A group of hardcore bitcoin maximalists have heroically overcome their hatred for Ethereum after receiving ERC20 shares in crypto exchange INX worth hundreds of thousands of dollars. The staunch BTC loyalists, led by Blockstream CTO Samson Mow, have agreed to support a project built on Ethereum, despite all the mean things they’ve said about it. The news has provoked intense debate within the crypto space, however, with some cynics arguing that the maximalists are only in it for the money.
Mow Money, Mo’ Problems
As CTO of Bitcoin development company Blockstream, Samson Mow’s primary duty is to keep block sizes small to peddle his firm’s scaling solutions to the problem it engineered. High fees don’t generally concern bitcoin maximalists such as Mow, who have no interest in using BTC for its intended purpose, instead preferring to lock it away in a vault and never look at it again. It’s a policy that, for all its flaws, has helped to make Mow and his cronies extremely wealthy, and Blockstream an extremely influential Bitcoin company.
The significant success of Mow’s primary business, however, has caused a paradox: to launch one of his secondary ventures, a crypto exchange in which he has invested $100K, it will be necessary to utilize a network with low fees. Bitcoin is out of the question for the aforementioned reasons, while Ethereum should also be a non-starter due to a number of immutable statements Mow has made about the rival network, calling it “the most impractical thing in existence,” a “science fair project” and “centralized AF.” The Blockstream bigshot also wrote“I wish ill on Ethereum” which “has no future.”
On the surface, these damning remarks would appear to preclude Mow from accepting 100,000 ERC20 tokens to serve on the advisory board of INX Limited. To do so would be at odds with everything he has ever fought for, and could be interpreted as the actions of a man with no spine or standards. On closer inspection, however, it becomes evident that Samson Mow is not the flip-flopping fool that many have taken him for. Rather, his actions are those of a true bitcoin maximalist, whose sole motivation for accepting Ethereum tokens is to demonstrate the superiority of BTC.
Samson Mow Plays 4D Chess
Samson Mow, together with fellow maximalist Jameson Lopp, and a handful of other close collaborators including Riccardo Spagni and Charlie Lee, will have a significant stake in the venture, which will see 130 million shares issued as ERC20 tokens. All of the project’s early investors will be remunerated in Ethereum tokens, as detailed in an SEC filing unveiled this week. “Ethereum” and “ERC20” appear over 100 times in the document, attesting to the pivotal role that will be played by the network maligned by Blockstream’s Mow et al. Notably, the IPO filing expounds at length on Ethereum’s gas fees, which are multiples lower than their BTC equivalent.
Despite Mow’s previously scathing comments about Ethereum, his decision to accept $100,000 of ERC20s is probably born not out of avarice, but from a principled desire to prove that only Bitcoin is immutable. Everything else in this world – including the Ethereum blockchain and even Mow’s own words – is reversible, and subject to being rolled back when there is a financial incentive to do so.
It is to Samson Mow’s credit that, after years of badmouthing Ethereum, he has eaten his words to prove the inviolability of BTC alone. When Mow’s stake in INX became public this week, bitcoiners were swift to label him an unprincipled hypocrite. It turns out he was playing 4D chess all along.
Bitcoin [BTC] Price Crosses $10,200 As There Are More Inflows to Exchanges
There are more inflows than outflows at the top seven leading cryptocurrency exchanges, including Binance, BitMex, and OKEx, according to statistics from Token Analyst.
On average, $47.2 million was deposited and $44.9 million withdrawn on Feb 18, 2020.
Crypto Markets Correction
The revelation is a relief for the crypto market.
From price charts, it appears as if bulls are exhausted following parabolic rallies that saw the value of some digital assets like Ethereum Classic, Ethereum, and Tezos post impressive gains, pushing them to a new valuation.
Ethereum Classic, for instance, nearly tripled, soaring to around $3.5 in Q4 2019 to $11 in Jan 2020.
Similarly, Tezos (XTZ) boosted by new developments and heavy involvement from the French—including a research team with links to the government working on Tenderbake, and French Army and the Information & Public Relations Center (SIRPA), soared to new all-time highs.
Other altcoins posted extra-ordinary performances as well thanks in part to a bullish Bitcoin which for the first time in 2020 broke above $10,000. The level is an important resistance level.
Traders are Bullish
The inflow of new cash into the crypto market is definitely a mark of confidence. It also shows that market participants, despite the recent lull, are bullish of what lies ahead.
Specifically, the buzz around Bitcoin halving is creating an aura of expectation. Previous events saw prices rally in subsequent months.
However, compared to leaps made in recent years, this year’s halving could either thrust BTC prices to new highs, or see price flat-line before dropping even if demand is constant, or even higher.
Bitcoin Halving: will Price Drop or Rally after May 2020
Debate around post-Bitcoin halving price trajectory varies.
Some analysts and crypto commentators are expectant that more gains are in the pipeline because market forces are yet to price in BTC’s forthcoming rally.
Yet some are adamant that the rally to $10,500 marks the tipping point of BTC prices. Subsequent sessions, they believe, would see prices crumble.
US Plans to Regulate Cryptocurrencies
The optimism also comes when US government officials plan to draft laws that would shield the USD hegemony and discourage the use of cryptocurrencies, especially Bitcoin—partly because of its popularity, and privacy coins like Monero.
The contention is that privacy coin mixers and obfuscation of transactions are illegal.
Bitcoin’s golden cross changes everything for the 2020 rally
Bitcoin’s stay under $10,000 was short-lived as it picked up momentum on 17th Feb. The valuation witnessed a 6.07 percent surge, and Bitcoin re-entered the $10,000 range. Over the past 24 hours, BTC registered a 4.02 percent uptick and the current market cap remained at $184 billion.
Bitcoin 1-day chart
BTC/USD on Trading View
The 1-day chart of Bitcoin has been evidently bullish since the turn of the year after the price broke out from a falling wedge pattern. The pattern started taking shape toward the end of November and a bullish breakout surfaced in the 3rd week of December. After the breakout, Bitcoin has periodically risen from $7000 to $10,000.
Until now, the bullish surge of Bitcoin has been expected to exhibit some form of correction, but besides minor dips, nothing has really impacted its rise.
At press time, Bitcoin held consolidation just under the resistance at $10265, with immediate support at $9800. However, Bitcoin may continue to progress upward now, since the highly anticipated golden cross has taken shape.
The last golden cross took place on 23rd April 2019. The positive turnaround after the cross-over was significant, as Bitcoin experienced a 164.43 percent rise, reaching last year’s ATH at $13,880. A repeat of such a trend would easily take Bitcoin above its all-time-high at $20,000.
According to VPVR indicator, trading volume at $10,200 has been strong over the past year which indicated that Bitcoin may consolidate in his range over the next week. RSI also pictured a bullish incline since the start of December.
Bitcoin 4-hour chart
BTC/USD on Trading View
Analyzing the 4-hour chart of Bitcoin may give a clear indication of Bitcoin’s trading range over the next few weeks. Bitcoin’s correction on 15th February can be observed in the 4-hour chart, which transpired after the formation of a rising wedge pattern. As mentioned earlier, Bitcoin managed to recover quickly and it rose back above the $10,000 range.
If Bitcoin manages to trade above $10,265 resistance and consolidate near the $10,700 range, the possibility of a bullish rise to $11,500 could be very much on the cards.
Consolidation below $10,200 may open doors for another correction. With the completion of the golden cross, that situation seems less likely.
The completion of a golden cross is a positive bullish sign, which may take Bitcoin well beyond the $11,000 range over the next few weeks. With the ‘FOMO’ kicking in after the golden cross, the next few days would decide Bitcoin’s long-term price movement until the halving.
Bitcoin Supply Distribution Increased by 33 Percent in the Past Decade
The supply of Bitcoin has naturally dispersed over time. Thanks to a wide variety of factors, such as increasing demand for BTC. The use of Bitcoin in payments and remittances has also had an effect. As more people have been able to get their hands on the asset, and as supply levels change, volumes do as well.
However, it would seem that the extent to which this change has occurred is beginning to gain steam. While Bitcoin and other cryptos are often held by whales, their influence is now dwindling.
Less Bitcoin for Larger Exchanges
Earlier this week, CoinMetrics, a data provider for the crypto space, published its State of the Network report for Bitcoin. The report revealed the volume of Bitcoin held by larger addresses had dropped significantly over the past decade.
In the report, the firm explained that “larger addresses’’ were taken to mean cryptocurrency wallet addresses that have more than a thousandth of the total supply of Bitcoin. Current data from Blockchain shows that there are 18.22 million BTC (worth about $184 billion at current prices) available in supply. This is out of a possible 21 million Bitcoins. For an address to be considered a “large address” by CoinMetrics’ estimates, it needs to contain 18,220 BTC (worth about $184 million), according to the data provider.
The report goes on to show that the volume of Bitcoin held by these addresses was 33 percent as of February 2011. Today, that number has dropped to 11 percent. The report also revealed that smaller addresses held more of the Bitcoin in circulation. This means that individuals Bitcoin users have been on the rise, contrary to public opinion.
In part, the report also touched on Tether, the most valuable stablecoin. CoinMetrics explained that Tether had seen a surge in its distribution as well, thus positing that the asset could see increasing use as a medium of exchange. The company also opined that this could be the most significant reason why supply was flowing more to the smaller wallets.
Ether Still Has a Long Way to Go
The state of Bitcoin is different from that of its biggest competitor, Ether. Last May, Chainalysis published a blog post titled the Economic Impact of Whales on the Market. At the time, the blockchain analysis firm explained that “whales:” were the top 50 shareholders within the global crypto space- with the exclusion of exchanges, wallet providers, and other asset custodial services.
The report eventually showed that there were 124 services as part of the top 500 ETH holders, while the remaining 376 were “individual whales.” These whales were also said to be in control of 33 percent of Ether’s entire supply- although the number was markedly lower than the 47 percent reported in 2016.
The report also explained that these individual Ether whales accounted for just 7 percent of the asset’s economic activity. As Chainalysis explained, most of these whales are hodlers, not traders.