Forget BTC; Several Crypto Stocks Are on Fire

Who says that bitcoin and the stock market aren’t correlated? Following bitcoin’s meteoric rise beyond the $50,000 line a few days ago, it looks like several crypto-based stocks are potentially following in the asset’s footsteps and are now trading at new highs for the year.

Crypto Stocks Have Been Firing on All Cylinders

Bitcoin has been on a serious roll as of late. In fact, it can be said that the currency has been on a bullish run for almost a year now, having shot up to about $9,000 in May of last year after hitting a new low before the $4,000 mark. Still, things took a heavy turn in October when the currency shot up to about $13,000 from its previous $10,000, and it’s been reaching new highs ever since.

There has also been a heavy argument over the years that both bitcoin and the stock market are correlated, and that when one goes up or down, the other is likely to follow suit. As we’re seeing right now, this argument may have some truth behind it, as several crypto-related stocks are boosting themselves and crossing some impressive price lines.

Some examples include KR1, a London-listed digital investment company. The firm has seen its stock shares spike by an impressive 800 percent in just the last three months. The company has built its reputation off investing in alternate currencies such as Ethereum and Polkadot, and now it looks like those investments are starting to pay off as everyone is eager to get their fingers on crypto.

In a statement, George McDonaugh – the managing director of the London-based enterprise – said:

KR1 was set up to allow investors access to the crypto economy via a publicly-listed company. Cryptocurrency stocks are outperforming the underlying assets because of the infrastructure that allows people to invest in public stock, such as 401Ks and ISAs. If you can tax-wrapper something as explosive as crypto, that makes a lot of sense in a lot of investor’s eyes.

We have also witnessed many crypto mining stocks shoot up in the past few months. Marathon Digital Holdings in Las Vegas, Nevada is up by around 500 percent since December, while Riot Blockchain in Colorado has also shot up by around 400 percent.

Perhaps even more impressive is the currency share price of The9, based in Shanghai, China. The company has seen its stock rise by as much as 1,500 percent since late last year.

Some Previous Bets Are Being Cashed In

McDonaugh chimed in further, claiming:

There could be every possible shade of despair if digital assets fall by 90 percent again. It will mean we can start allocating capital again. Right now, we’re riding the success of projects we bet on during the 2018-19 bear market. We need to make sure we’re best positioned to take advantage of the tailwinds and we’re able to work harder if we enter a slow down.

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Survey: Most Bitcoin Investors Know Zilch About the Currency

Uh oh. It looks like many of the people who invest in bitcoin know little or nothing about it. What does that say about the industry?

Bitcoin Investors Don’t Always Seem to Know What They’re Doing

Bitcoin is shaping up to be one of the biggest and most popular assets in history. The currency is reaching unprecedented levels, and recently shot beyond the $50,000 mark for the umpteenth time, though it has since incurred a small dip that has brought it back down into the $48,000 range. Still, the asset has shot up by more than $30,000 in just the past few months alone.

Obviously, people are eager to get their fingers on it. With something rising so quickly, people want to take advantage of the currency, though it appears that at the present time, the main thing that’s driving bitcoin purchases is fear of missing out or FOMO as it’s so often called. The fact is that many traders and investors are not too familiar with the technical side of bitcoin, and thus are buying something that’s going right over their heads.

Survey company Cardify conducted a poll involving more than 700 separate investors between early and mid-February. During that time, bitcoin shot up by more than $10,000, boosting itself from $37,000 to about $47,000. According to the survey data, not even 17 percent of those who took part in the study fall into the “fully understand bitcoin” category. However, a whopping near-34 percent fall into the category of “zero knowledge.”

This is a scary thought for many reasons. For one thing, if people aren’t doing their research before getting involved in BTC, that means they’re simply buying and not thinking about the future. Thus, it can be argued that they may be doing irresponsible things to get their fingers on BTC, such as mortgaging their homes or taking out loans they can’t hope to pay back.

In addition, it’s likely that those who are buying it in such a way are not leaving room for volatility. At this stage of the game, analysts don’t care how high bitcoin spikes. The fact is that tomorrow, things could come to a sudden end. We’ve seen this time and time again, perhaps the biggest example being between 2017 and 2018.

A Fluctuating Price Can Do Some Damage

During the former year, bitcoin was on a roll and by the end of those 12 months, reached its then high of nearly $20,000 per unit. The following year, within just a month or two, bitcoin had lost more than half of that value. By the summer, it was trading in the $6,000 range, and by the end of the year, each bitcoin was worth only about $3,500.

Price swings are a huge problem, and those that don’t make room for them could potentially see a lot of their wealth vanish quickly and without warning.

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Jesse Powell: BTC Will Be the Currency of the World

Kraken CEO Jesse Powell is taking a page out of Jack Dorsey’s book and claiming that bitcoin will some day be a global currency.

Jesse Powell: BTC Will Beat All Fiat

Back in 2018, the CEO of both social media giant Twitter and payments company Square claimed that bitcoin would be a global currency. Rather, he stated that it would be the world’s only currency within ten years, and that it would replace all known forms of fiat. While bitcoin hasn’t quite reached this level yet, the idea of BTC and its digital counterparts is that they would one day replace all national forms of money and serve as the ultimate payment source for both goods and services.

Today, that dream is getting closer and closer to reality, as many large companies – including Tesla, Uber and General Motors – have stated in the past few weeks that they are now considering bitcoin as a potential payment method alongside cash and credit cards in the future. Jesse Powell is confident that bitcoin will ultimately be used by many different people in many different countries.

He was also quick to suggest that the asset could potentially reach a price of $1 million per unit, thereby pulling a page out of John McAfee’s book. While we’d all like to see BTC reach this price, it’s going to be a while before the asset ever crosses into seven-figure territory, as we learned with McAfee’s prediction for the year 2020.

The antivirus mogul commented in the past that bitcoin would reach this price at some point during the infamous year in which the coronavirus pandemic began striking all our global markets. He further stated that he would eat his own d*ck if this didn’t happen. Well, it didn’t occur, but as far as we’re concerned, McAfee is not missing any of his parts and was quick to defend himself by claiming that the entire prediction was nothing more than a joke.

$1 Million in Ten Years?

But for Powell, $1 million for bitcoin isn’t a joke. It’s something that could easily happen in the foreseeable future, as he claims that many national forms of currency are already suffering and showing “extreme signs of weakness.” In a recent interview, he stated:

The true believers will tell you it’s going all the way to the moon, to Mars, and eventually it’ll be the world’s currency… In the near term, people see it surpassing gold as a store of value, so I think $1 million as a price target within the next ten years is rather reasonable.

At the time of writing, Kraken is based in San Francisco, California and considered one of the largest and most powerful cryptocurrency exchanges of all time, presently managing digital assets worth more than $10 billion. Despite a recent rise beyond $50,000, BTC has fallen back to the $48,000 range.

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Canada’s BTC ETF Is Experiencing Slump in Activity

Canada’s first bitcoin exchange-traded fund (ETF) was released to the public not too long ago. The idea of a bitcoin-based ETF had been in the back of investors’ minds for some time, and now that the product has been unveiled, it looks like many fantasies are becoming real, but is it possible that the product has already worn out its welcome?

The First Bitcoin ETF Is Already Seeing Trading Dips

According to new data, trading in the bitcoin-based ETF has already taken a serious dive, with transactions slowing down significantly from just last week. To be fair, we see this all the time with individuals. They want something so bad that they build it up in their heads. They obsess about it, they can’t stop thinking about it, and yet, when they finally get it or indulge in it, the excitement only lasts about ten minutes or so.

It appears they built it up so big in their heads that the reality of the product or event, whatever it may be, was far less joyous than the fantasy that was behind it. Could this be the case with the bitcoin ETF? Canada was the first country in the world to get the product approved, beating several rivals such as the United States for its place at the front of the line. However, not long after things began moving, they are already beginning to slow down.

The first bitcoin-based ETF was known as the Purpose Bitcoin ETF. It trades under the ticker BTCC and saw more than $17 million shares traded in just the first few days of its availability. Not long after, that $17 million shot up to about $400 million. By the early part of this week, the total peaked at a whopping $500 million. That’s half a billion dollars in a relatively short period.

Now that things have taken a serious slump, men such as Ben Johnson – Morningstar’s global director of ETF research – are working hard to explain what the problem could be. In a recent interview, he states:

The initial surge in interest was evidence of some combination of pent-up demand, investors switching from other means of getting bitcoin exposure, and the fact that bitcoin’s price was notching new highs as the Purpose ETF began trading. Longer term, I expect volumes will be correlated with bitcoin’s price.

Maybe This Can’t Be Attributed to Lagging Demand

In other words, it’s not so much that people’s demand has suddenly been waning. Rather, the ETF will work in tandem with bitcoin’s price, and thus if the currency is experiencing some sort of neutral period, like it is now, the ETF is likely to follow suit.

At press time, bitcoin has risen somewhat and is trading for around $50,400 per unit. This is certainly an improvement over the $47,000 it was experiencing last week, but it’s not a huge boost.

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Analysts Differ on Where Bitcoin Will Go in the Coming Weeks

It looks like the trouble bitcoin has been experiencing as of late is coming to an end. The world’s number one digital currency by market cap has been traversing the doldrums as of late, falling even further into the mid-$40,000 range, though at the time of writing, things have improved somewhat. The currency is back above the $50,000 line and trading more in the range that investors have become used to these past few weeks.

Bitcoin Is Starting to Improve

The present price of $50,600 is a bit of a downward slope from the $52,000 mark that bitcoin was trading at during the early morning hours of Wednesday, but the fact that bitcoin has remained above $50K is certainly a positive sign.

Not long ago, bitcoin had fallen to about $46,000 per unit – a near $10,000 drop from where it had been just a few days beforehand. Naturally, the currency is nowhere near where it was early last week, and it will take time to recover some of the lost ground (as is the case with most corrections), but analysts appear confident that the asset is looking to turn itself around rather swiftly.

Constantin Kogan – managing director of Wave Financial Group – believes that the asset is in line for another upswing, and that this recent jump past $50K is going to place bitcoin in a stronger position rather soon. He states:

With this surprising move overnight to $52K, we may see further upside resistance at the $52,500 and $55,000 levels, and obviously gain again at $58K, as the market will test and discover how many market participants are willing to buy at that price. On the downside, weak support may be found in each key psychological level and ranges where high volume previously occurred, such as $50K, $48K, $44K and ultimately $39K, strengthening as price lowers and becomes more attractive to a wider range of investors.

Are We in for Another Bearish Round?

Kiana Danial – CEO of Invest Diva – believes this recent jump to be only temporary and is confident that we may see another bearish round for crypto investors before bitcoin really takes the time to heal itself. She comments:

Bitcoin has bounced off the $44K support level and is currently attempting to break above the Ichimoku cloud on the four-hour chart. While we have several medium-term bullish indicators on the daily chart, the Ichimoku indicator’s conversion moving average is just about to cross below the baseline moving average which indicates that we may see another round of bearish sentiment longer term. The key Fibonacci retracement levels tracing the uptrend that started in January 2021 and ended in February are set at $47,174, $44K, $40K and $35,754, respectively. Due to bitcoin’s volatile nature, there’s a possibility that we see a break above the all-time highs and a visit to a new high at $67,810 before another pullback.

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Citibank: Crypto Crime Really Isn’t That Common

There is still much concern amongst government regulators surrounding cryptocurrency fraud and illicit usage. Everyone is so terrified that cryptocurrencies are being used to commit crimes and engage in wrongful behavior, but according to a new report issued by Citibank, this really isn’t something that people need to be so concerned with, as fraudulent activity involving bitcoin and its digital cousins has gone down significantly over the past few years.

Citibank: Crypto Crime Doesn’t Happen as Often as We Think

At the time of writing, there are still several figures and financial heads that are oozing with worry about how bitcoin and cryptocurrencies are being used. Janet Yellen, for example, has recently stated as the new Treasury Secretary that she is considering placing limits on all BTC activity in the future considering that it is not only volatile, but allegedly opens the doors to financial misdoings.

In addition, Gary Gensler – the nominated chairman of the Securities and Exchange Commission (SEC) – has stated that the organization is looking to do all it can to combat fraud and protect investors.

However, per data from Citibank, people may be worrying just a bit too much. The report explains:

In total, just over two percent of the activity in the cryptocurrency space was linked to illicit activity in 2019, and that total was down to only 0.3 percent in 2020. However, the extent of such activity can often seem overblown based on news headlines alone.

No doubt financial crime centering on crypto has occurred in the past. The biggest examples include Mt. Gox and Coincheck, two of the biggest and most prominent crypto exchanges in Japan. Both saw hundreds of millions of dollars-worth of crypto funds disappear overnight, and to this day, much of that money has still not been recovered.

Of course, these situations occurred when less protections were in place and the crypto world was more reminiscent of the wild west. Now, things are becoming different, and illicit activity is really in the minority, Citibank assures its readers.

The document does mention, however, that while crime may be at a new low, there are still hindrances to bitcoin and crypto-based payment systems, and that adoption isn’t likely to become widespread for a while granted these problems remain. Among some of the major problems occurring in the crypto space are volatility and price swings. Citibank says:

Security issues with cryptocurrency do occur, but when compared to traditional payments, it performs better. The entrance of institutional investors has sparked confidence in cryptocurrency, but there are still persistent issues that could limit widespread adoption.

Still Some Barriers to Cross

Still, the outlook is positive as bitcoin’s persona continues to change with time. The report says:

Perceptions about what makes bitcoin important continue to evolve and create new opportunities while increasing its perception towards becoming mainstream.

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Ruffer: Bitcoin Adoption Is Going to Shoot Through the Roof

Bitcoin has been exploding over the past year. Aside from experiencing heavy price booms that saw the currency rise from about $10,000 to $40,000 in just three months and attain all kinds of new highs, the currency has also been seeing fresh waves of institutional interest from the likes of companies such as MicroStrategy and Tesla, which have both purchased billions of dollars-worth of the asset. Now, asset manager Ruffer claims that things are just getting started for the world’s number one digital coin by market cap, and adoption is going to increase tenfold throughout the year.

Ruffer: Bitcoin Hasn’t Come Close to Peaking

Bitcoin has been experiencing loads of new respect and support over the past several months, though according to Ruffer, we’re nowhere near the peak yet. The company is adamant that adoption for the currency is still low, and that we’re only in the early stages. In a statement, the company looks at how the asset has exploded by nearly 500 percent in a rather short period:

We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialization of bitcoin. Think of bitcoin’s bad reputation as a risk premium. As we move through the process of normalization, regulation and institutionalization, the compression of this premium can have a dramatic effect on the price.

At the time of writing, Ruffer manages nearly $4 billion in assets, of which three percent are based in bitcoin and cryptocurrency. The company itself invested in the digital asset late last year, marking another turn for institutional support in the cryptocurrency arena. The company has commented that its investments have more than doubled in the last three months alone.

The company was initially attracted to BTC largely because it felt it added something unique to its portfolio and would ultimately help to diversify things a bit. Ruffer mentions:

Due to zero interest rates, the investment world is desperate for new ‘safe havens’ and uncorrelated assets.

At the same time, the company acknowledges that bitcoin and other forms of crypto are consistently straddled by volatility and price fluctuations, and that anything could happen overnight. That’s why the company’s present bitcoin assets will not go more than the three percent it invested in last November. Right now, it’s simply watching and waiting to see what BTC does next.

Trying to Stay Safe

Ruffer states:

If we are wrong, bitcoin will return to the shadows and we will lose money. This explains why we have kept the position size small but meaningful.

At press time, many regulators and officials are expressing similar sentiment that traders need to be wary when it comes to bitcoin including Janet Yellen – the new Treasury Secretary – and Gary Gensler, the current nominee for chair of the Securities and Exchange Commission (SEC).

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Canada Is Now Looking to Unveil an Ethereum ETF

It’s only been a few weeks since Canada introduced the world to the first bitcoin-based exchange-traded fund (ETF). Now, it looks like an Ethereum-based ETF may be on its way.

The Case for Canada and the Crypto ETF

Evolve Funds is the company behind Canada’s BTC ETF, and it looks like the company is already experiencing heavy success with this product. So much, in fact, that it wants to bring similar products to the market, and it feels that Ethereum may be the way to go. As the world’s second-largest cryptocurrency by market cap and the number one competitor to bitcoin, chances are plenty of people exist out there that will look to take advantage of additional ETH trading.

In a press release, the company announced:

Ether is the building block for a revolution in digital finance which is still in its infancy. All ether transactions are recorded on the Ethereum computer network, which is a decentralized, open source blockchain featuring smart contract functionality. Ethereum is the most actively used blockchain with ether being used to pay for transaction fees and computation services.

Ethereum is widely considered a stronger blockchain than bitcoin in many ways thanks to its capabilities with smart contracts. Many developers seek to utilize Ethereum for building new decentralized apps (dapps) and coins, which has led to heavy traffic congestion and high fees in the past. Co-creator of ETH Vitalik Buterin has even stated that Ethereum was no longer scalable, though the release of Ethereum 2.0 is likely to make some of these problems vanish.

In addition, the idea of a bitcoin or crypto-based ETF has been in the back of traders’ minds for several years. North America was widely considered a leader when it came to financial revolution, though the release of a crypto ETF wasn’t something that came easily. Many companies – from Van Eck to Bitwise – have struggled to get approval from organizations such as the Securities and Exchange Commission (SEC), only to come up empty handed in the end.

A “Complementary” Product?

Finally, it looks like Canada has come to the rescue. Raj Lala – president and CEO of Evolve Funds – says:

As a leader in disruptive innovation, we look forward to providing Canadian investors with access to another leading cryptocurrency through an ETF structure. Cryptocurrencies are fundamentally transforming digital finance and Evolve is quickly establishing itself as a leading facilitator for investing in this space. Ether is a digital asset that is not issued by any government, bank or central organization and was intended to complement rather than compete with bitcoin.

Right now, the Ethereum ETF is in its early filing stage, and no approval has been given, though the move is leading many investors and traders to feel confident that developed nations such as the U.S. will soon follow in Canada’s footsteps and unveil similar products.

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Michael Burry: Bitcoin’s Sudden Rise Is Unsustainable

Bitcoin has been doing quite well as of late, but as we’ve seen in the past, not everyone is set to be convinced by the world’s largest and most popular digital currency by market cap. Michael Burry – a legendary investor and the subject of both the book and the film “The Big Short” – is one such person and believes that bitcoin is trapped within the confines of a massive bubble.

Michael Burry: Bitcoin Is Headed Downhill

In a tweet he was quick to get rid of, Burry claimed that bitcoin is rising too fast, and that the recent gains the currency has garnered are not sustainable. He appears to be taking a page out of the JPMorgan book, which issued similar sentiment in a recent report. He says that many current investors are likely to experience heavy losses they will not recover from.

He comments:

$BTC is a speculative bubble that poses more risk than opportunity despite most of the proponents being correct in their arguments for why it is relevant at this point in history. If you do not know how much leverage is involved in the run-up, you may not know enough to own it.

As discussed in “The Big Short,” Burry made quite a bit of money off the collapse of the housing market in the year 2007, so it would be wrong to doubt his words right away. He appears to know a thing or two about bubbles and is quick to recognize the signs. He says that bitcoin’s sudden rise to fame bears many similarities to what he witnessed during the housing market boom 15 years ago.

Burry isn’t the only one who at press time is warning against bitcoin and advising caution. Gary Gensler – the present nominee for chair of the Securities and Exchange Commission (SEC) – commented after his recent Senate hearing that cryptocurrency is likely to present several challenges to the world of finance, and he is warning regulators to keep their heads up.

Gensler is concerned that the volatility of cryptocurrencies is too much to handle, thereby echoing the words of new Treasury Secretary Janet Yellen. He claims that the risks outdo the positives when it comes to bitcoin and feels that limits need to be in place.

In addition, Letitia James – the attorney general of New York – has also stated that cryptocurrencies are not to be taken lightly. Her words come after a long legal battle with both Bitfinex and Tether in the Big Apple, and both companies are being forced to pay $18.5 million in fees following a settlement.

Everyone Seems Worried

In a recent statement, James commented that the crypto space is marred with greed and fraud:

Too often, greedy industry players take unnecessary risks with investors’ money, but today, we’re leveling the playing field and issuing alerts to both investors and industry members across the nation.

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Survey Participants Think Its 2018 All Over Again for Bitcoin

Bitcoin, despite a few ups and downs over the past week, appears to be doing quite well when compared with where it’s been in the past. No doubt the asset has proven itself in the past 12 months, and the currency is turning out to be one of the top assets a person can invest in. Sadly, not everyone is convinced, as according to a new survey, many of the world’s financial traders view BTC as being trapped in another bubble and feel its recent surges have nothing to do with growing legitimacy.

Bitcoin Is Doing Well, but Not Everyone Sees This

Over the past year, bitcoin’s price has spiked by a whopping 475 percent. This is extremely impressive, but the news appears to be failing to make any sort of impression on traders, who according to data from a recent survey, believe that 2021 will exhibit the crypto behavior traders were privy to in 2018, and with last week’s drop by roughly $10,000, one can understand why they would feel that way.

2018 was a disastrous time for crypto. If 2017 was a period of power and stability, 2018 suggested that crypto was weak and illegitimate. 2017 saw bitcoin reach a pinnacle in that the currency hit its then all-time high of nearly $20,000 per unit. Everybody got excited, and immediately began jumping on the bitcoin bandwagon out of fear that they were going to miss out on something revolutionary.

While everyone foresaw bitcoin continuing its meteoric rises into the new year, the exact opposite occurred. The world’s number one digital currency by market cap began dropping as soon as 2018 showed itself. By early February, the currency had lost more than $10,000 and was trading in the low $9,000 range. By summer, it was at $6,000, and by Thanksgiving of that year, bitcoin had fallen to about $3,500 per unit. Thus, BTC had failed in everyone’s eyes.

Not as Much Harm as One Might Think

Now, bitcoin has surged to a record high, shooting beyond the $50,000 mark in early February and more than doubling its 2017 high. However, not everyone is convinced that 2021 is going to be a stellar year. In fact, the survey suggests that many traders think 2021 and 2018 will be one and the same. As many as 394 investors took part in the survey, and nearly 72 percent shared the opinion that bitcoin was trapped in another bubble – a bubble that wasn’t going to last much longer.

There is some positive news in that many of the participating investors do not see a huge bitcoin crash as anything significant… At least not significant enough to do any serious damage to the economy. Only about 29 percent of participating individuals feel that the currency dipping to new lows would cause serious economic harm to global markets, while more than 30 percent feel the impact would be small or nonexistent.

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Citibank Praises BTC, While China Seeks to Limit Mining Activity

From both ends of the world, bitcoin is the target of much speculation. In the west, it appears to be the subject of positivity, with the likes of Citibank commenting that bitcoin is likely to be at the center of much cultural and revolutionary change. In the east, countries like China are looking to implement serious limits on bitcoin and crypto mining. With both sides offering opposing views, it looks like bitcoin has used this time to heal some of its wounds and bounce back by roughly nine percent at press time.

Citibank Is Working to Push BTC Forward

Paolo Ardoino – CTO of Bitfinex – examined the current situation surrounding BTC and said:

Bitcoin seems to have bounced back today as cryptocurrency markets start the week in a resurgent mood. The backdrop of huge pent-up institutional demand and interest from long-term investors may be here to stay, but time will tell.

The world’s number one cryptocurrency has been suffering as of late. The asset ultimately fell by more than $10,000 last week, dipping down from around $57,000 per unit to just over $46,000. Now, at the time of writing, the currency has surged back into the $48,000 region, thereby incurring a $2,000 spike over the course of a few days.

It’s nowhere near as impressive as some of bitcoin’s past figures, but it’s a step in the right direction – especially when one considers how much has been lost in the space of just one week. The move appears to stem from words offered by Citibank, which in a recent report, acknowledged that there were risks involved with both mining and trading crypto, but that the positives heavily outweighed the negatives.

The document explains:

There are a host of risks and obstacles that stand in the way of bitcoin progress but weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point and we could be at the start of massive transformation of cryptocurrency into the mainstream.

In addition, Citibank also suggested that bitcoin could ultimately serve as the primary form of currency for international trade between countries.

By contrast, the words and comments from Citibank are potentially being countered by the likes of China and its Inner Mongolia region, which is famous for the heavy amounts of crypto mining that occur there and its low electricity prices. Recently, the area said that it was looking to ban all crypto mining within the next month, and that all present operations will cease by mid-April.

Too Much Expended Energy!

The goal is to limit high-energy projects within China and reduce environmental strain. In a recent draft of the bill working to reduce energy costs, the following is written:

[Inner Mongolia] will tighten its energy control measures and bear the targets throughout all economic and social aspects.

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NY’s Letitia James: You Must Be Very Careful Investing in Crypto

New York attorney general Letitia James has issued a statement to all residents of New York warning them that cryptocurrencies are risky, and that they should think twice before investing in them.

Letitia James Warns Against Crypto Usage

In the statement, she also takes aim at all cryptocurrency businesses, claiming that if they do not follow the rules set forth by New York and the rest of the country, they are likely to face serious monetary and legal consequences. This is no doubt a nod to the recent court battle James faced with the likes of Tether and Bitfinex; a case that was ultimately settled and has barred both companies from ever doing business in New York again.

James mentions:

Too often, greedy industry players take unnecessary risks with investors’ money, but today, we’re leveling the playing field and issuing alerts to both investors and industry members across the nation. All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are high-risk, unstable investments that can result in devastating losses just as quickly as they can provide gains… We will not hesitate to take action against anyone who violates the law.

Cryptocurrencies, despite having legions of loyal fans and users across the board, continue to face scrutiny in recent months and years given how vulnerable to price fluctuations they can be. These swings have often caused several traders to lose most or all their crypto savings within specific periods, as we saw in the year 2018 when bitcoin fell apart.

In addition, the space is often fraught with fraud and other illicit activity that causes losses and poses serious threats to users.

James recently “won” her legal standing against both Tether and Bitfinex within the Big Apple. While the case reached a settlement and was never placed in a judge’s hands, both entities will be forced to pay as much as $18.5 million in legal fees and can no longer administer their services to residents of the state.

Both firms have been accused in the past of hiding losses that amount to a whopping $850 million. Furthermore, James has accused Tether of lying to investors about how much money it had in its reserve accounts and about the status of its stable currency, which is allegedly backed by USD. James has stated that at the time the suit began, Tether had no USD in its bank reserves and thus the stable currency it had established wasn’t so stable.

Tether Feels the Same Way

Neither Tether nor Bitfinex has admitted to any wrongdoing, though the former has issued a formal statement explaining:

We share the attorney general’s goal of increasing transparency. Contrary to online speculation, after two and a half years, there was no finding that Tether ever issued tethers without backing or to manipulate crypto prices.

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The Bitcoin Space Is Largely Controlled By a Select Few

The bitcoin space was supposed to be decentralized. One that was controlled by the people that owned it. It was supposed to give people more financial independence and say in their futures. However, light is being shed on an arena that is now largely controlled by a small group of crypto-centered businessmen.

Is Bitcoin Remaining Decentralized?

As it turns out, more than 95 percent of the world’s total bitcoins are stored within two percent of the world’s crypto accounts. This data comes by way of Flipside Crypto, a research firm that suggests bitcoin is perhaps not as decentralized as it’s been made out to be. Among the top bitcoin influencers are Dan Morehead, the founder of Pantera Capital; Barry Silbert, the founder of Digital Currency Group, and Tyler and Cameron Winklevoss, who currently run the Gemini Exchange in New York.

In addition, there are also figures such as Brian Armstrong, the young CEO of Coinbase, one of the biggest and most popular cryptocurrency exchanges in the world. At this time, the company has filed paperwork to go public, and Armstrong – who is rather rich and controls a healthy portion of the world’s bitcoin supply – is set to become even stronger and wealthier with this move.

Individuals like Morehead remember a time when bitcoin wasn’t anywhere near as large as it is today. He’s been an investor for much of his adult life and remembers when bitcoin was small and unknown. He states in an interview:

I was first attracted to bitcoin as an investment. It was something interesting to learn about. I sent $2 million to Coinbase, and I started trying to buy $2 million of bitcoin. My daily trading limit was $50.

Today, Pantera manages more than $50 billion in assets and has invested in some of the world’s biggest tech and financial startups, while companies like Coinbase initially began in an apartment in San Francisco to become one of the largest digital trading platforms the world has ever seen.

By contrast, Cameron and Tyler Winklevoss didn’t have years of investing under their belts when they first made their way into the bitcoin arena. In a recent discussion, Cameron mentions that their lack of career options and low interest in Wall Street is what made them curious about the digital currency.

Curiosity Is What Drove Them

He states:

Tyler and I didn’t have 20 years of capital markets experience when we came to bitcoin. We were open to this possibility, and that’s how we’ve always been: driven by curiosity… In the early days of Facebook, in watching and being part of that ride, we saw the power of networks, and so many people dismissing social networks as a fad… [Bitcoin] is a money network. What happens when you put an economic incentive around that network? That’s possibly the most effective network in the world.

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Cathie Wood: BTC Will Be a Staple Investment

Imagine a world where bitcoin and cryptocurrency just completely took over. There are no more standard financial investment tools, and things like stocks and bonds cease to exist. The entire world is based on cryptocurrency, and everything is paid for in bitcoin. While it may be many years until we reach a society like this, Cathie Wood of ARK Invest thinks we’re heading in that direction.

Cathie Wood: BTC Will Replace Bonds

In a recent interview, the monetary executive claimed that she’s confident bitcoin will one day replace bonds, and that the currency is going to be a primary staple of many professional portfolios. She says:

You think about the traditional 60/40 stock and bond portfolio but look what’s happening to bonds right now. If we’re ending a 40-year secular decline in interest rates, that asset class has done its thing. What’s next? We think crypto could be the solution.

Right now, bonds are selling off at an alarming rate. In addition, many analysts are convinced that the inflation that exploded in 2020 is going to continue throughout the new year, and this will ultimately cause many bonds to lose their worth. Institutions such as the Federal Reserve have continued to purchase bonds as a means of keeping the economy stable, and this has caused bitcoin to increase in value according to Wood.

She’s confident that so long as this behavior continues, people will eventually turn their backs on bonds and begin investing further in bitcoin and assorted cryptocurrencies. She states:

We know there’s a concern given all the quantitative easing and the no-rules based monetary policy out there. Fixed income has done 40 years of really hard work. If bitcoin represents a new asset class, why not invest in it?

Wood mentions that last year saw huge bouts of technological innovation come about, and this has also contributed to the death of the dollar and the inflation experienced by the U.S. and other established countries. She also says that while many aspects of the global economy are still based on gold, much of the money and financial flow designed for gold saw itself going to BTC over the past 12 months.

Gold Isn’t as Big as It Once Was

She explains:

The dollar dropping seven percent on a trade weighed basis last year and falling further this year is another stimulus. It should be a stimulus for gold, but bitcoin is getting the incremental flows that might go to gold.

We are seeing clear evidence of this by simply viewing the prices of both assets. For example, while gold ultimately rose beyond the $2,000 mark in the year 2020, it is presently down by a little more than six percent, while bitcoin – despite a sudden dip in the past week – is still up 75 percent compared with where it was at the beginning of the year.

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Despite the Bitcoin Drop, Many Analysts Remain Bullish

Bitcoin has been a major focal point of discussion as of late. The world’s number one digital currency by market cap experienced a record bull run during the month of February, but during the final days of the month, the currency came crashing down and experienced a $10,000 dip. The asset fell from roughly $56,000 per unit to about $46,000, which is what it remains at still.

The Latest Bitcoin Slip Hasn’t Caused Many People to Turn

Despite this mega drop, the currency still has many advocates, and a lot of analysts and industry experts appear to be coming to the asset’s aid. Michael Saylor, for example, is the leader of MicroStrategy, a software firm and one of the original public institutions to express support for cryptocurrency. The company has purchased more than $4 billion worth of bitcoin in the past six months, and it appears the firm isn’t quite done with its buying plans.

In a recent interview, Saylor says that the dip doesn’t mean anything, and that the asset is going to replace gold at some point in the future. He says:

Bitcoin is going to flip gold, and it’s going to subsume the entire gold market cap. Then, [bitcoin is] going to subsume negative-yielding sovereign debt and other monetary indexes until it grows to $100 trillion.

Others feel that while bitcoin is likely to experience more bullish behavior throughout the year, Saylor’s prediction might be going a little overboard. One such figure is Anthony Pompliano, a partner at the hedge fund Morgan Creek Digital. He says:

I’ve held a price target of $100,000 per bitcoin by the end of 2021 since I publicly wrote about it in 2019. [I’m] sticking with that, yet somehow have become the most conservative person in the room.

In other words, while he’s confident bitcoin is going to do well, his predictions for the asset – which at one point were considered boisterous – are now rather small when compared with the thoughts of some of his peers and counterparts.

Mati Greenspan – the founder of Quantum Economics and a former analyst with e-Toro – says that so long as institutions continue to pour money into the asset, it’s going to hit new highs. He mentions:

Bitcoin has already had a fantastic year, and further gains would indeed be a blessing. The main driver lately has been the rush from multinational corporations to diversify out of fiat money and into crypto, a trend that we see as just getting started now.

Not Everyone Is Confident

By contrast, Charlie Munger – the vice chairman of Berkshire Hathaway – says he sees no future for bitcoin, citing its volatility as a major problem. He comments:

I don’t think bitcoin is going to end up the medium of exchange for the world. It’s too volatile to serve well as a medium of exchange.

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As the Dollar Begins to Rebound, Bitcoin Is Struggling to Remain Solid

At the time of writing, bitcoin – the world’s number one digital currency by market cap – isn’t doing so hot. The currency has fallen to about $46,000 per unit at press time, meaning it is now about $10,000 lower than where it stood during the early portion of last week. Things are not looking good for the asset, but how much of this is just part of a healthy correction?

Bitcoin Has Taken an Ugly Dip

As it turns out, things may be a little more extreme than normal. While there’s no way to predict if this is a final stretch for the world’s most popular cryptocurrency, the asset is experiencing losses it hasn’t seen in almost a year. The currency has fallen by about 21 percent in just the last few days alone and hasn’t dropped this much since March of 2020.

During that time, the coronavirus pandemic first began striking all corners of our global markets, and many assets – bitcoin included – began to witness dips nobody could have anticipated. Stocks fell to record lows, while precious metals such as gold also incurred heavy dips. Bitcoin – which during the previous month, was trading for well over $10,000 – fell below the $4,000 mark, and the dollar began experiencing heavy inflation.

Furthermore, many platforms centered around bitcoin and the world’s leading crypto assets (such as Ethereum) are also experiencing a few stumbles here and there. For example, the Bloomberg Galaxy Crypto Index – which monitors BTC, ETH and three additional crypto assets – has fallen by about 23 percent over the past week.

The Grayscale Bitcoin Trust has also been suffering, experiencing heavy slumps following the expiration of several bitcoin futures contracts in the past few days. The trust has fallen by as much as 20 percent since late last week.

Vijay Ayyar – an executive with cryptocurrency exchange Luno in Singapore – explained in a recent interview that the U.S. dollar is beginning to rebound, which could be why bitcoin is heading into darker territory. He says:

Risk-on assets are taking a hit at this moment. We’re seeing stocks slide and crypto is following. The dollar is strengthening, which is a good indication to expect a slide in bitcoin and crypto.

Standard Assets Are Staging a Comeback

In addition, gold – which has been declining somewhat in recent days – is also making a slight comeback, with one ounce now trading for well over the $1,700 mark. Clearly this is a case of traditional finance working to repair itself, and as we understand by now, bitcoin ultimately survives when standard markets are in chaos or having a hard time. When things are steady or neutral in this respect, bitcoin will likely trade in a lower register.

At press time, many are still laying the blame on Elon Musk, who recently tweeted that bitcoin’s price was “too high.” Things began taking a nasty toll from there.

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Bitcoin Is Suffering, but Many Institutions See This as an Opportunity

Bitcoin has taken a turn for the worse, but while the move may not look great on paper, it turns out things are going quite well for some of the institutional traders that have yet to step into the cryptocurrency arena. Many institutions are using the recent bitcoin price dip as an opportunity to buy at a lesser price and get their fingers on an asset that many companies have been going crazy over for the past six months.

Bitcoin Has Taken an Ugly Stumble

Things really took a serious turn back in August of last year, when companies such as MicroStrategy first began buying up tons of BTC and commenting about what an important asset it was for all who engaged in crypto trading. From there, many other institutions – such as Square, MassMutual and Stone Ridge – began making their way into the crypto space, and bitcoin’s price started to grow at an alarming rate.

However, nobody could have predicted the latest institutional move set forth by Tesla, which two weeks ago purchased approximately $1.5 billion worth of the world’s biggest cryptocurrency asset. However, this was all done at a time when bitcoin was trading in the $50,000 range. Now, it has fallen by about $10,000, which some believe to be a healthy correction, but either way, many institutions that haven’t gotten involved in crypto yet see this as a chance to finally try it out.

Aside from bitcoin, other altcoins appear to be feeling the heat as well. Assets such as Ethereum, Ripple’s XRP and Stellar are all suffering at the time of writing, though a select few – such as Cardano – are experiencing slight gains of around five percent at press time.

Many people seem to believe things will ultimately pick up once Coinbase fully goes public. The popular crypto exchange has just filed paperwork to be listed on the Nasdaq, and many analysts and industry experts alike think this is going to set things up for major change in the crypto space.

In a statement, the company explained:

Our mission is to create an open financial system for the world. We are building the crypto economy; a more fair, accessible, efficient and transparent financial system for the internet age that leverages crypto assets. These are digital assets built using blockchain technology.

We Need to Be Ready for Price Fluctuations

In addition, the company warned that volatility isn’t likely to disappear anytime soon, and traders – along with crypto-based companies like itself – need to be prepared for that. Coinbase explained:

Our operating results have and will significantly fluctuate due to the highly volatile nature of crypto. Most of our net revenue is derived from transactions in bitcoin and Ethereum. If demand for these crypto assets declines and is not replaced by new crypto asset demand, our business, operating results and financial condition could be adversely affected.

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Coinbase Let’s You Trade Crypto… And Engages in It as Well

Coinbase is known for storing cryptocurrency and allowing its many customers to trade digital assets. However, what we didn’t know was that the company also did its own investing in crypto as well.

We’re Learning a Lot About Coinbase

As it turns out, the company has become of the first major cryptocurrency exchanges to file for a public listing. In doing so, a lot of information has come out about the firm that many traders were unaware of prior, a big one being that Coinbase ultimately does its own trading.

Over the past year, with bitcoin’s meteoric rise and the world’s number one digital asset shooting into the $40,000 range by the end of 2021, the company saw its crypto assets shoot up to a whopping $316.1 million. This is an increase of roughly $33 million within 12 months.

Bitcoin grew by as much as 300 percent, while many competing altcoins – such as Ethereum – surged even more and incurred growth of 500 percent or more. In addition, both assets have continued their surges well into the new year, and things are set to continue throughout 2021 though at press time, the setting has taken a bit of a stumble with assets like bitcoin now in the $46,000 range – down from last week’s $56,000.

Brett Teipaul – Coinbase’s head of institutional coverage – explained in a recent blog entry:

Since our founding in 2012, Coinbase has held bitcoin and other crypto assets on our balance sheet, and we plan to maintain an investment in crypto assets as we believe strongly in the long-term potential of the crypto economy. Investing in crypto assets required us to develop new investment, accounting and tax policies, as well as ensure we established a control environment for purposes of receiving unqualified audit opinions on our financial statements.

Things have really turned themselves around for the digital trading platform. Coinbase saw a net profit of roughly $322 million throughout 2020. This is a huge change from the figures it saw in 2019, which brought a $30 million loss to the company. Overall, business for Coinbase grew by over $1 billion. By the time it appears on the Nasdaq, Coinbase is slated to have revenue considerably higher than its operating expenses and the company is valued at more than $100 billion.

Could Things Take a Nasty Turn?

The sudden drop in bitcoin’s price, however, could bear a few problems for the exchange, and the company explained in a recent statement:

A decline in price may require us to take an impairment charge on our crypto assets and a decline in the value of the crypto assets we hold in higher concentrations may have a larger impact on our operating results in any given period.

Still, the company appears to be in solid shape. Coinbase has also engaged in a private market sale prior to its official Nasdaq listing.

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More Details Emerge Regarding Coinbase and Its Public Offering

Last December, Live Bitcoin News reported that Coinbase – one of the largest and most popular cryptocurrency exchanges in the United States – had decided to go public. On Thursday, the documents tied to the filing were revealed and made available to interested readers.

Coinbase Is Going Public, and Brian Armstrong Has a Lot to Say

Among these documents was a heartfelt letter written and filed by the company’s CEO Brian Armstrong. In the letter, Armstrong describes the cryptocurrency space as something that could ultimately outdo the world of traditional finance and even knock it aside at some point. He says that the space has become wrought with high fees, unequal access and delays, and that there are several “barriers to innovation.”

He further writes that the initial goals of the crypto space are still a long way off, and that the exchange is looking to do all it can to give traders full control over their financial futures. The letter states:

Coinbase is a company with an ambitious vision: to create more economic freedom for every person and business. Everyone deserves access to financial services that can help empower them to create a better life for themselves and their families, but today, we are a long way from this vision.

The letter further explains:

People are using cryptocurrency to earn, spend, save, stake, borrow, lend, vote and perform many other types of economic activity. Coinbase is building the infrastructure to power the crypto economy, helping bring the benefits of this new technology to the world.

Armstrong says that reading the bitcoin whitepaper more than ten years ago was a real gamechanger for him. It led him to a world where virtually everyone could have access to financial services on the cheap. He says that the world of bitcoin and crypto intrigued him because it could make payments faster, and bring businesses separated by geography closer together.

His letter says:

Economic freedom is a necessary, if not sufficient, condition for human progress. Societies with greater economic freedom have higher life expectancy and GDP growth, less war and corruption, better treatment of the environment, and higher income of the poorest ten percent of people in society. Higher economic freedom correlates with the kind of societies that we all aspire to create. Our job at Coinbase is to help make this future a reality.

He further comments that the creation of bitcoin has led to an entirely new financial world of digital prospects. He says that nobody could have ever assumed that the establishment of BTC would have ever led to the development of additional assets such as Ethereum, Ripple and the many stable currencies that now fuse standard crypto assets with fiat.

The Economy Is Seriously Changing

He writes:

We’re seeing the digitization of all types of value in a new economy that we call the crypto economy.

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Coinbase CEO: Satoshi Nakamoto Should Stay Hidden

Brian Armstrong – the CEO of Coinbase – is saying that if Satoshi Nakamoto were to ever reveal his full identity, there would be serious repercussions for both bitcoin and its many investors.

Satoshi Nakamoto Should Always Stay Hidden

Not long ago, the company had decided that it was going to go public through a direct filing. In documents related to the filing, the digital exchange claims that Satoshi Nakamoto is a “risk factor,” and that the real identification of the man could lead to problems down the line.

It is widely believed that if Satoshi Nakamoto were to ever reveal himself, things wouldn’t go well for the bitcoin and crypto space. In addition, it was also revealed in the filing that the man possesses more than one million individual units of the world’s number one digital currency by market cap. This means he’s a serious billionaire, as each coin is trading for about $49,000 at press time.

Should Nakamoto ever decide to transfer his bitcoins – which are presently valued at well over $30 billion – the ground could become very shaky for both Coinbase and the people it seeks to serve.

The reason for this is because bitcoin is allegedly driven by its rarity. Right now, it is estimated that Nakamoto holds about five percent of the world’s bitcoins, which doesn’t sound like a huge figure at first, but when one considers that there are only 18.5 million BTC units in the world, things get a little more complicated.

If Nakamoto were to release his 1.1 million bitcoins into the trading space, the price would certainly crash. This is a huge amount of BTC suddenly open and available to investors. With so much available at once, the asset would cease to be as rare as it is today, and thus its price would likely take a nasty fall.

Furthermore, bitcoin is widely labeled as a decentralized form of financial technology, and that revealing Satoshi Nakamoto would go against the very principles the cryptocurrency is built upon. Bitcoin is designed to keep one’s identity hidden and prevent outside parties from having control over another person’s finances and financial goals, and a sudden reveal of Nakamoto would put a damper in this narrative.

This Technology Can Help the World

Brian Armstrong explained in a recent statement:

When I first read the bitcoin whitepaper back in 2010, I realized this computer science breakthrough might be the key to unlock this vision of the future. Cryptocurrency could provide the core tenets of economic freedom to anyone: property rights, sound money, free trade and the ability to work how and where they want.

Over the years, traders have gone nuts trying to potentially find out who could be the legendary Nakamoto, and several famous names have been dropped into the “Nakamoto pot” including Nick Szabo, Tesla CEO Elon Musk and Craig Wright.

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Bitcoin Scam Leads to a Family’s False Relocation

A bitcoin scam involving a bunch of house renters has taken place in the city of Vallejo, California. In what is certainly a unique spin on scam-based bitcoin behavior, it appears someone pretended to be a landlord of a vacant home and said that a $2,000 down payment in BTC was all that was needed to give a family a new place to live, but things weren’t as simple as they seemed…

How Bitcoin Scams Are Taking on New Form

In the crypto space, traders and buyers often go by a simple rule: if it sounds too good to be true, it probably is, and that’s the best way to describe the situation at hand. A suspect had found a specific property and spent time placing it on several rental sites. From there, a family reached out asking about the property and what it would take to serve as new renters.

From there, the suspect posing as the landlord said that he would not need to meet them face to face. He also would not need any background information, nor would he have to engage in a credit check of any kind. All he would need was a $2,000 bitcoin payment. This would be enough to get them into the house quickly.

Naturally, the family felt that they had hit the jackpot. The only problem was that the house was not up for rent, nor was the person posing as the landlord in any position to rent the home out, and it wasn’t until two days after they unpacked that the family had learned they were the victims of a scam.

Krystle Karimian – CEO of the property management company in charge of the home – described the suspect in a recent statement:

Scammers are getting smarter… We track renters and prospective renters and he acted like he was going in and viewing property. Instead of viewing it, he gave the ‘keys’ to a family and pretended he was the landlord.

Trying to Help the Family Out

Karimian believes that the man had gotten the keys to the home either through taking a tour of the home and stealing it from a tenant or by posing as a potential renter himself. Either way, the man has been traced to an address in Los Angeles and was revealed in a report to be 35 years of age. He is also believed to have shown the property at least four times to people.

The property company was then forced to tell the family what had happened. The situation is made even more devastating considering the family consists of children and a young man who’s bound to a wheelchair and cannot use stairs. The company has since started a GoFundMe page in the hopes that it can raise $5,000 for the group to help them relocate.

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MicroStrategy Adds More Than $1 Billion in BTC to Its Asset Stash

MicroStrategy has established itself as one of bitcoin’s biggest fans in recent months.

MicroStrategy Buys a Lot More Bitcoin

The company was one of the first institutional players to come out publicly and support the world’s primary digital currency by market cap through a purchase of more than $250 million worth of the asset last August. Things didn’t quite stop there, however, as the company felt this wasn’t enough and engaged in another buy of the cryptocurrency just a few months later that brought its bitcoin ownership level beyond $400 million.

From there, it engaged in a third purchase and later announced that it was looking to sell other assets – including convertible debt – so that it could get the funds necessary to purchase even more BTC down the line. After everything was said and done, MicroStrategy had garnered more than $3 billion worth of the digital currency.

For most firms, it could probably be argued that this was a good place to stop, yet MicroStrategy clearly feels differently as having sold some of its debt, the enterprise has purchased more than $1 billion more in BTC. Clearly, MicroStrategy is quite passionate about the world’s primary digital asset, and its looking to garner all it can within a specific window. This recent purchase saw the company add more than 19,400 more bitcoins to its stash.

It is estimated that MicroStrategy purchased the asset at a price of around $52,000, meaning the currency had fallen somewhat from its $56,000 price earlier in the week. Thus, as bitcoin is currently trading for around $49,000 per unit, it can be said that the company has already lost money on this purchase. However, this was also the case in August as at that time, the bitcoin MicroStrategy had bought was going for around $12,000.

A month later, BTC fell to just over $10,000 per unit, meaning that within weeks MicroStrategy had lost quite a bit, though things ultimately picked back up in October and the company never lost its faith. Perhaps this time around will be no different.

In addition, it appears many investors and shareholders of MicroStrategy were approving of the recent purchase, as shares in the company rose by more than five percent to about $730 each. Stock in MicroStrategy has more than quadrupled in the past six months alone, suggesting that these bitcoin purchases really have company players excited.

A Massive Total

CEO Michael Saylor explained in a statement:

The company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin. Our belief is that bitcoin, as the world’s most widely adopted cryptocurrency, can serve as a dependable store of value.

Overall, MicroStrategy is believed to own more than 90,500 bitcoin units. Together, they are worth a whopping $4.5 billion at press time.

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Square Just Added a Lot of Bitcoin to Its Stash

It’s not like we didn’t know that Square – the financial payment firm owned and operated by Jack Dorsey of Twitter fame – was a bitcoin fan. Dorsey himself has been advocating for bitcoin for the past several years, even going so far as to claim in 2018 that it would be the world’s only currency within ten years. In addition, Square was one of the first institutions to pledge support for the world’s number one digital currency back in October of last year when it purchased approximately $50 million worth of BTC.

Square Has Bought More than $150 Million in BTC

However, it looks like that $50 million really wasn’t enough for the company, as Square has now stepped up and purchased an additional $170 million of the digital currency. Taking a page right out of MicroStrategy’s book, it looks like the company has decided to up the ante on how much bitcoin it owns and has engaged in another major purchase – so big in fact, that it’s about three times larger than the one from four months ago.

This brings the total amount of BTC owned by Square to more than $200 million. While this may appear small when compared to the BTC ownership of firms such as MicroStrategy and Tesla, the number is still important in that it shows institutions are doing all they can to potentially spike interest in bitcoin and get their fingers on it. Clearly, this is an important asset to them, and they’re doing everything to get a hold of it.

The total amount of bitcoins purchased by Square came to 3,318 units. It is estimated that bitcoin now makes up about five percent of the company’s assets. In addition, bitcoin is becoming a large staple for the enterprise’s Cash App, a mobile payment service that permits users to invest in crypto. In a statement, the company claims:

The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.

Following news of the purchase, bitcoin – which had been struggling and initially fell from about $56,000 per unit to just over $47,000 – added roughly $2,000 to its price and is currently trading for approximately $49,000. Meanwhile, the currency is also garnering acclaim and positive sentiment from figures such as Cathie Wood, the CEO of Ark Investment Management.

These Corrections Are Normal

In a recent interview, she mentions that she is unfazed by the recent price dip bitcoin has experienced and feels that corrections such as these are normal and part of a healthy and growing market. She says:

We’re quite positive on bitcoin. We’re happy to see a healthy correction here. No market is straight up. Everyone should know that.

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Bitcoin Experienced Heavy FUD During the Week

It’s certainly been a crazy week for bitcoin. The currency – which was trading for about $56,000 per unit during the early portion of the week – later fell to about $47,000, thereby losing roughly $9,000 from its price. Since then, it has spiked back to $49,000 at the time of writing, gaining $2,000. However, it still isn’t anywhere near where it was previously, and data suggests that many investors and traders as of late have been selling their coins for a profit and causing the sudden dip for BTC.

The Bitcoin Drop Explained

As we have discussed before, whenever large amounts of crypto holders sell their stashes, they’re likely to cause massive dips in the price of whatever digital asset is in question. The market cannot handle that many trades and losses at once. As a result, a correction often occurs, and the price will sink.

This is what many analysts and industry experts say occurred. In addition, it appears that many bitcoin futures contracts expired, which may have also led to panic and further selling. Glen Goodman – a crypto trader and author – explained in a recent interview:

The bitcoin market was like a tinderbox waiting for a spark. It didn’t cause an immediate crash, but it sowed a heavy fear, uncertainty and doubt (FUD) seed that grew into a selling panic. Traders had borrowed huge sums of money to buy bitcoin futures contracts, betting that the bitcoin price would continue to go up.

It is estimated that on Monday, as much as $1.6 billion worth of BTC futures contracts came to their end. This likely caused many people to experience heavy concern, and the market is enduring a bit of a struggle as a result.

Goodman further states that many of the individuals that wound up selling were initially people that were going “long” on bitcoin futures and assuming that further price spikes would be constant. This caused interest rates to reach new peaks on digital exchanges. He said:

Their interest payments on that borrowing skyrocketed. On Saturday, the annual rate reached 144 percent per year on the largest crypto exchange Binance. Clearly that is unsustainable, so the market was ready for a spark to tank the price and blow up the trading accounts of those who’d borrowed too much. That way, the interest rate on borrowing could return to normal.

Will It Be a While Before It Spikes?

Many analysts are now of the belief that bitcoin will continue to remain in the lower levels for a while, and that the currency isn’t likely to experience any further surges in the coming weeks. Bendik Norheim Schei – head of research at Arcane Research – mentioned in a statement:

I would not be surprised if we range for a while. Many got punished hard this week and the market may need some time to recover.

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Tether, Bitfinex Settle Major Legal Case in New York

Tether and Bitfinex have settled their case with the New York Attorney General’s office. Both companies have agreed to pay as much as $18.5 million to make the issues of the past finally disappear.

The Tether Bitfinex Fiasco Has Come to an End

Both companies have been under serious investigation for the last few years after having been accused of working to cover up an $850 million loss of both corporate and client funds. As a result of the settlement, both Tether and Bitfinex will no longer be allowed to do business in New York, nor can they offer their services to residents of the state.

Tether is the creator of the one of the world’s primary stable currencies. It is allegedly tied to the U.S. dollar, which prevents it from being susceptible to price swings and volatility like common virtual assets such as BTC and Ethereum. However, according to Attorney General Letitia James of New York, the company has never held any dollars in its reserve account. Thus, the currency was not backed by fiat. In addition, she claims that the company had no access to standard banking services throughout 2017 and ultimately lied to investors about liquidity.

James explained in a statement:

Bitfinex and Tether recklessly and unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars all the time was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system.

The idea of a cover up first emerged through a filing in 2019. The attorney general claimed that Bitfinex had handed over roughly $850 million to a company called Crypto Capital in Panama. The moving of funds occurred without the knowledge of investors and nobody was told that the money was being relocated, which was an alleged breach of the company’s protocols.

Trying to Move Forward

While both entities are agreeing to settle the case, neither is admitting to doing anything wrong. However, they both agreed that transparency was key to all future operations. In a statement, Tether explained to its users:

We share the attorney general’s goal of increasing transparency. Contrary to online speculation, after two and a half years, there was no finding that Tether ever issued tethers without backing or to manipulate crypto prices.

Initially, Tether was accused of potentially boosting bitcoin’s price during 2017 in a research paper published by University of Texas finance professor John Griffin. The document suggests that those who owned Tether during the time would often use the stable currency to purchase BTC the minute it showed any signs of a slump. This would inadvertently tie BTC to the U.S. dollar and help to – temporarily at least – boost its price.

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Daniel Ives: When Bitcoin Falls, Tesla May Follow Suit

Elon Musk has worked so hard to push bitcoin and to purchase the asset that it’s ultimately tied itself to Tesla shares, according to stock and crypto analyst Daniel Ives of Wedbush fame.

Daniel Ives: BTC and Tesla Are Practically One and the Same

In a recent interview, Ives says that when Tesla goes up, bitcoin will follow suit and vice versa. Tesla can also expect to see action whenever bitcoin makes a move. Not too long ago, the company purchased as much as $1.5 billion worth of the digital asset. The purchase was so big that the currency and shares in the company are now practically one and the same.

Ives comments:

Musk is now tied to the bitcoin story in the eyes of the Street, and although Tesla made a billion-paper profit in its first month owning the digital gold, it comes with added risk, as seen this week. With Tesla diving into the deep end of the pool on bitcoin, Musk runs the risk that this side show can overshadow the fundamental EV (electric vehicle) vision in the near term for investors.

Earlier in the week, the price of bitcoin hit a real barricade, having fallen from around $56,000 per unit to just over $47,000. This constitutes a two-day loss of approximately $9,000. Thus, Tesla and many other companies that invested late in bitcoin are probably feeling the heat right about now.

Still, Ives comments that investing in BTC was the right move to make on Tesla’s part, though he did mention that there is a scary side to Tesla’s recent decisions. He says:

On the downside, it’s playing with firecrackers and risks and volatility are added to the Tesla story.

Already, we are witnessing both Tesla and bitcoin work hand in hand. Following the crypto’s legendary drop, shares in the electric car company slipped as much as 11 percent each, thereby proving that both assets are deeply connected to one another. This was Tesla’s largest drop in the past five months, having fallen by more than ten percent last September. Ironically, that period proved to be rather bearish for BTC as well.

Both Assets Have Fallen This Week

Bitcoin ultimately took a serious dive not too long after Musk had issued a message on Twitter calling bitcoin’s and Ethereum’s prices “too high.” Eric Lonergan – fund manager at M&G – explained in a statement that Musk needs to get it together on social media or things like this are going to keep happening. He says:

When your Twitter feed is non-stop about an asset, that is a huge warning signal. In the world of social media narratives, you’ve got to be extremely careful. When the personality of a CEO is ten times bigger than the cars they’re manufacturing, you’ve got to take this stuff with… you know… this is rather dangerous territory from an investment standpoint.

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Michael Saylor: BTC’s Market Cap Will Soon Explode

Bitcoin and Ethereum prices have tanked. BTC, for example – the world’s number one cryptocurrency by market cap – has dropped into the high $47,000 range. This is a $9,000 drop in about two days, as recently, the asset was trading for about $56,000 per unit. Despite this, Michael Saylor – the CEO of MicroStrategy – remains confident that things are going to turn out well for the currency. So well, in fact, that he thinks it will one day have a $100 trillion market cap.

Michael Saylor: Bitcoin Is Going to Get Much Bigger

Michael Saylor has been pushing a bitcoin agenda for the past six months. His company MicroStrategy initially bought the currency back in August of 2020, becoming one of the first major institutions to pledge support for the digital asset during a time when it was still considered relatively taboo and unsafe due to its volatility. The company ultimately paved the way for several others – including Stone Ridge, Square, MassMutual and then Tesla – to step in and invest in the cryptocurrency.

In a recent interview, Saylor comments that he still believes bitcoin has a serious future ahead, and that it’s going to experience hardcore bursts in both price and value in the coming months. He states:

There’s a $500 trillion monetary planet and the outer layer is currency. Then you’ve got stocks, bonds and real estate. There’s $10 trillion worth of gold in there, $1 trillion of bitcoin in there. Bitcoin is going to flip gold, and it’s going to subsume the entire gold market cap. Then it’s going to subsume negative yielding sovereign debt and other monetary indexes until it grows to $100 trillion. Once it gets to $10 trillion, its volatility will be dramatically less. As it marches toward $100 trillion, you’re going to see the growth rates fall, the volatility fall, and it’s going to be a stabilizing influence in the entire financial system of the 21st century.

People Really Trust It

He further stated that while his company owns a grand stake in the primary digital asset, he also owns it personally and possesses his own individual account. He’s also rather critical of Janet Yellen and fellow regulators who seem intent on limiting crypto usage in the coming months and who claim it’s purely speculative and unusable. He mentions:

I think that you can expect that we’ll have a billion people storing their value, in essence a savings account, on a mobile device within five years and they’re going to want to use something like bitcoin.

Recently, it was reported that MicroStrategy still reigns as king of the institutional crypto investors, having bought nearly $2 billion more than Tesla. In addition, the company has just sold hundreds of millions of dollars in convertible debt so it could garner the funds necessary to purchase more BTC.

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JPMorgan: Fintech, Not BTC, Is the True Coronavirus Hero

Bitcoin has been doing extremely well for the past nine months. The currency really came to fruition during the initial time of the coronavirus pandemic, and it has been on a serious roll ever since, recently striking a new high of roughly $56,000 per unit. However, despite all the glitz and glam the currency has been attaining, financial giant JPMorgan believes that it’s fintech and not bitcoin or crypto that has garnered true recognition during the time of COVID.

JPMorgan: FinTech Has Done More During the Pandemic Than BTC

In a recent report, JPMorgan commented that while bitcoin is doing relatively well for the time being, it doesn’t boast the long-term financial stamina that many people seem to think it has. The company suggests that it will never earn a place as a payment currency, and that it’s still too vulnerable to price swings and volatility to be taken seriously by anyone.

Now, JPMorgan says that the only reason it’s price is skyrocketing is because companies say they are “looking into it.” However, no serious plans to establish bitcoin as a payment method or use it as such have been cemented just yet. The company claims:

Bitcoin prices have continued their meteoric rise with Tesla, BNY Mellon and Mastercard’s announcements of greater acceptance of cryptocurrencies, but fintech innovation and increased demand for digital services are the real COVID-19 story with the rise of online startups and expansion of digital platforms into credit and payments.

JPMorgan suggests that fintech and digital startups have ultimately pushed bitcoin and crypto aside in many ways, and that companies within this space have done a lot more when it comes to ensuring payments can be made swiftly and with ease. It goes on to say:

Competition between banks and fintech is intensifying, with big tech possessing the most potent digital platforms due to their access to customer data. ‘Co-opetition’ between ‘fin’ and ‘tech’ players lies ahead, with banks stepping up investment to narrow the technology gap, and the battle between US banks and non-bank fintech is also playing out on the regulatory front… Traditional banks could emerge as endgame winners in the digital age of banking due to their advantage from deposit franchise, risk management and regulation.

Bitcoin Could Still See Further Spikes

Despite the attacks on crypto, JPMorgan’s own analysts are predicting that bitcoin is likely to continue its present run, and that the asset could hit a price of roughly $146,000 per unit in the coming future and serve as a potential hedge against further economic damage caused by the pandemic.

Sadly, JPMorgan isn’t the only entity that remains unconvinced about bitcoin’s future. Economist Nouriel Roubini states that the asset bears no “intrinsic value,” while a survey conducted by Deutsche Bank has its investors referring to bitcoin as one of the world’s most “extreme bubbles.”

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Meltem Demirors: Bitcoin Is a Question of When, Not If

Meltem Demirors – chief strategy officer at digital asset investment firm Coin Shares – stated in a recent interview that all those who are quickly investing in bitcoin are late to the crypto party.

Meltem Demirors: You Needed to Invest in BTC Yesterday

During a discussion with CNBC, Demirors commented that one of the primary reasons many have not invested in bitcoin is likely due to regulatory hurdles that may allegedly appear in the coming future. However, she is confident that many of the regulatory changes that are set to occur will not hurt bitcoin, but rather enhance it, and that those that didn’t invest early will be sorry. She says:

The regulatory issues have been around for a long time. We’ve been dispelling for a long time. At this point, our belief is bitcoin is not a question of if, but when. We certainly believe, you know, the best time to invest in bitcoin was yesterday. The second-best time to allocate is today.

Bitcoin has been doing extremely well as of late. The world’s number one digital currency by market cap recently hit a new all-time high of roughly $57,000 per unit, making the recent $40K mark it struck at the end of 2020 look relatively small by comparison. Anyone who invests in the asset today is going to have a particularly hard time getting more bang for their buck when compared with someone who got involved a few years ago.

Dave Chapman – executive director at BC Group – says that bitcoin is here to stay, and there is no longer reliable justification regarding why a person wouldn’t invest in the asset. He comments:

It’s becoming increasingly difficult for the bitcoin naysayers to continue with their decade-old narrative that bitcoin will never be utilized by traditional… financial institutions. Frankly, I’m not sure how much more evidence one needs to conclude that bitcoin isn’t going away.

When one looks at the serious facts of the previous week, it’s hard to say he doesn’t have a point. After all, many major banks – including BNY Mellon in New York, one of the oldest financial institutions in the United States – have begun offering crypto custody services to their clients, while large companies from General Motors to Uber have commented that they are now looking to permit bitcoin and crypto payments in the future.

The Price Swings Are Still Problematic

Still, digital assets are somewhat marred by volatility, as was the case recently when bitcoin fell by about $3,000 from $56,000 per unit to $53,000 at press time. The dip followed a series of tweets by South African entrepreneur Elon Musk, who commented on social media that both bitcoin’s and Ethereum’s prices were “too high.”

For this reason, Demirors says that people shouldn’t be investing all their money into BTC just yet, and that around four percent is strong enough to avoid certain risks.

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Elon Musk May Have Hurt BTC with Latest Tweets

Oh, Elon Musk… You just can’t seem to make up your mind, can you? One minute, you’re all over bitcoin and investing billions of dollars in the world’s number one digital currency by market cap. The next minute, you’re saying something that doesn’t work well for the asset and every trader – yourself included – winds up experiencing some level of loss.

Elon Musk Has Potentially Caused a Dip in the BTC Price

This is the case behind last weekend’s market dip, in which bitcoin saw its price stumble by roughly ten percent over the course of 24 hours. Musk – the South African entrepreneur behind mega companies such as SpaceX and Tesla – claimed in a series of tweets that bitcoin’s price was a bit “too high.” Naturally, the world’s primary digital currency reacted negatively to this statement, and it wasn’t long before the asset took a dip that saw it’s price falling from around $56,000 to $53,000 per unit.

Musk has always been there to discuss bitcoin and crypto, but sometimes, it feels like it’s because he’s got nothing better to do. One moment, he’s making one of the largest institutional purchases of the asset. The next, he’s saying that bitcoin “isn’t his safe word” or something else that really has investors and traders scratching their heads and saying, “Huh?”

This appears to be one of those times. What was the point of such tweets? Surely, by now, Musk realizes that he has heavy control over assets like bitcoin and where they go in the future. His words can typically have major influence over the coin and its many crypto cousins and bear influence over whether the price of BTC falls or spikes.

Aside from his “tweet attack” on the BTC price, Musk was also quick to target Ethereum, the world’s second-largest cryptocurrency by market cap and the number one competitor to bitcoin. He mentioned that the currency’s price was “excessive,” having just hit a new all-time high of more than $1,900 per token. Either way, it looks like Musk’s words have had something of a reverse effect in that his own investments are likely suffering at this time.

A Loss of $150 Million?

Recently, the electric car company he heads purchased as much as $1.5 billion worth of the asset. If bitcoin has fallen by ten percent at press time, that means Musk has lost as much as $150 million.

The good news is that the currency has already recovered somewhat. Some media outlets report that the currency fell below the $50,000 line and was briefly trading for as low as $47,000 per unit. Thus, the fact that it’s already gained another $6,000 this quickly is a positive sign. Perhaps these tweets can potentially disappear and BTC can quickly regain its footing, but this should probably serve as a lesson for people who would like BTC’s price to remain high.

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