US Rep. Patrick McHenry (R-N.C.), ranking member of the Financial Services Committee, confirms why Bitcoin is shaking up governments, banks and institutional and retail investors around the globe.
“There’s no capacity to kill Bitcoin.”
Speaking on CNBC’s Squawk Box, McHenry gives an overview of the government’s efforts to tame Libra and its development team at Facebook by holding consecutive Senate hearings. In large part, the hearings reveal Libra’s threat as a game-changer in global finance with the power to reach billions of people overnight.
According to McHenry,
“The issue here is there’s a knee-jerk reaction to kill it before it grows. There’s a whitepaper that’s an idea and there’s a consortium of companies – some with better reputations than Facebook currently has – that are developing a digital payments platform and a digital currency. Interesting, right? Instead, we have a knee-jerk reaction to kill an idea.”
McHenry questions the role of government in private enterprise and intervention in the development of business concepts.
Slaying Facebook over its latest innovation has raised concerns about the government’s willingness to support the foundational tenets of free markets, free enterprise, product competition and the country’s history of invigorating capitalism, jobs and leadership through innovation.
“Look, in the broad sense here, I’m a friend of innovation and I’m not a friend of a missioned society where every business has to come to government with their hand out and say, ‘Can I do this? Can I bring a new product to market?’ If they comply with existing laws, have at it.
I’ve got legitimate questions that I think need to be answered, but this whole thing about yelling at Facebook about trust – give me a break. Consumers are making a choice.”
Regarding Facebook’s record on protecting data privacy, McHenry doesn’t conflate the two.
“There’s a whole slew of litigation about this. Let’s have a separate hearing about that – that’s fine.”
“The way we’ve set this up is we have guardrails. You follow the speed limit, you can drive whatever vehicle as long as it’s safe.“
Host Andrew Ross Sorkin, who posits that governments have a monopoly on money, asks McHenry if lawmakers will ultimately try to stifle the crypto industry or if they’ll let it flourish.
“Long-term, do you think that regulators and politicians like yourself will allow the emergence of these new types of currencies if they don’t look a lot like the regulations and guardrails that we currently have around fiat currency and money?”
“Well, I think there’s no capacity to kill Bitcoin. Even the Chinese with their firewall and their extreme intervention in their society couldn’t kill Bitcoin. So a distributed ledger, full and open, in the essence of Bitcoin as a first mover in this space, the developer of this technology blockchain
When Sorkin jumped in to point out that Bitcoin’s price has taken a precipitous drop over the past 48 hours as speculators seemingly react to a slew of high-level bashes against cryptocurrency, including recent criticisms from President Trump, Treasury Secretary Steven Mnuchin and the politicians conducting the Facebook Libra hearings, McHenry stayed on point about the foundations of the technology which has not changed since Bitcoin launched in 2009.
“My point here is you can’t kill Bitcoin. But new iterations of this that are trying to mimic it, that are not fully distributed, that are not fully open, there are different mechanisms to kill it.”
But regulators could prohibit businesses and services that provide support for Bitcoin – like Coinbase. While McHenry agrees that there’s room for a new financial product that could dramatically improve the flow of money around the globe by implementing a system that is much more cost-effective and technologically advanced than old legacy platforms such as SWIFT and Western Union, he avoided giving Sorkin a direct answer to a key question.
Speaking on behalf of Bitcoin investors, Sorkin asks,
“If you said right now that Coinbase could not accept money from an American citizen, if you said that any of these wallets cannot accept money, you – I’m not saying you’d shut down Bitcoin. Bitcoin would exist somewhere and it would be in sort of a dark web kind of situation. But it effectively would make it very, very difficult for the mainstream to use it…
If it ever gets mainstream, if it ever gets to escape velocity, does Congress, do regulators say, ‘You know what, actually – in the same way that you’re looking at Libra as closely as you are, and this is going to happen at the G7 meeting as well – do people say, ‘Bitcoin will live in the shadows. But boy, it’s not going to live in the mainstream.’ And that’s the question that I think I have and that’s the question that I think Bitcoin investors have and that’s why the price of it has come down, literally, in the past 48 hours.”
McHenry had no direct reply.
Dave Hodgson, director and co-founder of NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem, tells Forbes that the rubber has met the road.
“Government and central banks are after Bitcoin and Libra because they reduce their ability to control markets and populations, while also making some of what they do irrelevant. It is uncomfortable when people ultimately realize that the emperor has no clothes.”
Crypto Analyst Says: Bitcoin Price to Head for $18,000 with ‘Halving Pre-Pump’ in Three Months
With Bitcoin and the crypto market pumping again and the Bitcoin halving drawing closer, more crypto analysts and traders are expecting BTC to start pumping hard soon. Among the figures that have been voiced so far are $11,000 and $18,000 per Bitcoin if the price begins to accelerate in April, prior to the halving.
‘The target is $18,000’
Analyst @CryptoMichNL believes that the current situation in the cryptomarket has started resembling January 2016, which he has recently been referring to often – the time when the market went into tremendous volatility. This should last for about three months now, he states, and then he expects Bitcoin to start pumping, powered by the approaching halving in May.
The expert believes the price target to be $18,000. The all-time high Bitcoin reached in 2017 was $19,772 – on December 17.
‘Bitcoin is about to rip to $11k’
Investor and trader ‘D.I.Y Investing’ suggests there is a Parabolic SAR on the chart. He expects Bitcoin to surge to $11,000.
The trader also points out that the Bitcoin dominance on the market is getting higher. ‘D.I.Y Investing’ concludes that it will be altcoins that may lead the next rally.
Image via Twitter
‘The crypto market is very sentiment driven’
Crypto expert and columnist Joseph Young believes that pretty much everything on the crypto market depends on investor sentiment. Young tweets that this makes it unpredictable and that a price rise or a price fall may suddenly increase just when you expect it the least.
The upcoming halving could push Bitcoin to new all-time highs
Bitcoin is only 117 days away from a block rewards reduction event that affects the number of tokens that can be generated every 10 minutes. Based on historical data, this event tends to serve as a catalyst that propels the flagship cryptocurrency into new all-time highs.
The Halving Event
Bitcoin goes through a fixed process known as the halving every time 210,000 BTC blocks are mined. This is considered the core economic model in BTC’s protocol that guarantees that coins are issued at a steady pace. The halving takes place, approximately, every four years. It cuts in half the rewards miners get for mining a block, consequently, decreasing the rate of issuance.
Around May 12, 2020, at exactly block 630,000, miners who are currently being awarded 12.5 new BTC for every block they solve will only be rewarded with 6.25 BTC per block. The inflation rate of this cryptocurrency will also be impacted for an extended period of time as the reduction in future supply increases.
The series of block rewards reduction events are scheduled to occur until the total supply of 21 million BTC are mined. These events could prolong until 2140 when the block reward would drop below 1 satoshi, assuming that miners will be around in the next 120 years.
Previous Block Rewards Reduction Events
To date, there have only been two halving events since Bitcoin was launched on Jan. 3, 2009. These events have proven to be an important catalyst that pushes the price of this crypto up before and after they take place. BTC’s disinflationary monetary policy has allowed its value to enhance significantly as it becomes more scarce.
The 2012 Halving
On Nov. 28, 2012, Bitcoin went through its first halving, at a block height of 210,000. During that time, the block rewards provided to miners dropped from 50 BTC per block to 25 BTC. Such a significant supply reduction had a great impact on the price of the pioneer cryptocurrency, which was perceived in anticipation of the event and after it occurred.
After reaching a market bottom of $2 on Nov. 19, 2011, Bitcoin entered a year-long bull rally. This cryptocurrency saw its price appreciate by nearly 500% in anticipation of the first halving. By the time the event concluded on Nov. 28, 2012, BTC was trading around $12. From that point, Bitcoin skyrocketed over 97x peaking at an all-time high of $1,177 on Nov. 30, 2013.
The 2016 Halving
The second block rewards reduction event took place on July 9, 2016, at a block height of 420,000. At the time, the 25 BTC mining reward halved to 12.5 BTC per block. Like the first halving, this one also had serious implications on the price of Bitcoin.
On Jan. 14, 2015, Bitcoin hit a market bottom at a price of $164 following the 2014 bear market. Since then, BTC surged by nearly 300 percent to a high of $650 on the
History Repeats Itself
The previous halvings have demonstrated to be a significant pivotal point in Bitcoin’s trend. They tend to propel the price of the flagship cryptocurrency into new all-time highs. Therefore, the upcoming block rewards reduction event could have similar implications.
Thus far, it seems like Bitcoin reached a market bottom on Dec. 15, 2018, at a price of $3,150. Since then, this cryptocurrency is up over 180 percent and is currently trading around $8,700. Now, investors appear to anticipate higher prices as the date approaches.
The Wisdom of the Crowd
Alex Kruger recently ran a poll on Twitter that involved over 4,000 participants. Kruger asked his followers what they thought will be the high of the year for Bitcoin.
The results show that 47 percent of the respondents believe that BTC would trade above $20,000 sometime this year. Around 28 percent are convinced that this crypto would peak between $14,000 and $19,999. Meanwhile, the remaining 25 percent stated that it will trade at $13,999 or lower.
The survey reveals that nearly 75 percent of the participants think that Bitcoin will double in price this year.
Along the same lines, some of the most prominent technical analysts in the crypto community affirm that Bitcoin entered a new bull market last week. The break of the $8,500 resistance level, was seen as a make-or-break point that could have set out the stage for a bull run. According to Mohit Sorout, a partner at Bitazu Capital, a new uptrend is emerging.
However, there are other analysts who disagree with the bullish outlook. Chris Slaughter, the founder and CEO of LVL, for instance, has been studying a fractal since Dec. 27, 2019, that has proven to be correct. This pattern anticipated the recent rally that took Bitcoin above $8,500. Now, Slaughter estimates a downturn in the market that could push BTC to “new lows.”
The wisdom of the crowd is rarely correct, especially in the cryptocurrency market. Under this premise, since 75 percent of the market is bullish, the probabilities for the bearish outlook increase.
The different perspectives about Bitcoin’s future have the overall market sentiment in a “neutral” stage, according to the Crypto Fear and Greed Index. It remains to be seen whether history will repeat itself and the upcoming halving will trigger an inflow of capital in the market that allows BTC to reach new all-time highs.
This Single Factor Suggests Bitcoin’s 2020 Rally is Far From Over
Bitcoin has been holding steady around the $8,700 region after facing an influx of selling pressure that forced it to lose its previously held position within the $8,800 region. Data suggests that this selling pressure was quite massive, despite BTC only seeing slight losses.
Bull’s ability to absorb the majority of this selling pressure may be a sign that points to the possibility that BTC will soon see a continuation of the bullish uptrend it has been caught within throughout the past couple of weeks.
Bitcoin Declines Towards $8,700 as Selling Pressure Ramps Up
At the time of writing, Bitcoin is trading down just over 1% at its current price of $8,700, which marks a slight decline from its daily highs of over $8,800.
Although BTC has only seen a slight downwards movement following its recent period of sideways trading around $8,800, it is important to note that some analysts have claimed that the crypto’s inability to continue extending its upwards momentum is a sign of technical weakness.
Bitcoin has been able to post a slight bounce from its daily lows of $8,600, and it currently appears that bulls and bears remain at an impasse.
One factor surrounding the cryptocurrency’s recent price action that should be carefully considered is the fact that the selling pressure has been incredibly aggressive, despite there not being any type of major price drop.
Cantering Clark, a popular crypto analyst on
“ONE THING THAT’S WORTH PAYING ATTENTION TO IS HOW AGGRESSIVE THESE LOWS WERE SOLD, YET THE LOW NEVER GAVE WAY. BULLISH CONTINUATION IS NEVER CLEAN. I WOULDN’T CALL A CORRECTION JUST YET,” HE EXPLAINED.
Is BTC’s Stability a Bullish Sign? This Analyst Thinks So
Although Clark doesn’t explicitly conclude that Bitcoin’s stability in the face of aggressive selling pressure is bullish, Josh Rager – another prominent cryptocurrency analyst – explained that he believes this reaction is a bullish sign for what’s to come next.“WHEN PRICE HOLDS DURING AGGRESSIVE SELLING… IT’S TYPICALLY A BULLISH SIGN FOR BTC,” HE EXPLAINED WHILE REFERENCING CANTERING CLARK’S ANALYSIS.
If BTC is able to find continued support around $8,600 and buyers continue absorbing the significant selling pressure it is currently facing, the crypto could soon see an extension of the massive upwards momentum it has found over the past two weeks.