- Crypto assets have once again outperformed other major asset classes.
- A huge percentage of the crypto rally this year is due to Bitcoin’s ability to lead the market trends.
Cryptocurrency News Today – It is that time of the year when analysts compare the performance of different asset classes. During this decade, digital currencies came into existence and stayed on top compared to traditional assets. Every year since the decade began cryptocurrencies have led.
Now as the year draws to a close and as this decade ends, we have taken a look at how each class of assets performed. In the last 12 months, cryptocurrencies have once again outperformed traditional assets. Note that the asset class was able to achieve this feat once again despite trading significantly lower than the record highs attained on December 2017.
At the time, the large-cap cryptos had a phenomenal 12 months. That period remains the greatest investment success story in the closing decade. It was during that era that crypto placed itself as the world’s number one asset class by yearly performance. It is safe to agree that cryptos have risen significantly above the annualized returns issued by the equities, commodities and bond markets of the U.S for the closing year.
Large-cap Digital Assets Offer Higher Returns than Traditional Assets for the Year
The Co-founder and president of Digital Assets Data, Ryan Alfred, remarked that for this year large-cap cryptos possess higher returns compared to traditional markets. A research given by Digital Assets Data highlights this year’s performance of top 10 digital tokens by market cap and how they fared against traditional assets like gold, oil and equities. 2019 didn’t start booming for crypto.
In February 2019, crypto was in a fairly dismal run, and was resting below the bulk of traditional assets. However, sentiment picked up in March and as of mid-year, cryptos were ahead of other asset classes. This began to close as stocks, bonds and commodities increased their lead. Yet crypto remained significantly ahead of others as the year draws to a close. Much of this is courtesy of Bitcoin. BTC is currently up by 100% since the beginning of the year.
Ethereum is up by 35% up. XRP is down by 25% from the point it traded as of January 1 2019. During the year before the closing decade began, there was a global financial crisis. Since then to this day, stocks have rebounded. From the March 2009 market meltdown to now, S&P 500 has gained 369%. While, the Dow Jones Industrial Average has gained 326% in the same period. All in all cryptocurrencies have had another remarkable year.
Healthy Correction or Reason To Panic? Price Analysis & Overview
Bitcoin has fabulous times since entering the new decade. However, when we see such a parabolic move to the upside, we can expect volatile moves to the other side, as well.
Just yesterday, we mentioned Bitcoin price reaching its first major test – the 200-days moving average line (marked light green on the following chart). Many analysts see this tough resistance as the barrier between Bear and Bull markets.
Today, Bitcoin surpassed the crucial moving average line (roughly around $9060). However, shortly after recording a daily high (and year to date) at $9188 (Bitstamp), we received a MEGA dump.
Besides, on the 4-hour chart, we can clearly see Bitcoin reaching the top area of the marked ascending channel.
Bitcoin lost over $700, plunging to the $8400 old resistance level. As of writing these lines, Bitcoin had recovered a bit, trading above the $8600 resistance level.
Market Cap Evaporated $13 Billion In Minutes
So far, there is no reason to panic, in my opinion. It’s OK not to overcome the significant MA-200 at the first chance.
Another thing to keep in mind is the CME Futures’ Friday low at $8720. This means that as of now, there will be a positive price gap.
Following the drop, the total market cap had reached $250 billion at the top before losing over $13 billion in less than 60 minutes.
Total Market Cap: $237.5 billion
Bitcoin Market Cap: $157.5 billion
BTC Dominance Index: 66.4%
*Data by CoinGecko
Key Levels To Watch & Next Targets
– Support/Resistance levels: Bitcoin is now trying to keep above the $8600 resistance turned support level. If the
Further below lies the $8000 area, along with the 100-days moving average line (marked by white). This also contains the bottom trend-line of the ascending channel.
From above, $8730 will be the first level of resistance Bitcoin will face (38.2% Fib level). The next major resistance is $8900, along with the Golden Fib of %61.8.
Further above is $9000, along with the most significant resistance at the current price area – the 200-days moving average line.
– The RSI Indicator: The RSI that was hovering at its highest levels since June had plunged together with the price. It will be interesting to see if the RSI can hold the mini-ascending trend-line.
A bearish sign might be coming on behalf of the Stochastic RSI oscillator, as it made a bearish cross-over and about to enter the neutral territory, which can ignite a further correction.
– Trading volume: We need to keep in mind that the vast move is taking place during the weekend when it’s easier to shift the markets.
BTC/USD BitStamp 4-Hour Chart
BTC/USD BitStamp 1-Day Chart
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Cryptocurrencies’ legitimization shouldn’t be restricted by AML risk: Perianne Boring
2019 saw regulators around the world paying serious attention to cryptocurrencies and its regulation. Even though many countries are still skeptical about digital assets, some have embraced crypto, along with blockchain. Even the U.S. has long been dealing with cryptocurrencies and its regulations and according to Perianne Boring, President of the Chamber of Digital Commerce, 2020 has already been a “remarkable year” in crypto-time.
The president of the blockchain trade association, a guest on the latest edition of the Off the Chain podcast with Anthony Pompliano, noted that the association has been working with agencies like the U.S. Securities and Exchange Commission by filling them in about cryptocurrencies and the understanding gap that exists, along with FinCen. According to Boring, crypto’s growth has accelerated over time, so it would be better for the government to “help shape that process than for it to be shaped around you.”
Shifting focus to Washington D.C, Boring
“If that is what you are really concerned about, you should be so excited about Bitcoin because it is a radically transparent system and if your job is to follow the money, we have actually given you the best tool, ever possible to do that. So that kind of pushback is really weird.”
With AML and terrorism financing being the main and genuine concern, she said that tracking money could be the “big step up” for law enforcement agencies as the ledger can be viewed publically by anyone. Boring added that “AML as a risk for cryptocurrencies is not a legitimate reason to not embrace this technology.” However, there are tools available to address this concern and will require law enforcement agencies to learn them, she went on to state.
Davos Needs to Wake Up to the Ills of Centralization
This is part of a series of op-eds previewing the World Economic Forum in Davos, Switzerland. CoinDesk will be on the ground in Davos from Jan. 20–24 chronicling all things crypto at the annual gathering of the world’s economic and political elite. Follow along by subscribing to our pop-up newsletter, CoinDesk Confidential: Davos.
Michael J. Casey is the chief content officer of CoinDesk. The opinions here are his own.
As the world’s most influential and self-entitled gather in Davos, Switzerland, for next week’s World Economic Forum, a predictable set of problems are on their minds: climate change, political polarization, trade tensions and cyber-attacks top their list of worries, according to the WEF’s just-released Global Risks Survey.
Those are weighty issues. But if we look at them through the decentralization mindset encouraged by cryptocurrencies and blockchain technology, it’s hard not to conclude that elephants in rooms are being overlooked. It’s with those issues, the ones not being talked about, where the real important stuff lies.
The disintermediating, fragmenting and decentralizing impact of the internet has made the 21st century’s political and economic structure profoundly different from the previous one. But the Baby Boomers who run our governments and companies still tend to apply 20th century assumptions about centralized money and power. They fail to see how our outdated political and economic institutions are out of touch with this new reality, and how that explains society’s ever-waning trust in them. It’s a myopia that also means they often fail to recognize, much less understand, the alternative decentralized models quietly emerging from the developers building cryptocurrency, blockchain and digital identity technologies.
So, as I head to Davos with my CoinDesk colleagues for a week of reporting and speaking engagements, I want to contemplate some of the issues “Davos Man” might be missing.
It’s worth remembering the people for whom these issues most matter are not those cocktail-sipping elites but regular Joes and Joans. This year may well mark the most divisive U.S. election in decades. If our bickering leaders aren’t focused on these big themes, where does that leave us in four years’ time? We need these issues on the ballot.
China’s digital yuan
China is expected to launch a digital currency sometime this year. The question not being asked enough is: As this project grows – and likely many others from other countries and companies – what will it mean for the dollar-centric global economy and its multitudinous stakeholders?
How will digital fiat currencies impact global trade and capital flows? Do they pose a competitive threat to the dollar and, by extension, to U.S. economic power? What would such a transformation mean for how the international community tackles the big-ticket issues Davos elites worry about: petrodollar investments in carbon-rich assets, for example, or global trade tensions?
The digital yuan might seem like a superficial change, akin to a more advanced banknote or a state-run version of a mobile banking or payments app. But while China’s centrally managed approach to digital-currency technology is in some respects the antithesis of the decentralized model behind bitcoin, it is nonetheless a radical change.
Two things matter: One, a digital fiat currency will circulate without banks managing the flow and, two, it is programmable, which makes it much more powerful than analog currency. Marc Andreessen says “software is eating the world.” Money-as-software might just devour it.
A digital currency will enable the Chinese government to directly manage and monitor its users’ spending patterns. Putting aside the terrifying surveillance prospects behind this “panopticon” vision, this information-gathering power will greatly aid China in its international aspirations. Its economic response machine will be run by a far superior data-analytics system than anything employed by any other country.
A “programmable” yuan will provide the missing payment component that hundreds of Chinese blockchain and smart-contract projects need. It will enable autonomous machines, micropayment infrastructure management systems, smart cities and other ideas the West will struggle to keep up with.
As I’ve argued elsewhere, currency programmability, when interoperable with other countries’ fiat digital currencies, could also enable Chinese companies and their foreign partners to do a direct runaround of the dollar-based trade system.
Currently, the yuan occupies an immaterial amount of cross-border trade and reserve asset holdings. But as this technology poses alternatives to the dollar and if China aggressively inserts its version into investment projects in Africa, for example, or into its 65-country Belt and Road Initiative, its international usage could grow rapidly.
Recently, a Harvard-MIT simulation
Some people, including former U.S. Commodity Futures Trading Commission Chairman Chris Giancarlo, have recognized this threat to U.S. economic leadership. But Chinese digital currency dominance does not appear to be on many leaders’ radars – it’s certainly not featuring in the Democratic primary presidential debates.
So, come on, Davos, let’s talk about it.
To be fair, privacy in the internet age, defined as the threat to our online personal data, will probably get a decent examination at Davos 2020.
The Cambridge Analytica story, Edward Snowden’s unveiling of the NSA’s citizen-snooping system and the growing awareness that Silicon Valley behemoths such as Google are managing our lives, has put this issue front and center. It deserves to be.
The problem is the structural factors behind this dangerous surveillance capitalism system are poorly understood.
Most political reactions to the drumbeat of stories about data abuse by Facebook and Google amount to leaders tut-tutting at these companies, occasionally fining them and demanding they just stop being bad. Few realize that, essentially, they can’t stop being bad. These centralized entities, with their closed, non-interoperable “walled gardens” of data, have built their entire business models – and therefore their shareholders’ profit expectations – on surreptitiously and systematically extracting information about human lives.
The other problem is the ad-hoc efforts to change these businesses’ behavior clashes with other demands placed upon them.
Witness the contradiction in lawmakers’ critiques of the Facebook-founded Libra digital currency project. On the one hand, they demanded it protect users’ privacy but on the other they demanded it maintain all the monitoring necessary to prevent money laundering. Or look at how Facebook’s critics simultaneously demand its social media platform remove disturbing hate-speech content and that it also cease arbitrarily censoring and “de-platforming” users. Without understanding the problem, people can’t see how holding both of these positions is untenable.
There are two approaches to this issue: a political one, such as an antitrust order to constrain the internet giants, or a technological one, in which social media platforms move to a decentralized structure of user control (one potentially where zero-knowledge proofs or other advanced forms of encryption enable verification without revealing identities).
Let’s discuss these options, Davos.
You thought fake news was a problem. You ain’t seen nothing yet.
As Arif Khan writes in this pre-Davos opener for CoinDesk, fake news is going on steroids.
With people such as Jordan Peele using clever stunts to highlight the problem, “deepfakes” – in which image manipulation technology is making it increasingly difficult for people to detect reality-altering changes to a digital video or image – are starting to get people’s attention.
Yet, the full extent of how much society depends on the glue of trustworthy information is greatly underappreciated. The foundation of our democracy, of our legal system, of our business relationships and of everything else in between is at stake when the truth cannot be verified.
How do we get ahead of this when artificial intelligence is progressing so rapidly and when information is no longer delivered to us through central filters?
A solution will require a combination of tools like AI detection software, watermarking and blockchain-based tracking of digital media provenance.
It also requires stakeholders at technology companies, media organizations and government bodies to jointly establish standards for those technologies so we can all agree on how we’ll re-establish the integrity of the information we rely on.
This is an urgent problem, one tailor-made for a mountain-town gathering of money and power.
Let’s look outside the bubble. Let’s become inquisitive. Let’s abandon rigid, outdated ways of thinking. Let’s say goodbye to know-it-all Davos Man, because clearly he doesn’t.