A slight beam of good news shines over the bleeding cryptocurrency market as Arizona State University Professor Dragan Boscovic discusses the future of Bitcoin from a trading standpoint. The scholar seems to think that Bitcoin is regarded by investors as a ‘valued investment opportunity’.
Dragan Boscovic is a computer science research professor at Arizona State University (ASU) and also a director of the Blockchain Research Lab – a project that aims to further the development blockchain-based technology’s applications. In a recent interview with ASU Now, Boscovic offers his insight on Bitcoin’s past, present, and future as an investment asset.
BITCOIN GOES TO WALL STREET
In December 2017, with the eyes of the financial world firmly fixed on Bitcoin, two major futures exchanges – CBOE and CME Group – began offering bitcoin futures. It was an exciting time for the cryptocurrency. The launch of futures trading marked a turning point in Wall Street’s sentiment toward the crypto industry, allowing for a gradual, but nonetheless definitive, entry into mainstream adoption.
The excitement continued into the new year as the Intercontinental Exchange (ICE), which also owns the New York Stock Exchange (NYSE), announced that it was developing a cryptocurrency data feed. The service, which gives financial firms access to “streaming real-time, end of day and historical data for the most actively traded digital currencies,” was rolled out in March. In addition, the NYSE is developing its own online trading platform.
According to Boscovic, cryptocurrencies, while still relatively new, have already been around for nearly a decade – well within the normal time frame for a new technology to gain traction. The professor also notes that “the industry now sees an opportunity to offer a new asset for trade, broadening choices for investors.”
HOLDING UP TO TRADITIONAL CURRENCIES
One key difference between cryptocurrencies and fiat – or sovereign – currencies, Boscovic points out, is the fact that crypto, unlike fiat, cannot be directly influenced by governments. He explains:The vulnerability of a digital currency is based on demand, and it is not open to influence by additional supply. A government can bootstrap an economy by introducing a new supply of traditional currency to influence borrowing. That can’t happen with cryptocurrency.
From a consumer’s standpoint, cryptocurrencies introduce a new choice – an intangible asset which brings with it further investment opportunities.
WHAT’S IN IT FOR OTHER CRYPTOCURRENCIES?
Boscovic believes that the acceptance of Bitcoin into traditional investment instruments is also going to open the door to other cryptocurrencies:Institutional investors are recognizing this new asset as a valued investment opportunity; this will encourage individual investors. It will also encourage consumers and small shops to start trading in cryptocurrency.
While he refused to make a firm statement about the legitimacy that Bitcoin receives from potential inclusion in the NYSE, the professor did acknowledge that it is offers a serious confidence boost:It’s an encouraging development. Consumers do develop confidence when they see a large institution such as the stock exchange backing and selling cryptocurrencies.
Bitcoin slides under $6,400 as Dogecoin creator says institutional investors will kill the industry
- BTC/USD is creeping lower, but the momentum is weak so far.
- Jackson Palmer believes institutional investors will do more harm than good.
Bitcoin is changing hands at $6,393. Despite range bound trading, the biggest cryptocurrency has lost over 2% in recent 7 days and moved to trade at the lower line of the recent channel. While the longer-term picture confirms the indecisiveness on the market, the further decline may tilt the balance in favor of Bitcoin bears.
Bitcoin’s short-term technical picture
BTC/USD has moved under SMA200 (1-hour) and psychological $6,400, which might lead to a more extensive sell-off once the breakthrough is confirmed. The next downside target is produced by $6,355 (October 19 low) and $6,300 handle. Once below, the bears will have a chance to push the coin towards critical $6,200 and possibly $6,060 (the recent low).
On the upside, we need to return above $6,400 and see a sustainable movement above $6,480. In this case, the recovery may be extended towards $6,500 that capped the upside since October 16.
No institutional investors, please
While the industry is frantically waiting for institutional money, Jackson Palmer the creator of a joke coin Dogecoin believes that it will kill the industry by turning in into Wall Street 2.0. Recently he posted a tweet where he confessed that he did not understand why people were so enthusiastic about institutional investors.
“The institutionalization of cryptocurrency will heavily re-centralize both power structures and token distribution. So you can say goodbye to much of the original vision for the technology.”
He is also worried by the fact that 1% of all cryptocurrency wallets hold 55% of all the Bitcoins in the circulation. He is sure that institutions will deepen the divide and inequality of digital assets distribution.
BTC/USD, 1-hour chart
Physically settled Bitcoin futures to go live on ICE’s Bakkt platform on December 12
- ICE published a press-release with a proposed date of Bakkt platform launch.
- The futures will be traded in dollar terms with settlement agains USD, EUR, and GBP.
The Intercontinental Exchange, a parent company of the New York Stock Exchange revealed that it would launche Bitcoin Futures on Bakkt platform on December 12, according to the official press release published on Monday.
Bakkt will offer physically settled bitcoin futures contracts and hold Bitcoins to back the futures in the ICE Digital Asset Warehouse. The contracts will be cleared through anouther ICE subsidary, ICE Clear US.
“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day,” the press releas goes.
The minimum price movement will be set at $2.5, while Block Trades may be executed at $0.01 per Bitcoin.
Why is it important?
Bakkt is supposed to provide a regulated ecosystem for institutional players that want to get exposure to digital assets and stay compliant with the regulatory requirements. Moreover, the unlike the rival platforms, Bakkt will offer deliverable futures against three major fiat currencies (Euro, USD, GBP). CBOE and CME have only non-deliverable futures for Bitcoins.
Top 3: Bitcoin, Ethereum and Ripple. The market needs stable and reliable Coins
- BTC/USD barely moves on another likely soporific day.
- Speculation continues on Tether’s degree of reliability (USDT).
- Ripple could be at the gates of another bullish swing despite the general atony.
Another day without any technical novelty for the Bitcoin against the US dollar. In the midst of the storm unleashed by what appears to be a controlled liquidation of the USDT at the same time as the launch of other anchoring instruments, the relationship between the Bitcoin and the US Dollar remains firm and does not reflect any substantial change in value. The controversy has not affected Bitcoin at all, which has been in the same range for weeks, but it has punished and much the perception of reliability about Tether. A controversy that has grown at the same time that other options appeared in the market with the aim of sharing a very appetizing business exchange.
The usefulness of these instruments for the trader would be based on acting as a shield against instabilities in the Crypto market, “sterilizing” the portfolio but without really leaving the system. A great idea, great but very dangerous if we cannot have absolute confidence in the robustness and capacity of the instrument to maintain parity with the currency issued by the Federal Reserve of the United States.
Whether called Tether (USDT), TrueUSD (TUSD), Circle´s USDCoin (USDC), Gemini Dollar(GUSD) or Paxos (PAX), their validity is based on their ability to faithfully transmit and preserve the value relationship between the American currency and the Crypto universe.
After the brief commentary, we now move on to a quick analysis of the Top 3 of the Crypto board by capitalization.
The BTC/USD is currently trading at the $6,394 price level, sliding below the SMA100 and EMA50 averages. These averages tilt downwards and point us in the direction of the price for the next few hours. The fact that this is the direction does not mean that the price is going to follow it without any possible remedy, but that it is going to tend to move downwards.
The MACD at 240-Min is totally horizontal and rests on the equilibrium line of the indicator. Zero information on this side. For its part, the DMI at 240 Min shows an absolute tie between bears and bulls being both groups above level 20, so any movement, whether up or down, will have development potential.
Below the current price first support at the price level of $6,211 (price congestion support). The second support at $5,873 is the last guarantee not to see new annual lows soon.
Above the current price, first resistance level between the price level of $6,399 and $6,400 (SMA100 and EMA50). Then, next resistance at$6,482 (SMA200) and third resistance at $6,588 (price congestion resistance). The BTC/USD will not enter a bullish scenario until it sees a close above the $6,850 price level.
The ETH/USD already moves below their moving averages. The main averages continue their downward trajectory and widen the distance between them. Only the horizontality of the SMA200 supports the whole structure in a demonstration of delicate balance.
The MACD at 240-Min is also, as in the case of the Bitcoin, totally flat although in the case of the ETH/USD it is below the zero line. The DMI at 240-Min also shows an absolute tie between bears and bulls, although below indicator level 20.
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Below the current price, first support for ETH/USD at the $195 price level (price congestion support). Second level support at $170 (annual lows), and as the third support level, at $155 (price congestion support) and gateway to setting new annual lows consistently.
Above the current price, three clear objectives for ETH/USD in the three moving averages area. The EMA50 at $205, the SMA100 at $209 and finally the SMA200 at $217. Above these averages, clear target level at closing above the resistance level at $270.
The XRP/USD is just above the trend line that was surpassed in the middle of the month. It is currently trading at the $0.454 price level. If it were not for the general sluggishness of the market I would declare this level as an optimal entry point, since we have a very clear Stop level at $0.443.
The MACD shows a flat profile and above the zero level of the indicator. The structure is typically bullish. The DMI at 240-Min shows the bulls a little above the bears and both above the 20 level of the indicator. An optimal profile to see volatility increases following price action.
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Below the current price, the first support at the above-mentioned trend line price level of $0.448. Second support at the EMA50 at $0.443(EMA50) and, a third, critical support level at $0.366.
Above the current price, the first target at the price level of $0.50 (price congestion resistance), followed immediately by a second resistance at $0.51 (SMA200). Overcoming this second resistance could result in an immediate move to the price level of $0.77.