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Crypto Derivatives & The Looming Shadow of Institutional Investment

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Bitcoin has had a stellar 2019 so far. Year-to-date, the cryptocurrency has gained a jaw-dropping 200%, shocking investors the world over.

While crypto investors are used to such moves, Bitcoin’s strength comes as the macroeconomic and geopolitical stage has started to rapidly deteriorate. This dichotomy has resulted in many economists, investors, and even politicians starting to give Bitcoin a nod as a store of value and a safe haven.

And while BTC’s momentum has clearly tapered off since the blow-off top in late-June, this narrative doesn’t seem to be losing steam one bit.

Finally Trading Alongside Gold

Bitcoin has long been touted as an alternative to gold. The precious metal shares a number of characteristics with the cryptocurrency: decentralization, non-sovereignty, scarcity, fungibility, among others.

But only recently has Bitcoin begun to trace the price action of gold. In fact, as spotted by Bloomberg, the correlation between the two assets has nearly doubled in the past six months, rising to just over 0.842 from 0.496. Just look to this chart from Binance’s research division, which shows that when gold spiked due to a fresh Trump tariff, so did the world’s favorite cryptocurrency.

Speaking to CNBC’s “Fast Money” panel, Brian Kelly of BKCM touched on this correlation. According to Kelly, this is a clear sign that investors playing macro trends are starting to use “Bitcoin as a currency hedge”, which would be a massive step forward in the cryptocurrency’s life cycle.

He adds that the correlation between Bitcoin and gold is likely to continue, especially as there are “multiple currencies around the world breaking down at the same time and institutional investors that are actually embracing this asset class.”

In fact, the industry investor called the macroeconomic backdrop a “perfect storm” for Bitcoin to become further acknowledged as a store of value, which is likely what BTC needs to kickstart the next leg of the ongoing bull market.

Kelly wasn’t the only investor on CNBC to have perpetuated the safe haven narrative. Not 24 hours after his “Fast Money” segment, Jihan Bowes-Little, an investor of Coinbase through his venture fund Bracket Capital, went on CNBC’s “Squawk Box” to argue that Bitcoin’s strongest use case is “as a stored value”.

And just a week earlier, Circle’s Jeremy Allaire explained that he sees that “the broader theme of, you know, Bitcoin specifically, crypto more broadly participating in these global macro forces is becoming more and more clear.”

There Remain Naysayers

Despite the clear correlation and the countless respected individuals claiming that Bitcoin is becoming a fully-fledged safe haven, there are a few that claim this narrative is catching on too fast.

As reported by Blockonomi previously, an investment strategist at the anti-crypto (it banned clients from making cryptocurrency payments) Bank of Montreal explained that Bitcoin can’t be a safe haven due to its volatility.

Brian Belski argued that Bitcoin’s current investment appeal is mainly derived from its “sexy” values, effectively calling it a fad and an asset will little or no inherent value.

And Forex.com analyst Fawad Razaqzada told Reuters that the recent correlations seen between Bitcoin and gold are nothing more than short-term trends, and are thus not indicative of BTC’s long-term potential as a hedge against risks.

Razaqzada elaborated that due to cryptocurrency companies and exchanges being so susceptible to hacks, it would be hard to classify Bitcoin as a safe haven play.

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Bitcoin

Bitcoin Price Analysis: BTC is On Price Recovery Mode; Gains 4.55% Overnight

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  • Bitcoin gained 4.55% in the last 24 hours and breached the resistance at 10,800 USD.
  • It may soon touch 12,000 USD and further, it is likely to get a price rally before the year ends.

Bitcoin has managed to reach its first resistance point at 10,800 USD with the help of a 4.55% hike. It is likely to rise more in the coming days and by the end of this year, the coin is likely to be near 15,000 USD. In the last three months, the journey of Bitcoin was full of shocks and volatility. The coin reached its peak towards the end of June and it has been trying to reach there since then. We will now analyze the current statistics of the coin before going into details of the price movement pattern.

Bitcoin Price Statistics-

e Comparison-

Bitcoin price chart August 20
Bitcoin Price Chart by TradingView

Bitcoin’s highest hike of this year has been the 85.70% hike between 04th June and 26thJune. This hike pushed the coin near 14,000 USD. From there, Bitcoin has been showing huge volatility. It was followed by a fall of almost 30% in the value against USD which deducted 4039 USD from the coin over just 5 days. After a week of growth, Bitcoin again took a dip to 9208.95 USD by 17th July. From there it has been a satisfying journey for the coin and it has risen to 12,196 USD by 06th August with the help of a 32% increase in the value. The market cap on 20th July was 186,505,443,026 USD and the value of the coin was 10,991.43 USD. The current market cap and the value of each coin are respectively 4.30 % more and 1.10 % less than the figures for the last month.

Bitcoin Price Prediction-

Bitcoin is consistently raging against 11,000 USD and the next big target should be 12,000 USD with so many little halts. But the coin is likely to get a good growth by the mid of next month. With the help of a price rally, the target of 15,000 USD by 2019 seems reasonable. The details of the resistance and support levels are given below.


Bitcoin (BTC)
1st Resistance11117 USD
2nd Resistance11317.95 USD
3rd Resistance11719.85 USD
1st Support Level10514.15 USD
2nd Support Level10112.25 USD
3rd Support Level9911.3 USD
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Winklevoss Twins Say They’re ‘In Talks’ About Joining Libra Association

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Tyler and Cameron Winklevoss — Bitcoin (BTC) bulls and founders of the Gemini crypto exchange — say they are open to partnering with archrival Mark Zuckerberg on Libra.

CNN Business reported on Aug. 19 that the twins are not allowing their notorious and drawn-outsettlement with Zuckerberg stand in the way of a potential collaboration.

In talks to join the Libra Association

Whether or not a partnership will finally materialize, Cameron told CNN that Libra represents a step towards mass adoption of cryptocurrency, underscoring:

“I think there is a day in the future where we can’t live without crypto, or imagine a world before crypto.” 

As CNN notes, the twins’ proactive promotion of crypto-regulatory matters could make the duo an attractive partner for Facebook, given the widespread alarm the latter’s Libra project has already sparked among governments and regulators globally. 

The twins revealed they have been in talks about joining the Libra Association — the newly-created, independent governance consortium for Facebook’s planned token —  which currently counts 28 founding members and should expand to 100 by the time of Libra’s launch.

Tyler and Cameron noted, however, that they still need to learn more about the details of the project before deciding whether or not to join the Association, as well as whether to list Libra on the Gemini exchange.

The Libra Association has reportedly declined to comment on any ongoing negotiations with partners.

All the internet titans will embrace crypto

According to Cameron, Facebook may be the first tech titan to attempt a native cryptocurrency launch — but it won’t be the last:

“I think that internet companies have to have a crypto strategy, and I think a lot of them are thinking about their own coin projects. They’re probably watching Libra and Facebook to see how that fares as they develop it.” 

He forecast that Amazon, Apple, Netflix and Google will follow suit, isolating Amazon in particular as a solid contender:

“Amazon can probably get packages to literally any place in the world, even if the last mile is on a dirt bike or something […] very ironic, that the physical stuff we can move all around the world and we can’t get money to a lot of places around the world.”

Earlier today, Cointelegraph reported that the design for the Chinese central bank’s planned state-backed cryptocurrency is reported to have been influenced by Libra’s unveiling.

Source:cointelegraph

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Bitcoin Price Fails to Break Through $11K — Altcoin Bull Run Fizzles 1809

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Bitcoin (BTC) price slid from levels near $11,000 Aug. 20 as momentum which sparked bullish sentiment at the start of the week fizzled.

Market visualization

Market visualization. Source: Coin360

Bitcoin lingers below $11K resistance

Data from Coin360 showed BTC/USD abandoning its shot at passing $11,000, having risen from levels near $10,700 on Monday.

The pair was trading back at those levels at press time, having dropped $350 over the past few hours. 

24-hour gains for Bitcoin thus remained tapered at 2%, while weekly performance still revolved around an overall loss of nearly 6%. 

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

Anticipation had run high as $11,000 approached, analysts rating chances for a definitive upward trend to recommence.

“I wanted to see it over $10,800 and it did close, short term bullish,” regular trader Josh Ragersummarized in his most recent update on Monday. 

He added that BTC/USD remains under its weekly opening level from two weeks previously, an area which will now act as resistance. 

Meanwhile, another fellow market analyst and trader, Filb Filb, was more buoyant, telling followers of his dedicated Telegram channel about the possibility of a break to $11,400.

Altcoins return to flat performance

Altcoins meanwhile failed once again to capitalize on previous gains. A look at the top twenty cryptocurrencies by market cap shows most reversing progress made on Monday, when some outperformed Bitcoin itself. 

Ether (ETH), the largest altcoin, then dropped 1.6% to slide back below $200. Litecoin (LTC) dropped more at 2.3%, while XRP shed almost 5%. 

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

Only Monero (XMR) and Bitcoin SV (BSV) showed signs of life, gaining 1.2% and 0.8% respectively. 

The overall cryptocurrency market cap was $276 billion on Tuesday, down $3 billion from the day before, while Bitcoin’s share remained over 69%.

Source:cointelegraph

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