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Vitalik Buterin warns that cryptocurrencies are in a bubble and Bitcoin may get left behind

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  • Vitalik Buterin has said that cryptocurrencies are in a bubble.
  • Despite seeing over $300 million wiped out in a day, the Ethereum founder is however unfazed by the market downturn.

The 27-year-old Ethereum co-founder, Vitalik Buterin is not worried about the struggling state of the crypto market, he revealed recently, while taking a dig at Bitcoin.

In an interview with CNN, he disclosed that cryptocurrencies are in a bubble. However, when the bubble finally bursts is uncertain, though it could be months away. According to Buterin, the current bubble is common in its history with at least three recorded so far.

And often enough, the reason the bubbles end up stopping is that some event happens that just makes it clear that the technology isn’t there yet.

Buterin remains one of the most affected key players by the current market struggle after a chunk of his investment was wiped off within a day. His public wallet shows that the value of Ether in his portfolio reduced to $870 million on Thursday morning from $1.1 billion on Wednesday morning.

Buterin: Crypto is not just a toy anymore

Buterin had always disputed the valuation of the crypto market. In 2017, when the crypto market value was half a trillion dollars, he raised questions about the technological accomplishment of the industry. Today, he believes that the industry has come far in terms of technological breakthroughs, and its valuation is well deserved. Ethereum, for instance, has seen a lot of activity recently as its network backs the sale of many Non-Fungible Tokens (NFTs).

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It feels like crypto is close to ready for the mainstream in a way that it wasn’t even four years ago. Crypto isn’t just a toy anymore.

In his response to Tesla CEO Elon Musk’s impact on the crypto market, Buterin stated that the market will learn and move away from his influence.

Bitcoin may be left behind

Bitcoin has lately come under criticism for its high energy consumption. Buterin feels these concerns are justified. In his statement, he said the resource consumption is not something that is going to break the world, but it is a significant downside. He also mentioned that if nothing is changed, the Bitcoin community may be forced to switch to Proof-of-Stake (PoS).

If Bitcoin sticks with its technology exactly as it is today, there’s a big risk it will get left behind.

Ethereum is transitioning to ETH 2.0. This means it will no longer rely on Proof-of-Work (PoW), but instead, the PoS consensus mechanism. Reports estimate that there will be a great decrease in Ethereum’s energy consumption. PoS is reported to be up to 99% energy efficient.

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We go from consuming the same energy as a medium-sized country to consuming the same energy as a village.

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Bitcoin extends correction as Ethereum sees ‘picture perfect’ rejection at all-time highs

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Bitcoin (BTC) stayed closer to $60,000 on Oct. 22 after the largest altcoin Ether (ETH) failed to cement new all-time highs.

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BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

ETH all-time high? Blink and you’ll miss it

Data from Cointelegraph Markets Pro and TradingView ETH/USD just match its record $4,380 on Bitstamp before seeing a harsh rejection.

Traders watched in anticipation as Ethereum appeared to follow Bitcoin to historic new levels, only to face immediate resistance and fall sharply back into a lower range.

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Trader and analyst Rekt Capital called the event a “picture perfect rejection.”

At the time of writing, ETH/USD circled $4,150, preserving $4,000 as support with the exception of a flash dip which immediately followed the all-time high rematch.

ETH

ETH/USD 1-day candle chart (Bitstamp). Source: TradingView

Against Bitcoin, Ethereum fared better, with the ETH/BTC pair having bounced near lows last seen in late July. 

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Bitcoin could see “additional topside euphoria”

Having similarly failed to hold significantly higher levels, Bitcoin itself took an extended break as overheated markets cooled their excitement.

Funding rates were returning to normal on Friday, having reached a state reminiscient of the blow-off top from April. 

Chart

Bitcoin funding rates chart. Source: Bybt

As with open interest, however, these were not as frenzied as the Q2 rush, which produced the $64,900 all-time high in place until this week.

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“This means there is possibly still room for additional topside euphoria but we are at levels that are starting to stretch the market,” crypto trading firm QCP Capital commented in its latest market update.

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Bitcoin Forecast and Analysis BTC/USD October 22, 2021

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BTC/USD are trading at 64619 and continue to move as part of the correction and the bullish channel. Bitcoin cryptocurrency capitalization at the time of the publication of the forecast is $1,194,342,792,891. Moving averages indicate a short-term bullish trend for Bitcoin. Prices went up from the area between the signal lines up, which indicates pressure from buyers of ”Digital Gold” and a potential continuation of the rise in the value of the asset already from the current levels. As part of the cryptocurrency rate forecast for tomorrow, October 22, 2021, we should expect an attempt to develop a decrease in the value of a digital asset and a test of the support level near the 57505 area. Where again should we expect a rebound and an attempt to raise the Bitcoin rate with a target above the 74055 area.

Bitcoin Forecast and Analysis BTC/USD October 22, 2021

An additional signal in favor of the growth of BTC/USD quotes will be a test of the rising trend line on the relative strength index (RSI). The second signal in favor of this option will be a rebound from the lower border of the bullish channel. Cancellation of the growth rate and value of Bitcoin will be a fall in the value of the asset and a breakdown of the area of ​​52205. This will indicate a breakdown of the support area and a continuation of the fall in the Bitcoin rate with a potential target at 42055. Confirmation of the rise in the price of the asset will be a breakdown of the resistance area with the price fixing above the level of 69205.

Bitcoin Forecast and Analysis BTC/USD October 22, 2021

Bitcoin Forecast and Analysis BTC/USD October 22, 2021 suggests an attempt to test the support level near the 57505 area. And further, the cryptocurrency will continue to grow with a potential target at 74055. An additional signal in favor of the Bitcoin rate rise will be a test of the support line on the relative strength index (RSI). Cancellation of the cryptocurrency growth option will be a fall and a breakdown of the 52205 area. This will indicate a continued fall with a potential target below the 42055 area.

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Bitcoin Price Flash Crashes for Second Time in a Month in the US

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The price of bitcoin (BTC) on Binance.US, the US-based exchange affiliated with Binance, briefly crashed to as low as USD 8,200 today – a drop of 87% – before recovering again. The crash marks the second time in a month when bitcoin prices in the US have briefly disconnected from the rest of the world. 

Today’s flash crash, which was one of the most significant on a major exchange in bitcoin’s history, all happened within less than 1 minute, the BTC/USD price chart from Binance.US showed. 

Although the flash crash was all over within a minute, the trading volume showed that a significant number of coins did change hands during the crash, indicating that some traders may have been able to fill orders for bitcoin at extremely low prices.

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BTC/USD on Binance.US. Source: TradingView

Flash crashes can happen when large market sell orders are sent to exchanges without sufficient liquidity on its order books, for instance, because a large trader accidentally placed the order as a market order instead of a limit order.

Today’s flash crash on Binance’s US exchange is the second such incident in a month in the US. On September 20, a data feed for crypto prices called Pyth that is used by some of the largest financial institutions on Wall Street showed a 90% crash in the price of bitcoin.

The feed briefly showed bitcoin at a price of USD 5,402. However, a similar price crash was nowhere else to be seen. Two days later, in a report about the incident, Pyth concluded that the abnormally low price was indeed a technical glitch, “caused by the combination of (1) two different Pyth publishers publishing a near-zero price for BTC/USD and (2) the aggregation logic overweighting these publishers’ contributions.”

Discussing today’s incident on Twitter, many traders complained about being forced by US regulations to use exchanges such as Binance.US, which has thin order books and low liquidity compared to the international version of the exchange.

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No statement has yet been made from Binance or Binance US regarding today’s flash crash.

At 16:11 UTC, BTC trades at USD 63,180 and is down by almost 6% in a day, trimming its weekly gains to 10%.

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