As the 2020 U.S. presidential election draws near, two crypto traders on Twitter shared their predictions for how Bitcoin's price could react to the event.

"If we have a clear winner and an easy transition of power, I do not see much of an impact on the price per coin," trader "BigCheds" told Cointelegraph. "On the other hand, if we have a close and/or contested election, we should see a bounce in risk-off assets like gold and Bitcoin."

The election is a summation of 2020'swild year, with a number of other factors also remaining at play."This election year is certainly different considering what we have seen in the past due to the pandemic and the global economy taking a toll," Twitter trader "CryptoWendyO" told Cointelegraph. "With an event like Covid, one would assume that Bitcoin would pump due to financial market uncertainty, however we are not seeing that," she said.

Crypto Twitter has been filled with political talk in the weeks leading to November's presidential election. The event arrives at the tail end of a year featuring pandemic scares,business shutdowns and economic troubles.

"Tensions are high especially with the election," WendyO said. "Markets need money coming in to flourish and Im not certain that will happen right now as the middle class is holding on to their capital," she added.

Government stimulus money plays into the equation as well, with the current administration failing to reach a decision on further economic support. Mainstream markets and crypto both reacted to news that the president had decided to delay further stimulus talks until the election is over.

"After the election as we will get more of an idea when the economy will open up I believe we will see a change in Bitcoin price and I'm hoping it's bullish but we must pay attention to current price action as well,"WendyO explained, subsequently pointing out Bitcoin's struggle to decisively break and hold above weekly chart resistance levels.

In the short term, Bitcoin's price recently broke back above $11,000, shining a ray of optimism.

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How will the US presidential election affect the price of Bitcoin? - Cointelegraph

Coinbase CEO Brian Armstrong recently sparked a firestorm by announcing his company would now be apolitical.

In a memo posted on Medium, Armstrong argued that political divisions were undermining productivity, and Coinbase should remain laser-focused on its mission. The company then offered severance packages, giving employees until Wednesday, Oct. 7 to send a form signaling their interest. Staying at Coinbase would indicate you are on board with the companys new direction, Armstrong wrote.

Emily Parker is CoinDesk's Global Macro Editor.

Twitter CEO Jack Dorsey pushed back on the memo, pointing out that Armstrongs position is incongruous with Bitcoin, which is direct activism at an exclusionary financial system. In response, Armstrong said: We are political about one thing: our mission. (This includes Bitcoin, crypto, economic freedom, etc.)

Armstrong would like to have it both ways. He wants to be apolitical about the disruptions that make him uncomfortable, but political about Bitcoins mission to disrupt the world. This position is not only somewhat incoherent, it undermines the core principles of Bitcoin.

Here are a few reasons why.

Bitcoin is value-neutral

It is not controlled by any government or political party. It is designed to be resistant to censorship and cannot be shut down. It can be embraced by freedom fighters and money launderers, human rights activists and scammers, liberals and conservatives alike.

Yes, as Dorsey points out, Bitcoin is meant to disrupt the status quo i.e.,the power of banks and the traditional financial system. At the same time, Bitcoin aims to change the world without pledging allegiance to any political camp. So in that sense, Bitcoin is apolitical.

Unlike Bitcoin, Armstrongs mission is not value-neutral. It is advocacy disguised as neutrality.

Armstrongs position is nothing like this. Rather, he is pushing for a status quo that many Americans, including his own employees, are actively rejecting. You can disagree with those employees or dislike their tactics, but it is illogical to say their position is political while Armstrongs is not.

This post by Ranjan Roy and Can Duruk sums up Armstrongs stance: Political apathy is not a neutral stance, but a strongly conservative one, almost by definition. When there are competing forces, one trying to pull you in [one] direction and another forcing you to stay where you are, saying that youd rather not move is picking a side, not removing yourself from the equation.

Unlike Bitcoin, Armstrongs mission is not value-neutral. It is advocacy disguised as neutrality.

Bitcoin is censorship-resistant

The beauty of Bitcoins decentralized technology is that it cant be shut down by any person or entity. Bitcoin makes governments nervous, and for good reason. It gives individuals power over their own money in a way that can dilute the power of the state. In countries like Russia, where political dissidents are targets of bank freezes, Vladimir Putins opponents use bitcoin to raise funds. The Kremlin doesnt like it but it doesnt have the ability to shut the Bitcoin network down. China has cracked down on cryptocurrency exchanges and public sales but has not been able to stop people from buying and selling bitcoin.

Censorship resistance is not the spirit behind Armstrongs memo, which is a top-down directive that declares: We wont debate causes or political candidates internally that are unrelated to work. Clearly, not all employees are on board with this direction, and some appear to have different ideas about which causes are related to work.

According to reporting by Wired, the memo has left Coinbase employees confused about which topics are off-limits. Rather than say clearly what you can and cant say, Coinbase has issued a vague edict that will cause people to curb their own speech. Often, they will err on the side of excessive caution. At the risk of sounding melodramatic, creating an atmosphere of self-censorship is a classic authoritarian tactic.

Armstrongs argument is that the company cant focus on everything, and he is just trying to cut out noise that distracts the company from its larger mission. Some may be sympathetic to this position but its hard to call it censorship-resistant.

Bitcoin cuts out the intermediary

Bitcoin was created to be a decentralized form of money that cuts out the intermediary.

Just look at the Bitcoin white paper. Satoshi Nakomoto wrote: Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

Armstrongs memo highlights an awkward truth about Coinbase: Rather than disrupting the third party, Coinbase is that third party. Far from being a punk rock disruptor, Coinbase is a centralized financial institution. While bitcoin is supposed to be a relatively private form of money, setting up a Coinbase account feels a lot like setting up a bank account, and the company knows a great deal about you.

Coinbase has not consistently adhered to Bitcoins ideals of freedom and privacy. One well-known example was its acquisition of the spyware firm Neutrino, which sparked a #deletecoinbase campaign.

This battle for the soul of crypto is much bigger than Coinbase itself. Some compromises may be necessary for Bitcoin to reach mainstream adoption, but where do you draw the line? At what point does Bitcoin lose the characteristics that made it special in the first place?

Bitcoin is revolutionary. It was born in the wake of the global financial crisis, with an explicit mission to disrupt the banking system. It allows billions of dollars to flow around the world without government oversight. And revolutions, especially decentralized ones, tend to be messy. Coinbase is trying to embrace disruption in some areas while chilling it in others, based on a CEOs judgment over which disruptions are more important.

For better or worse, Coinbase plays an outsized role in the cryptocurrency industry, which is why the memo is getting so much attention. So when Armstrong claims that his mission is about Bitcoin, its worth asking what that really means.

Originally posted here:
Coinbase's 'Mission' Violates the Spirit of Bitcoin - CoinDesk - CoinDesk

Bitcoin has multiple long-term and short-term variables that affect its price, and many folks debate what its major correlations are, if any. It turns out, the same factors that affect bitcoins price real rates of inflation, monetary and fiscal policy and market exuberance also partially determine to which assets bitcoin is correlated.

Over the long run since its launch, increasing user adoption, ever-strengthening security and the widening network effect have propelled bitcoins market capitalization to greater and greater heights. Those are the long-term variables.

Lyn Alden is the founder of Lyn Alden Investment Strategy.

The halving periods tend to act as fundamental catalysts for the next bull market within this long-term trend, as new supply gets cut in half while incoming demand remains robust. As long as that demand indeed remains strong, upward pressure builds on its price, and then when it eventually breaks out, momentum traders hop on board with a new influx of demand and drive it up further.

All pre-programmed halving events occurred during periods where bitcoin had been off from its all-time highs for at least a year, and usually more than one year. On the other hand, the year after a halving has always been great for its price, without exception so far (albeit with a very small sample size), and has eventually led to the next blow-off top and a period of consolidation.

Visualizing post-halving market reactions.(Blockchain.com)

During those long consolidations, bitcoin becomes more correlated to short-term variables related to global liquidity and other risk assets. This becomes especially true as it reaches wider adoption and is invested in by the financial community. Basically, the ongoing debates about the degree to which bitcoin is correlated to other assets would do well to break bitcoins price behavior into two phases: bull runs and consolidation periods.

If we look at percent drawdowns in bitcoin compared to drawdowns in the S&P 500, for example, we can see a lot of correlation over the past two years in this consolidation phase, particularly when sharp drawdowns occur and investors broadly de-risk their holdings.

Percent drawdowns in bitcoin compared to drawdowns in the S&P 500 shows correlation.(YCharts)

More interestingly, during bitcoins consolidation period, it acts a lot like digital gold.

Gold investors have long since known that the single biggest variable for gold price movements has historically been real interest rates. Real interest rates measure the difference between a risk free yield, like the 10-year Treasury rate, and the prevailing inflation rate or expected forward inflation rate.

Whenever real rates go lower, especially if they turn negative, gold tends to spike in price. On the other hand, when real rates rise, gold usually suffers. The period from 1980-2000 was particularly bad for gold because real rates were strongly positive for the entire duration.

This relationship is due to the opportunity cost of holding gold. Gold is a scarce but yield-less asset and has fees for minting, verifying, purchasing, transportation and secure storage. When bank accounts and Treasury bonds pay a yield much higher than the prevailing inflation rate, your purchasing power can grow within the fiat system.

On the other hand, when bank accounts and Treasury bonds no longer keep up with inflation and are being debased with negative real yields, the opportunity cost for gold vanishes. Its inherently inflation-protected zero yield becomes a lot more attractive.

System-wide debt and wealth concentration, unfolding in the backdrop of civil unrest and slow growth will keep pressuring policymakers to stimulate.

Over the past two years, we can see that bitcoin behaved in a similar way during its consolidation phase. This chart shows the inflation-adjusted 10-year Treasury rate in blue on the left axis and the year-over-year percent change in the price of bitcoin in red on the right axis.

In this period, whenever real yields stalled or reversed upward bitcoins price usually would either stall or reverse downward.

Real Treasury yields peaked in late 2018 and have been on a multi-year downtrend into negative territory. Meanwhile, bitcoins price has been in a volatile rebound from the depths it experienced in late 2018 and early 2019.

In this period, whenever real yields stalled or reversed upward bitcoins price usually would either stall or reverse downward. The same phenomenon continued into the second half of 2019 and increased sharply in March 2020 during the deflationary shock. Most recently, it has occurred gradually since the beginning of September 2020.

There are multiple reasons that real yields can change direction and it particularly depends on what part of the yield curve we are looking at. Longer-term rates are mostly controlled by the market. For instance, inflation expectations were on the uptrend this year from their March lows due to stimulus, but stalled and rolled over at the beginning of September when second-round stimulus talks werent going well.

Due to where we are in the long-term debt cycle and current trends of currency debasement, most of the developed world (and particularly the U.S.) is likely to experience negative real yields for its bank savers and sovereign bondholders for quite some time. This wont be a linear process; there will likely be occasional political gridlocks on stimulus, deflationary shocks and other roadblocks, but the trend itself is almost inevitable. System-wide debt and wealth concentration, unfolding in the backdrop of civil unrest and slow growth will keep pressuring policymakers to stimulate.

Going forward, bitcoins price is likely to continue to be affected in the near-term by stimulus outcomes, and consequently shifts in inflation expectations and real yields. Thus, it could very well be correlated to some extent with other risk assets and inflation hedges, like stocks and precious metals.

Over the past month, fundamentals have served as a headwind for these various assets, including bitcoin, because weve been in one of these gridlock, counter-trend, no-stimulus, rising-real-yield periods.

However, when fundamentals turn back into a tailwind, likely due to another stimulus bill being passed and a renewed decline in real rates at some point, bitcoin likely has a lot more upside potential than similar asset classes. The network effect for the protocol remains very strong, and whenever it breaks out to new highs, momentum investors and institutional money have plenty of capacity to propel its market capitalization upwards.

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Lyn Alden: Bitcoin Correlations Depend on What Phase It Is In - CoinDesk - CoinDesk

Yearn Finances native token YFI has been seeing significant capitulation as the price has dropped from an all-time high (ATH) of $43k in mid-September to todays $13,875 USD value. Despite the -67.7% loss since the tokens ATH, the Yearn Finance project still has around $624 million total value locked into the platform.

Yearn Finance and the native token YFI has been a hot topic during the latter half of 2020. This is because the YFI token went from an all-time low of $739 on July 21, 2020, to reaching an ATH of $43k on September 12. In between that time, YFI saw a whopping 5,718% gain for anyone who held YFI at those times. Additionally, on August 29, the Yearn Finance project had around $967 million locked into the protocol according to Defipulse.com stats.

However, since these recent ATHs, both the projects TVL (total value locked) and the native tokens value has plummeted. The projects TVL has slid to $624 million in assets locked on Wednesday, October 7, 2020. Thats a large decent of around -35% since the August 29 TVL-ATH locked into the Yearn Finance project. The coin itself, YFI has lost a critical -67.7% since the September 12 ATH and has been sliding relentlessly since that day.

Some people blame the drop on the lack of trust in Yearn Finance founder Andre Cronje. Not too long ago the decentralized finance (defi) crowd witnessed a mishap with Cronjes secret Eminence (EMN) project. YFI has been getting creamed, tweeted the crypto proponent Alex Krger in regard to the declining YFI value. Recent underperformance relative to other cryptos has been notable. One could argue it is the chart. But it is not. One can find plenty of equally poor charts across crypto. This IMO is the marketplace punishing YFI by removing the Cronje premium, Krger added.

Krger also said:

The main reason IMO was Yearns blatant negligence around the EMN launch, and how poorly the aftermath was handled. Said so when it happened, not in hindsight later. Many exited/reduced YFI positions because of it.

The Eminence (EMN) project was considered bizarre as the unfinished project was hacked for $15 million before it even launched. Even after the incident, Cronje said that he was going to continue building Eminence.

I am still building [Eminence], the Yearn Finance developer wrote on Twitter. I love the metaverse and metaconomy. I am also going to continue deploying test contracts. I have over ~100 deployed contracts, of which probably >half have vulnerabilities.

Still, Cronje was criticized for putting unfinished work on the main network instead of using an Ethereum testnet.

Why put unfinished code on mainnet to be tested? an individual asked Cronje after his statement. The contract should have been on a testnet. Any noob programmer knows not to test on a live server. With great reputation comes great responsibility. You need to own this and return funds fully before the hack.

What do you think about the Yearn Finance and YFI decline, as well as the Eminence controversy? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Yearn Finance Token Value Slides 67%, While Locked Value Loses Over $300M | Altcoins - Bitcoin News

Bloomberg analyst Mike McGlone has predicted that the price of bitcoin will hit $100,000 by 2025. McGlone premised his argument on past bitcoin trends, including the period in which the price took four years to go from $1,000 to $10,000 in 2017.

So, doubling that time frame for maturation could get the price toward $100,000 in about five more years, he said, in Bloombergs Crypto Outlook report for October. Most demand and adoption measures indicate bitcoin is more likely to stay on its upward path.

McGlone observed how that a top metric for adoption, the 30-day average of BTC addresses, is equivalent to a price of about $15,000, suggesting that, at current prices of $10,700, the top cryptocurrency is greatly undervalued. He sees the digital asset breaking above $14,000 by end of 2020.

The number of active bitcoin addresses has soared to 981,000, Glassnode data shows, up from 684,000 at the beginning of this year, when the assets price averaged around $7,700. When active addresses hit nearly 1.1 million on December 23, 2018, bitcoin traded for $14,800, on the average.

McGlone, a senior commodity strategist at Bloomberg, also pointed to bitcoins increasing hashrate, growing institutional investor interest, the coins limited supply as well as failing global macroeconomics as potential key drivers for future price growth. He uses the example of the Grayscale Bitcoin Trust (GBTC) as a direct indicator of investor demand.

Today, the trust holds the equivalent of about 450,000 BTC. A year ago, it held less than half that amount, indicating rising institutional investor interest. Inflows in GBTC, the largest exchange traded product, absorbed about 70% of new bitcoin supply in third quarter of this year, according to the report.

The report also speculates that the market capitalization of tether (USDT) will surpass that of ethereum (ETH) by 2021, to become the second-largest cryptocurrency in the world. In recent months, tethers market cap has exploded to $15.6 billion as more investors look to stablecoins to preserve the value of their coins. ETH market cap currently hovers around $39.6 billion.

Indicating demand for a digital version of gold (bitcoin) and a crypto-asset like the dollar, if current trends prevail, the market cap of tether may surpass ethereum next year, it said. Increasing adoption of stable coins is likely a precursor for central bank digital currencies and promises to be more enduring than alt-coin speculative excesses.

What do you think about bitcoin getting to $100,000? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Bitcoin To Hit $100,000 in Five Years as Demand and Adoption Increase - Report | Markets and Prices - Bitcoin News