The Sleeping Giant Has Awoken, Bringing Venture Capital to the Masses

Behold the mighty strength of DAO Maker. After recently celebrating DAO Maker’s 3rd anniversary, we have decided to no longer let you wait. Our loyal community and follower-base anticipated DAO Maker’s token launch for years and we are ready to serve the public demand.

Following the smashing success of Orion Protocol, DAO Maker is throwing its hat in the ring. After the completion of the private sale through our next-generation DYCO 2.0, we are ready to launch.

Among the first exchanges adopting DAO Maker’s native token ( DAO ) will be Kucoin and Gate. DAO Maker will be pioneering on Kucoin on Tuesday, February 9th. Fronting a DAO/USDT pair. Simultaneously on Gate, Tuesday, February 9th. Fronting a DAO/USDT pair and DAO/BTC pair.

Please take note of the following schedule on Kucoin and Gate:

Deposits & Trading Effective Immediately: 09:00 on February 9th, 2021 (UTC)
Withdrawal: 13:00 on February 9, 2021 (UTC)

DAO Maker Private Sale Summary:

DAO Maker Token Smart Contract Address: 0x0f51bb10119727a7e5ea3538074fb341f56b09ad

DAO Maker Token Sale Key Metrics:

Token Sale Framework: DYCO
Dynamic Supply: 234M (max refund) to 312M
Dynamic Hardcap: 2.73M – 7.8M
Dynamic Valuation: $10.92M – $31.2M

DYCO Protected:

The DAO Maker token is being issued under a 65% DYCO, meaning every single token will be refundable at 65% of the purchase value, and the refunded tokens will be burned.

The Toll Bridge:

Additionally, the DYCO will include a Toll Bridge, allowing token buyers who seek an early exit to burn a portion of their tokens to skip the vesting schedule.

The Toll Bridge gives token buyers the option to unlock all or part of their vested tokens, while paying a toll fee. The toll fee is paid as a portion of the vested tokens, which are then burned.

Participants have the option to remain committed to the vesting schedule and receive 20% of their purchased amount every quarter. Alternately, they can claim unlocked their tokens early in exchange for burning a portion of their vested tokens.

What is DAO Maker:

Self-funded since 2018, DAO Maker is now one of the most well-connected and reputable brands in the cryptocurrency space, providing industry leaders with technological products, compliance and fundraising solutions, and strategy consulting.

DAO Maker is an established consulting agency and software provider serving startups in the blockchain space. We are proud to count projects such as LTO Network, Elrond Network, Harmony Protocol, AVA Labs, 2key Network, Injective Protocol, Orion Protocol, NEM and DEFI unicorn OpenPredict to our trusted clients. DAO Maker’s client portfolio average ROI is + 3,000%, ATH (All-Time High) ROI is at an incredible + 5,300%.

DAO Maker’s Product Range:

Venture Bonds: https://mk0boxminingmedysvof.kinstacdn.com/wp-content/uploads/2021/01/dao-maker-venture-bond-.jpg 
DYCO – Dynamic Coin Offering: https://daomaker.com/dyco
SHO – Strong Holder Offering: https://mk0boxminingmedysvof.kinstacdn.com/wp-content/uploads/2021/01/daomaker-strong-holder-offerings.jpg
Social Mining: https://daomaker.com/socialmining
DAO Maker Collective Reward Pool: https://mk0boxminingmedysvof.kinstacdn.com/wp-content/uploads/2021/01/DAO-token-utilities.jpg

We are proud to share this moment with our loyal followers, supporting us for the last 3 years and placing their trust in DAO Maker’s Vision. Thank you

Disclaimer Note: DAO Maker token listings appearing on Uniswap or other Dexes neither originate from DAO Maker nor were sanctioned by DAO Maker. To protect yourself, please refrain from using non-announced ways to obtain the token.

Bitcoin Bulls Constantly Exhaust Kraken’s Liquidity Pool: CEO

Bitcoin bulls are constantly exhausting the US dollar reserve pool for opening leveraged Long positions, revealed Jesse Powell of Kraken – a US-based cryptocurrency exchange.

The chief executive officer told Youtuber Ivan on Tech in an interview that the number of traders who believe that the bitcoin price would go higher is more than those who believe in the opposite. The upside sentiment, therefore, prompts a majority of traders to borrow funds from Kraken to increase their Long positions in the bitcoin market. Many a time, the absence of Short traders – those who believe that the bitcoin price would fall, misbalances the liquidity. As a result, the margin pool keeps getting exhausted.

“There is always a broad disagreement about what the price should be. There is always someone who wants to Short bitcoin […] We definitely have a way more demand to go Long Bitcoin. But, we have got only so many dollars in the system. The margin pool for borrowing dollars to buy bitcoin is constantly being exhausted, which proves that people are bullish.”

The Near-Term Effect

Exchanges in the cryptocurrency sector offer traders to leverage up to 100 times than their principal cash balance. That means an investor with, say, only a dollar in his trade account can bet up to $100 in a single trade. In case bitcoin moves in the direction as intended by the Long traders, he/she makes multiplied gains from their $100 position. If not, then he/she loses more than $100 from their one dollar trade account. Overall, the amplified upside potential is why traders find leverage exciting.

Powell indicates that not many traders bet in favor of a bitcoin price fall, which means a majority of them are bullish. The sentiment serves as an indicator that the market prefers the cryptocurrency at a much larger value than where it is today.

Nonetheless, since the leveraged trades are short-term mostly, they cannot determine bitcoin’s long-term bias. The answer to that query lies in the macroeconomy – that in the US dollar shortage.

Travis Kling, the founder & chief investment officer of crypto asset management firm Ikigai, noted in September that a global liquidity crisis is underway. The former Wall Street executive referred to the Federal Reserve’s repo rate program, wherein the US central bank overnight injected hundreds of billions of dollars into the banking system. He added that investors started dumping their bitcoin positions to get as much cash on their hands as they can.

Dollar Shortage is Good for Bitcoin

With Kraken revealing a higher demand for bitcoin against lower liquidity, and a global dollar shortage issue underway, some analysts also believe traders would not exit their Bitcoin positions as a defense. Game liquidity theorist Majin said that a dollar squeeze is bullish for the cryptocurrency thanks to its low correlation with the dollar-denominated mainstream markets.

“Bitcoin is relatively easier to control versus the huge global regular finance market,” he said.

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Indonesia Watchdog Blocks Cryptocurrency Lending Platform

Indonesia’s Financial Services Authority, known as OJK, has identified and blocked almost 300 illegal peer-to-peer lending platforms, which includes one cryptocurrency firm.

According to Nikkei, OJK’s investment alert unit joined hands with the IT ministry and local police to launch a crackdown against unlicensed FinTech platforms. The investigations found that most of the unregistered lending platforms had servers located in Indonesia, but a few of them were operating from outside the international borders. Nevertheless, OJK did not reveal the names of sacked entities, particularly the one that was facilitating cryptocurrency loaning between Indonesians.

“Once a fintech platform has been verified as illegal, we will directly block it. By blocking these illegal platforms, we hope to protect the consumers and the public,” said Anthonius Malau, acting director of informatics application control at the Indonesian IT ministry.

The Backdrop

The crackdown follows years of development in the cryptocurrency-enabled lending industry. Unlike the traditional mechanisms, wherein people rely on banking approvals to secure loans, a decentralized financing approach allows people to undergo a short-cycled approach. A borrower can connect to potential lenders via web portals and collect financing in the form of decentralized cryptocurrencies, such as bitcoin, ether, or portal-enabled native tokens.

The exercise, albeit seamless, also creates opportunities for fraud. Fintech startups might attract funds from small investors to run P2P lending platforms and go default at later stages, as evident in the many cases arising from another Asian economy China. Certain cryptocurrency platforms, in particular, have a history of disappearing with investors’ money. BitConnect, a cryptocurrency lending platform that was highly active in Indonesia, vanished with about $250 million of funders’ money.

OJK in December 2016 decided to include P2P lending in its financial technology regulation law. The watchdog said that it would license platforms that possess at least 1 billion rupiahs ($75,000) in the capital and 2.5 billion rupiahs (nearly $200,000) to apply for a license to operate. The expensive legal process discouraged many Fintech startups from even seeking an operational license, leading to the formation of an illegal lending industry.

“Fraud will be inevitable, even when there is regulation,” said Aidil Zulkifli, CEO of UangTeman.com, an Indonesian direct online lender. “However, I don’t think that it will be as rife as in China because the Chinese and Indonesian supply-side environments are very different.”

The Crackdown

Tongam Lumban Tobing, chief of the OJK’s investment alert unit, said they so far have blocked 1,369 illegal lending platforms in 2019. Many of them were directly or indirectly working with cryptocurrencies and acted like loan sharks while charging excessive interest rates from unbanked Indonesians.

Last year, the authorities had nabbed 1,773 unlicensed lending platforms.

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Bitcoin Stock-to-Flow Model is Massively Overhyped: Analyst

A financial forecasting tool that predicts bitcoin market cap would hit a trillion-dollar valuation is misleading, according to cryptocurrency analyst Alex Krüger.

The noted economist called Bitcoin’s Stock-to-Flow Model (S2F) “massively overhyped” as he criticized it for not assessing certain crucial parameters. In retrospective, S2F is a ratio of a commodity’s stock (the units in circulation) and its flow (the amount produced in a year). That said, the model specifically puts weight on the supply factors without dwelling aggressively on the demand side.

bitcoin, bitcoin price

Stock to Flow (Scarcity) | Image credits: PlanB

S2F so far has been instrumental in predicting the prices of traditional assets like Gold and Silver. Quantitative analyst PlanB tested the same predictive mechanism on the bitcoin market in his paper published on March 23. He noted that bitcoin exhibited the same properties as that of traditional commodities: that of scarcity. He said it drives the value of every commodity, and bitcoin is no different. Excerpts from his blog:

“A statistically significant relationship between stock-to-flow and market value exists. The likelihood that the relationship between stock-to-flow and market value is caused by chance is close to zero.”

The Core Flaw

Krüger differed with PlanB in the way the latter stressed hugely on the supply-side factors but completely ignored the role the demand-side plays.

“Bitcoin is a demand-side story,” he said in a tweet. “Supply is fully deterministic. There are no supply-side shocks. Fixed total supply and diminishing supply growth are crucial because these drive demand. It is that simple. Demand is what matters most.”

In his paper, PlanB briefly describes how bitcoin could attract $1 trillion into its market. Speculatively, he mentions that investors with exposure in gold, silver, or assets belonging to countries that are in socio-political and economic crisis, would more likely move their capital into bitcoin. Moreover, central banks’ dovish policies, such as rate cuts and quantitative easing, would further prompt investors to seek safety in safe-havens like bitcoin.

But Krüger sees it a justification by bulls to keep the bitcoin upward momentum alive. He said:

“The Stock to Flow model is to bulls, what the Tether Manipulation paper is to bears. Both based on fancy looking statistical models (more so the latter). Both are flawed. Doubt whoever believes in these extremes will change their minds. The mind believes what it wants to believe.”

Bitcoin S2F 99.6% Accurate So Far

Past performances do not predict future price actions. But that has not deterred S2F supporters from making a case in favor of it. One of the respondents to Krüger’s opinion pointed out how the bitcoin price has so far followed the PlanB’s model with 99.6 percent accuracy. Halving, a four-yearly event that cut bitcoin’s supply rate by half, also served as the biggest reason why the S2F model works as planned in the long run.

“S2f model is in my humble opinion very important since it indirectly reflects miners’ capacity to stay profitable,” said Maros Hajduk, president of BlockYard – a digital asset management fund. “Unprofitable miners=dead network=nothing else matters. There’s direct pressure on [the] price to rise because of the halving events.”

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Analyst: Stellar (XLM) Decreasing Supply Could Increase Chances of Exchange Delisting

The Stellar Development Foundation’s (SDF) unanimous decision to burn XLM’s supply by half could spell troubles for the project, believes noted bitcoin maximalist WhalePanda.

The anonymous trader on Tuesday said the cryptocurrency exchanges could start treating XLM as security, explaining that SDF showed excessive control over the blockchain asset when they cut down its supply from 105 billion to 50 billion. The move increased the chances of getting XLM delisted from exchanges that have been careful about which digital asset they would list on their trading platforms.

So Far So Good

The statement came almost a year after the New York Department of Financial Services (NYDFS) allowed a local exchange itBit to list XLM. While the department did not issue any statement regarding the cryptocurrency’s original category, its move indicated that it considered XLM as a security token.

Instances such as these also prompted other US exchanges to list XLM pairs on their trading platforms. San Francisco-based Coinbase started offering XLM trading services from March 2019 all across the US, with the exception of New York City. However, in September 2019, the firm obtained permission from the NYDFS to cater to New York residents for XLM trading.

Part of the reason why exchanges are comfortable with listing XLM was its nonprofit backing. SDF never behaved as an organization that was out to sell XLM for profits. In September, for instance, SDF announced a massive giveaway of $124 million worth of XLM tokens to Keybase – a group messaging, community and file transfer hub.

In contrast, Stellar’s closes rival Ripple was selling off its XRP holdings of hundreds of millions of dollars to boost its adoption. Ripple continues to be in a legal battle with its early investors, attempting to prove that its XRP tokens are not securities.

But WhalePanda thinks exchanges are about to feel cold-feet about XLM’s future prospects on their platform. That is majorly due to the 1946 Howey Test, a benchmark for the US Securities and Exchange (SEC) in determining which assets are securities. The law can see SDF’s decision to cut supply as an effort to boost its prices in retail markets, which makes XLM security. Nevertheless, since the token is not funding a for-profit enterprise, there is always a scope for debate whether it is partial or full security.

XLM Going Up

The reduction in supply, meanwhile, is also boosting the XLM price. The XLM/USD instrument since yesterday has surged by up to 31 percent, thereby becoming the most profitable digital asset on Tuesday. Investors believe scarcity makes the cryptocurrency more bullish – again signifying that SDF’s move is an effort to boost Stellar’s value.

 

 

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Chinese are Not Coming to Bag Bitcoin: Analyst

The bitcoin price climbed by more than 40 percent after China’s President Xi Jinping endorsed blockchain technology in his speech on October 25. Global outlets were quick to correlate the two events, stating that investors [probably] increased their holdings in bitcoin, hoping that the Chinese people would also do the same by taking cues from Jinping’s blockchain support.

But, according to market analyst Alex Krüger, the benchmark cryptocurrency will have a difficult time attracting the Chinese population. The economist on Sunday noted that bitcoin corrected by as much as 14 percent after the last week’s price rally. And it has since trended horizontally, slowed down by less-than-expected volume. The price action does not prove that the Chinese are coming to bag bitcoin anytime soon.

“When markets experience a seismic shift, price, and volume rarely flat-line within a week,” said Krüger. “Instead, one would expect the price to trend for a while [at] high volume. It is what it is.”

Dwindling Volume

Trading data aggregator Bitcoinity shows a similar picture. On October 25, the total bitcoin trades recorded across all the cryptocurrency exchanges were 126,032. The next day, when the bitcoin price surged by circa $600, the total trades too climbed to 207,608.  Nevertheless, the figures started declining thereafter, trending downwards as each day passed. The bitcoin price also started trending sideways within the same period – from October 28 until the press time, as shown in the chart below.

bitcoin, bitcoin trading

Bitcoin trade volume recorded since October 25 | Image credits: Bitcoinity

Krüger said the fall in bitcoin trade volumes did not show any drastic change in China’s sentiment towards the cryptocurrency. He added:

“If there were a seismic change bringing an important influx of new investors, then likely best to buy and hold and forget about trading in and out, and the sole question becomes “how big do I go in”. Hence why this matters. At least to me.”

Unconventional Markets

A large portion of bitcoin’s trading activities often lies outside the conventional cryptocurrency exchanges. Paxful, a web portal that allows people to exchange bitcoin for fiat directly, offered insights into how the cryptocurrency’s peer-to-peer volumes surged even before Jinping’s blockchain endorsement. As noted by Matt Ahiborg, a researcher associated with DLAB – a New York-based blockchain startup incubator, Chinese people were trading bitcoin at large, with weekly volumes touching even the 2 million Chinese Yuan (CNY) mark.

“CNY volume on Paxful has had three record-breaking weeks in a row. 90% of the volume is to buy Bitcoin from vendors on the platform and the top payment methods used are Alipay and Bank transfers.”

Nevertheless, the massive buying sentiment in the Chinese bitcoin market did not sustain for too long on the global charts. Ahiborg asserted that it was due to people using the cryptocurrency as a tunnel, not a safe destination. Chinese bought dollar-denominated gift cards using bitcoin. Those products later resurfaced on the Chinese markets at a discount.

“Other evidence points to an international web of importing and exporting of goods purchased with these gift cards,” added Ahiborg.

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Decred, Stellar Post Massive Gains as Bitcoin Uptrend Halts

Decred (DCR) and Stellar (XLM) were moving higher on Friday as traders shifted focus from sideways-biased bitcoin.

The thirty fifth-largest blockchain project by market valuation, Decred, today surged by as much as 17.83 percent against bitcoin to trade at 1,755 sats a token. At the same time, the altcoin’s performance against the US dollar also improved, with DCR/USD pair registering up to 19.14 percent gains since the market open, to trade at $18.73 a token.

decred, dcr bitcoin news

Decred’s DCR outperforms bitcoin on Friday morning trade | Image credits: TradingView.com

Stellar, the world’s tenth-largest blockchain project by market capitalization, also showed similar upside movements like that of Decred. The firm’s native token, XLM, jumped by as much as 11.94 percent against bitcoin on Friday to trade at 797 sats. Meanwhile, its value against the US dollar was also strong, with the pair XLM/USD registering up to 11.19 percent in session profits.

xlm, stellar, bitcoin

Stellar’s XLM registers solid gains during Friday trade | Image credits: TradingView.com

The capital outflow from bitcoin to both Stellar and Decred did not affect its intraday bias much. The benchmark cryptocurrency was trading in a positive area on Friday, up by 0.51 percent, as its macro bullish bias remained strong. Bitcoin’s halving event next year, which would see its supply rate cut by half, is particularly prompting speculators to hold on to it. Meanwhile, mainstream financial companies are building a regulated bitcoin trading infrastructure to cater to institutional investors, especially amidst the fears of a recession that could send big monies looking for non-correlated safe-havens.

Fundamentals

Gains in Stellar’s XLM appeared shortly after Japanese cryptocurrency exchange Coincheck announced that it would start offering XLM trading from November 12. Yoriko Beal, the co-founder of HashHub – a blockchain community in Tokyo, said after the announcement.

“It’s significant news because this is the first token to be whitelisted by regulator after crypto regulation came into effect.”

XLM’s upside action came also ahead of its annual Meridian conference, showing how traders might have increased their Long positions on the altcoin while expecting short-term profits. That further indicates that XLM might correct heavily to the downside in the coming days against Bitcoin. 2019 is the altcoin’s worst year against BTC; the XLM/BTC pair is down by more than 75 percent on a year-to-date (YTD) basis.

Unlike Stellar, Decred did not show any strong fundamentals that could explain its intraday price rally. The upside looked technical since the DCR token is also down by more than 60 percent against bitcoin YTD.

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Bitcoin Calm ahead of Federal Reserve’s Rate Cut Verdict

Bitcoin held to a stable range as investors wait for the Federal Reserve to take a final call on introducing another interest rate cut.

The benchmark cryptocurrency was trading at $9,171.54 as of 10:13 UTC, down 2.75 percent from the market open. At its session high, bitcoin attracted a bid of $9,431.36 on the San Francisco-based Coinbase cryptocurrency exchange. That was still more than 10 percent lower than bitcoin’s weekend high of $10,540.59, showing that the market – at best – has digested the bullish sentiments arising from China’s President Xi Jinping’s encouraging comments on the blockchain technology last Friday.

bitcoin, cryptocurrency

Bitcoin steady after weekend’s supersonic rally | Image credits: TradingView.com

Bitcoin is now waiting for more upside factors, one of them being the Federal Reserve’s call on whether or not it should introduce more rate cuts.

95% of Economists Predict Rate Cut

The US central bank will likely introduce a third consecutive rate cut after concluding today’s Federal Open Market Committee’s meeting, says 95 percent of the economists surveyed by Bloomberg. The sentiments predict a 25bps slashing in the benchmark lending rates, with a focus on similar moves by the Fed before December 31.

The S&P 500 index on Tuesday turned back from its record highs and closed 0.1 lower. The US Dollar Index also dropped 0.06 percent on Wednesday and yield on the 10-year US Treasury Bond also fell 0.38 percent to 1.834. Bitcoin, on the other hand, showed an interim correlation with the equity market, looking similarly steadier as investors expected a rate cut from the Fed.

Analysts/speculators within the cryptocurrency industry consider that dovish monetary policies are bullish for bitcoin. The injection of new money into the market, coupled with cheaper lending against growing fears of a recession, increases investors’ appetitive for assets. Bonds, Gold, and equities – all perceived safe-havens – this year surged due to one of those sentiments.

“Investors need to prepare for today’s challenges by building portfolios that can provide true diversification against highly correlated risks present across many asset classes,” said Michael Hasenstab of Franklin Templeton in a note to customers. “Despite extraordinary market conditions, we see an opportunity to invest in potential hedges against global risks while aiming to build a portfolio that is truly uncorrelated to general market risk.”

Quantitative Easing

A similar cash flow is coming into the European markets this week as the central bank goes ahead with its plan to acquire €20 billion bonds every month. According to Alex Krüger, a prominent market analyst, the move would bring bitcoin before the regional investors as a potential safe-haven asset. Excerpt from his statement:

“QE would push longer interest rates lower and thus push some investors out the risk curve, i.e., seeking riskier investments to achieve desired returns. One can theorize some of that money would end in Bitcoin, adding upward pressure to prices.”

 

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This Crypto Related Stock Surged 67% after Xi Jinping’s Blockchain Push

Hong Kong investors increased their exposure in a blockchain firm after China’s premier Xi Jinping endorsed the technology in his Friday speech.

The stock value of Pantronics Holdings Limited (1611:HK), a Hong Kong-based electronic product manufacturing firm, climbed by up to 67.10 percent on Monday. The company did not display any concrete fundamentals that could push its stock price exponentially except its relationship with a cryptocurrency exchange.

Singapore-based Huobi Global, in August 2018, had acquired 74 percent of stakes in Pantronics in a reverse takeover. The exchange, at the time of the acquisition, hinted that it would utilize Pantronics to create equipment for a new blockchain-enabled phone targeting cryptocurrency traders created by the Whole Network, a startup which attracted investment from Huobi’s venture capital arm in 2018.

Pump and Dump on HKEX

The cross-connections between Pantronics and Huobi helped the former attract bulls during the early morning trade. Its stock price surged to as high as 6.50 points on Monday from Friday’s close of 3.89 points. Most notably, the rate opened on Monday at a much higher level than Friday’s close of 5.80, showing that investors had already processed Xi Jinping’s favorable comments on the blockchain technology before the Hong Kong Exchange opened after the weekend.

pantronics, huobi, blockchain

Huobi’s relative gains from China’s President Xi Jinping’s favorable comments on blockchain | Image credits: TradingView.com

Nevertheless, the Pantronics stock failed to hold up to the enormous profits for too long. Its price started slipping shortly after the HKEX market open – from about 0940 Local Time. The move eventually led Pantronics to establish a Session low down 29.23 percent from its Session high, indicating that the hype was fading.

The company’s overall daily gains were, however, up by 20.82 percent at the time of this writing.

Selfie with Xi Jinping

The same pump-and-dump scenario was visible in the share prices of Meitu (1357:HK). The Chinese photo editor firm, which is creating a blockchain-based facial recognition system, registered a 31 percent spike after the HKEX open; but, its gain began negating in the after hours. As of 1530 Local Time, the price had plunged by 18.06 percent from its intraday peak.

“It’s all because of Xi,” said Pan Shaochang of Dongwu Securities, “but the talk around blockchain is all conceptual. There’s still a long way to go to actually bring it to fruition at an individual and enterprise level.”

“Still, the growth potential is huge”, the equity analyst said.

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Bitcoin Pops after Xi Jinping’s Blockchain Endorsement

China’s President Xi Jinping’s endorsement of the blockchain technology sent bitcoin up by more than 40 percent.

The benchmark cryptocurrency established a new session high of $10,540.49 after rising by $3,109 over the weekend. The surplus gains came after a depressive performance last week, wherein bitcoin price shed as much as 17.33 percent, or $1,529.96. However, on Friday, Xinping called blockchain “a core technology” of China’s next-age innovation plans. The premier called for more investments into the nascent sector, a move that speculators treated as bullish for blockchain’s first working application, Bitcoin.

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Bitcoin corrects to the downside, but the bullish bias remains intact | Image credits: TradingView.com

Maple Leaf Capital, a UK-based investment management company, conclusively suggested that Jinping’s comments on the blockchain would make it possible for people to ignore Bitcoin. The more educated a common man becomes about the cryptocurrency, the better would be his likelihood of buying it. Excerpts:

“Doesn’t mean [Bitcoin] can’t go lower in the interim (chart says chop for a while), but this event is something to be extra mindful of as it actually drives both narrative and fundamentals (i.e. demand), similar to the halving being a supply event.”

US-China Trade Talks, Brexit

Bitcoin opened Monday in negative territory as it underwent a natural downside correction after the weekend spike. The cryptocurrency, as of 0956 UTC, was trading at $9,404.24, down 1.51 percent from the open.

The move downhill also occurred amid signs of improving trade talks between the US and China “on specific issues.” Also, the macroeconomic sentiment hinted a near-term revival as Brussel came closer to granting the UK an extension until January 31 to finalize the Brexit deal. If the treaty is signed in the parliament, Prime Minister Boris Johnson could also have the UK divorce the European Union on December 1 or the New Year’s Day.

The pound, nevertheless, slipped by a moderate 0.02 percent against the US dollar. The drop appeared technical, especially after the sterling recording its biggest monthly gain since January 2018. Meanwhile, the FTSE 100 index opened lower as well, down by 0.3 percent as of the time of this writing.

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GBP corrects lower against the US dollar as Brexit deal hints another extension | Image credits: TradingView.com

The S&P 500 index, which came close to setting its all-time high last Friday, is looking to open in positive territory on Monday as optimism over US-China trade talks, as well as expectations of another rate cut announcement this week grow. As Thomas Lee of Fundstrat said last month, growth in the US equities could prompt bitcoin – an otherwise uncorrelated asset – to grow higher.

The rate cut sentiment was also sending Gold – bitcoin’s traditional rival – higher on Monday. The yellow metal’s spot rate grew 0.8 percent to $1,503.80 as of 1045 UTC.

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Gold, Not Bitcoin, is Making Most Out of Ongoing Economic Crisis

On Wednesday, US-based Grayscale Bitcoin Trust released an advertisement wherein a white-collar miner cheerfully extracts a gold rock from a cave and takes it down to his bosses on Wall Street to make a few bucks. Nevertheless, he is told that the company is investing in bitcoin instead. The poor bloke – and his shiny gold rock – is shown the door before the advertisement concludes.

In the real world, however, the narrative is very different.

Bitcoin, a supposed digital alternative to Gold, has plunged by up to 47.39 percent from its year-to-date high. The drop came after the cryptocurrency’s stunning climb from December 2018’s low of $3,120 to June’s top of $13,868. That still makes it a better performing asset than gold, which, on a year-to-date basis, is now up by 17.52 percent. Nevertheless, bitcoin’s massive drop in the last and currency quarter is alarming because it is taking place against a string of so-called favorable macroeconomic narratives.

An Unconcerned Safe-Haven

Quantitative easing programs, currency devaluation, rate cuts, Brexit, Hong Kong crisis, US-China trade war, and recession are among some global catalysts that could send bitcoin’s value higher. Maximalists on Crypto Twitter often chanted the “buy bitcoin” slogan whenever things turned sour for investors in traditional financial markets.

As a non-sovereign, non-correlated asset, bitcoin promises to offer traders an umbrella against a dwindling macroeconomic sentiment, a role otherwise performed by gold during geopolitical and economic uncertainties. But barring the second quarter’s impressive performance against the escalating trade war, further supported by the introduction of Facebook’s Libra cryptocurrency, bitcoin has failed to behave as a safe-haven. In the third quarter, the cryptocurrency plunged by 23.01 percent.

bitcoin, gold

Bitcoin’s drop continues despite favorable macroeconomic factors; Gold rises | Image credits: TradingView.com

Traditional is Better

Gold, at the same time, was growing – albeit steadily. According to OANDA, the yellow metal surged by close to 4.5 percent in the third quarter as the oil crisis mounted, the Federal Reserve cut benchmark rates, inverted yield curve hinted recession, and uncertainties over Brexit and US-China trade deal remained. Gold’s performance showed that investors were trusting traditional hedging assets, also confirmed by the bond market’s roller-coaster ride – another safe-haven.

Chris Vermeulen, the author of Wealth Building Newsletter, also noted that investors might want to stay away from overly-volatile assets like bitcoin. Instead, they would go after traditional asset classes, which include stocks as well. Excerpt from his FXEmpire blog post:

“We believe Cryptos may be left on the sidelines as investors prefer more traditional assets as a measure of safety as global concerns continue to weigh on investor’s minds headed into a very contentious US presidential election.  Currencies, Metals, Mature global market assets and true value stocks may become the investment of choice until we see some real clarity for the future from the global markets, global central banks, and global political leaders.”

Bitcoin continues to underperform against more devastating economic data coming from the US, Germany, and China. The cryptocurrency this week plunged by more than $600 to go below a crucial support level of $7,500. Analysts believe it would continue its downtrend further toward the $5,000 level.

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No Bitcoin Price Breakout for Another Year; Here’s Why

A zoomed out version of the bitcoin chart shows it would take the cryptocurrency another 365 days to achieve a full-fledged upside breakout.

Brought to notice by Teddy Cleps, a prominent cryptocurrency analyst, the weekly Bitcoin chart shows the possibility of it forming a massive bullish pennant. In retrospective, a Pennant structure marks a pause in the price movement of an asset midway, followed by a strong breakout in the direction of the trend. However, if the formation lasts longer than four weeks, traders often start treating the Pennant as a symmetrical triangle.

bitcoin, bitcoin price

Bitcoin price might be trending inside a bullish pennant | Source: Teddy Cleps

Unlike Pennant, a Symmetric Triangle formation could give either of the two scenarios: a breakout or a breakdown. In the case of the latter, the price moves in the downside direction, with target equivalent to the height of the triangle. Should such a scenario takes place, bitcoin will fall to as low as $1,000.

“What if the last run to 14k was just a lower high,” said Cleps. “If a massive pennant similar to the chart were to play out – it would take more or less 350+ days for a breakout/bull run.”

No Halving Effect

The biggest takeaway from Cleps’ pennant theory is the date of bitcoin’s next halving – an event that reduces the cryptocurrency’s supply rate by half. Bitcoin supporters think an additional scarcity would make the cryptocurrency more expensive based on its history following each halving date.

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Bitcoin price after each halving event | Image credits: Reddit

The halving theory somewhat conflicts with that of Cleps. Ideally, the bitcoin price should surge exponentially after the next supply cut. Nevertheless, Cleps’ chat shows bitcoin swinging lower around May, the month in which the halving will take place. The analysts further belives that traders have already priced in the halving sentiment during bitcoin’s stupendous bull run this year. He tweeted:

“I believe its already priced in – me, you and my grandma is aware of the halving! Unlike the previous one.”

The Bullish Call

The theory is in direct conflict with what the bulls believe. The popular stock-to-flow model created by PlanB projects the cryptocurrency at a $55,000 valuation after the next halving. Excerpts from his analysis:

“People ask me where all the money needed for $1trn bitcoin market value would come from? My answer: silver, gold, countries with a negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.”

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Fed’s Repo Crisis Bullish for Bitcoin, Hints VanEck Executive

Bitcoin is going to benefit from the ongoing repo crisis in the US banking system, hinted Gabor Gurbacs of VanEck, a New York-based investment management firm.

The Digital Asset Strategist, who oversaw the drafting and filing of VanEck’s Bitcoin ETF application to Securities and Exchange Commission (SEC), on Thursday indicated that Fed’s plans to inject more money into the lending market could generate more demand for Bitcoin.

Exemplifying with a ZeroHedge report, Gurbacks noted how increased liquidity was already pushing the benchmark S&P 500 index higher. The US equities surged dramatically during the Wednesday session, shortly after the Fed – suddenly – announced that it would raise the lending amount to the market from $75nbn to “at least” $120bn daily. The announcement caught market participants off-guard, with a repo trader saying that he did not “see a reason to upsize the overnight operation so substantially.

Gubar expressed that the money Fed would inject daily was more than the market capitalization of bitcoin, which currently sits near $135bn.

“Think about it for a moment,” he added cryptically.

“Buy BTC” Cries Grow Loud

Fed officials so far have denied that their injection of billions of dollars is to offer a soft cushion to the US economy as concerns related to negative-yielding bond markets, the US-China trade war, and weak manufacturing data grows among investors. Predictably, certain bitcoin maximalists have started treating the alarming macroeconomic scenario as a reason to “buy bitcoin.”

The sentiment follows a depleting trust in the banking system. The Fed issues debt to banks based on the belief that they would pay the money back. Nevertheless, if the faith fails anywhere – in case of banks running out of cash to back their obligations – they start pawning stocks or securities for hard money. They also begin seeking loans from other banks for as long as twelve hours, leading to what the world calls repurchase agreements or repo.

The real issue arises when banks stop lending money to each other, fearing one of them would collapse. That said, banks stop functioning daily on their deposits to continue their operations. Hence, they rely on the big boss – the central bank – to bail them out every day.

More injection of the US dollar into the financial system makes it weaker. Investors attempt to reduce their greenback holdings by offloading it onto neighbor markets – equities, safe-haven assets, etc.

Where Bitcoin Comes

Bitcoin’s fame as a non-sovereign, scarce currency makes people consider its potential to behave as a hedging asset. Nevertheless, the use-case remains highly speculative.

“Bitcoin is empowering because it provides a choice to opt-out of the traditional financial system,” writes Caitlyn Long, a Wall Street Veteran. “In light of the traditional financial system’s instability, despite all of Bitcoin’s drawbacks, I find that a powerful concept.”

The BTC/USD exchange rate has dropped by around 7 percent since the repo announcement.

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Bitcoin Collapses below $7,500 after Brexit Breakthrough

Bitcoin took a deep dive on Wednesday to test the levels last seen in May.

The benchmark cryptocurrency plunged by up to circa $566.29, or 7.65 percent, in just two hours of trading. The move downside brought bitcoin down to a session low of $7,402.20. While the price later corrected, its upside remained capped by the support-turned-resistance level of $7,500, hinting an extended bearish action.

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Bitcoin dips below $7,500 in latest bearish continuation signal | Source: TradingView.com

The story was the same across the other top cryptocurrencies. Ethereum, the second-largest cryptocurrency by market cap, was down 7 percent while the third-largest XRP plunged by circa 6 percent. Litecoin, Binance Coin, and Bitcoin Cash also suffered similar setbacks. On a whole, the entire cryptocurrency market cap lost about $19 billion on a 24-hour timeline.

A Random Dump after Brexit Vote?

The downside in the bitcoin and altcoin markets appeared almost a day after UK President Boris Johnson was able to secure parliamentary support to his Brexit deal. Nevertheless, the optimism did not last for too long as the House of Commons refused to get Brexit implemented on or before October 31. As a result, PM Johnson would not be able to live up to its populist promise of delivering Brexit before the said, make-believe deadline.

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UK’s FTSE 100 index surged more than 1.5 percent on Brexit hopes | Image credits: TradingView.com

The outcome, in the long-term, appears positive for the UK, signaled by the upside performance of local equities on Tuesday and Wednesday.

As Mohamed El-Erian, chief economic adviser to Allianz, said on Twitter, a good deal could offset weakening global fundamentals” and “growing central bank ineffectiveness” to boost global equities.

Meanwhile, investors could take a Brexit deal as a sign to move out from hedging assets like Bitcoin to risk-on assets. With the cryptocurrency dipping massively right after the Brexit breakthrough, the signals are becoming more accurate.

Mark Zuckerberg’s Grilling on Libra

Bitcoin’s massive fall also comes on the day when Facebook co-founder Mark Zuckerberg is appearing before the US Congressional committee to answer questions about their payment project Libra. Earlier in June, the cryptocurrency had surged by more than 50 percent after Libra announcement. However, it also dropped after global lawmakers and regulators voiced their concerns against Facebook’s involvement in a financial project.

BitMEX Liquidation

Meanwhile, there are reports of more than $250 million liquidations of Long positions on controversial crypto derivative exchange BitMEX. The impact is clearly visible on the spot market rates of bitcoin.

“If buyers weren’t interested in $7,800 bitcoin, they’re likely not interested in $7,500 price,” said market analyst Josh Rager. “It likely goes lower with confluence support at $7,200 & below Even after a natural bounce there, it comes down to where large/aggressive buyers are interested.”

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Bitcoin Has Enormous Long-term Value: US Congressman

Bitcoin has an enormous long-term value, believes US Congressman Patrick McHenry.

The North Carolina representative said decentralized cryptocurrencies like bitcoin are “very real, very important projects” that are still in the early stage of innovation. He noted that bitcoin’s real use case remains outside the grasp of financial industry, saying that nobody can predict which way the cryptocurrency would go in the next 20 years.

“Nevertheless, it would be of enormous value and utility,” asserted Congressman McHenry.

Bitcoin against Digital Yuan

The statements came during a podcast show hosted by Laura Shin, wherein the journalist asked McHenry about how the United States would compete with China’s digital yuan. The country, which continues to be a hotbed for the world’s leading cryptocurrency and blockchain startups, falls short when it comes to providing an innovative regulatory sandbox.

Michael Arrington, the founder of TechCrunch who manages a dedicated crypto fund, said last year that the US’s strict regulatory and visa regime is sending talents out to tech-havens like Singapore, Switzerland, and Israel.

Facebook’s Libra, the US’s leading high-profile global payment project also rammed into a dead wall after the US regulators and politicians snubbed it at a Capitol Hill hearing. On the other hand, China accelerated its plans for a similar, but state-controlled blockchain project that would digitize yuan. In her questions to Congressman McHenry, Shin quoted RBC analysts Mark Mahaney and Zachary Schwartzman stating that digital yuan would become a de facto global digital currency “if the US regulators ultimately dismiss Libra” and decide not to draft a cryptocurrency regulation draft.

Congressman McHenry ignored the prospects of a Libra or a Bitcoin to compete with digital yuan. The politician praised Libra for putting cryptocurrencies in the conscious of many people around the world. But he denied the possibility of the US ever projecting a corporate-backed digital currency to compete with central bank digital currencies like Digital Yuan. Bitcoin, too, appeared like a no-choice to Congressman McHenry despite being a promising technology for the job.

 “A digitized US dollar is a reasonable next step from our central banks,” he said, adding later:

America’s AliPay

Congressman McHenry did not entirely reject Libra and Bitcoin for their potential role in advancing digital finance. The representative said the US could make use of technology giants and decentralized payments solutions to compete with Chinese companies like AliPay.

“We are looking into whether or not the Federal Reserve has the legal capacity currently to issue digital currencies. If they do not have a legal authority, I would support the legislation so that the Federal Reserve have that capacity,” he added.

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Bitcoin Holds Gains against Trade Deal Hopes, Brexit Uncertainty

Bitcoin was maintaining its weekend gains on Tuesday as investors assess positive outcomes from the ongoing US-China trade talks but remained uncertain over the Brexit deal.

The benchmark cryptocurrency established a session high of $8,296.50, up 1.05 percent from the market open. The upside move was minor in the context of bitcoin’s recent losses. Therefore, the cryptocurrency somewhat remained under the risks of further downside moves. At the same time, alternative cryptocurrencies, or altcoins, performed way better than bitcoin, indicating that traders are looking elsewhere as the number-one cryptocurrency shows low price volatility.

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Bitcoin price trending sideways | Image credits: TradingView.com

Famous cryptocurrency investor, codenamed Salsa Tekila, noted that bitcoin is now consolidating around the $8,000 level for almost a month. He said the absence of corrective trades could push the cryptocurrency lower.

“I might be on a drawdown streak past few days,” Tekila tweeted. “I maybe will lose more due to my short bias if we’re bottoming. But odds that BTC have bottomed are slim IMO. Break down more likely.”

Macroeconomic Factors in Focus

The sideways trend in the bitcoin market also comes at the time when the global economy is waiting for the outcome of two of the most important events: the US-China trade war and Brexit. Bitcoin was trending upwards when concerns over the trade dispute rocked the global markets. The cryptocurrency’s move uphill in the second quarter led analysts to say that it behaves like a hedging asset.

Even in the past week, Bitcoin formed a near-term negative correlation with the pound, matching steps with the sentiments arising from an uncertain Brexit deal. As of today, the cryptocurrency remained firm as the UK Prime Minister Boris Johnson entered the parliament to secure a vote on Brexit. But the possibility of a breakthrough is highly unlike as the House of Commons looks to defeat the motion altogether.

Across the Atlantic ocean, US President Donald Trump had better news for the global market. He tweeted on Monday that the trade deal with China was coming along very well. China’s vice foreign minister Le Yucheng confirmed the same early Tuesday, sending the Asian equities higher alongside Bitcoin.

The Bulls Theory

Away from the cryptocurrency exchanges, people in the Asian region have already started stockpiling bitcoin as their fear of a recession rises. Cryptocurrency Investment Firm ID Theory found that the Chinese have dumped almost $2.9 million worth of yuan for bitcoin. In India, an economy also facing one of its worst slowdowns in two decades, peer-to-peer traders have exchanged almost $1 million worth of Indian Rupees for bitcoin.

Nevertheless, the biggest crypto funders have maintained their distance from bitcoin for a while. Volumes of Bakkt’s physically-settled bitcoin futures continue to remain lower, showing investors’ constant focus on traditional assets. At the same time, cash-settled bitcoin futures’ volume is growing higher on CME, with the latest data showing investors’ mounting Long positions.

An increase in Long positions is a bullish sign for bitcoin’s retail markets.

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Bitcoin Lacks Direction after Weekend Gains; Correction Incoming?

Bitcoin was trading in positive territory on Monday to uphold gains it made during this weekend.

The benchmark cryptocurrency surged by 0.07 percent to trade near $8,230 as of 1140 UTC. At its session high, it was trading at $8,301.85, which was 4.37 percent higher than Friday’s closing point. The upside came as a part of technical correction after bitcoin tested $7,800 as support. More ideally, the cryptocurrency tested the lower trendline of the sideways channel, wherein it is trending since September 25. It opened possibilities of bitcoin to test the upper trendline, which currently sits near the $8,700 level.

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Bitcoin price’s upside stops on Monday | Image credits: TradingView.com

Brexit Uncertainty

Bitcoin’s upside during the weekend appeared after traders hinted to sell pounds upon facing uncertainty over a Brexit deal. UK Prime Minister Boris Johnson on Friday announced that he had secured a contract from the European Union. But afraid that his proposal would meet naysayers in the UK parliament, Johnson aborted the vote over the weekend. The move rose the prospect of getting a Brexit deal before October 31, the deadline.

The risk sentiments arising on a macroeconomic level helped Bitcoin in neutralizing its bearish bias. Last week, the cryptocurrency typically moved in the opposite direction of the pound, as discussed by NewsBTC here. A stronger sterling sent bitcoin lower while a weaker one sent it upward. That did not prove any long-term correlation between the two distinct assets, but the proximity opened up possibilities of exploration.

The pound opened lower on Monday, falling as much as 0.6 percent after the last week’s breathtaking rise. And with bitcoin maintaining gains, there is a possibility that adverse outcomes from the Brexit deal process could benefit the cryptocurrency.

“Not only will a no-deal departure from the EU create turmoil and volatility across two major fiat currencies, but it will also trigger an identity crisis for the global system as the contingency and vulnerability of major global fiat currencies is laid bare,” said Nicholas Gregory, CEO of blockchain firm CommerceBlock, in August.

“Come 2020, we expect an increasingly populist and politically unstable world to cement the safe-haven status of Bitcoin and other cryptocurrencies more generally. And if central banks revert to ramping up the money printing all over again, the case for cryptocurrencies like Bitcoin whose supply is capped will be further reinforced.”

Correction Calls

According to Josh Rager, bitcoin’s upside correction during the weekend has not ended its bearish bias. The market analyst said in a tweet that the crypocurrency could now go up to $8,350 or more. But, its possibility to resume its decline would remain higher unless it breaks out from the said upside target.

“BTC is still in this sideways range, nothing really has changed outside of short term bullish price action until we see higher highs,” said Rager.

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Lump Sum Bitcoin Investors Makes More Profits than DCA

Investors who put all their capital at once into bitcoin win more than those who invest strategically over some time, according to a study conducted by Shitcoin Ninja.

The crypto researcher noted that Lump Sum – an act of investing everything available at once into bitcoin – works better than the Dollar Cost Strategy (DCA), which requires investors to invest in installments. He reached the said conclusion after conducting two parallel “trial” investments of $10,000 each.

The Lump Sum Investing (LSI), as explained, saw Shitcoin Ninja assuming to invest $10,000 in bitcoin at one go while the DCA strategy showed him putting the same amount into the cryptocurrency but across the span of nine years. The experiment resulted in a win for the lump sum, which beat DCA 67.9 percent of the time. The strategy made profits 60.8 percent of the time in recent datasets. Excerpts from the report:

“Dollar Cost Averaging is a form of smoothing that reduces the volatility associated with investing date. Investing at the ‘wrong’ time can cause a lot of anxiety and wishful thinking, if only I had waited to buy in or if only I sold at the peak. Using DCA, we can alleviate the pressure of worrying that we’re investing at a peak right before a looming cliff. This peace of mind comes at a high cost, though, as we are reducing the statistical average return by more than ~50% compared to Lump Sum strategy.”

Bitcoin Mirrors Global Markets

Similar studies conducted across the global markets provide the same outcomes: that LSI leads to higher portfolio values than DCA does. US investment giant Vanguard, in its 2012 report, found that LSI outperformed DCA by 67 percent in the US and UK market. At the same time, the former did better than the latter by 66 percent in DCA.

“Outside of these studies,” wrote Shitcoin Ninja, “there are also many believers in one or other strategy, that will push it without any data to back it up. Worse, sometimes they pick precisely the data that matches their result (buying at the extremes). When evaluating any investment strategy, it is important to look at the strategy overall and not at a particular point of time, which may never happen again.”

Nevertheless, to some, DCA is not a bad strategy if an investor is looking to secure some retirement money or invest a regular amount each month from personal savings. It is better when it comes to building wealth without going overboard with one-time massive liquidity injections.

“Ultimately, the best solution is the one that gets an investor into an appropriate portfolio, encourages them to stay on track for their long term financial goals, and appropriately manages any behavioral consequences along the way,” states Nathan Faber, portfolio manager at Newfound Research.

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Bitcoin, Gold Dives in Tandem as China Posts Poor Economic Data

Perceived safe-haven assets Bitcoin and Gold were trending downwards on Friday as investors processed the emotional aftermath of China’s weak economic data.

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Bitcoin extends bearish bias after breaking crucial support of $8,000 | Image credits: TradingView.com

The BTC/USD instrument slipped by 1.96 percent, or $158.23, on San Francisco-based Coinbase exchange to trade at $7,917.97. The downside pressure mounted shortly after the Shanghai market open, leading to a circa $308 drop right ahead of the close. The move downhill reflected a similar price action in China’s CSI 300 of Shanghai- and Shenzen-listed stocks, which fell 1.6 percent on the day. Hong Kong’s Hang Sang index, at the same time, edged 0.7 percent lower.

China’s GDP, Brexit in Focus

The drops came after China posted its weakest GDP growth since the early 1990s. The world’s second-largest economy grew 6 percent year-on-year against the forecast expansion of 6.1 percent. The GDP figure was below closest to the expected that led to early gains in the Chinese equities. Nevertheless, investors remained focused on the broader spectrum of the ongoing US-China trade war, which, despite making some advances after the recent trade meets in Washington, looks uncertain to reach a full-fledged deal.

Gold, meanwhile, failed to behave as a safe-haven asset for Chinese as it dipped 0.26 percent on profit-taking after the European Union and the United Kingdom worked out a Brexit deal. More likely, trade uncertainties – and doubts if UK Prime Minister Boris Johnson will be unable to secure UK parliament backing on Brexit – capped gold’s downside.

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Gold slips on profit-taking behavior | Image credits: TradingView.com

According to Brian Lan, of Singapore dealer GoldSilver Central, gold could remain rangebound unless more clarity on the outcomes of Brexit and trade negotiations surface. He said the yellow metal could trade between $1,475 and $1,503 in the near-term.

Meanwhile, Hareesh V, head of commodity research at Geojit Financial Services, said gold’s long-term bias is bullish.

“Considering the present uncertainties around the US-China trade war and other geopolitical risks, gold still has potential upside,” he told CNBC.

Bitcoin Rangebound As Well

Bitcoin, which investors treat as a new form of Gold, is also trending inside a strict trading range since September 26. The benchmark cryptocurrency’s iconic performance against the trade war and yuan devaluations this year instilled a belief that it is the next-best hedging asset. After surging by more than 150 percent in the second quarter, bitcoin, however, has corrected downwards by more than 43 percent. That, coupled with the rejection of yet another Bitcoin ETF application, has pushed institutional interest in the cryptocurrency downwards.

But supporters within the bitcoin space hold their trust in the technicalities. They believe the bitcoin is merely correcting after a strong uptrend, and a next price breakout is on the way.

[Disclaimer: The author holds Bitcoin and Ethereum in his cryptocurrency portfolio.]

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Regulators can Shut Down Bitcoin Anytime: Bloomberg Editor

Law enforcement authorities can shut down bitcoin anytime, according to Bloomberg Digital’s executive editor Joe Weisenthal.

The media talent warned institutions against creating bitcoin-based investment products, stating that they could become a tool to take capital from fiat markets. Citing Bitcoin exchange-traded funds, Weisenthal said no regulators would want to approve fiat onramps to pump money into the bitcoin ecosystem. First, the move would make fiat unattractive to investors. And second, it would increase the amount of illicit financial transactions.

Weisenthal thinks bitcoin has only one critical use case: to facilitate trades that the governments and regulators – or “the MAN” – do not want anyone to make. That makes the cryptocurrency an ideal tool designed to serve criminals – and criminals only. Creating new markets to inject more into bitcoin, therefore, would increase the number of financial crimes. So, one way or another, an average law enforcement agency would attempt to get rid of bitcoin once and all.

“If you’re building or launching these institutionally-grade products, how sure are you that down the road regulators won’t come in and shut it all down,” questioned Weisenthal. “There is so much interest in this space, but is anyone thinking this through?”

The Man Will Come After Big Bitcoiners?

The statements were a part of a newsletter that showcased bitcoin as an ecosystem run by two kinds of users: speculators and transactors. Weisenthal said the bitcoin protocol works when certain people expect more massive profits out of their so-called bitcoin investments – or when they use bitcoin to conduct transactions away from the prying eyes of regulators. Both kinds of users, wrote Weisenthal, compliment each other.

The introduction of Wall Street-level products, meanwhile, would boost the number in both kinds: speculators and transactors. Weisenthal added:

“If you’re in the business of creating institutional onramps to crypto, you have to be cognizant of the risk that one day regulators wake up and ask: Wait, why did we provide a gateway to provide liquidity into [the] space whose express purpose is to let people evade The Man?”

The Bitcoin Community’s Response

“This is wildly inaccurate,” replied Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, about Weisenthal’s assessment. He added:

“You’re claiming that non-censorship is the only value prop of Bitcoin. What about the non-seizure element? What about the disinflationary monetary supply? Or the sound money element? Or pseudonymity? Please stop writing nonsense & misinformation.”

Larry Cermak of the Block, meanwhile, agreed with Weisenthal, differing only with one point about the “types of bitcoin investors.”

“I would say that there is a third (small) group of people that buy bitcoin (or dollars/dai if it’s available) to hedge against the government’s corruption and inflation. I wouldn’t classify these people as speculators. But I agree with everything else.”

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Bitcoin Corrects Above $8K against Weak US Data, Brexit Deal

Bitcoin was attempting to hold $8,000 as support on Thursday after it slipped briefly below the said level yesterday.

The benchmark cryptocurrency surged by 0.83 percent, or $66.14, to trade at $8,059.68. The move uphill came after a depressive price action on Wednesday that took the bitcoin price below the $8,000 support level. At its intraday lowest, the cryptocurrency was trading at $7,908.86.

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Bitcoin attempts a weak pullback after dropping below $8,000 on Wednesday | Image credits: TradingView.com

Weak US Economic Data

The bitcoin’s loss and subsequent mild recovery came amidst the release of vital US economic data on Wednesday morning. The retail sales report showed a drop of 0.3 percent, marking the first contraction in months. It raised concerns over the deteriorating health of the US economy, which could prompt the Federal Reserve to announce fresh rate cuts at its next meeting.

The weaker-than-expected economic data pushed the US stocks lower on Wednesday. The benchmark S&P 500 index plunged by 0.2 percent at the close. The sentiment towards risk-on assets spread into the Asian markets today. Japan’s Topix was down 0.3 percent while Australia’s S&P ASX 200 plunged by 0.2 percent. Meanwhile, in China, the CSI 300 of Shanghai- and Shenzhen-listed stocks were up by 0.1 percent.

Brexit Deal Reached

Bitcoin held on to its gains also as UK Prime Minister Boris Johnson announced that they had reached a Brexit deal with the European Union. The politician confirmed in a tweet:

“We’ve got a great new deal that takes back control — now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment.”

The new propelled pound to register its best month in months. The sterling surged about 0.70 percent against the dollar after the London market open. Meanwhile, the FTSE 100 index jumped by 0.60 on the Brexit news.

In Europe, demand for risk-on assets climbed as well. The benchmark Stoxx 600 surged o.70 percent.

Meanwhile, a Brexit deal expects to spell trouble on Bitcoin, which investors long perceived as a safe-haven asset should the UK-EU negotiations go south. Bitcoin rival Gold is already dropping on the news, down about 0.27 percent now.

Moody Bitcoin

As NewsBTC noted earlier, Bitcoin’s rate against the pound was forming an interim negative correlation with the pound’s performance against the US dollar. Excerpts:

“Bitcoin’s gains in the GBP markets are coinciding with the GBP’s losses against the US dollar – or vice versa, at least in the last seven days. The most visible correlation is GBP/USD’s gains on October 11 and 12, wherein the pair surged by as much as 4.20 percent. On the same days, bitcoin dropped by up to 7.62 percent against the pound.”

Meanwhile, speculators believe bitcoin could rise after Fed cut benchmark rates. Lately, the cryptocurrency has reacted mildly to rate cut events. On September 18, for instance, bitcoin was unfazed by the central bank’s announcement of pushing lending rates down to 1-3/4 to 2 percent. The cryptocurrency dropped by more than 6 percent a day after the FOMC statement.

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Craig Wright: Satoshi Nakamoto Plagiarized My Bitcoin Paper

Craig S Wright, an Australian computer scientist who claims that he created billions of dollars worth of payment protocol Bitcoin, accused Satoshi Nakamoto of plagiarizing his paper.

The Bitcoin SV founder stressed that he is the original author of Bitcoin’s whitepaper during CC Forum in London. According to eyewitness Toni Vays, a famous cryptocurrency trader, who was also available at the event, Wright did not offer proof that could substantiate his claims. Instead, he said he would need to win a court case before the university allows him to release the so-called real Bitcoin whitepaper.

According to Wright’s earlier statements, bitcoin’s creation was the effort of a team, not an individual. He had claimed that he was an integral part of the group that conceived the cryptocurrency. Nevertheless, Wright, on many occasions, failed to provide cryptographic keys of messages signed digitally by the real Satoshi Nakamoto during the early days of Bitcoin. His failure to prove his involvement led many to believe that Wright was a scammer.

In February 2018, the estate of Dave Kleiman (now deceased) also initiated a lawsuit against Wright for allegedly stealing US$5,118,266,427.50 worth of bitcoin. The judge for the case last month ordered Wright to hand all the bitcoin to the brother of Dave Kleiman, Ira. If Wright had produced that bitcoin, he would have proven his involvement in the Bitcoin project. But he did not, leading many to say that he did not even have those tokens.

The case also revealed that Wright forged Dave’s signatures to steal the bitcoin – a similar argument he is now making against Satoshi Nakamoto.

Community Laughs It Off

Wright’s latest stunt drew canny reactions from the cryptocurrency community. A Twitterati joked about Wright’s earlier statements, saying that he claimed he is Satoshi Nakamoto and now he is referring the same name as if it is a third person.

“So he plagiarised his own paper,” wondered JJ.

Litecoin creator Charlie Lee, meanwhile, added:

Word Manipulation

Other eyewitnesses accused Vays of taking Wright’s words out of context. Diego SV, a hardcore Bitcoin SV follower, clarified:

“In the fireside chat, CSW refers to the looming McCormack case and how his paper from 2008 will come out which shows great chunks of this is identical to the 2009 Bitcoin whitepaper. He clearly says this either proves I am Satoshi or Satoshi plagiarised me.”

[Disclaimer: The author holds small amounts of Bitcoin SV after the last year’s Bitcoin Cash hard fork. The author does not trade or speculate on the said assets.]

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Bitcoin Underperforms as Investors’ Focus Remains on Brexit

Bitcoin was trading in negative territory on Wednesday as a broader market focus remained glued on Brexit and other critical macroeconomic events.

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Bitcoin price slips as speculators/investors shift focus elsewhere | Image credits: TradingView.com

The benchmark cryptocurrency slipped 0.12 percent to trade at $8,152.92, continuing its choppy actions seen after the last significant drop on September 24. The lack of upside bias in the bitcoin market was visible in the performance of rival cryptocurrencies. Almost all the top altcoins surged slightly against bitcoin on Wednesday, indicating traders’ conflict. Bitcoin SV, in particular, emerged as the top performer, rising more than 6 percent against bitcoin on a 24-hour live timeframe.

Brexit, China’s Capital Injection in Focus

Bitcoin’s losses came on the day China surprised traders with a sudden injection of $28 billion into the financial system. The People’s Bank of China (PBOC) added the said amount through its medium-term lending facility to banks. The injection came ahead of the release of Chinese economic data coming Friday, hinting it would show a further slowdown in the domestic market.

China’s policymaking on yuan has typically assisted in boosting bitcoin’s demand. Domestic traders start fleeing from the national currency into assets they perceive as safe-havens. During the escalation of the trade war with the US in Q2/2019, bitcoin surged impressively, showing a negative correlation with yuan. While the $28 billion injection – surprising as it was – did not impact the yuan’s value against the US dollar during Wednesday’s trade, the move left possibilities of a new bitcoin upside action.

Meanwhile, in the West, Brexit continued to affect market sentiments all across the European and the UK. Talks resumed between negotiators after they missed Tuesday’s midnight deadline. Hopes of UK PM Boris Johnson delivering a Brexit before October is high ahead of a crucial two-day European Council summit starting Thursday. Failure to do so would put further pressure on the European and British economy, a move that could move investors away from risk-on trades.

Fingers Crossed

Analysts within the cryptocurrency space project Brexit as a bullish event for Bitcoin. New York-based asset management firm Grayscale Investments noted occasional correlations between Brexit and Bitcoin. In a report published in June, it said:

“On the day of the announcement, we witnessed a broad-based selloff across both fiat currencies and risk assets as the market attempted to digest whether Brexit would portend the disintegration of the European Union. During the knee-jerk, one-day global selloff, Bitcoin was a top-performing asset, boasting a return of 7.1% on strong volume, versus an average of -2.1% for the rest of the group. Once again, we watched Bitcoin outperform other perceived safe-haven assets including gold, the Japanese yen (JPY), and global bonds.”

Nevertheless, bitcoin lately failed to behave as a go-to instrument for institutional traders amidst hard economic events. The ongoing turbulence in China, coupled with central banks’ easing policies and the US-China trade war, are no more behaving as a bullish for the cryptocurrency.

“I’m not so sure that it’s a safe haven asset yet, but I do think that it’s starting to act like one,” said Nelson Minier, head of OTC sales at Kraken. “I think that people are starting to portfolio manage, are starting to come in slowly. And when the market is getting shaky you saw Bitcoin rise, I mean, you wouldn’t see that before, it was trading like a risky asset.”

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US Senators Coercing Libra Partners is Un-American: Coinbase CEO

Facebook’s plan to launch Libra came under further pressure after its partners Visa, Mastercard, Paypal, and Stripe announced that they were leaving the digital currency project. And as it turned out, there was some political pushing involved.

Senator Brian Schatz (D-HI) and Sherrod Brown (D-OH) sent letters to the chief executive officers of Visa, Mastercard, and Stripe, wherein they asked the trio to quit Facebook’s Libra project. The politicians iterated that the social media giant had failed to respond to regulatory concerns related to money laundering, terrorist financing, economic stability, and monetary policy. They further reminded the executives about Facebook’s track of record of misusing users’ data.

“Your companies should be extremely cautious about moving ahead with a project that will foreseeably fuel the growth in global criminal activity,” the senators wrote.

The language turned threatening as both Schatz and Brown warned Visa CEO Alfred F. Kelly Jr., Stripe CEO Patrick Collinson, and Mastercard CEO and president Ajaypal Singh Banga of consequences should they not quit Libra. The senators intimidated the trio that they would impose additional scrutiny if they decide to move against their recommendations.

“If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities,” they wrote.

Coinbase CEO Bashes US Senators

Facebook did not provide any statement on the matter. But Brian Armstrong, the chief executive of San Francisco-based Coinbase cryptocurrency exchange, strongly objected to the way lawmakers went after Libra members. In a thread published on Sunday, Armstrong called the senators’ behavior “un-American,” adding that they both were resorting to “intimidation tactics.”

“[It] doesn’t matter what you think of Libra. If it’s not a useful tool or innovation, people won’t use it. Why the need for the intimidation tactics? This would be called anti-competitive/monopolistic behavior if any private company did it,” – Armstrong tweeted.

“Do we want to have a centrally planned economy, or let 1,000 ideas be tried in a free market to see which ones break through and deliver real value? Breakthroughs are by definition contrarian ideas, otherwise they would have already have been tried.”

Avivah Litan, vice president at Gartner Research, raised similar concerns. In her interview with CNBC, the analyst noted that governments are afraid of losing their authority to emerging technology projects like Libra. She also mentioned bitcoin, a non-sovereign asset, for scaring governments with its potential to replace all their monopoly.

“In the case of Libra, you replace central authority with task force authority and big tech authority. In the case of Bitcoin, you just replace all central authority,” said Litan.

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UK Forex Giant Launches New Bitcoin Service as Brexit Fears Grow

UK-based FXCM Group has introduced a new bitcoin trading service right around the time when investors weigh the possibility of a hard Brexit.

The forex brokerage giant announced in a press release published on Monday that it is launching CryptoMajor. It is a basket that contains five popular cryptocurrencies – Bitcoin, Ether, XRP, Bitcoin Cash, and Litecoin – in equal proportions. CryptoMajor behaves as a single unit representing the combined value of the said assets. It means FXCM users would be able to collate and offload multiple cryptocurrencies at one go, without the need to manage each one of them independently.

Brendan Callan, the chief executive officer of FXCM, treats CryptoMajor as an ideal hedging risk management tool for retail traders. He projected the basket as a “great opportunity” for traders who want to start trading cryptocurrencies but do not want “to risk too much exposure.”

 “Trading a basket of cryptocurrencies means our users are freed from the hassle of constantly monitoring the markets,” Callan said.

Brexit Fears

FXCM’s announcement arrived on the day when Pound slipped 0.71 percent against the US dollar. The drop, in turn, came on the back of pessimism surrounding Brexit. European Union’s chief Brexit negotiator Michel Barnier said that UK Prime Minister Boris Johnson’s deal is too complicated and needs more time. That put clouds over Johnson’s promise to deliver Brexit before October 31.

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GBP/USD down 0.71% on Brexit Fears | Image credits: TradingView.com

The news erased part of the gains Pound, as well as the UK stocks, had made at the end of the last week. Strategists at ING called the downside correction a “reality check” for Brexit bulls, adding that the sterling is now under threat of a further price breakdown.

“GBP gains have, in part, been caused by meaningful short speculative positioning, exaggerating the effect of the news flow,” they explained.

Holger Schmieding, the chief economist of Berenberg Bank, further stressed:

“Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. Also, the EU may need a technical extension to ratify the deal on its side anyway.”

Meanwhile, with Callan mainly confirming on the “risk” part of the bitcoin and other cryptocurrencies, it is safe to assume that FXCM is looking to make CryptoMajor an attractive alternative for CFD traders who might want to ignore Brexit-hit markets.

No Base Currency Specified

FXCM did not reveal the base currency for the CryptoMajor basket in its announcement. The brokerage, which offers three similar baskets, typically uses the US dollar as its underlying currency to value the different assets. FXCM would likely employ the dollar for the crypto basket, considering the brokerage has a presence all across the globe.

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Bitcoin Eyes Gains as Pound Drops on Brexit Uncertainty

Bitcoin was inching higher on Monday in the UK markets as Pound gave up some part of its last week’s sharp gains.

bitcoin, pound, brexit, boris johnson

Bitcoin shows upside sentiment as the Pound drops to 1-month low | Image credits: TradingView.com

The cryptocurrency surged by 0.76 percent against the sterling as of 1005 UTC to trade at £6,627.90. The minor surge came after the pound dropped by 0.68 percent against the US dollar. The sum of all negativities lied with the statements issued by the European Union on Brexit. Michel Barnier, EU’s chief Brexit negotiator, told press on Sunday that UK president Boris Johnson’s plans to divorce Europe by October 31 while avoiding a hard border with Ireland were too complicated.

The statement impacted the UK market as it opened on Monday. With sterling down, UK stocks also gave some part of its last week’s gains. That was unusual for the benchmark FTSE 100, which typically rises when pound slides. Today, that was not the case. FTSE 100 and sterling both fell in tandem, showing that investors were pulling out their capital ahead of Johnson’s first Queen Speech scheduled today.

Strategists associated with ING said in a note that Monday’s drop is a “reality check” for Brexit bulls. Excerpts from their statement:

“GBP gains have, in part, been caused by meaningful short speculative positioning, exaggerating the effect of the news flow. With the market possibly getting ahead of itself, the pound is now vulnerable to a sell-off should the talks break down again.”

Growing Correlation with Bitcoin

Meanwhile, bitcoin’s gains in the GBP markets are coinciding with the GBP’s losses against the US dollar – or vice versa, at least in the last seven days. The most visible correlation is GBP/USD’s gains on October 11 and 12, wherein the pair surged by as much as 4.20 percent. On the same days, bitcoin dropped by up to 7.62 percent against the pound.

pound, gbp, bitcoin, brexit

GBP/USD shows a negative correlation with BTC/GBP | Image credits: TradingView.com

No other evidence indicates a negative relationship between the two pairs. It might be less likely for mainstream investors to treat bitcoin as a hedging instrument against the Brexit uncertainty. But traders inside the cryptocurrency market could enter open positions after taking cues from the pound’s interim bias. A similar sentiment engulfed the bitcoin market during yuan’s devaluation against the Q2’s US-China trade war escalation.

Pound Eyes Drop

Bitcoin’s probability of striking gains is looking better, with both the EU and noted market analysts predicting an extension for Brexit deal. Holger Schmieding and Kallum Pickering, chief economist and senior U.K. economist of Berenberg Bank, said in an investor note Monday:

“Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. Also, the EU may need a technical extension to ratify the deal on its side anyway.”

An adjunct is the least Johnson needs, which has promised the UK citizens a deal or no-deal Brexit before October 31. If the Prime Minister goes ahead with the least-favorite route of divorcing the EU, the ramification could fall on the country’s economy. According to estimates from the UK in a Changing Europe, a hard-deal Brexit could reduce the GDP by 7 percent.

That would eventually come to haunt the GBP.

Investors then have a likelihood of parking their capital into stocks, bonds, or perceived hedging assets. Bitcoin, given its recent correlation with the GBP/USD pair, could also get a push from the mainstream market.

[Disclaimer: The opinions expressed in the article are not investment advice.]

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Bitcoin is Riskier for Retail Investors: Fidelity VP

The bitcoin market is 90 percent retail-based. And that makes Fidelity Investments nervous about its very-own digital currency offerings, says the company’s Personal Investing President, Kathleen Murphy.

The business executive said in an interview with CNBC Squawk Box that bitcoin is a far riskier asset for retail investors that it is for institutional investors. She admitted that while Fidelity’s chief executive officer, Abigail Johnson, is a huge fan of cryptocurrency, the company is still cautious about how it wants to offer its bitcoin custodian and trading services to investors.

Murphy confirmed that Fidelity is embracing cryptocurrencies because they want to understand it further. And while doing so, they want to be innovative and thoughtful about the digital currency space.

Nevertheless, the firm does not want to offer trading services on a retail level, Murphy said, adding that they “want to be very careful about making sure that investors that REALLY are not institutional investors don’t make a mistake with cryptocurrencies.”

Big Firms Need Big Clients

Murphy’s statements came two days after the US Securities and Exchange Commission (SEC) rejected the Bitcoin ETF application filed by Bitwise Asset Management and NYSE Arca. In one of its first descriptive orders, SEC provided a comprehensive view on why it does not want to approve a bitcoin-based derivative. The securities regulator complained about how a majority of bitcoin market volume is outside the US without any regulatory oversight, which makes it susceptible to price manipulation. It also raised concerns about bitcoin’s use in illicit activities.

Fidelity’s bitcoin products, nevertheless, are not ETFs. The Boston firm announced in May that it would offer straightforward cryptocurrency trading services to institutional investors only. In those regards, Fidelity also launched a cold storage custodianship service, a regulated digital vault that would store cryptocurrencies to back on- and off-ramp trading on its platform.

“We currently have a select set of clients we’re supporting on our platform,” Fidelity spokeswoman Arlene Roberts told Bloomberg in May. “We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on Bitcoin.”

No Institutional Investors for Bitcoin?

Institutional interest, particularly in bitcoin, has dwindled since May. Open interest in CME’s bitcoin futures contracts, which cryptocurrency market treats as a gauge to measure the presence of big investors, dropped severely since June. Atop that, bitcoin underperformed as a safe-haven asset against a string of poor macroeconomic catalysts, showing that investors are not looking at the cryptocurrency in times of crisis.

Recently, the launch of the first physically-settled bitcoin futures by Bakkt also further with a cold response. The ICE-backed platform processed only 149 monthly contracts on its first day, revealing that institutional investors are focusing more on the outcome of the ongoing US-China trade talks, Brexit, and other global factors.

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Bitcoin Drops as Investors See Optimistic Signs on Trade Deal

Bitcoin struggled to maintain gains on Friday as investors processed the possibility of an optimistic trade deal and Brexit.

The benchmark cryptocurrency was trading at $8,373.96, down 2.49 percent as of 11:03 UTC. Its downside sentiment came on the back of an unbiased Thursday, wherein its opening and closing price was almost the same. The rate also remained capped under technical barriers, represented by a long-term moving average indicator in the chart below. Meanwhile, sentiments arising from the rejection of yet another Bitcoin exchange-traded fund in the US kept potential buyers at a distance.

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Bitcoin capped by the red curve (200-day MA) | Image credits: TradingView.com

Brexit meets US-China Trade War

Bitcoin’s losses occurred on the day when two of the global market’s most significant concerns hinted at a resolution. On the US-China trade war, President Donald Trump said that their discussion with the Chinese is “going very well” shortly after Beijing offered to purchase more agricultural products from the US. People associated with the matter revealed that other negotiations, including currency provisions and intellectual property, were also on the discussion table.

A breakthrough in the US-China trade dispute would have Trump meet his Chinese counterpart Xi Jinping at the Asia-Pacific Economic Cooperation leaders’ meeting in Chile next month.

Meanwhile, investors welcomed Trump’s comments on the dispute. Their interest in the risk-on assets like equities peaked at its highest this week, with the US benchmark S&P 500 closing Thursday 0.6 percent higher, while its futures are indicating a 0.5 percent increase when the Wall Street opens on Friday.

Then there were positive developments in an overly-stretched Brexit issue. UK prime minister Boris Johnson and his Irish counterpart Leo Varadkar said on Thursday that they could achieve a Brexit deal by the end of the month. The news sent Pound to its best levels since September 25. Meanwhile, UK’s FTSE 100 and 250 index each delivered impressive gains, rising 0.13 and 2.53 percent, respectively, on Brexit hopes.

Donald Tusk, the council president of the EU, welcomed the move, noting that it could open the possibilities of new agreements between the UK and Europe. Excerpts from his press briefing:

“I have received promising signals from the Taoiseach that a deal is still possible. Technical talks are taking place in Brussels as we speak. Of course, there is no guarantee of success and the time is practically up. But even the slightest chance must be used.”

Bitcoin Got Sidelined

Bitcoin, which earlier served as a backup asset against the US-China trade war and Brexit, behaved negatively to the resolve. Kelvin Kelly, the co-founder of Delphi Digital – a New York-based data research firm, noted that bitcoin worked a safe-haven asset earlier this year but dovish developments on the central policies front could put the cryptocurrency in the league of risk-on assets.

 

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Jay Clayton’s SEC Will Never Approve a Bitcoin ETF: US Counsel

The US Security and Exchange Commission (SEC) under the leadership of Chairman Jay Clayton will never approve a bitcoin exchange-traded fund (ETF), believes Jake Chervinsky of New York-based Kobre & Kim, LLP.

The general counsel noted that Clayton and his team look at bitcoin as an asset that remains “susceptible to manipulation and surveillance-sharing agreements.” So no matter how the ETF backers decorate their applications, the SEC officials would continue to reject them under the guise of the Exchange Act.

“Clayton’s term ends on June 5, 2021, but could go another 18 months longer,” added Chervinsky. “Usually, we’d see new ETF proposals filed immediately after rejection, but it might be time to take a year off.”

The statements came around right after the SEC rejected the Bitcoin ETF application filed by Bitwise Asset Management in partnership with NYSE Arca. The order reiterated that both NYSE Arca, in particular, failed to respond to their concerns related to price manipulation or other illegal activities. It read:

“The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices.’”

Non-Event

SEC’s latest decision on Bitcoin ETF asserted its conservative approach towards emerging assets. The move left a large portion of cryptocurrency enthusiasts disappointed, with many calling on to appoint Hester Peirce as the next chairman. The republican SEC commissioner was only among the five to have supported a Bitcoin ETF.

Meanwhile, the other section of the cryptocurrency community saw the news as a non-event – something that does not impact the performance of bitcoin as both technology and investable asset. Market analyst Alex Krüger exemplified it with bitcoin’s unfazed price performance after the ETF rejection.

Nevertheless, an approved Bitcoin ETF could have opened a floodgate of investors towards bitcoin. A study conducted by Tom Alford at TotalCrypto.io predicted a 500 percent price rally in the bitcoin market upon an ETF approval after analyzing the gold market.

“ETF kick-started the biggest bull run in gold’s history. Prices rose from just $331.60 per ounce to a high of $1,917.90. That’s an incredible 478% increase in price after the gold ETF was launched,” reasoned Alford.

Bad Bitcoin ETF Application

Rptr45 in a long thread showed how Bitwise shot itself in the foot after releasing its renowned “Real 10” report. Published earlier this year, the study noted that 95 percent of bitcoin spot market volume is fake and is open to price manipulation.

“There’s a good chance any new application must prove what Bitwise stated with their 95% study is WRONG before they can even get them comfortable that the underlying spot market isn’t subject to manipulation and look to approve an ETF,” wrote Rptr45.

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Hong Kong Free Press Fires BitPay Over Bitcoin Payment Delays

Hong Kong Free Press (HKFP) has fired BitPay, a US-based bitcoin payment processing service, over non-service.

The independent media firm announced today that it is going to replace BitPay with its rival BTCPay, an open-source alternative to pay merchants online via bitcoin. HKFP projected BTCPay as better service, stating that it would allow donators to remain anonymous, a feature that was missing in a more-regulated BitPay.

“Help us eliminate processing fees or make a fully anonymous contribution by donating Bitcoin,” wrote HKFP.

The Brawl That Started It All

HKFP’s announcement came a month after the agency complained about BitPay for blocking their bitcoin payments. Editor-in-chief Tom Grundy took to Twitter to explain how the US company was sitting atop their donations for almost three weeks. He added BitPay refused to process their financial transactions because it does not support IBAN, an internationally recognized, standardized method of identifying bank accounts during a money transaction.

“Never use BitPay, folks,” Grundy tweeted, adding the firm offers “truly the worst experience you can imagine – poor reputation, abysmal communication, horrible customer service, *very* high fees.”

“Almost any alternative will be better,” he said.

Grundy also threatened to sue BitPay’s co-founder & CEO Stephen Pair, stating that he is “ready to go to war.”

BitPay did not issue any official statement related to the controversy, which might have led Grundy & co to look for better, peer-to-peer alternatives.

Bitcoin to the Rescue

Nonprofit journalist groups have continuously relied on bitcoin for receiving donations. The cryptocurrency helps them bypass expensive – and often overly-regulated – banking systems. Even whistleblowers like Wikileaks, whose inbound contributions were once blocked by Visa and Mastercard, resorted to bitcoin. HKFP, which relentlessly offers non-biased reports out of Chinese and Hong Kong regions, therefore relies on the cryptocurrency for the very same reason.

The agency has so far received HK$15,000 worth of support in bitcoin. But, owing to the cryptocurrency’s underlying price volatility, it had opted to hire BitPay, which instantly converts bitcoin payments to fiat for a fee. Nevertheless, with BitPay choking HKFP’s payments, especially in times of ongoing protests in Hong Kong, the nonprofit thought it was better to either halt their bitcoin payment option or choose an alternative.

The event put BitPay in a bad light, specifically after similar incidents showed the US firm blocking payments to specific firms. The most controversial decision in the recent memory was of preventing donations that could have contributed groups fighting against the Amazon rainforest fires.

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