Venezuela and the world of cryptocurrencies together have been in the news constantly for the past couple of months due to multiple decisions and forays into the field. With the advent of Petro and the sovereign bolivar in the country, the government has taken radical steps to change regulations and rules surrounding cryptocurrencies.
The growing demand for cryptocurrencies in the crumbling economy was evidenced recently when Bitcoin [BTC] trading volumes hit a record high in the country. This information comes on the back of reports that stated that Sunacrip, the official cryptocurrency regulatory body in Venezuela, will start cryptocurrency taxation and remittances. On a local platform, it was calculated that 2,485 BTC were transferred during the last week while the previous week saw the transaction of 2004 BTC.
Other portals have also said that many citizens like the concept of cryptocurrencies and see it as a way to fix the economy in shambles. Venezuela is also in the middle of political controversy, one that involves incumbent President Nicolas Maduro and the US, Canada approved Juan Guido. Maduro was one of the mean reasons for the establishment of Petro and the Sovereign Bolivar.
The aforementioned Sunacrip, which controls the crypto regulations in Venezuela had also created a ripple recently when it announced 63 new decrees to decide the future of cryptocurrencies in the country. Ramirez Joselit, the Superintendent of Sunacrip had said:
“Today the constituent decree that will govern the operation of the Integral System of Crypto Assets of Venezuela was published in Official Gazette Number 41.575.”
The decrees have also been split into different articles that will entail certain aspects of cryptocurrency regulations. According to article 3:
“The scope of application of this constituent decree [covers] goods, services, values or activities related to the constitution, issuance, organization, operation and use of [the] national crypto assets and [other] crypto assets, within the national territory, as well as the purchase, sale, use, distribution and exchange of any product or service derived from them and other activities that are connected.”
Sunacrip also commented:
“[Sunacrip] will exercise the broadest powers within the legal and constitutional framework, to regulate the creation, issuance, organization, operation, and use of crypto assets, and consequently, to regulate the operation of the exchange houses and other crypto asset financial services, as well as activities associated with digital mining.
Bitcoin’s perfect combination of pseudonymity and decentralization has allowed it to survive the government
Bitcoin has been alive for more than 10 years now, and it gets stronger with each passing day. On the other hand, Facebook’s Libra, which is yet to be launched, is facing a lot of setbacks from the government. Coinbase’s ex-CTO, Balaji Srinivasan, compared Libra to Bitcoin and pointed out the differences that has allowed Bitcoin to thrive.
“When Satoshi launched Bitcoin he combined pseudonymity with decentralization. So neither the person nor the chain could be targeted. Libra might be able to become more decentralized, but it would be hard to not associate it with Facebook.”
Bitcoin is not anonymous, but pseudonymous because each user has addresses which aren’t linked to their original identity, thus making it pseudonymous. Users often use different addresses for every transaction to cover their tracks and to avoid being traced.
Srinivasan described Bitcoin’s pseudonymity as a “bridge” which allows one “to port over some (not all) of the attributes associated with a high reputation identity to a fresh pseudonym, while preserving statistical guarantees around anonymity.”
While there are many privacy-based cryptocurrencies focusing on anonymity and privacy, there are ways where one could be totally anonymous with Bitcoin using methods like CoinJoin, Wasabi etc.
Additionally, Srinivasan described this pseudonymous bridge as an “interface” between fiat identity and cryptocurrency identity, just like exchanges are an interface between fiat and crypto.
Comparing this with Facebook’s Libra, Srinivasan stated that Facebook will always be associated with Libra and the other way around. He added that it wouldn’t be able to achieve necessary decentralization because of this. He added,
“Libra might be able to become more decentralized, but it would be hard to not associate it with Facebook.”
A Twitter user, @Mrauchs, commented,
“How could the Libra network ever become more decentralised than Bitcoin if it relies on a permissioned validator set (i.e. identified actors) and a closed governance model?”
Bitcoin Bounce Capped by $10K Price Resistance
- Bitcoin’s recovery from $9,049 to $10,000 lacks substance and may be short lived.
- Signs of bullish exhaustion near $10,000 have emerged on the 4-hour chart. A break below $9,580 would confirm the corrective bounce has ended and allow a drop to $9,000.
- Moving average (MA) studies and key indicators like the relative strength and the Chaikin money flow indices on the daily chart continue to call a bearish move.
- A high-volume break above $10,000 could yield a move to $10,400, but a 4-hour close above $11,080 is needed to invalidate the short-term bearish setup.
Bitcoin’s recovery from one-month lows looks to have stalled near $10,000 and the cryptocurrency may end up charting a bearish lower high around the psychological resistance level.
The top cryptocurrency by market value slipped to $9,049 in the European trading hours yesterday, the lowest level since June 19, according to Bitstamp data. That drop came after the bullish higher-lows pattern was invalidated with a move below $9,614 on Tuesday.
The drop was short-lived, as expected, though. Prices bounced up in the U.S. trading hours, keeping the former resistance-turned-support of the $9,097 May 30 high intact.
The recovery, however, looks to have run out of steam, and BTC has spent a better part of the last 13 hours struggling to settle above $10,000.
A persistent failure to convincingly beat $10,000 means the market is no longer viewing sub-$10,000 levels as an opportunity to get involved in the bull market the way it did on July 2, when prices charted a V-shaped recovery from $9,614 to $11,000.
Further, technical charts indicate the bounce seen in the last 24 hours lacks volume support. So, the odds appear stacked in favor of the creation of a bearish lower high at $10,000 and a fall back to $9,000 in the next day or two.
As of writing, BTC is changing hands at $9,850 on Bitstamp, representing 3.5 percent gains on the day.
Buying volumes (green bars) on the hourly chart have been very low throughout the price bounce from $9,049 to today’s high of $10,027.
A low-volume recovery often ends up as a “dead cat bounce” – a short-lived recovery after a notable price drop – meaning BTC will likely fall back to $9,000.
Sell volumes (red bars) have been consistently higher than buying volumes ever since BTC topped out at $13,200 on July 10 – a sign of change in market sentiment.
4-hour and daily chart
Multiple candles with long upper wicks (above left) near $10,000 indicate BTC’s recovery has run out of steam near $10,000. A break below $9,580 – the low of the doji candle created in the Asian trading hours – would confirm a bearish lower high at $10,000 and allow a drop to $9,000.
The bearish view would be invalidated only if prices invalidate the lower-highs pattern with a high-volume move above $11,080.
That, however, looks unlikely as the daily chart is biased bearish. The 5- and 10-day moving averages are trending south, indicating a bearish setup. The 5- and 50-day MAs are teasing a bearish crossover.
The Chaikin money flow index is now barely holding in positive territory compared to highs above 0.35 seen at the end of June. That indicates a significant weakening of buying pressure.
Further, the relative strength index is reporting bearish conditions with a below-50 print.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
5 Best Reasons to Invest in Bitcoin Today
The digital media has taken giant leaps in the delivery of information, communication, and technology in the past few years. This has also made way for the digital currencies to take the center-stage amid the rise of e-commerce and digital banking/financing products.
There are more than 2,300 cryptocurrencies in the global market, but Bitcoin has already become the industry leader. Almost a decade ago, Bitcoin was created by a person(s) named Satoshi Nakamoto (pseudonym).
Bitcoin is the hottest cryptocurrency in the world and is the most lucrative product in the finance and investments sectors. However, one can’t disassociate the element of unpredictability from the cryptocurrencies market. It can make a sudden spike in a minute but can nosedive the very next minute. This unpredictability has left many to think why not or why invest in Bitcoin?
- Consistent Rise in Acceptance of Bitcoin
There are several cryptocurrencies in the market but Bitcoin is the first and the most successful of them. The Bitcoin blockchain technology has been growing consistently which has helped its global adaptation rate remarkably. Due to this reason, Bitcoin has managed to build its credibility in the market.
- Better Regulations
The anomalous rise in the demand of cryptocurrencies gave birth to the introduction of proper regulations. Defined regulations reduced the element of uncertainty and provided a significant boost to the coin investment and its prices. Similarly, Bitcoin regulations helped tackle various associated scams, which, in return, added to the investors’ confidence.
- Wall Street to Launch Crypto
Wall Street announced last year to launch cryptocurrency trading offerings for investors in 2019. This would be more efficient for many businesses because the number of crypto hedge funds had reportedly increased in 2018.
The custody and Bitcoin trading platform will be finally introduced in 2019 and it will be known as Bakkt. The Commodity Futures Trading Commission (CFTC) has said that Bakkt is still in its preview stage. Once Bakkt is introduced, Bitcoin will be at a different height altogether which will give other cryptocurrencies a good run for their money.
- Developers Enhancing Bitcoin Scalability
Due to its volatile nature, Bitcoin has made developers to boost its security and develop a more enhanced network. In the past, many other cryptocurrencies faced reliability issues. The introduction of the lightning network and Bitcoin Cash (BCH) was one of the major breakthroughs, and it facilitated better transactional and reliability features.
- Bitcoin Always Ready to Scale New Highs
In 2017, Bitcoin reached its historic peak of approximately $19,500. Eventually, it led to the inevitable price correction. In the past two years, the Bitcoin price has dropped appreciably but it is always estimated to achieve new highs in the coming times.
It is a good time to invest in Bitcoin now especially when the sentiments are negative and the chips are down. In the words of leading capital markets investor Warren Buffett, who stated that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”