There have been numerous tales and conspiracy theories about how big businesses don’t like crypto as it will break their existing setup. Most take these as what they are, theories. However, as there is no smoke without fire, there is an iota of truth behind the rumors. For example the CEO of BlackRock, Larry Fink is a known crypto skeptic.
And now Fink has seen it fit to promote Mark Wiedman, senior managing director, to oversee all of the international operations of the company. The move is seen by many as setting up Wiedman to take on more responsibility later.
At the helm of BlackRock, the world’s largest asset manager, and ETF provider is Fink who, in his late sixties, seems to show no signs of slowing down. With over $6 trillion in asset management when the current CEO does decide to call it time, he would no doubt look at someone with a similar outlook.
Wiedman has repeatedly confirmed that he agrees with his boss about Cryptos. And his latest portfolio will see him actively help to shape the company strategy and global corporate plans. It also makes Wiedman one of six board members who will eventually succeed Larry Fink.
Larry Fink Says Bitcoin Too Erratic
Fink has been rather open and frank about his distrust of bitcoin. Calling out the whole asset class as illegitimate, he has cited three main concerns to back up his claim. The infamous erratic price swings, the mostly anonymous nature of the market and the unregulated playing field make him feel he has a case.
These are genuine concerns that are slowly being addressed. After the high volatility was seen last year, the past few weeks have been as stable as most of the market. Governments the world over are aware of the lack of regulations and are moving to rectify this.
Perhaps in response, Fink recently said in an interview “I wouldn’t say never — when it’s legitimate, yes, It will ultimately have to be backed by a government.” A shrewd way of addressing the anonymity concern as all governments would like to be able to trace the money.
Mark Wiedman Says He Doesn’t See The Point
Wiedman follows on his boss and mentors steps, closely. He says he would not advise his clients to get into crypto, in any case, he doesn’t see the point of a bitcoin ETF. He has historically been a skeptic, telling the news outlet, Bloomberg in 2017, “I don’t quite get the point of a bitcoin ETF, If bitcoin is ever successful, I wouldn’t recommend it. But if it were [successful], why would you need an ETF to access it?”
Strict SEC Cant Smother Hope
The concerns of Blackrock are similar to that of the Securities and Exchange Commission. In fact, insofar, no investment groups application has found success. Repeated requests have met with rejections, citing that the application has been unable to viability demonstrate how it would prevent fraud and market manipulation. Jay Clayton, the SEC chairman has time and again stated that this sort of tough love is essential for the fledgling industry. While the SEC rejects up to 9 applications a month, some have not lost hope.
Crypto market players are optimistic that the first-ever bitcoin ETF is around the corner. Gabor Gurbacs, director of the market strategy at VanEck, is confident that his firm will be the first to cross the line. Talking about the demand for such an instrument he says “It’s fairly certain to us that America wants a bitcoin ETF. We think that we’ve met all market structure obstacles and requirements on pricing, custody, valuation, and safekeeping, so we are cautiously optimistic.”
The key operative should be cautious, the SEC has already delayed their answer more than a couple of times and now a decision on VanEck’s bitcoin ETF application is expected by the 27th of February. A similar story played out for the Winklevoss twins who had to drag their feet around for over a year before finally being told no by the governing body.
All concerns about a nascent industry need to be properly assessed. It should also be understood that those at the very top are people not fully familiar with the technology and would naturally be risk-averse. Thus only by addressing concerns and patiently waiting can this field truly prosper.
Crypto Money Managers Unleash Social Media Algos to Predict Bitcoin Volatility
Money managers are hungry for yield. Crypto continues to outperform just about any other asset class making this nascent market a hot-bed for alternative prediction solutions. And social media algos are front and centre of that speculation.
Cryptocurrency prices, like foreign exchange, are largely decentralized providing plenty of opportunities for smart programmers to profit from the difference. But can those same programmers hone their craft to take advantage of a new form of opportunity, social media sentiment analysis? Some seem to think so.
Funds Head-Hunting Algo Programmers At Alarming Rates
Sentiment analysis is not particularly new, but crypto is. And retail investors don’t hang out in private meeting rooms and exclusive restaurants. They hang out on Twitter and a whole host of other digital mediums. Good-quality programmers who can tap this diamond mine are in high demand.
One report revealed that the number of blockchain job postings has soared to 4,086%since 2019. The large majority of those likely data-driven roles. According to PricewaterhouseCoopers, quantitative crypto funds significantly outperform their peers’ thanks to the analysis of online crypto chatter.
Coders with machine learning skills are particularly highly sought after. One Taiwan-based expert even used crowdsourcing to build an analysis algorithm. Mark Howard explains:
“It’s pretty hot right now, any fund that’s worth their salt, they are devoting some of their resources and allocation for sentiment analysis.”
Fake News and Paid Views
If you were thinking about jumping on the bandwagon, realize that sentiment analysis is not the holy grail of all crypto predictive analysis. At least not yet. Platforms like Twitter, Facebook, and Reddit are still plagued with bag-holders and marketers looking for every chance to punt their own coins.
BitSpread, a blockchain asset management advisory in London has built its own social media algo but warns of the dangers. In an interview with Reuters, CEO Cedric Jeanson explained:
“The sentiment itself, what we see on Twitter, can be really geared toward fake news. We are always very cautious about what we’re reading in the news because, most of the time, we’ve seen that there’s a bias.”
Scraping the most relevant data is no easy task. Indeed, getting an accurate picture of what people are trading compared to what they are saying is tricky. Part of Bitspread’s algorithm focuses on cryptocurrency exchange posts that highlight trading positions. Similar to this:
Retail Interest Not Catching up in This Crypto Bull Run
The jury is still out on how successful this approach will be. Despite Facebook’s Libra recently surpassing Bitcoin on crypto Twitter, the latest Google Trends data is not very encouraging.
While Google search interest for Bitcoin was at its highest 2019 level in June, it’s still well off the 2017 highs. Meanwhile, the price has rallied to $14 000, not far from its all-time highs. The data suggests that retail investors may not be driving this bull run as in previous years.
That could ultimately put a spanner in the works for crypto social media algos considering that institutional investors are highly unlikely to post their trades via social media. Either way, it’s early days and the volatility afforded by Bitcoin still offers potential lucrative gains.
Bitcoin Correction to $9,500 Could Be Followed by 20% Drop: Analyst
Bitcoin (BTC) has been absolutely slammed over the past week. Since passing above $13,000 for the second time this year last Wednesday, the crypto has been on a clearly downward-sloping trend.
In fact, as of the time of writing this article, Bitcoin has lost 25% in the past week, falling to as low as $9,300.
Despite the fact that optimists are expecting for bulls to experience some form of short-term reprieve, historical trends and other key indicators predict a further unwinding of the cryptocurrency bull market.
Bitcoin Poised to Hit $7,500
Conceptualized by Trace Mayer, an early Bitcoin investor and funder of Kraken, the Mayer Multiple is a way of determining if BTC is either overbought, fairly valued, or oversold. It is calculated by putting the asset’s current price over its 200-day moving average.
Per an analysis of this indicator (currently sits at 1.6) by CryptoKea, a little-known analyst that accurately called the recent drop to at least $9,700 earlier this month, if you consider the Multiple, the ongoing correction looks much like the first “major correction” of 2017’s bull run.
He notes that if history repeats itself and Bitcoin reverses out of its current short-term bearish trend like it did in 2012 and 2017, it could find support anywhere from $7,148 to $8,700. This corresponds to 1.20 times to 1.46 times of the 200-day moving average, which currently sits at $5,957.
Most likely, however, Kea notes that the “most probable target” as per the use of the Mayer Multiple will be $7,505 — another 20% drop from the current Bitcoin price of $9,600.
This somewhat lines up with the target of $8,000 that other analysts hold. Per previous reports from NewsBTC, Timothy Peterson, a prominent American crypto fund manager, notes that Bitcoin’s current active account figure suggests that BTC is overvalued.
According to Peterson’s model, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.
In a tweet issued on Saturday, Josh Rager, a prominent technical analyst and cryptocurrency commentator, looked to this same level. View image on Twitter
Rager notes that a “confluence” of chart data and on-chain data suggests that a pullback “would likely bottom out at $8,000”. As he explained in the chart above, $8,000 acted as a key horizontal support and resistance level in the recent rally and 2018’s crash.
What’s more, there is also a CME Bitcoin futures gap around $8,500, which is one of the last gaps waiting to be filled.
And as Alfonso Esparza, senior market analyst at Oanda Corp, recently told Bloomberg: “[Bitcoin] continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency. It could fall further to $8,000, giving back all the gains made in June.”
Drop Might be Over?
Despite this, one analyst believes that the drop is most likely over. In fact, he drew attention to almost five signs why this may very well be the case, even if it sounds crazy.
Firstly, the one-day Relative Strength Index (RSI) and the Stochastic iteration of this indicator are at their lowest levels since at least February, entering the “oversold” range. The one-day Moving Average Convergence Divergence (MACD) has tapped the zero level, despite the fact that Bitcoin is in a raging bull market according to most analysis.
Also, the Elder’s Forse Index, an indicator meant to exhibit the strength of moves, is at its lowest since November 2018; and historical volatility is almost at 100%, implying a move to the upside to return volatility to levels deemed normal.
Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April
Bitcoin’s average transaction volume is topping $3 billion per day, data from crypto analytics site Coinmetrics.io reveals as of July 16.
Bitcoin’s Uptrend in Daily Transaction Value Eclipsing Altcoins’
The data — which has been adjusted to remove noise and certain artifacts, per Coinmetrics — shows an impressive uptrend in the USD value for the volume of the coin’s transactions and transfers over the past 90 days.
On April 17, the average daily value was at $1.04 billion as compared with $3.22 billion on July 16, an almost 210% increase.
The top coin has seen a significantly higher spike in volume as compared with ether (ETH), which saw a 77% increase over the same time period — from a daily average of $370 million to $657 million. XRP has seen a still milder uptrend, at 61% — with the value of daily transactions climbing from $152.5 million in mid-April to $245.6 in mid-July.
3-month chart for BTC transactions, transfers, value, adjusted, in USD. Source: Coinmetrics.io
Bitcoin broke the $3 billion daily average mark on July 11, Coinmetrics’ data shows, when the coin was circling the $11,500 price point. Despite trading roughly $2,000 lower as of today — having taken a steep 11.4% hit on the day and over 24% on the week — average daily transaction value has continued to climb.
Commentators have today argued that the coin’s short-term downtrend was triggered by an antagonistic response from the United States government to Facebook’s Libra coin, which has extended to the cryptocurrency space more broadly.
Veteran trader Peter Brandt anticipates that total market cap could now correct by as much as 80% — yet argues that most of the damage will be shouldered by altcoins, not Bitcoin.
On July 7, Cointelegraph reported that Bitcoin’s hash rate had hit a new all-time high of 65.87 EH/s. Nevertheless, despite the week’s price fluctuations, this figure has continued to soar north, reaching almost 73 EH/s to press time.