In a tumultuous day of trading, the Dow crashed by 800 points, yesterday, as an ominous recession indicator came to life. For the first time since 2007, 10-year bond yields dipped below 2-year bond yields .
For the record, every time that happened in the last 50 years, a recession followed . We’re the first ones to say that past performance doesn’t indicate future results, but hey, you’ve got to admit that’s a pretty rockin’ track record.
It isn’t just the US standing on the cusp of what seems like an impending recession. Bloomberg had this to say in wrapping up the world’s financial woes:
“China reported the weakest growth in industrial output since 2002. Germany’s economy shrank as exports slumped, and euro-area production plunged the most in more than three years as the overall expansion cooled.”
So, yeah, not looking too hot out there. What does it mean for the cryptocurrency market? Yesterday, the price of Bitcoin (BTC) dropped below $10,200 while ETH, XRP, EOS, TRX, XTZ, and several other blue chips fell off the proverbial cliff. For anyone who is keen to think that crypto markets are decoupled from traditional markets – think again .
At a very fundamental level, the fortunes of all markets are tied together by whichever is the true hegemonic power. While we love crypto, it would be an outright lie for us to claim that digital assets assume more importance, economically speaking, than traditional global markets. With a total market cap that is less than Amazon’s, the cryptocurrency market pales in comparison to global stock markets, which are valued somewhere north of $60 trillion.
Bitcoin is just a drop in the bucket compared to the squidzillions at play in the bigger picture around the world. For those of you who, like us, are living and breathing crypto every day, this may be a hard fact to accept. However, being aware of it will strengthen your position and
BTC may act as a store of value during a recession
Bitcoin was born along with the last global recession back in 2008. Satoshi understood the ill effects of centralized finance and knew that bankers were sending the world economy straight for the dumpster.
While the Great Recession hit hard in countries around the world, BTC gained notoriety at first, and then real value right around 2013, when signs of relief from the recession first flickered. The rest of the digital asset market as we know it today emerged during a period of economic expansion and rebuilding in the US, Asia, and many European countries.
As such, the cryptocurrency market hasn’t faced a real recession, so predicting how it will react to a global economic downturn is more or less impossible. However, without recession fears at hand for last year and most of this one, altcoins have performed dismally. It’s highly doubtful that a downturn of the kind anticipated will help matters on that score.
Bitcoin, on the other hand, may perform better than expected. Safe-haven assets like gold and bonds have rallied in recent days. In 2008, the USD jumped nearly 20% against other currencies. Can Bitcoin make a safe-haven case?
Well…“Bitcoin is a remarkably stable and reliable store of value” said no one ever. With all due respect to Anthony Pompliano, it’s possible to be bullish on both Bitcoin and reality.
Look, we definitely puff puff pass the crypto hopium . But believing that people everywhere will suddenly flee for safety into an asset class based on bleeding edge tech defies reason. Then again, if Bitcoin has done anything well over the last decade, it’s defy reason.
Bitcoin’s drop yesterday was understandable. If someone says recession, everyone jumps back. The coming weeks and months will be crucial, though. Do we trend higher as hopes for the global economy sink further? That’s for time to tell.
Bitcoin Set to Shatter $100K in 2020, Says Ross Ulbricht – BTC, Ripple, XRP, Litecoin Updates
From a Bitcoin forecast by the creator of the notorious Silk Road marketplace to rising volume on the XRP Ledger, here’s a look at some of the stories breaking in the world of crypto.
Bitcoin is poised to surge to $100,000 over the next year, according to the founder of the darknet market Silk Road, which was known for selling illegal drugs and illicit goods.
Ross Ulbricht is serving a double life sentence plus 40 years without the possibility of parole for running the online marketplace, where users transacted in Bitcoin.
In a new blog post on Medium, Ulbricht says he’s getting Bitcoin charts sent to him in prison on a weekly basis. He’s tracking the leading cryptocurrency’s trajectory using Elliott Wave Theory, a market analysis method that aims to predict future price action by identifying crowd psychology which manifests in waves.
Ulbricht says his analysis of the first cycle, which is broken up into five waves, shows BTC is likely to reach $100,000 in 2020.
“If the price move of wave ⑤ was on par with ① and ③ (530–620x), it would have to end around $93,000-$109,000.
Thus, if our interpretation that wave ⑤ is not over, and the ~$20,000 peak was just wave (3) of ⑤, then a good target for the end of wave ⑤ of ⑤ of I is around $100,000.”
Despite his imprisonment, Ulbricht is considered a pioneer in the crypto industry, and more than
Venture capitalist and Bitcoin bull Tim Draper recently made headlines by calling for his release.
“I get that he’s got to be an example, and he stepped over the line. But he’s been in jail for a while. Get him out. I cry when my cat goes into a cage, it tears my heart out when these prisoners go into cages.”
Ripple and XRP
New numbers show the use of Ripple’s XRP-powered cross-border payment product On-Demand Liquidity (ODL) may be on the rise.
The Liquidity Index Bot shows record XRP volume this week against the Mexican Peso on the crypto exchange Bitso.
Bitso is one of the exchanges powering ODL, and money transfer giant and Ripple partner MoneyGram says it’s now moving 10% of its daily transactions between Mexico and the US by using the liquidity product.
The Litecoin Foundation’s efforts to raise money to fund the research and implementation of privacy features appear to be paying off.
The Foundation has now received 163 LTC worth about $7,230 at time of publishing.
Litecoin creator Charlie Lee says he will match every donation. The money will fund efforts led by developer David Burkett to implement the Mimblewimble protocol.
Ethereum’s Contract Failure Rate Rose Drastically After Istanbul Hard Fork
Ethereum’s hard forks rarely run like clockwork. The last batch for the Parity client was released just before the fork, but some acute concerns remain.
While running more or less smoothly from a technical perspective, Ethereum’s Istanbul upgrade has caused some problems within the network’s operations.
Smart Contracts Fail
Antoine Le Calvez, Data Engineer at Coin Metrics, highlighted on his Twitter page some of the problems of Ethereum (ETH) network caused by switching to the Istanbul rules. After launching its hard fork last Sunday, the price of gas (small transaction fee used to reward Ethereum miners) was redesigned.
It is from these gas price dynamics that led to unexpected consequences. According to Mr. Le Calvez:
on a global level, smart contract calls running out of gas became much more frequent following the hard fork.
La Calvez calculated the rate of smart contract failure due to gas insufficiency and noted that “failure rates more than quadrupled”.
Image by: https://mobile.twitter.com/khannib/status/1204032838166822916
Mr. Le Calvez also found out that some exchange users were facing challenges in the post-Istanbul Ethereum. For instance,
That’s What Bitcoin Tries to Avoid
The assumptions of Mr. Le Calvez excited numerous crypto traders, developers, and researchers. Lucas Nuzzi, Head of Research at Digital Assets Research, compared the problems of Ethereum with those of a post-fork Bitcoin (BTC). He said that such transformations have “led thousands of dApps to fail”, and that this should be regarded as a form of censorship.
Mr. Nuzzi further stated that Bitcoin faced challenges of this type while implementing the multi-signature features. This experience made Bitcoin developers reconsider their attitude towards backward compatibility.
Ethereum’s Istanbul Hard Fork occurred on December 8, 2019 on Block #9069000. It was one of the last systemwide upgrades of the Ethereum 1.0 network.
Lisk (LSK) internal pressures seeing huge 40% employee cuts
- Lisk project has cut a chunky 40 percent of its staff and some quitting.
- The company said the move is part of efforts to improve its operational efficiency
The Lisk (LSK) project has reportedly fired some 40 percent of its workforce, with reports also suggesting that employees quitting the company in droves.
However, the Lisk hierarchy noted that the move is part of efforts to improve its operational efficiency. Community members are somewhat sceptical saying the project is looking like another potential failed altcoin experiment.
Lisk co-founder Max Kordek, posting on the project’s Discord, wrote:
Today, at Lightcurve, we laid off 21 of our employees and terminated the contracts of three employees who were yet to join. This concludes the recent wave of terminations you may have observed. We are now ready to go completely dedicated into 2020 with a solid team of 31 individuals on the Lightcurve side.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.