Category Archives: Bitcoin
What August’s record breaking month for crypto flows means for bitcoin – Yahoo Finance
Over the past month, the crypto market has looked like a rising tide for all coins but data suggest growth across the asset class hasnt been equal.
Last week, Bitcoin (BTC-USD) breached $50,000 for the second time in two weeks, extending a rally that put a grim sell-off that started in May further in the rear-view mirror. While notable for its volatility, gains in the the largest cryptocurrency may have gotten lost in the swell of rising prices across the entire asset class.
With a majority of decentralized finance and non-fungible token (NFT) trading happening on the Ethereum (ETH-USD) blockchain, the second largest cryptocurrency by market capitalization rose by a third from $2,700 to $3,900, a growth rate 17 percent higher than BTC.
And other blockchain-based currencies such as the third highest valued cryptocurrency, Cardano (ADA-USD) has more than doubled while a newer one, Solana (SOL-USD), has more than tripled in value over the past month. ADA and SOL have continued to notch almost daily all time highs for the past two weeks.
Bitcoin IRA, an investment platform that helps retail investors gain crypto exposure in their retirement accounts, saw record-breaking inflows of new accounts over the previous month.
We broke our record in the first quarter right before Bitcoin ran from $45,000 to $65,000, the companys Chief Operating Officer, Chris Kline told Yahoo Finance. Were seeing the same pattern happen again. So this past month [August] felt a lot like April, but about twice as big.
Currently, Bitcoin IRA has close to 120,000 client accounts, with approximately $2 billion in assets on the platform. Although platform's heft doesnt move the market, the swell of retail investors opening new accounts especially for tax-advantaged IRA accounts is an indicator of how curious investors are as they seek more traditional ways to participate in this market.
By rough approximation across all accounts, Kline said his clients hold 43% of their portfolio in bitcoin, 27% in ethereum, and the remaining 30 percent in a mix of other cryptocurrencies. The company offers 10 different cryptocurrencies in total, and is planning to more than double their crypto offerings in the fall.
Story continues
Back in early May when Ethereum started rising to its all-time high above $4,000, the company saw a large influx of swaps or pairing from BTC to ETH. It signaled many of his clients were shifting their portfolios from BTC to ETH.
However, in recent weeks? Not so much this time, Kline told Yahoo Finance.
To be sure, there could be a lag. Retail buyers are looking for percentage growth. While bitcoin reigns supreme, it has relatively stable growth while there is exponential growth happening on ethereum. Thats what really gets their attention, Kline explained.
Bitcoin's August peak at $50K served as a key technical and psychological level, according to Will Clemente, an analyst at crypto mining and hardware broker Blockware Solutions.
Clemente told Yahoo Finance that for the last seven days, bitcoins price has remained in what he called a volatility squeeze. The idea being that buyers and sellers have balanced each other out, thereby reducing the assets typically high volatility.
But the analyst suggested that could be about to change. A volatility squeeze for bitcoin usually takes a week to two weeks to resolve.
Thats not telling you the direction, it's just telling you that theres going to be a big move soon, said Clemente.
Analyzing price action alone remains a dominant, more contested method for predicting buyers and sellers around a cryptocurrency. But Clementes specialization, on-chain analysis, has quickly become a crucial tool kit of metrics for investors hoping to gleam some clarity into the nascent asset-class.
Similar to technical analysis, the on-chain technique tries to forecast future moves based on supply and demand. However, it relies on a far larger quantity of data only available for assets operating on publicly available blockchains.
While Clemente cannot predict the price shift of Bitcoin, he pointed to a handful of supply shock ratios, such as the movement of coin supply from speculators to long term holders and the exchange supply ratio, which shows the number of Bitcoins available to buy on exchanges relative to the overall circulating supply.
Each of these metrics continue to rise higher after Bitcoin crested above $50,000, according to Clemente. Historically, supply shocks begin before the Bitcoin price moves upward.
Bitcoin Illiquid Supply (RSI)
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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What August's record breaking month for crypto flows means for bitcoin - Yahoo Finance
CryptoCodex: Crypto Price Extreme Greed As Bitcoin Gears Up For A Big Week And An NFT Bombshell – Forbes
The following is an excerpt from the daily CryptoCodex email newsletter.Sign up now for free here
The cryptocurrency market has stormed into the new month, with expectations high thatbitcoincould break its historically poor September performance. A look back at monthly price data since 2013 shows bitcoin has closed September in the green just twice in eight yearsin 2015 and again in 2016but even then with only small gains.Cointelegraphhas a full write-up. With bitcoin looking healthy today, many areanticipating a pumpthanks to the attention bitcoin's set to see from El Salvador's adoption of the cryptocurrency tomorrow.
The crypto market continues to climb despite sentiment switching to "extreme greed."
Elsewhere, cryptocurrencies across the board are continuing to climb.Chainlink, a 2020 crypto darling, has led the major market higher with a 15% rise over the last 24 hours and adding to gains of almost 40% this past week.Ethereumis holding onto its huge more-than-20% gains over the last seven days but is flat on this time yesterday. Among the crypto top ten Ripple'sXRPpayment token is leading the pack, up 10% on the last 24 hours.Dogecoinis also outperforming other tokens with a 5% gain as an upgrade continues to improve confidence.
Now read this:Cryptocurrencies: developing countries provide fertile ground
Solana, one of the many ethereum rivals jostling for attention, has now climbed to the seventh spot among the worlds top 10 largest cryptocurrencies, after its price has tripled in about three weeks, giving it a value of more than $42 billion, according to CoinMarketCap. The market could be getting dangerously hot, however, with theCrypto Fear & Greed Index, a measure of market sentiment, showing traders are back in the "extreme greed" mindset. With a score of 79/100, the gauge is just 16 points away from its historical top zone, an area that has sparked corrective moves in the past.
TheNew York Times'big weekend of crypto coverage:
-Cryptos rapid move into banking elicits alarm in Washington
-Crypto banking and decentralized finance, explained
-Bitcoin uses more electricity than many countries. How is that possible?
FTX CEO and crypto billionaire Sam Bankman-Fried
NFTs for all:FTX, the derivatives-focused bitcoin and crypto exchange that's seen its volumes explode this year, is ramping up its support for NFTsnon-fungible tokens that digitize all manner of different assets and have become a collecting craze. This morning, FTX chief executive Sam Bankman-Friedtweetedthat the exchange will offer the ability to mint NFTs directly on its platform.
Minted:FTX users, including on the U.S.FTX.US, will be able to create their own artwork and mint them as NFTs directly on FTX and then sell them on its marketplace, with the exchange hoping to win market share from dedicated NFT platforms such as OpenSea to be sold within its marketplace. Other crypto exchanges, including Binance and OKEx, also offer NFT marketplaces to varying degrees and on a mixture of blockchains. FTX NFTs will be cross-chain, across the ethereum and solana blockchains, according to Bankman-Fried. Ethereum remains by far the most popular NFT blockchain despite its eye-watering fees. Bankman-Fried and FTX have close ties to ethereum rival solana.
The big question:Is bitcoin losing its position as the crypto market's leader?
Crypto craze 2.0:The NFT market has roared back in recent weeks, defying suggestions the bottom had fallen out of the market after Beeple's $69 million salein March. Last week, one day's sales volume of the CryptoPunks NFT collection alone touched $150 million, according to data from NFT tracking websiteCryptoSlam. Last month, Visa set the market alight whenit announcedit had bought CryptoPunk #7610 for 49.50 ethereumaround $150,000 at the time's price.
Testing patience:Bankman-Fried's scribble of the word "test" with the caption "I'm testing out a DIY NFT listing onFTX.US" hasalreadyreached a price of $1,100 with 19 bids. But FTX isn't giving out NFTs for free: it will charge 5% to the buyer and to the seller per salea 10% fee in total, it was noted byThe Block.
Now read this:Meet the self-hosters, taking back the internet one server at a time
Don't miss:A father and son who help clients find forgotten crypto passwords estimate billions of dollars worth of lost bitcoin is recoverable
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CryptoCodex: Crypto Price Extreme Greed As Bitcoin Gears Up For A Big Week And An NFT Bombshell - Forbes
Bitcoin miners and oil and gas execs mingled at a secretive meetup in Houston here’s what they talked about – CNBC
Bitcoin enthusiasts, miners, and oil & gas execs gathered at a meetup in Houston to talk about the future of bitcoin mining.
HOUSTON On a residential back street of Houston, in a 150,000 square-foot warehouse safeguarding high-end vintage cars, 200 oil and gas execs and bitcoin miners mingled, drank beer, and talked shop on a recent Wednesday night in August.
These two groups of people may seem as though they are at opposite ends of the professional and social spectrums, but their worlds are colliding fast. As it turns out, the industries make for compatible bedfellows.
Just take Hayden Griffin Haby III, an oilman turned bitcoiner. The Texas native and father of three has spent 14 years in oil and gas, and he epitomizes what this monthly meetup is all about.
Haby started as a surface landman where he brokered land contracts, and later, ran his own oil company. But for the last nine months, he's exclusively been in the business of mining bitcoin.
As Haby describes it, he was "orange pilled" in November 2020 a term used to describe the process of convincing a fiat-minded person that they are missing out by not investing in bitcoin. A month later, he co-founded Limpia Creek Technologies, which powers bitcoin mining rigs with flared, vented, and stranded natural gas assets.
"When I heard that you could make this much money per MCF (a metric used to measure natural gas), instead of just burning it up into the atmosphere, thanks to the whole 'bitcoin mining thing,' I couldn't look away," Haby said. "You can't unsee that."
When China kicked out all its crypto miners this spring an exodus which Haby calls the "Chexit" that poured kerosene on the flames. "This is an opportunity we didn't think was coming," he said.
Haby tells CNBC they are already seeing demand rushing to Texas, and he is convinced that the state is poised to capture most of the Chinese hashrate looking for a new home on friendlier shores.
Bitcoin miners care most about finding cheap sources of electricity, so Texas with its crypto-friendly politicians, deregulated power grid, and crucially, abundance of inexpensive power sources is a virtually perfect fit. The union becomes even more harmonious when miners connect their rigs to otherwise stranded energy, like natural gas going to waste on oil fields across Texas.
"This is Texas, boys. We got what you need, so come on down," said Haby. "We are sitting on the energy capital of the world."
"I think Kevin Costner said it best: 'If you build it, they will come,'" said Haby.
An underground meetup of bitcoin miners and oil & gas execs was held at a 150,000 square-foot warehouse safeguarding high-end vintage cars.
Parker Lewis is one of Texas' de facto bitcoin ambassadors. Everyone knows him. Everyone likes him. And virtually any bitcoiner you ask refers to him as the future mayor of Austin.
Lewis is an executive at Unchained Capital, a bitcoin-native financial services firm. He isn't in politics yet but he is hustling across the state of Texas to spread the good word on the world's biggest cryptocurrency. In May, the Houston Bitcoin Meetup consisted of only 20 people in a fluorescent-lit conference room in an office. Then Lewis decided to get involved.
"I just knew Houston would be prime to explode because of the energy connection to mining if we organized a good meetup," Lewis told CNBC. "It's also key to Texas being the bitcoin capital of the world."
His efforts are paying off. Wednesday's meetup drew more than 200 attendees from across the state of Texas, as well as California, Colorado, Louisiana, Pennsylvania, New York, Australia and the UK.
The buzz was electric on Wednesday night. You had to shout to be heard. And no one in the room mentioned any cryptocurrency beside bitcoin. There was also an unmistakable air of stealth and FOMO. The people who showed up to this event did so, at least in part, because they didn't want to get left behind.
Capturing excess and otherwise wasted natural gas from drilling sites and then using that energy to mine bitcoin is still firmly in the category of avant-garde tech.
Haby, who's affable and an open book on most things, clams up when it comes to sharing the location of his company's mining sites. "West Texas" is as much as Haby would give CNBC, though if the name "Limpia Creek" is any indication, that would place them 100 miles due north of Big Bend National Park.
His secrecy was par for the course that evening.
Oilmen, turned bitcoin miners, Griffin Haby with Conner Murphree and Jordan Kuntz at one of their bitcoin mining sites in Texas.
Bitcoin miner Alejandro de la Torre was born in Spain, but he's spent years minting bitcoin all over the world, most recently in China. When Beijing cracked down on all things crypto, De La Torre got a call from his boss at 3 A.M. telling him he had to go to Texas. He was in Austin the next day.
Since then, he's been shipping his new-generation mining gear to the U.S. in bulk.
"It's all through ships and from the Pacific side," De La Torre told CNBC. "The port depends on the location of where the rigs will end up."
That was as much as De La Torre would divulge, because, as he explains it, any further details about the destination, or the gear itself, could give his competitors an edge.
Bitcoin believers care a lot about privacy, as do the oil and gas guys. Some cited non-disclosure agreements as a reason to speak to CNBC in vague platitudes about business deals. Others were only willing to share their thoughts on the condition of anonymity. And some attendees worried about their job security should their employer find out they were there.
These weren't tycoons -- they were mostly up-and-coming young execs, hungry to get ahead and make a name by taking a gamble on bitcoin mining.
For years, oil and gas companies have struggled with the problem of what to do when they accidentally hit a natural gas formation while drilling for oil. Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline.
If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. "There's no choice. There's no middle finger. Whatever gas comes out that day has to be sold," explained Haby.
But if it's 20 miles from a pipeline, things start to get more complicated.
More often than not, the gas well won't be big enough to warrant the time and expense of building an entirely new pipeline. If a driller can't immediately find a way to sell the stash of natural gas, most look to dispose of it on site.
One method is to vent it, which releases methane directly into the air a poor choice for the environment, as its greenhouse effects are shown to be much stronger than carbon dioxide.A more environmentally friendly option is to flare it, which means actually lighting the gas on fire.
"Chemistry is amazing," explained Adam Ortolf, who heads up business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.
"When CH4, or methane, combusts, the only exhaust is CO2 and H2O vapor. That's literally the same thing that comes out of my mouth when I exhale," continued Ortolf.
But Ortolf points out, flares are only 75 to 90% efficient. "Even with a flare, some of the methane is being vented without being combusted," he said.
This is when on-site bitcoin mining can prove to be especially impactful.
When the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air, according to Ortolf.
"But nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain," he said. "So unless it's economically sustainable, producers won't internally combust the gas."
A panel of bitcoin miners and oil & gas execs share what it's like to mine bitcoin in Texas.
Bitcoin makes it economically sustainable for oil and gas companies to combust their methane rather than externally combust it with a flare.
"There is no such thing as stranded gas anymore," said Haby.
But Ortolf has taken years to convince people that parking a trailer full of ASICs on an oil and gas field is a smart and financially sound idea.
"In 2018, I got laughed out of the room when I talked about mining bitcoin on flared gas," said Ortolf. "The concept of bringing hydrocarbons to market without a counterparty was laughable."
Fast forward three years, and business at Upstream, a company founded by lead engineer Steve Barbour, is booming. It now works with 140 bitcoin mines across North America.
"This is the best gift the oil and gas industry could've gotten," said Ortolf. "They were leaving a lot of hydrocarbons on the table, but now, they're no longer limited by geography to sell energy."
It is also helping to curtail the overall carbon footprint of some of these oil and gas sites. Recent production stats show that in the U.S. alone about 1.5 billion cubic feet of natural gas is wasted on a daily basis. And these are just the reported numbers, so the actual figures are likely higher.
Meanwhile, bitcoin miners get what they want most: cheap electricity.
The thing about all these grand visions for bitcoin mining to stay the course, it requires some manpower on Capitol Hill to safeguard its plan to scale.And right now, politicians in Washington are scrambling to figure out what and how to regulate cryptocurrencies and all the ancillary services that make up the wider ecosystem for digital currencies.
That's why another big topic of conversation at the Houston Bitcoin Meeting was political activism.
"Who knows a staffer or a representative?" one member of the crowd posed to the group. At least half a dozen people raised their hands and one stepped up to confirm they would reach out to their contact in Senator Cruz's office.
There was a sense of momentum in the audience.Several people made the point that the bitcoin contingent across the country had paralyzed a $1 trillion rubber-stamped, bipartisan bill, no small feat for a voting bloc which hitherto hadn't been viewed as much of a threat on the Hill.
But it's not just about being on the defensive for these tens of millions of voters and bitcoin faithful.They're going on the offensive by working to install like-minded people into office so that they can do something "before they do it to us," as one member of the audience said to the group.They're also teaching veteran lawmakers about bitcoin, as many representatives don't understand it.
"We need to target anyone who is anti-bitcoin. There are 45 million of us in America, and we are not silent," said this same attendee.
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Bitcoin miners and oil and gas execs mingled at a secretive meetup in Houston here's what they talked about - CNBC
Yes, Bitcoin Is A Brand. Heres What That Means. – Bitcoin Magazine
Just as the Apple brand is to tech, McDonalds is to burgers, Nike is to sneakers and Coke is to cola, so is the Bitcoin brand to cryptocurrency.
Whoa hold the phone! you say. Bitcoin isnt a brand. It's a currency. Currencies arent brands!
Well, thats a traditional way of looking at it. And Bitcoin is anything but traditional.
Think of it this way: blockchain is a technology. Coins are an asset on the blockchain. Bitcoin is a brand that brings its unique selling proposition to blockchain.
To be clear, Bitcoin is not an ordinary brand. Its what I call a User-Generated Brand (UGB). Because Bitcoin lacks a centralized brand owner or chief marketing officer, it is molded by a large ecosystem of foundation members, technologists, investors, miners, commentators, thought leaders, innovators, journalists and more. Nevertheless, as a UGB, the cumulative effect of its brand assets stand for something.
Still skeptical? Consider this:
Moreover, what makes the Bitcoin brand so intriguing are some other less cut-and-dry factors:
Okay, so youre onboard: Bitcoin is a brand. A User-Generated Brand. Next question you may be asking is: so what? Consider these:
The Contract A great brand, at the end of the day, is a promise (a contract) that the sum total of it what it stands for and how it behaves will provide confidence and comfort that if you put your faith in it (by purchasing, investing, advocating, etc.), youll be rewarded. For all the reasons stated above, Bitcoin is in an enviable pole position, particularly as it relates to wooing institutional investors and their allocation committees who, once fully bought in, would represent a true tipping point in the race to bitcoin adoption. To propel this forward, as a UGB, it is incumbent on the communitys most vocal believers to not just talk amongst themselves (as they are apt to do) but to the masses in ways that will elucidate that promise to them.
The Community A great brand feeds off the passion of its most active users. In fact, passion is the fuel that ignites any brands fire. So while Bitcoin, as a UGB, may not have a chief marketing officer, it does have an army of de facto marketing officers (many of whom read this magazine). Collectively, they believe that Bitcoin and its underlying technology is a true force for good in democratizing finance and have many forums for sharing that point of view. For them, its important to spread the word: Bitcoins primary purpose is not about making money, its about making a change. And, as with any movement, the rubber meets the road when its story can be told in calm and simple terms, using analogies that everyone understands.
The Coattails Versus The Contrarian Project founders, foundations and decentralized autonomous organizations of every size and shape have a decision to make: regardless of their technical or functional relationship, do they ride Bitcoins coattails or cast it off as a fine but flawed product that is ripe for disruption? It will vary from case to case for sure, but contrarians should be forewarned: brands with the community, contract, passion and purpose that Bitcoin has are formidable. While a small group of insurgents may rejoice at the thought of dethroning the king, most of these contrarians efforts will be rejected entirely by the Bitcoin community, as proven by previous hard forks.
The Conventional Wisdom Dominant brands are typically expected to act in conventional ways. In fact, it can be argued, it is the shackles of category conventions that box them in, allowing challengers to erode or overtake their position. So is Bitcoin a conventional player in an unconventional category? Hardly. Conventional behaviors come with time and a sense of dominance that is considered an impenetrable moat. This leads to a risk-averse, defensive posture and possible stagnation. But Bitcoin is still in its infancy and is at the center of a tsunami of innovation. To the UGB community that is pushing boundaries and challenging the status quo I say, Rock on!
To summarize: to some, the very thought of traditional, centralized marketing in the Bitcoin space is antithetical to the category. As with any radical change in conventions and norms, this is to be understood. But, even as a User-Generated Brand, the marketing of Bitcoin most certainly is influential in ways that will certainly evolve over time. As advertising veteran Regis McKenna famously said, marketing is everything, and everything is marketing.
Today, while metrics such as Reddit subscribers, social comments per hour, Twitter followers, website traffic and community size dominate the discussion of brand health (and are closely watched by investors), there will certainly be other, perhaps more influential metrics, as the roles, bullhorns and motivations of key voices decentralized and centralized in the ecosystem evolve.
As it does, you can be sure that Bitcoin will be at the forefront of this evolution. Because if it looks like a brand, acts like a brand and works like a brand, then it is a brand. That its a UGB simply means that you cant expect the same rules that governed branding and marketing over the past 25 years to hold.
This is a guest post by Rich Feldman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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Yes, Bitcoin Is A Brand. Heres What That Means. - Bitcoin Magazine
These 3 altcoins mooned as Bitcoin price rallied to $52,000 – Cointelegraph
The wider cryptocurrency market is showing signs of strength on Sept. 6 as Bitcoin (BTC) bulls battle for control at the $51,500 level.
Altcoins have benefited from Bitcoins strong showing, with many seeing gains in excess of 20%, and the Altseason Indicator from Cointelegraph Markets Pro continues to signal that market conditions are tilted toward further gains for altcoins.
Data from Cointelegraph Markets Pro and TradingView shows that the biggest gainers over the past 24 hours were Oasis Network's ROSE, Parsiq's PRQ and Travala's AVA.
Oasis Network is a blockchain protocol with privacy-enhancing features that create a secure platform for open finance and responsible data management.
VORTECS Score data from Cointelegraph Markets Pro began to detect a bullish outlook for ROSE on Sept. 1, prior to the recent price rise.
The VORTECS Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS Score for ROSE climbed into the green on Sept. 1 and reached a high of 76, around 82 hours before its price surged 135% over the next two days.
The sudden rise in the price of ROSE comes following the Sept. 3 announcement that the project has partnered with API3 and will be co-sponsoring a grant program for development teams wishing to build a Rust version of the protocol's Airnode service.
Parsiq, a blockchain-based analytics platform, saw the price of its PRQ token rally 51% over the past 24 hours.
VORTECS Score data from Cointelegraph Markets Pro began to detect a bullish outlook for PRQ on Sept. 5, prior to the recent price rise.
As seen in the chart above, the VORTECS Score for PRQ climbed into the green on Sept. 5 and reached a high of 72 roughly 12 hours before its price spiked 52% over the next day.
This growing momentum for Parsiq comes following the introduction of its new subscription model that makes the protocol the worlds first decentralized software as a service (SaaS).
Related: US SEC releases fresh investor alert against crypto investment scams
Travala is a leading blockchain-based travel booking platform that offers flights and accommodation services to more than 90,000 destinations in 230 countries and territories around the world.
VORTECS Score data from Cointelegraph Markets Pro began to detect a bullish outlook for AVA on Sept. 1, prior to the recent price rise.
As seen in the chart above, the VORTECS Score for AVA reached a high of 70 on Sept. 5, around 120 hours before its price spiked 54% over the next day.
The spike in price comes as the project has been making its end-of-summer push to engage users, and the project also allows users to spend stablecoins such as USD Coin (USDC) or Dai to book their next vacation.
The overall cryptocurrency market capitalization now stands at $2.341 trillion, and Bitcoins dominance rate is 41.4%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.
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These 3 altcoins mooned as Bitcoin price rallied to $52,000 - Cointelegraph
As Global Inflation Heats Up, Bitcoin Saves The Day – Bitcoin Magazine
The world is breathing a sigh of relief as things normalize after Covid-19 pandemic devastation. Governments are lifting lockdowns, restrictions are being relaxed, and the economy is slowly returning to a semblance of normality. As a result, consumer spending is on the rise.
In April, CNBC reported that the Consumer Price Inflation in the U.S. increased 4.2% from the previous year. Additionally, in June, the consumer price index increased 5.4% from last year, the sharpest jump since the 2008 Global Financial Crisis. Excluding energy and food, the core CPI increased by 4.5, the biggest jump since 1991.
Now, the big question is, what is causing the high inflation?
The Federal Reserve has resorted to flooding the economy with dollars to curb inflation. According to Forbes, the M2 money supply in April 2021 was $20.11 trillion, representing a 30% increase since January 2020. Too many dollars in the system reduces the currency value.
In addition, there is pent-up demand more money going after fewer products that exacerbates the inflation problem. Remember, when the COVID-19 pandemic hit, some manufacturing plants were closed while others downsized their operation. As a result, the market has exhausted its stockpiles. Similarly, the demand for air tickets is up again.
Manufacturers are working against time to match the demand. For instance, the pandemic affected car production. As a result, the cost of used cars and trucks is higher than ever before. The point is, a limited supply of goods, coupled with the expansion of dollars in the economy leads to inflation.
The real rate of inflation is a growing concern especially among economic policymakers. While the whole discussion could be confusing to the masses, it is of critical importance. The next course of action could result in an economic slowdown, an increase in mortgage rates, and high volatility of stock prices. For these reasons, incoming economic data will be critical for financial analysts, policymakers, and economists.
According to AP News, Federal Reserve chairman Jerome Powell argues that the inflation spike is transitory, caused by the reopening economy after the pandemic. While the Federal Reserve maintains the inflation rate will average above 2% and move down after that, many economic experts hold a different view.
According to Bank of America strategist, Michael Harnett inflation could rise by up to 4% and persist longer than the Fed reported. David Roche, president of the investment firm Independent Strategy, holds a similar view. He said inflation could hit 3-4% in mid-2022. This could cause a crisis in the financial market and the U.S. economy at large.
According to the thinkers, Fed measurement tools aren't in line with consumer spending. In other words, the inflation experienced by consumers is understated. Once the consumers start feeling the effects, they are likely to push for higher wages, starting a vicious inflation circle.
The inflation in the U.S. will not spare other countries. High inflation will make the U.S. dollar more attractive against other countries. Therefore, these countries will likely experience capital outflow as investors seek high returns. The result will be market volatility, slow economic growth, and a high-interest rate.
This means countries with dollar-denominated loans will have it rough paying back their loans. In the worst-case scenario, some countries could experience a recession. Needless to say, the whole world is watching, and they want to see how far this goes.
Inflation fears are apparent with economic contraction and government stimulus increasing the global money supply. Bitcoin has positioned itself as a perfect hedge against inflation. Unlike fiat currency, bitcoin is not regulated by the central bank. Additionally, it has a finite supply of 21 million units. This is unlike fiat currency which can be printed in large, as is happening in the United States.
The decentralized nature of bitcoin makes it a perfect store of value. In addition, bitcoin proponents believe the price of virtual currency could increase as investors run from vulnerable conventional financial systems. Therefore, Bitcoin can act as a safe haven for investors.
A good hedge against inflation is an asset that increases its value over time. Bitcoin has withstood the harsh effects of the Covid-19 pandemic with relative ease. It was trading at around $5000 when the Coronavirus was recognised as a global pandemic. Nevertheless, in the last 52 weeks, bitcoin has increased 235% and many analysts that focus on predicting Bitcoin prices went this year as far as to predict that BTC will yet hit the $100,000 mark by the end of Q4 2021.
Inflation has increased over the same period, and while according to Trading Economics U.S. inflation rates data the inflation at first was only 2.6% in March, it swiftly increased in April with CPI hitting 4.2%, 5% in May and finally 5.4% in June. This time bitcoin was proliferating, responding well to inflation.
Therefore, investors who turned to bitcoin to hedge against inflation are smiling. We have seen institutional adoption of the cryptocurrency from companies that see massive potential in bitcoin growth.
Bitcoin is also an excellent hedge against the social disruption and political instability that result from inflation. For instance, runaway inflation leads to increased uncertainty, poverty, and a lack of trust in institutions. Zimbabwe, Argentina, and Venezuela are just some of the examples. While these cases are unlikely in developed countries, it is better to be safe than sorry. Remember, Venezuela was in the past one of the richest countries in the world and look how they are doing now from an economical standpoint. Therefore, using bitcoin as a hedge against instability, broken payment systems, and control by the government is a prudent move.
Usually, rising interest rates is one of the ways to curb inflation. However, many current economies are debt-ridden. Therefore, this move could have the opposite effect. As a result, the inflation rate could continue to rise even as the interest rates increase.
Luckily, bitcoin trading is majorly based on U.S. dollars. Therefore, as the dollar value reduces, there is no good reason why the BTC/USD pair should not continue to increase. In addition, the decentralized nature of the Bitcoin network and the fact that it runs on technology created by anonymous individuals giving no central point of failure or attack, make bitcoin an excellent investment asset. It is not restricted to conventional economics.
Bitcoin is quite safe in the current world environment where old ideas vanish, and new ideas take roots. Moreover, with changing politics and economics, bitcoin is a good hedge against the possibility of a crazy future.
The global nature and limited supply of bitcoin make it an excellent hedge against inflation. It is not controlled by any government or financial institutions. Therefore, it is not prone to economic measures that lead to inflation such as increasing currency supply through printing. In fact, the price proliferation of bitcoin as inflation increased during the Covid-19 pandemic, is enough evidence of its massive potential as a hedge against inflation. Suffice it to say, the cryptocurrency has positioned itself as a safe haven for investors with the rising inflation.
This is a guest post by Jerry Goddard. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
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As Global Inflation Heats Up, Bitcoin Saves The Day - Bitcoin Magazine
Why Bitcoin-Related And Ethereum-Related Stocks Are Rising – Yahoo Finance
Shares of crypto-related stocks, including Marathon Digital Holdings Inc (NASDAQ: MARA), Riot Blockchain Inc (NASDAQ: RIOT) and Coinbase Global Inc (NASDAQ: COIN) are trading higher amid an increase in the price of Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).
Bitcoin is trading higher by 3.7% at $48,800.
Ethereum is trading higher by 7.5% at $3,700.
Marathon Digital focuses on mining digital assets. It owns crypto-currency mining machines and a data center to mine digital assets. The company operates in the digital currency blockchain segment and its cryptocurrency machines are located in Canada.
Marathon Digital is trading higher by 5.1% at $42.65.
Riot Blockchain is focused on building, supporting and operating blockchain technologies. The company's portfolio consists of Verady, Tesspay, Coinsquare and others.
Riot Blockchain is trading higher by 2.2% at $38.13.
Coinbase is a provider of end-to-end financial infrastructure and technology for the crypto-economy.
Coinbase is trading higher by 4.3% at $270.20.
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Why Bitcoin-Related And Ethereum-Related Stocks Are Rising - Yahoo Finance
Scammers Offer Free Bitcoin on Hacked Government Site in Russia as Crypto Fraud Surges Bitcoin News – Bitcoin News
Unknown scammers have organized a fake bitcoin giveaway through a Russian government website they hacked. The news of the attack comes after a recent report revealed that damages from crypto-related fraud in Russia have reached $30 million in value in the first half of this year.
The main website of the local administration in the Russian city of Ryazan, around 200 km southeast of Moscow, has been targeted by hackers twice in a single day, Rzn.info reported quoted by the crypto news outlet Forklog. The unidentified attackers published an ad offering cryptocurrency to those who download a special application.
The scammers initially promised to send 0.025 to every visitor who installed the app. They later changed the offer to a prize of $1,000 in bitcoin for each of five randomly chosen participants in what was advertised as the Ryazani online lottery. Both ads have already disappeared from the mayoral site but the local news outlet published a screenshot of one of the ads.
The volume of cryptocurrency-related fraud around the world has increased significantly in 2021. In the first half of the year, losses amounted to an estimated $1.5 billion, which is two to three times more than the total registered during the same period of last year, experts from the IT security company Zecurion told the Russian daily Izvestia.
According to the report published earlier this week, the Russian Federation accounts for 2% of the global amount some $30 million, or almost 2.2 billion rubles. Analysts believe the main reasons for the spike stem from the growing exposure of users to digital assets as well as the desire to make quick profits in an expanding sector with limited regulations, amid volatility in the traditional financial markets. They also expect crypto fraud to continue to rise this year leading up to a 15% annual increase.
In July, the Central Bank of Russia (CBR) announced it had identified 146 financial pyramid schemes in the first six months of the year. The number is 1.5 times higher in comparison with the same period of 2020. Fraudsters often lure people with weak financial literacy into investment scams linked to cryptocurrencies or crypto mining, the regulator said. The CBR attributed the surge to the increasing activity of unfair market participants and investment demand in Russia.
Blockchain forensics firm Chainalysis revealed this week that crypto addresses based in Eastern Europe have sent $815 million of digital currency to scams in a single year. Over half of the money transferred to scam addresses from the region went to the Russia-based Ponzi scheme Finiko. The pyramid was targeting crypto holders in Russian-speaking populations in the former Soviet space with promises of 30% monthly returns before it collapsed in July.
Do you agree with experts expectations that crypto-related fraud will continue to increase this year? Share your thoughts on the subject in the comments section below.
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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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Scammers Offer Free Bitcoin on Hacked Government Site in Russia as Crypto Fraud Surges Bitcoin News - Bitcoin News
Twitter to enable receiving tips in Bitcoin – Moneycontrol.com
Twitter rolled out the tip jar feature in May through a number of payment gateways like Bandcamp, Patreon, PayPal, Venmo and Cash App
September 06, 2021 / 12:43 PM IST
Twitter is working to add Bitcoin transactions for its Tip Jar which enables content creators to monetize their content.
Twitters product lead Kayvon Beykpour confirmed the development after a user called Alessandro Paluzzi posted a screenshot showing how the users will be allowed to receive tips through Bitcoin. While Beykpour didnt elaborate on the subject, Paluzzis screenshot signals that Twitter is considering The Lightning Network, a payment transfer technology for tips in Bitcoin.
The microblogging platforms rolled out the tip jar feature in May through a number of payment gateways like Bandcamp, Patreon, PayPal, Venmo, and Cash App. It has also added an Indian payment gateway Razorpay for the same.
To send someone money, simply go to the persons profile, click on the tip jar icon, select from the available modes of payment and complete your payment. Twitter has also made it clear that the company takes no cut from the amount you send or receive.
While Tip Jar appears as an icon on iOS and Android, the feature is also accessible within Spaces on Android only.
Twitter CEO Jack Dorsey has time and again displayed his enthusiasm for cryptocurrencies. He had hailed Bitcoin saying it changes everything for the better while retweeting CFO of Square Amrita Ahuja's post reiterating the company's Bitcoin strategy.
Dorsey in February had put out the word that he and rap mogul Jay-Z were creating a fund devoted to making bitcoin digital money "the internet's currency." Dorsey, who is also the founder and chief of financial services and mobile payments firm Square, said in a tweet that he and Jay-Z are giving 500 bitcoin to fund an independent endowment called "Btrust."
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Twitter to enable receiving tips in Bitcoin - Moneycontrol.com
Crypto Exchange Binance Ceases Trading in Singapore Dollars to Comply With Regulations Regulation Bitcoin News – Bitcoin News
Cryptocurrency exchange Binance has announced that it will cease offering trading pairs and payment options in Singapore dollars to remain compliant with the countrys regulators. The announcement followed a notice issued by the Monetary Authority of Singapore (MAS) stating that Binance may be in breach of the Payment Services Act.
Crypto exchange Binance announced Sunday changes to its services in Singapore. The company wrote that to remain compliant with local regulators, it will cease offering SGD trading pairs and SGD payment options on Friday, Sept. 10.
Binance will also remove its app from Singapore iOS and Google Play stores. SGD trading pairs will also be removed from Binance P2P Friday.
The exchange further advised users to complete all related P2P trades and remove all related advertisements by Sept. 9 to avoid potential trading disputes. Moreover, Binance clarified that it is not operating any official Telegram or online communication channels in Singapore.
Our aim is to create a sustainable ecosystem around blockchain technology and digital assets, Binance commented, elaborating:
Binance welcomes developments to our industrys regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators.
The announcement to cease trading in Singapore dollars followed a notice by Singapores central bank, the Monetary Authority of Singapore (MAS), which oversees the crypto industry in the country.
MAS said Thursday that it had reviewed Binance.coms operations and is of the view that Binance, the operator of Binance.com, may be in breach of the Payment Services Act. The central bank added that Binance is required to cease providing payment services to Singapore residents and cease soliciting such business from Singapore residents.
Last week, Binance said it hired Richard Teng, former CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM) as the new CEO for its operations in Singapore. Binance aims to become a leader in regulatory compliance as it pivots into a financial services company.
The global crypto exchange recently became the focus of many other regulators worldwide, including those in the U.K., Netherlands, Thailand, Malaysia, Japan, Germany, Hong Kong, Lithuania, and South Africa. They claimed Binance had been operating without authorization in their jurisdictions.
What do you think about Binance ceasing trading in Singapore dollars? Let us know in the comments section below.
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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.