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Bitcoin’s Proof of Keys Protocol Continues to Gain Support, Honoring BTC’s 10th Anniversary [Jan/3 🔑]

As many of our readers may already know, there is currently a large-scale campaign underway that aims to see bitcoin “withdrawn its support” from third-party wallets so as to move exclusively towards private wallets. In relation to the matter, it is worth noting that over the course of the past few days many prominent crypto personalities (such as Nick Szabo) have have added the “[Jan/3 🔑]” logo their their Twitter handles— so as to show support for the above mentioned campaign.

More On The Matter

A few days back, respected altcoin proponent and financial analyst Trace Mayer launched a campaign to celebrate something he refers to as ‘Genesis Block Day’ by withdrawing cryptocurrency to non-custodial wallets.

On the subject, Mayer was noted as saying:

“I want to start a new cultural tradition where we declare and re-declare our monetary sovereignty every Jan. 3 as a celebration of the Genesis Block”.

Lastly, Mayer’s Genesis Block Day in many ways signals a homecoming for BTC— since the movement aims to bring Bitcoin back to its original roots (where users can only store their funds in the noncustodial Bitcoin-qt client, and not on some external wallet service).

What’s Causing All This Hoopla?

As things stand, a large number of cryptocurrency owners do not even realize that they are not really in control of their funds (since many of them still store their digital assets in wallets owned by an exchange or some other third-party entity). Thus, in order for investors to really take charge of their funds, they need to secure their alt-assets in a private wallet.

Proof of Keys Movement Continues To Gain Support

As mentioned earlier, a large number of prominent figures from within the Bitcoin community have recently added the “[Jan/3 🔑]” icon to their official Twitter profiles as a way of showing support for this grassroots movement. Some notable personalities include:

  • Max Keiser
  • Caitlin Long
  • Giacomo Zucco.
  • As a result of all of this, it now appears as though Jan. 3, 2019, is shaping out to be quite a monumental day for the Bitcoin community at large. If successful, the scheme will see a large number of onchain transactions recorded that day. This is because a sizeable upswell in the number of of BTC and BCH transactions can be used as a proof that the aforementioned Genesis Block Day campaign was able to resonate with the BTC/BCH community at large.Whether or not this campaign is able to flourish and spread all over the globe still remains to be seen, however, it now appears as though the PoK (Proof of Keys) protocol will become a regular feature of the Bitcoin calender for many years to come.

Bitcoin

Bitcoin [BTC] Price Crosses $10,200 As There Are More Inflows to Exchanges


There are more inflows than outflows at the top seven leading cryptocurrency exchanges, including Binance, BitMex, and OKEx, according to statistics from Token Analyst.

On average, $47.2 million was deposited and $44.9 million withdrawn on Feb 18, 2020.

Crypto Markets Correction

The revelation is a relief for the crypto market.

From price charts, it appears as if bulls are exhausted following parabolic rallies that saw the value of some digital assets like Ethereum Classic, Ethereum, and Tezos post impressive gains, pushing them to a new valuation.

Ethereum Classic, for instance, nearly tripled, soaring to around $3.5 in Q4 2019 to $11 in Jan 2020.

Similarly, Tezos (XTZ) boosted by new developments and heavy involvement from the French—including a research team with links to the government working on Tenderbake, and French Army and the Information & Public Relations Center (SIRPA), soared to new all-time highs.

Tezos XTZ Market Performance
Tezos XTZ Market Performance | source: Coinstats.app

Other altcoins posted extra-ordinary performances as well thanks in part to a bullish Bitcoin which for the first time in 2020 broke above $10,000. The level is an important resistance level.

Traders are Bullish

The inflow of new cash into the crypto market is definitely a mark of confidence. It also shows that market participants, despite the recent lull, are bullish of what lies ahead.

Specifically, the buzz around Bitcoin halving is creating an aura of expectation. Previous events saw prices rally in subsequent months.

However, compared to leaps made in recent years, this year’s halving could either thrust BTC prices to new highs, or see price flat-line before dropping even if demand is constant, or even higher.

Bitcoin Halving: will Price Drop or Rally after May 2020

Debate around post-Bitcoin halving price trajectory varies.

Bitcoin BTC Halving
Bitcoin BTC Halving

Some analysts and crypto commentators are expectant that more gains are in the pipeline because market forces are yet to price in BTC’s forthcoming rally.

Yet some are adamant that the rally to $10,500 marks the tipping point of BTC prices. Subsequent sessions, they believe, would see prices crumble.

US Plans to Regulate Cryptocurrencies

The optimism also comes when US government officials plan to draft laws that would shield the USD hegemony and discourage the use of cryptocurrencies, especially Bitcoin—partly because of its popularity, and privacy coins like Monero.

The contention is that privacy coin mixers and obfuscation of transactions are illegal.

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Bitcoin’s golden cross changes everything for the 2020 rally

Bitcoin’s stay under $10,000 was short-lived as it picked up momentum on 17th Feb. The valuation witnessed a 6.07 percent surge, and Bitcoin re-entered the $10,000 range. Over the past 24 hours, BTC registered a 4.02 percent uptick and the current market cap remained at $184 billion.

Source: Coinstats

Bitcoin 1-day chart

BTC/USD on Trading View

The 1-day chart of Bitcoin has been evidently bullish since the turn of the year after the price broke out from a falling wedge pattern. The pattern started taking shape toward the end of November and a bullish breakout surfaced in the 3rd week of December. After the breakout, Bitcoin has periodically risen from $7000 to $10,000.

Until now, the bullish surge of Bitcoin has been expected to exhibit some form of correction, but besides minor dips, nothing has really impacted its rise.

At press time, Bitcoin held consolidation just under the resistance at $10265, with immediate support at $9800. However, Bitcoin may continue to progress upward now, since the highly anticipated golden cross has taken shape.

The last golden cross took place on 23rd April 2019. The positive turnaround after the cross-over was significant, as Bitcoin experienced a 164.43 percent rise, reaching last year’s ATH at $13,880. A repeat of such a trend would easily take Bitcoin above its all-time-high at $20,000.

According to VPVR indicator, trading volume at $10,200 has been strong over the past year which indicated that Bitcoin may consolidate in his range over the next week. RSI also pictured a bullish incline since the start of December.

Bitcoin 4-hour chart

BTC/USD on Trading View

Analyzing the 4-hour chart of Bitcoin may give a clear indication of Bitcoin’s trading range over the next few weeks. Bitcoin’s correction on 15th February can be observed in the 4-hour chart, which transpired after the formation of a rising wedge pattern. As mentioned earlier, Bitcoin managed to recover quickly and it rose back above the $10,000 range.

If Bitcoin manages to trade above $10,265 resistance and consolidate near the $10,700 range, the possibility of a bullish rise to $11,500 could be very much on the cards.

Consolidation below $10,200 may open doors for another correction. With the completion of the golden cross, that situation seems less likely.

Conclusion

The completion of a golden cross is a positive bullish sign, which may take Bitcoin well beyond the $11,000 range over the next few weeks. With the ‘FOMO’ kicking in after the golden cross, the next few days would decide Bitcoin’s long-term price movement until the halving.

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Bitcoin Supply Distribution Increased by 33 Percent in the Past Decade

The supply of Bitcoin has naturally dispersed over time. Thanks to a wide variety of factors, such as increasing demand for BTC. The use of Bitcoin in payments and remittances has also had an effect. As more people have been able to get their hands on the asset, and as supply levels change, volumes do as well. 

However, it would seem that the extent to which this change has occurred is beginning to gain steam. While Bitcoin and other cryptos are often held by whales, their influence is now dwindling.

Less Bitcoin for Larger Exchanges 

Earlier this week, CoinMetrics, a data provider for the crypto space, published its State of the Network report for Bitcoin. The report revealed the volume of Bitcoin held by larger addresses had dropped significantly over the past decade. 

In the report, the firm explained that “larger addresses’’ were taken to mean cryptocurrency wallet addresses that have more than a thousandth of the total supply of Bitcoin. Current data from Blockchain shows that there are 18.22 million BTC (worth about $184 billion at current prices) available in supply. This is out of a possible 21 million Bitcoins. For an address to be considered a “large address” by CoinMetrics’ estimates, it needs to contain 18,220 BTC (worth about $184 million), according to the data provider. 

The report goes on to show that the volume of Bitcoin held by these addresses was 33 percent as of February 2011. Today, that number has dropped to 11 percent. The report also revealed that smaller addresses held more of the Bitcoin in circulation. This means that individuals Bitcoin users have been on the rise, contrary to public opinion.

In part, the report also touched on Tether, the most valuable stablecoin. CoinMetrics explained that Tether had seen a surge in its distribution as well, thus positing that the asset could see increasing use as a medium of exchange. The company also opined that this could be the most significant reason why supply was flowing more to the smaller wallets. 

Ether Still Has a Long Way to Go 

The state of Bitcoin is different from that of its biggest competitor, Ether. Last May, Chainalysis published a blog post titled the Economic Impact of Whales on the Market. At the time, the blockchain analysis firm explained that “whales:” were the top 50 shareholders within the global crypto space- with the exclusion of exchanges, wallet providers, and other asset custodial services. 

The report eventually showed that there were 124 services as part of the top 500 ETH holders, while the remaining 376 were “individual whales.” These whales were also said to be in control of 33 percent of Ether’s entire supply- although the number was markedly lower than the 47 percent reported in 2016. 

The report also explained that these individual Ether whales accounted for just 7 percent of the asset’s economic activity. As Chainalysis explained, most of these whales are hodlers, not traders.

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