar listed companies, all these, you know, all these newcomers into crypto. They’re buying Bitcoins, they’re buying crypto and there are only 21 million Bitcoins out there.”

References to large mainstream players buying Bitcoin has become much more common in recent months. Microstrategy allocated more than $1 billion to Bitcoin in 2020. MassMutual put $100 million into BTC sometime thereafter, and Square later came in as welwith $50 million.

Rationale for Bitcoin’s long-term price rise includes its limited supply matched with significant interest in the asset, Wu explained. “There will be price volatility, there will be short-term price corrections,” he added. “Sometimes these price corrections can be violent, but I think we’ve passed the stage of calling Bitcoin a bubble anymore.”

Wu also commented on BTC and its store of value role, similar to gold. Bitcoin has seen its fair share of comparisons against gold over the years. “The worst case scenario of Bitcoin is still a better form of gold,” he said.

On Wednesday, Wu’s company Amber Group announced that Annabelle Huang, one of the firm’s partners, had been given the task of furthering institutional and retail involvement. Amber Group “appointed partner, Annabelle Huang, to lead GlobalX Center, a strategic global expansion team established to grow the company’s institutional and retail product offerings in regions including South Korea, Japan, Hong Kong, Singapore, Taipei, North America and more,” said a statement provided to Cointelegraph.

BlockTower Capital CIO estimates another 9–22 months of bull run for crypto

The crypto gains are coming in, but how long will it last?

How long will crypto’s current season of prosperity last? Ari Paul, chief information officer at BlockTower Capital, thinks the bull run has at least nine more months. 

In a tweet on Feb. 4, Paul said the industry is currently in the “7th inning of the crypto bull market.”

He added:

“This is where we get ongoing, dizzying rotation. BTC up, then when BTC takes a breather, ETH and some largecaps (and in this regime, defi bluechips), then smallcaps, rinse and repeat. Of course, throw in some 30-60% retracements for fun.”

Paul’s comments refer to the overall crypto bull market, including Bitcoin (BTC) and altcoins, not just the current altcoin scene. Although the seventh inning of a standard nine-inning baseball game might seem late, Paul started his bull market clock when the crypto market bottomed in 2018. “I'm counting the bull market as starting from the all time lows of last cycle (end of 2018),” he said in a separate tweet.

“For everyone saying, ‘wait, this bull run clearly has much further to go!’ It does....the start of 2017 was already the 5th or 6th inning of that cycle's bull run,” he said in a different Twitter post.

The bull market of 2017 has been referenced multiple times as a significant period of asset price prosperity for the crypto space, which ultimately included Bitcoin reaching its previous all-time high near $20,000 in December of that year, followed by a 2018 market crash. Bitcoin broke its 2017 record high in December of 2020.

“Time-wise, my guess is we have 9-22 months,” Paul said of the current crypto bull run, responding to a comment on one of his tweets. “Price wise - my guess is BTC ends the bull run between $100k-$400k and alts do better,” he added.

Paul later clarified his thoughts in a subsequent tweet thread, noting the debatable nature of bull market timing. "My baseball analogy is causing some confusion since there's no consensus on how to categorize phases of a bull market or even where it starts," he tweeted. "So let me throw out the analogy and walk through my thoughts on the market cycle and where we are today." He explained his thoughts on how the crypto markets have performed since 2018, including comments on the COVID-19 drop in March 2020, and guesses on the months ahead.  

Regarding present day, Paul mentioned further possible performance from altcoins, barring significant volatility from Bitcoin. "As long as BTC is consolidating, I expect alts to continue doing reasonably well," he said. "At some point, BTC will start another parabolic move higher and it'll likely outperform alts on the move," he added. "That move will trigger the next surge in new money."

Coinbase outage caused crypto purchase issues, not an intentional ban

Coinbase posted an in-depth explanation of its Jan. 29 platform difficulties.

On Jan. 29, a number of Coinbase users reported issues with the platform’s buy and sell functions. The Coinbase difficulties arose just a day after Robinhood barred GameStop share purchases following surging prices on the stock. A recent blog post indicates the Coinbase difficulties arose from an outage, not a ban on trading. 

“Between 4:25am and 9:31am PST on Friday, January 29, api.coinbase.com had an outage,” Coinbase said in a post on Feb. 5. “During this time, many users experienced errors while attempting to use the Coinbase app and crypto buying, selling and trading features were intermittently available,” the post added, also noting that users of its professional exchange, Coinbase Pro, were still able to sign on to the platform.

The cause of the problems on Coinbase? Crypto price data difficulties. “It was quickly diagnosed as an issue with a Redis cluster used to store spot rates for currency conversions,” the blog post detailed. “These spot rates are used for estimated conversions between currencies, which puts it in the critical path for a range of functionality such as displaying the value of your portfolio in your local currency.”

Essentially, certain backend processes became overloaded and went down, based on subsequent information in the post. Coinbase’s tech team tried a number of options, eventually finding the right solution, which resurrected function on the platform. The post also dove deeper, laying out a timeline of events on the backend during the technical disruption.

“Any requests which relied on exchange rate data were failing, and users were therefore unable to access critical functionality on our site,” the post noted as a result of the issues described in the timeline of backend events.

Coinbase listed multiple changes the team has implemented for improvement going forward. Platform difficulties are not foreign to Coinbase. The outfit has experienced many connectivity problems in the past. In November 2020, Brian Armstrong, Coinbase’s CEO, tweeted about the company’s work toward fixing its issues.

CME chief economist hints Bitcoin is gaining ground on gold as a hedge

Why can't we be friends? The gold versus Bitcoin debate rages on.

CME Group’s chief economist and managing director, Bluford Putnam, recently acknowledged that Bitcoin is competing with gold as a hedge against inflation.

“Gold appears to have an emerging competitor in Bitcoin,” told Bloomberg for a video released on YouTube on Tuesday. “Given the current price range for gold, it is likely that increased production will be a feature of 2021,” he said.

Gold’s supply is less clearly defined than Bitcoin’s. Built into the asset’s code, BTC touts a set maximum limit of 21 million coins, dispersed into circulation on a steady mining schedule. Putnam mentioned this characteristic of Bitcoin in his rationale, although he also noted the coin’s volatile nature. “Please be aware, fixed supply does not mean less volatility,” he explained. “Indeed it can mean the opposite,” he said, adding:

“When the supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin has illustrated this point.”

A store of value or hedge often represents a place to put value on a longer-term basis as possible protection against inflation and shifting global economic factors. Lack of correlation can be a key aspect of safe-haven assets, as noted by Investopedia.

“We’ve also noticed that gold may be losing its appeal as a hedge against global political risks,” Putnam said. “In the 2017 to 2020 period, the mostly ups and occasional downs of the gold price appear to be directly tied to Fed policy shifts more than anything else,” he added. “Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s safe-haven appeal.”

Gold and Bitcoin both broke their previous all-time price highs in 2020. Gold bested its record high in July, going on to surpass $2,000 per ounce in August, according to data from TradingView.com. Bitcoin broke its record high in December, and doubled from there in the weeks following.

Proponents often argue that Bitcoin is like digital gold, but with properties that make it easier to store and transport. Industry leaders have also been known to pit the two store of value assets against each other. 

To see eye-to-eye? Crypto industry should start embracing regulation

Now it’s up to the crypto industry itself to start engaging with and accepting regulations.

Since the exuberant crypto bull run of 2017, regulators have increased their activity in the industry. United States governing bodies such as the Securities and Exchange Commission, the Department of Justice and the Commodity Futures Trading Commission have all pursued various types of legal enforcement. 

From December 2020, there has been an even further regulatory push, including a proposal from the Financial Crimes Enforcement Network aimed at heightened crypto wallet overwatch. What do crypto industry players think of regulation at present?

Dean Steinbeck, co-founder of Horizen Labs, told Cointelegraph that, indeed, in conjunction with increasing institutional involvement, “notices from entities such as the SEC, OCC, IRS and FinCEN have become more regular.” He added: “Over the recent few months, we’ve continued seeing an increase in institutional adoption of Bitcoin/cryptocurrency slowly but surely closing the educational gap between traditional and decentralized finance.”

Regulatory waters remain murky

Over the course of 2020, a number of sizable mainstream entities and individuals, including MicroStrategy, MassMutual, Square and Paul Tudor Jones, unveiled their large purchases of Bitcoin. In 2019 and 2020, U.S. regulators increased their activity in the space, both in terms of enforcement as well as clarity.

“However, these notices and regulations are often convoluted and unclear, which, in turn, makes them meaningless and misguided in the eyes of the crypto community,” Steinbeck said, adding:

“What is preventing the creation of transparent and fair regulation? Those drafting these regulations do not interact with crypto on a day-to-day basis. If we can change the system in which these notices, rules and policies are created, the community may be more receptive to proposed regulations being put into place.”

The past two years or so have yielded a number of regulatory actions. The Office of the Comptroller of the Currency gave national banks the go-ahead for crypto custody. The Internal Revenue Service attempted to issue clarity on taxes, although the agency’s effort added confusion in the process. The IRS also added a question about digital asset ownership to its tax reporting forms.

More recently, the CFTC and DoJ went after crypto derivatives exchanges BitMEX, the SEC filed a suit against Ripple, claiming its XRP asset as a security, and FinCEN proposed a rule to monitor the flow of funds to self-custodied crypto wallets, as well as between platforms.

“As an industry, we’ve come a long way but, in the same vein, are just getting started,” Konstantin Richter, founder and CEO of Blockdaemon, told Cointelegraph when asked about his thoughts on the current crypto regulatory scene, adding: “This past year, crypto regulators seemed to be moving faster and asking better questions — not easier questions per se.”

Richter noted a present opportunity to guide governing bodies in learning more about the industry. He added:

“I think we are collectively in a position to put our best foot forward to encourage and inform regulators on the best ways for them to be partners in innovation with the crypto industry at large and also enact more of the safeguards and standards required for continued institutional and mainstream adoption.”

In terms of educated government rule, President Joe Biden’s pick for SEC chairman, Gary Gensler, will likely bring a wealth of crypto knowledge into his position. Gensler taught a course on crypto and blockchain at the Massachusetts Institute of Technology’s Sloan School of Management. Recent Cointelegraph reporting reveals Gensler’s immense knowledge of the industry.

Digital asset regulation is not a foreign concept

“Crypto regulation has always been an important topic, with news or even just rumors causing major price fluctuations in the past,” Philip Salter, head of mining operations for Genesis Mining, told Cointelegraph.

Regulation has increased in line with crypto’s growth as an asset class. Part of its departure from a regulatory gray area can include government agencies fielding comments from the sector. Industry participants, for example, flooded FinCEN with comments recently on the governing body’s proposed crypto wallet regulation.

“We are seeing a much more open and knowledgeable discussion on crypto regulation lately,” Salter said. “The big new topic seems to be if KYC is required for personal wallets and coin holdings,” he explained, adding:

“This would have major implications and possibly cause some panic if enacted in the U.S. I think, generally, it’s the best not to worry too much about the short-term rumors and regulations but, instead, to take a step back and acknowledge that it will take years to reach a final conclusion on crypto regulation. We are talking about a financial revolution here, there will surely be battles.”

Erik Finman, an early crypto buyer who became a millionaire via his Bitcoin investments, sees regulation as a long-standing point of importance. “Regulation has always been the greatest challenge to cryptocurrency, and I think there’s been a bit of a pause with some of the political turbulence focusing on other things,” Finman told Cointelegraph, adding:

“Under the new administration, cryptocurrency advocates will need to do their best to work with the government to create win-win scenarios.”

As the U.S. continues firming up its government’s roles after a presidential changeover on Jan. 20, 2021, the atmosphere around crypto regulation remains to be seen. Gensler as the SEC’s chairman will bring a wealth of crypto knowledge to the commission, which could pave the way for educated regulation.

Janet Yellen, the president’s Treasury Secretary choice, however, worries about crypto’s role in criminal transactions, as per her recent comments. Meanwhile, the industry awaits new developments on FinCEN’s wallet regulation proposal, for which the agency recently extended the comment period.

Robinhood ordeal shows broken system and importance of regulation, crypto industry execs say

Richard Byworth of EQUOS and Aleks Svetski of Amber share their thoughts on Robinhood's suspension of GameStop stock buys.

Over the past few days, a number of stocks, such as GameStop (GME) and AMC Entertainment (AMC), have risen dramatically in price, reportedly in line with attention from Reddit users buying in the face of selling pressure from big players. Popular trading platform Robinhood subsequently began restricting customers’ ability to buy multiple assets associated with the drama. When asked about his thoughts about Robinhood suspending GameStop stock purchases, Richard Byworth, CEO of crypto exchange EQUOS, noted the importance of freedom in the markets. 

“It's always important to have free and transparent markets for all traders, and maintaining an open trading book that is available for everyone to use is a responsibility of all trading venue providers,” Byworth told Cointelegraph. “The GameStop issue and platform responses will likely see crypto assets come more into focus.”

On Jan 22, one share of GME cost about $53, according to TradingView.com data. By Jan. 28, GME hit a peak of roughly $508 per share. In the hours following its peak price, the asset dropped all the way back down to approximately $113. Since then, GME has remained volatile in price, ranging between about $197 and $411.

“I think it’s clear indication of how broken and fundamentally rigged the traditional financial system is,” Aleks Svetski, co-founder and CEO of Amber, a Bitcoin investing platform, told Cointelegraph.

“This will set all of the wrong precedents and is one of the final nails in the coffin for the relationship between Main Street and Wall Street,” he added. “The WSB people are also likely to move to Bitcoin next as they realise it’s the only thing that can’t be turned off.”

The folks thought to be responsible for the surging stocks are part of subreddit called Wall Street Bets, sometimes shortened to WSB. The squad reportedly looked for stocks with vast short-seller interest and bought up shares of those assets, causing price rallies, a CNBC article said on Wednesday. Robinhood suspended the purchase of certain associated assets on Thursday.

What type of effects might Robinhood’s asset purchasing suspension have on the crypto space going forward? “Situations like this show why regulation is important and ensuring there are orderly markets, equal access to information for everyone and trading venues that provide customers with fair opportunities to trade, hedge and take a position,” said Byworth, adding:

“In crypto, there have been some exchanges that have not provided this kind of trading environment, and often it is the customer who loses. It is incumbent on exchanges to provide a safe, transparent and compliant trading environment so that investors can access markets that are trusted - by regulators and by traders. At EQUOS, we do not trade against clients on our platform like most crypto exchanges nor do we sell our clients data to High Frequency Traders like many traditional brokers have done.”

The United States Securities and Exchange Commission, or SEC, recently expressed the intent to investigate the events of the past few days.

Coinbase comes back online following issues

Coinbase users were reporting issues with certain purchases, though normal function has now seemingly returned.

Coinbase users recently reported suffering difficulties on the platform. Coinbase and its trading platform, Coinbase Pro, have a history of experiencing outages and other issues during high-traffic times. 

Although users reported problems early this morning, a status update from Coinbase now indicates the platform is working normally once again. "All services are back up," the update said at 12:33 pm EST. "We are currently monitoring our systems."

“Coinbase has disabled buying and selling of some crypto assets,” Morgan Creek Digital co-founder Anthony Pompliano tweeted earlier on Friday morning. Multiple folks on Twitter posted pictures of their difficulties when attempting USD purchases on Coinbase. 

Crypto-Twitter personality Ryan Broderick also noted issues with buying BTC via the euro. He added in a separate tweet:

“For context, a bunch of big Twitter account have put #Bitcoin in their bios. Elon Musk being the biggest. Now $BTC is up almost 15% in the last 24 hours.”

Significant chatter has arisen in recent days surrounding drama in the financial markets and on social media. GameStop’s stock, under the ticker GME, enjoyed a significant rise in price, allegedly in connections with the efforts of a trading group on social media. Popular trading platform Robinhood recently suspended buying for a number of assets, including GME.

Coinbase often suffers platform downtime and technical difficulties. Multiple outage instances occurred in 2020, including during notable Bitcoin price moves in April and May. 

FTX created a Wall Street Bets index including GME, DOGE and others

The FTX crypto exchange’s new index is called the Wall Street Bets Index.

Following numerous headlines about the meteoric price rise of several assets, including GameStop (GME), AMC Entertainment (AMC) stocks, and Dogecoin (DOGE), crypto exchange FTX has listed an index following the assets. FTX named the index after Wall Street Bets — the Reddit group thought to be associated with pumping the prices of those assets. 

“We're happy to announce that we have launched trading for a basket of Wall Street Bets markets,” FTX said in a public statement on Thursday. The index trades as a futures contract with expiration on March 26, 2021.

When asked if the product is just a short-term offering on FTX, the exchange’s CEO, Sam Bankman-Fried, said it depends. “We'll see,” he told Cointelegraph. “If there's enough demand we'll list Junes!”

Bankman-Fried also explained that the WSB index futures contract is “cash settled vs the index of tokenized share markets on FTX.”

The Wall Street Bets, or WSB, index, officially trading under the ticker WSB-0326, “tracks the price of NOK, BB, AMC, GME, SLV, DOGE, and FTT using a weighed average of their prices,” FTX says in the product’s description on the exchange.

Each asset price holds a weight of 16.5% in the basket, except for FTT, which has a weight of just 1%. Adding the six assets with a weight of 16.5%, and FTT with a weight of 1%, gives a total of 100%.

Over the last several days, the Reddit group known as Wall Street Bets has reportedly worked to pump the prices of multiple stocks, including GME and AMC, in light of larger entities’ efforts to short those assets. Yesterday, DOGE also pumped massively in line with chatter from the group.

Harvard crypto skeptic calls Bitcoin a ‘hedge against dystopia’

Harvard professor Kenneth Rogoff says that he doesn't see Bitcoin succeeding, barring extenuating circumstances.

Often touted as a store of value or hedge asset, Bitcoin (BTC) has gained significant mainstream adoption over the past several months. Kenneth Rogoff, a public policy and economics professor at Harvard University, doubts the asset’s success, however. 

"I can see Bitcoin being used in failed states,” Rogoff said in a Bloomberg interview on Thursday, adding:

“It's conceivable, you know, it could have some use in a dystopian future, but I think the governments are not going to allow pseudonymous transactions on a big scale. They're just not going to allow it. The regulation will come in. The government will win. It doesn't matter what the technology is."

Bitcoin has weathered its fair share of criticisms throughout its 12-year history. Gold advocate Peter Schiff often comments against the technology, investor Warren Buffett once referred to the asset as "probably rat poison squared" and financial commentator Dennis Gartman expressed skepticism toward Bitcoin in late 2020, just to name a few examples.

Bitcoin adoption has continued to grow despite the skeptics, however. The asset broke past previous all-time price highs, hitting a recent peak near $42,000 after multiple large mainstream companies publicized their BTC purchases in 2020.

"I certainly think I agree that it's speculative,” Rogoff said of Bitcoin.

He added:

"I've been a Bitcoin skeptic, and certainly, the price has gone up, but there's sort of an ultimate question of what's the use. Is it just valuable because people think it's valuable? That is a bubble that would blow up."

“I think, over the long run, if there's not a use, yes, the bubble will burst,” Rogoff posited. “I hope there's not such a valuable use, but I suppose it’s a hedge against dystopia."

In contrast, leaders in the crypto industry have presented Bitcoin as a hedge under less abnormal circumstances.

Genesis Mining head forecasts importance of layer-two Bitcoin solutions

He feels Bitcoin might need such solutions, even with the coin in a store of value role.

Would Bitcoin and its blockchain be able to handle mainstream adoption as a store of value without requiring second-layer solutions? Genesis Mining’s head of mining operations, Philip Salter, holds a mixed view. 

"I think Bitcoin is a good store of value regardless of transaction fees,” Salter told Cointelegraph. “The issue is — the higher the fees are the larger is also the minimum value that can be efficiently transferred.”

Bitcoin (BTC) has stood the test of time up to this point, with BTC maintaining its place as the crypto industry’s highest market cap asset for the past 12 years. Bitcoin is seen as more of a store of value than digital cash these days, however, and Salter thinks complications may still arise from this shift in perceptions:

“Some years ago it was possible to store and transmit $1 efficiently, since tx fees were effectively zero. Currently, sending a transaction can easily cost $15, so it is not sensible to transmit $1 any more. If this trend continues due to more use of BTC and higher BTC prices, it will become prohibitive to transfer value in common amounts and it will be only an effective store of value for very large amounts.”

“That's why I think that 2nd Layer solutions are a necessity not only for the use of BTC as a currency but also for the long term feasibility of BTC as a store of value,” Salter added. Industry players have worked on layer-two scaling solutions, such as Lightning Network, in an effort to facilitate small transaction capabilities.

Salter himself uses Lightning Network solutions for his own Bitcoin endeavors. “I personally upgraded my personal phone wallet to a lightning-only wallet (Phoenix), so that I can even in these crazy times pay with coins quickly and cheaply,” he said. “To anyone who tried to use lightning two years ago and found it confusing, I strongly suggest that you give it another try now that it's far more established and user friendly to use.”

Bitcoin’s scaling debate was a focal point of discussion in 2017 and 2018. In September 2020, MicroStrategy said it faced no major issues during one of its BTC accumulations. The firm bought 38,250 BTC using a combination of off-chain and on-chain avenues.

Blockfi exec explains institutional outlook on altcoins

He says that institutional players look for certain volume and market cap levels when considering altcoins.

Could institutional investors begin expanding into altcoin purchases? Blockfi’s vice-president for Europe and Asia, David Olsson, mentioned liquidity as a component of consideration.

Some digital assets on the market, including newer ones, may see high volumes at times. “The question is, how long can that be sustained,” Olsson explained during a CfC Moritz conference segment on Wednesday, adding:

“Chainlink (LINK) is one that has held up decent volume over time, but a lot of them tend to, you know, be kind of the next greatest thing, and then fizzle out and volume disappears,”

Ethereum (ETH) sits right below Bitcoin with a market cap of roughly $152 billion. Tether (USDT) is in third at approximately $24 billion, and Polkadot (DOT) in fourth with about $15 billion. At 100th on the list, Lisk (LSK) holds a market cap of about $186 million. Thousands of other crypto assets have market caps which descend from there.

Olsson said of prospective altcoins:

“So I think that, from our trading desk perspective, we really want to see kind of one year trading history where the market cap is sort of nearish $1 billion and that it’s at least trading sort of $100 million a day in volume and that the sources of liquidity are reliable in terms of the exchanges where they’re trading.”

The crypto industry still has its skeptics, however, including billionaire Mark Cuban, who recently compared crypto assets to the dot-com bubble of the late 90s and early 00s.

Sweden is working with DLT for its CBDC proof-of-concept

Sweden’s central bank deputy governor recently updated the public on the country’s CBDC exploration.

Central Bank Digital Currencies, or CBDCs, were the talk of the town for many in crypto and banking in 2020, with Sweden's prospective e-krona one of the frontrunners. Sweden’s central bank, Sveriges Riksbank, is investigating distributed ledger technology, or DLT, for its CBDC proof-of-concept, the bank’s deputy governor confirmed today. 

“The technology we use is the DLT called Corda,” Cecilia Skingsley, the deputy governor of Sweden’s central bank, said on Wednesday during a CfC St. Moritz conference panel. She did, however, decline to turn the announcement into a full-bore advertisement for Corda:

“The reason we use Corda is not that we necessarily think that Corda is the best and optimal choice for an eventual future e-krona, but when we did our procurement process, the proposal from Accenture based on Corda we found was the one that fitted our criteria the best.”

The Riksbank teamed up with blockchain consulting outfit Accenture in late 2019 for its CBDC endeavors. The bank has put in slightly more than 12 months of work on its e-krona proof-of-concept, Skingsley noted.

The nation has been working on a CBDC for years already. Last year yielded a number of headlines on Sweden’s e-krona development. Back in December 2020, the country’s leaders began evaluating the ramifications around introducing a CBDC.

Skingsley, however, clarified that the country has not yet confirmed its decision to issue a CBDC. She said:

“Although we are exploring this issue, the Riksbank has not decided to issue an e-krona. We are still in the phase when we are investigating different options. So the Riksbank is building a proof-of-concept for an e-krona, and we are doing this in order to get a better understanding of how an e-krona could work in reality, and what trade-offs there are in choosing between different properties or functionalities.”

The past year saw CBDC interest from many countries into what resembles a race, with China taking significant steps forward.

Horizen Labs’ co-founder says CBDCs could raise Bitcoin awareness

Central Bank Digital Currencies, or CBDCs, will likely affect Bitcoin in some fashion.

Central bank digital currencies gained traction all over the world in 2020, as all the world's biggest economies considered producing their own digital money. But how will CBDCs affect Bitcoin (BTC) if every country comes out with its own? Dean Steinbeck, co-founder and chief operating officer of Horizen Labs, posited that Bitcoin’s core atmosphere would remain the same on the surface. 

“There has recently been plenty of activity internationally with governments exploring the development of native virtual assets,” Steinbeck told Cointelegraph. Steinbeck also works as general counsel at Horizen. “A healthy, robust virtual assets ecosystem has the potential for broader financial inclusion, more efficient markets, and so forth,” he added.

China seemingly led the CBDC charge in 2020, and has continued its hot pursuit of such an asset. The United States, on the other hand, positioned itself more toward accuracy instead of rushing a digital cash option to the market, although it has recently expressed greater emphasis on CBDC focus.

“It’s hard to say how the growing interest behind CBDCs will affect bitcoin, or cryptocurrency in general,” Steinbeck said, adding:

“Bitcoin was always meant to operate outside of governmental control in a peer-to-peer fashion, so on the face of things not much will change for those attracted to bitcoin on principle. However, it remains to be seen if governments will begin attempts to crack down on digital assets operating outside of whatever system they have decided is ‘correct.’”

Bitcoin is a borderless asset run by people and code, with a value untied to national currencies. In contrast, countries will peg the value of their CBDCs to native fiat currencies, although exact specifications remain unclear at this stage. Stablecoins tied to the value of national currencies could see impact from CBDCs in the future, according to recent comments from Decred’s co-founder, Jake Yocom-Piatt.

“I believe the collective awareness of censorship — among many other variables — bodes well for the future of cryptocurrency,” Steinbeck said. “Broader awareness of the benefits of digital currency, like CBDCs, also has the potential to expose more casual users to the world of crypto.”

France continued its CBDC testing earlier today with a pilot interbank payment.

Bitcoin can scale on chain just fine as a store of value, Blockdaemon CEO suggests

Could Bitcoin's blockchain handle full mainstream adoption?

Can Bitcoin’s (BTC) blockchain handle full mainstream adoption as a store of value, without needing layer-two scaling solutions? Konstantin Richter, founder and CEO of blockchain infrastructure company Blockdaemon, seems to think so.

“Bitcoin is the best cryptocurrency suited for store of value,” Richter told Cointelegraph, adding:

“In terms of what the Bitcoin blockchain can currently handle from a latency and throughput point of view, Bitcoin is very strong. If we start talking about using Bitcoin for payments, that’s where the need for layer-2 scaling comes into play, but for people who plan to buy and hold, there’s no need right now.”

Bitcoin’s pseudonymous creator, Satoshi Nakamoto, produced the digital asset as “A Peer-to-Peer Electronic Cash System,” as noted in the asset’s 2008 white paper. As price and adoption rose, however, Bitcoin’s role seemingly changed from a transactional, cash-like asset, to a gold-like store of value, due to relatively slow transaction times and high fees.

Near the end of the last Bitcoin bull run in 2017 and early 2018, Bitcoin’s transaction fees rose significantly. Since then, teams have worked on various layer-two solutions for moving BTC around, such as the Lightning Network — although as a store of value, Bitcoin’s blockchain may work fine as-is for now, based on Richter’s comments.

“Infrastructure and liquidity provisioning are also converging, allowing for new business models to be tested,” he included, adding:

“Exchanges, custodians and financial institutions are looking for bridges to all major protocols which is possible with horizontally scaling blockchains across a common stack which is where we are actively collaborating with protocols to support these integrations and the growth of the stack.”

Bitcoin still has the largest market cap of any crypto asset, even after a decade that ushered in thousands of new cryptocurrencies.

How to regulate exchanges: Learn crypto from Biden’s SEC chair pick, part 2/3

The SEC's incoming chair predicted the crackdown on crypto exchanges over AML concerns back in 2018. See what other insight he had.

This is the second in a three-part series based on Gary Gensler's extensive prior public statements on crypto. Here is part 1. A link to part 3 will appear here when it is published. 

Gary Gensler will likely become chairman for the U.S. Securities and Exchange Commission, or SEC, in the coming days. A professor at the Massachusetts Institute of Technology, or MIT, Gensler knows his way around crypto and blockchain, evident in his leadership of a class on the subject at MIT’s Sloan School of Management. 

While teaching the Fall 2018 semester, Gensler gave a wealth of insight into crypto regulation. In 2018, U.S. regulators were very much struggling to get a grip on the industry. But between the Bitcoin bull market that ended 2017 and the subsequent surge in initial coin offerings, it had become a top priority among the financial regulatory apparatus. Gensler's thinking was reflective of many broad trends that has since come about.

Crypto exchanges as the regulatory chokepoint

One element of crypto regulation that Gensler gives particular attention to is exchanges. A paper that Gensler authored with several of his colleagues at MIT around the time laid out their centrality to regulators:

“As most jurisdictions around the globe do not yet have specific regulatory regimes governing cryptocurrencies, ICOs or related tokens, exchanges are a critical gateway to protect against illicit money transmissions.”

Which largely remains true. Also called “fiat on- and off-ramps” in legalese, crypto exchanges function as centralized intermediaries in a largely decentralized economic system. The U.S. government thus pressures exchanges first in the crypto industry. Gensler's team argued that the situation was untenable:

“In the US to date, the only regulatory safeguards have been through state-administered money transmission regulations. This approach — regulating exchanges’ custodial duties in the same manner that Western Union and MoneyGram are regulated — has not been satisfactory.”

 The paper elaborated on the need to treat exchanges like exchanges, which register nationally: "To better protect the investing public, though, crypto-exchanges will need to be regulated more akin to traditional exchanges." 

Unaudited exchange data

Gensler also noted a few interesting points on crypto exchanges and opaque information on trading volumes. He used an October 2018 report from CryptoCompare on the most prevalent digital asset trading platforms to discuss a lack of clarity around exchange numbers:

“We don't know if these numbers are accurate. They are what CryptoCompare collects from 140 exchanges. But it doesn't mean they are accurate. One way they can be inaccurate is an exchange can just outright lie. And if there's no rule or law against it. They can do that.”

Gensler also mentioned market manipulation efforts, such as wash trading, as different methods of dishonestly producing exchange output data and prices. Other areas lacking data included the number of users on any given exchange, as well as those users’ activity levels.

Wash trading remains a huge issue in many global exchanges, with crypto being especially vulnerable. The situation has improved remarkably since 2018, but data quality from many exchanges remains a contentious subject. Crypto exchanges based in the U.S. are subject to much more aggressive auditing measures than those outside the country. For a long time regulators didn't really know who was accessing which exchanges, which led to the subsequent push for more user verification.

Few crypto exchanges had KYC protocols

Crypto exchanges are typically the front line for know your customer, or KYC, and anti-money laundering, or AML, laws in the U.S. Platforms have to gather a certain amount of information on their customers to operate in the U.S., although the exact degree is always a subject of debate.

As of 2018, 25% followed "partial” KYC, and 28% observed “absolutely none.” Gensler added: “I hope none of those 28% are operating in the US. But they might be.”

The U.S. has cracked down on crypto companies in the years since 2018. A large number of crypto exchanges now block customers residing in America, with Binance’s 2019 departure being a particularly notable example. U.S. regulatory bodies went after major derivatives exchange BitMEX in October 2020, in part citing a lack of KYC compliance that allowed U.S. persons to access investments that are not allowed in the country.

Predicting the regulatory crackdown

The crypto industry, as of 2018 at least, struggled with a lack of protective parameters, according to Gensler. He also predicted tougher incoming U.S. regulatory oversight in the U.S., which has indeed come true.

“They'll bring down a heavier footprint — bring down the hammer, if you wish — in 2019 or 2020,” he posited. “I don't think that it’s going to be in 2018.”

Various regulatory authorities have in fact come down on the crypto space since 2018, with the U.S. playing a particularly hawkish role worldwide. This is evident in examples like the SEC’s numerous cases against ICOs, the CFTC’s action against BitMEX or the DoJ’s seizures of illicit stockpiles. But contrary to popular belief, regulation in crypto is often good news for the industry when it provides a clear path forward. 

If Gensler takes the SEC chair, the crypto industry would gain someone who understands the crypto and blockchain space in depth. Producing rules and regulations based on an educated industry stance would likely help grow the space.

New timeline charts Bitcoin’s price alongside historical events of the past decade

Have major events throughout Bitcoin's history impacted its price?

Bitcoin (BTC) has travelled an eventful path since its creation in 2009. TradingView.com recently unveiled a BTC chart showing major events in the digital asset’s history, alongside the cryptocurrency's ever-changing price.

Released on Tuesday, the chart points out potentially significant events on Bitcoin’s price path, showing a "consolidated history of Bitcoin overlaid on the de facto crypto charts (by TradingView)," the platform’s general manager, Pierce Crosby, told Cointelegraph.

TradingView’s team intends to update the chart every 14 days — though if major news breaks, the team says they will adjust the metrics sooner. Clicking various bubbles on the chart produces an explanation of each event. The site also lists events in blog-like form below the chart.

Crosby said:

"TradingView Timelines have been a unique undertaking by our core visualization team and show us the importance of putting ‘news in context’ (the corresponding chart). We expect this logic will become much more mainstream in the coming years to prove the relevance of a given news story. This is just the first step."

Worth less than $1 in its earliest days, the digital asset rocketed up past $40,000 in 2021. Many major events have occurred along that price path, such as the Mt. Gox ordeal.

"Our initial observations show the immediate impact of historical events on the price of the asset," Crosby said. The BTC timeline shows a barrage of events, although the most recent headlines focus on the numerous price hurdles broken by the asset.

"Looking at some of the early historical events, they are dwarfed by the price action in 2015 - 2017 the first period of time when current events captured the mainstream imagination of investors," Crosby observed from the chart.

Such a timeline adds a tool for discussions on Bitcoin’s price as it pertains to events and possibly correlated reactions. "Looking solely at BTC price movements in the market gives an incomplete view of why its price fluctuates the way it does, in a seemingly volatile manner," Crosby said, adding:

"Timelines is the first comprehensive source to share price movements along with corresponding real-life events, so investors can understand why there are certain spikes or dips, helping inform them for the future and giving them a deeper understanding of the asset they’re trading."

Biden team announces pick to lead SEC

Biden’s pick to run the SEC has some serious crypto and blockchain chops.

President-elect Biden’s team recently unveiled additional folks it plans on nominating for various positions after the inauguration on Wednesday. 

One key pick is Gary Gensler as Chairman of the Securities and Exchange Commission, or SEC, according to a statement from Biden’s transition team on Monday. On Jan. 12, Reuters reported on anonymous sourcing forecasting Gensler as Biden’s choice. Today’s statement from the Biden team confirms the President-elect’s expected choice.

“Gary Gensler served as chairman of the U.S. Commodity Futures Trading Commission from 2009 to 2014,” the statement said. Coming immediately after the financial crisis, Gensler's term at the CFTC saw him enforcing the provisions of the nascent Dodd-Frank Act in commodities markets. 

Formal nomination will have to wait until Biden actually takes office, and will further need confirmation from the U.S. Senate. January run-off elections in Georgia, however, secured the Senate for the Democrats. 

Gensler also taught classes on blockchain and crypto at MIT. Having someone knowledgeable on the crypto and blockchain industry leading the SEC could pave the way for educated regulation and guidelines. The SEC has been critical for its role in regulating the initial coin offering market, which has quieted down significantly since the commission began treating many ICOs as unregistered public securities offerings

Decred co-founder explains the possible effects of a CBDC takeover

How would mass-scale CBDC issuance impact the crypto space?

Over the course of 2020, numerous countries across the globe raced toward their own digital versions of their currencies, known as central bank digital currencies, or CBDCs. The crypto industry still has its selling points, however, even if most countries launched CBDCs, according to Jake Yocom-Piatt, co-founder of crypto project Decred.

“I expect many nation states will create their own CBDCs in the not-so-distant future, but there is a key differentiator between CBDCs and cryptocurrencies,” Yocom-Piatt told Cointelegraph. “Cryptocurrencies, e.g. Bitcoin and Decred, are fundamentally fairer systems than fiat currencies, so while CBDCs may adopt many cryptocurrency features, they cannot compete on fairness.”

Last year, China led the way in terms of CBDC development pace, while the United States took a slower approach. Recent developments indicate an increased sense of importance around CBDC development in the U.S. CBDCs will likely represent digital versions of countries’ dollars, although many details remain in flux at this stage.

As mentioned by Yocom-Piatt, crypto assets pose different core frameworks, depending on the asset and its makeup. Bitcoin (BTC), for example, remains untied to national currencies and borders, run by computer code and miners. 

“Based on cryptocurrencies being demonstrably fairer with deterministic issuance schedules and self-custodied assets, I expect them to be relatively unaffected by CBDCs, which are just digital fiat,” Yocom-Piatt said.

Stablecoins, on the other hand, might logically feel more effect from a CBDC-run world, as their main purpose is to represent fiat in digital form, on the blockchain, pegged to specific value. The future of crypto-native stablecoins could still depend on the upcoming specifications of CBDCs though.

“Depending on what actions you can perform with your CBDC assets, it could make stablecoins mostly obsolete,” the Decred co-founder noted. “If there are too many restrictions on CBDC assets, stablecoins may compete on a flexibility front.”

Stablecoins, such as USDT and USDC, function on the blockchain and allow for a bevvy of transactions and storage accommodations. USDC in particular saw a notable amount of usage within the decentralized finance, or DeFi sector of crypto in 2020.

GBTC has a new a competitor in the OTC Bitcoin trust market

Another way to buy Bitcoin in stock form has surfaced.

A firm called Osprey Funds is offering an over-the-counter, or OTC, Bitcoin (BTC) trust under the ticker symbol OBTC. The trust is similar to Grayscale’s Bitcoin Trust, known as GBTC.

“The Osprey Bitcoin Trust provides easy access to bitcoin,” the firm’s website says. “With a 0.49% management fee, it is the lowest cost solution.” Osprey is an entity that “builds digital asset solutions for intelligent investors,” claiming OBTC as its “flagship offering,” the website adds.

"OBTC began being quoted in the OTC market today, Friday 1/15," Osprey Funds' CEO, Greg King, told Cointelegraph, adding:

"As of 1/14, the product met the requirements to become quoted under the ticker OBTC in the OTC market. Over the next 30 days, the fund will pursue DTC eligibility and after February 14, all additional market makers are allowed to quote it. After that point it will be considered 'fully launched.'"

Competitor Grayscale has become one of the largest Bitcoin holders in the world, possessing over 500,000 BTC as of November 2020. The firm is behind GBTC, which serves as a way to buy Bitcoin in stock share form. Each share of GBTC represents a fraction of a Bitcoin — 0.00094 BTC per share at the time of publication, based on Grayscale’s website. Interested parties buy and sell shares over-the-counter, available on mainstream brokerage platforms.

GBTC, in part, offers the public easier access to Bitcoin through more traditional avenues, without requiring them to custody their own funds. Grayscale’s Bitcoin Trust comes with a yearly 2% management fee, however. Osprey’s recently unveiled BTC trust touts a fee of 0.49%. “Osprey is likely trying to capture some of that market share by undercutting GBTC’s fee, according to Bloomberg Intelligence,” Bloomberg wrote in a report on Friday. Osprey has called on Fidelity as the custodian for the endeavor.

“We are always happy to see digital currency access products enter the market, especially here in the U.S.,” Grayscale CEO Michael Sonnenshein told Bloomberg.

“Accredited investors face a $25,000 minimum to buy directly into the trust,” Bloomberg wrote. “Shares have a lock-up period of one year before they can be sold in the secondary market.” In contrast, Grayscale’s Bitcoin Trust requires assets to be locked up for six months. Osprey could see its 12-month lock-up cut in half in the future, however, based on King’s comments to Bloomberg.

Wilshire Phoenix, an investment firm, filed for a similar product with the Securities and Exchange Commission in June 2020.

Here’s how institutional investors ignited Bitcoin’s rally to $40,000

Experts weigh in on the main events from 2020 that impacted Bitcoin’s price the most.

From the COVID-19 pandemic to mass-scale money printing and social unrest, 2020 was a wild year. Alongside a barrage of newsworthy events, Bitcoin (BTC) also turned in a standout year in the price category, ultimately rising from $3,600 to past $41,950, besting its 2017 all-time high of $19,892

A number of events, both crypto-specific and mainstream, appeared as catalysts for Bitcoin’s price action. Several crypto industry players weighed in on the events they believe affected BTC’s price action the most in 2020.

Morgan Creek Digital co-founder Anthony Pompliano labeled Bitcoin’s halving as the event with the greatest effect on the asset’s price action, according to his comments to Cointelegraph. “The incoming daily supply decreased and demand has increased significantly, which has led to an increase in the USD price,” Pompliano said.

Bitcoin’s halving occurred on May 11, 2020. The third such event since the asset’s launch in 2009, BTC’s halving resulted in miners receiving 6.25 BTC for block rewards instead of 12.5 BTC. Previous Bitcoin halvings brought price declines followed by sideways price action, although tremendous upswings eventually occurred after each halving.

The event in 2020 was no exception, as Bitcoin soared past record highs several months after the May event. The Bitcoin Stock-to-Flow model from analyst Plan B serves as a popular forecasting tool in the crypto space. The model predicts increasing future BTC prices based on halvings decreasing the asset’s incoming supply.

BTC/USD 1-week chart. Source: TradingView

Pierce Crosby, general manager for crypto asset charting platform TradingView, told Cointelegraph about three developments that he believes impacted the value of Bitcoin the most in 2020. The first aspect he noted: “Consumer continued adoption, apparent in Coinbase’s planned IPO.”

Major United States-based crypto exchange Coinbase recently filed with the Securities and Exchange Commission for approval to conduct an initial public offering. The move would take the company public, resulting in tradable company shares on the mainstream U.S. stock market. The news actually coincided with moderately downward BTC price action on the day of the development, although Crosby’s comment appears to indicate the IPO as simply a result of underlying and ongoing demand.

The “institutional adoption, seen in MicroStrategy’s treasury re-allocation to Bitcoin” was another rousing event on BTC’s price in 2020 according to Crosby. A slew of large mainstream companies unveiled large Bitcoin positions in 2020. It all began as billionaire hedge funder Paul Tudor Jones revealed his Bitcoin position in May 2020.

In the latter half of the year, business intelligence firm MicroStrategy picked up hundreds of millions of dollars in Bitcoin. Other firms, such as Jack Dorsey’s Square and MassMutual, also publicized BTC purchases as part of a buying trend for big players.

Bitcoin price appreciation as institutional investors stepped in. Source: TradingView

Crosby also said, “the boom of DeFi and the corresponding leveraged products that were built by this space” affected BTC’s price in 2020. Last year, a bevy of DeFi solutions entered the crypto industry, giving participants new ways of leveraging their capital.

Resembling 2017’s ICO bubble at times, decentralized finance moved significant money around in 2020. Related assets saw dramatic price swings, while shady projects also surfaced during the boom. Meanwhile, in line with the hype, Bitcoin rode an upward price trend toward record levels after recovering from its COVID-19-related price drop in March.

Speaking of the pandemic, Cheds, a crypto trader and analyst on Twitter, said COVID-19 steered Bitcoin’s price significantly last year.

Cheds said:

“COVID by far had the biggest impact on $BTC #Bitcoin price in 2020, taking it down from 8K down to around 3K briefly.”
Bitcoin price on Black Thursday. Source: TradingView

In March 2020, amid rapidly rising COVID-19 concerns and prevention measures, mainstream markets and crypto assets fell sharply in price. Bitcoin, however, rebounded more quickly than traditional financial assets. “Without a doubt, it sped up the process of finding a bottom, and since then, we have ripped back up to all-time highs, helped along by news of institutional investment,” Cheds said of the pandemic.

“Events like the public purchases of MicroStrategy and the addition of $BTC to PayPal’s arsenal have added a veneer of legitimacy that was missing, and help pave the way for even more of these types of investments in 2021,” Cheds added. PayPal unveiled the addition of multiple crypto assets to its platform back in October.

2021’s rally is driven by fundamentals, not FOMO

When asked what events had the least effect on Bitcoin’s price, Pompliano said, “most people’s opinion on Twitter,” with a smile. Meanwhile, Crosby pointed toward a detachment of Bitcoin from the political arena. “Very little impact came from politics this year, which is a substantial difference versus previous years,” he said. “We expect the impact of governments to be more visible with Bitcoin in 2021.”

Rounding out the year, the U.S. government proposed a ruling to monitor self-custodied crypto-asset wallets, for which the short comment period recently ended. The SEC also filed a movement against Ripple and its XRP asset in late-December. Both events could signal the beginning of increased government involvement.

Pompliano has often called Bitcoin a non-correlated asset when it comes to other financial instruments. An October 2020 report from Fidelity lends validity to such a view, concluding that Bitcoin holds virtually zero correlation to the price action seen across other markets.

Over the course of 2020, the world gave Bitcoin’s price plenty of headlines to react to. Some news events seemed impactful, while others did not, although definitively proving any direct correlation may be impossible.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

If Bitcoin doesn’t break record highs right away, it wouldn’t be the worst thing, trader posits

Trading sideways for a while could be healthy for Bitcoin.

After its rise past $40,000, and a correction back to nearly $30,000, Bitcoin (BTC) has rebounded once again. Stalling before jumping back up past highs near $42,000 could be good for the asset, however, according to Brian Krogsgard, a trader and podcaster going by the name LedgerStatus on Twitter. 

“Bitcoin's correction was healthy in a strong bullish environment, mean reverting back to the 20 day moving average,” Krogsgard told Cointelegraph on Thursday. “With a strong bounce now, it is time to see if it will immediately continue upward, or spend longer in prolonged consolidation, which I believe would be healthy.”

Bitcoin barely surpassed $40,000 on Thursday morning before retracing slightly, falling back into the $39,000 range, according to TradingView.com data at time of publication.

Surpassing the $36,000 mark was an important move for the asset, according to comments from CryptoWendyO, a trader and analyst on Twitter. “Unless we reclaim $36,000 I am not ruling out a further drop,” she told Cointelegraph on Jan. 12, before Bitcoin’s recovery past the level. The asset recently pushed past $36,000 with conviction. Bitcoin’s 4-hour price chart now shows a higher low.

Source: TradingView.com

Updated commentary from CryptoWendyO shows bullishness on price at present. She told Cointelegraph on Thursday:

"Bitcoin has experienced an amazing rebound at my ~$34,200 support box after that gnarly ~25% drop. I myself am in disbelief however the fundamental of 2020/2021 are different then prior Bitcoin history, currently I believe we will continue to rise and am expecting to flip $42,000 and go on a similar run after we experienced drop on 1/7/2021 from ~$34,200 to ~$28,000 to test ~$48,000."

Regarding recent price action, Krogsgard sees a correlation to one of the mainstream market's Bitcoin products. “It appears the GBTC's closing and re-opening for deposits had a real impact on demand for coins, as the re-opening of their market marked the bottom,” Krogsgard posited. “I believe we'll continue to see institutional demand on any dips.”

Run by Grayscale, GBTC is essentially the stock form of Bitcoin, with each share backed by a fraction of one Bitcoin. The company put BTC trust investments on hold back in December and reopened them this month.