Category Archives: Bitcoin
ISIS’s $300 million war chest is hidden in Bitcoin, says think tank – Decrypt
The Counter Extremism Project, a non-profit, non-governmental organization that combats extremist groups, believes that as much as $300 million (1.1 billion dirhams) worth of donations made to ISIS could be hidden in cryptocurrency.
The organizations new report, titled Cryptocurrencies and Financing of Terrorism: Threat Assessment and Regulatory Challenges, said that authorities have been searching for this missing war chest since 2017.
Im wondering if from 2017 to 2020 there has been $300 million that we have not found and thats why Im thinking this might have been one of the ways it might have been used, the think tanks director Hans-Jakob Schindler told The National, adding that This would be an ideal storage mechanism until it is needed. If done right, it would be unfindable and unseizable for most governments.
In 2019, ISIS reportedly used cryptocurrency to organize the Easter Sunday terrorist attack in Sri Lanka. Over 250 people were killed at the time as suicide bombers attacked churches and hotels.
ISIS is also considered the first terrorist group that was officially prosecuted in court for its cryptocurrency activities. In 2015, a US teenager Ali Shukri Amin was sentenced to 11 years in jail for providing its supporters with a manual on how to conceal donations with Bitcoin.
As Decrypt reported in March, a US woman was also sentenced to 13 years in prison for sending over $150,000 to ISISmuch of it in Bitcoin and other cryptocurrencies.
Yet it looks like various terrorist groups have been dabbling in crypto even earlier, as there are consistent cases of ISIS and Hamas using cryptocurrencies as far back as 2014, Schindler said.
From the get-go, ISIS has been clearly interested in what can be done with this new technology, he said, explaining that, Cryptocurrency is good for terrorists if they become public because it enables more people to fund them without running the risk of being discovered or stopped.
Schindler also said that EU governments must create a joint regulatory framework since they for once can be ahead of the curve and have time now to work on regulations before it becomes a $100 million problem.
Last summer, a research paper written by Steven Stalinsky, the executive director of the Middle East Media Research Institute, suggested that crypto fundraising for terrorist organizations is becoming more common, as groups look for ways to raise cash bypassing banks and other intermediaries.
In November 2019, officials from the Australian and US governments have also called for further action against the national security threats posed by cryptocurrencies.
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ISIS's $300 million war chest is hidden in Bitcoin, says think tank - Decrypt
S2F Hopium: Report and Twitter Critics Find Flaws With Bitcoin’s Stock-to-Flow Ratio – Bitcoin News
In mid-April, news.Bitcoin.com researched the popular stock-to-flow (S2F), which shows the price of a single bitcoin reaching $55K and even six figures. At the time, analysts questioned measuring bitcoins price in this manner and more recently, a few others have been criticizing the method as well. Just recently, a research report written by the author Francis Tapon finds eight flaws in bitcoins S2F model. Additionally, the well known crypto proponent Eric Wall has shown criticism toward Plan Bs S2F tweets as well.
For well over a year now, crypto advocates have discussed the popular editorial called Modeling Bitcoins Value with Scarcity written by the Twitter account Plan B. The report has caught the attention of the community for quite some time. This is because it predicts the price of a single BTC will be at least $55,000 or even $150,000 in the future. Certain types of crypto proponents love the research and stock-to-flow (S2F) models, but skeptics believe its because it may pad their bullish confirmation bias that someday BTC will be worth tens of thousands and even hundreds of thousands at some point in time.
Basically, the S2F ratio divides abundance with demand by treating bitcoin like commodities such as gold or platinum. This means any analyst can use the model to evaluate the current number of bitcoins in circulation against the number of coins mined during a specific year. The last BTC halving plays a crucial role in the S2F model and if Plan Bs predictions are correct, BTC could be around $55K within the next two years.
However, not everyone believes the model and news.Bitcoin.com discussed this situation during the first week of April. But now there is more evidence that the S2F model may not be as reliable as everyone believes and two critics who have explained publicly why S2F may be bunk. Just before the halving, author Francis Tapon who wrote the books The Unseen Africa and The Hidden Europe, wrote a research report on Plan Bs model.
Tapons argument gives the reader eight reasons why the stock-to-flow model has flaws. The number one reason why S2F has problems is because it defies physics. Some critics say that the stock-to-flow model will break in 2140, which is when we cannot mine new bitcoins. At that point, the S2F model predicts that the price of bitcoin will go to infinity, Tapon explains. Although that is a problem, bitcoins stock-to-flow model is doomed to break at least 100 years before that date. Tapon also stresses in his report, that there are two things BTC would have to do:
[One] Bitcoins price would have to double every year, on average, for the next 30 years. Thats 30 doublings. No asset has ever come close to such a performance. Maybe pre-IPO Microsoft or Google or Walmart had such a rise for 10 years. But doublings become extremely difficult once an asset becomes large. [And two] we would need to invent nuclear fusion reactors and become a Type 1 Civilization. Bitcoin consumes vast amounts of energy. The higher the price goes, the more it consumes.
The seven other flaws Tapon has found include the fact that not everyone agrees on what is golds stock-to-flow ratio, golds stock-to-flow isnt fixed, golds stock-to-flow does not drive its price, some metals with extremely low stock-to-flow ratios are worth more than gold, S2F doesnt explain the prices of other cryptocurrencies, S2F assumes that bitcoins demand continues to grow exponentially, and S2F underestimates the powers that be.
It is also worth noting that Plan B has blocked Francis Tapon on Twitter as well. According to Tapon, he had sent Plan B his analysis for review and Plan B responded by saying: Blocked Reason: pure click-bait (flaw fail doomed, only old and debunked arguments). However, Tapon thinks that his arguments are valid and concluded his report by saying:
The stock-to-flow model has been a novel way of looking at bitcoins early, meteoric years. However, it will soon break because it predicts nonstop doubling year after year. Our solar system prohibits nonstop doubling. Lets be happy with a 14x return in the 2020s. That would result in a $100,000 BTC price in 2029. Still, I secretly hope Im wrong and that the stock-to-flow model is right.
In addition to Tapon, the digital currency proponent Eric Wall has been tweeting about Plan Bs models and his statements as well. On Saturday, Wall tweeted two photos of Plan B explaining what it would take to invalidate his S2F model. Despite the number of critiques published and contradictions, a slew of bitcoiners wholeheartedly believe in the S2F model.
On May 12, the secretary and vice-chairman of the Digibyte Foundation Rudy Bouwman tweeted: Preparing for the next bull run? How long can miners that havent switched off, continue mining with a loss? [The] S2F model has proven highly accurate in charting price performance. BTC to +$100K in the next 2 years? Two days prior, Quantmario published a report leveraging the S2F model called The LGS-S2F Bitcoin price formula It is safe to say that the stock-to-flow model isnt going anywhere for quite some time, but the S2F theory does have its critics.
What do you think about the stock-to-flow model and the criticism? Let us know what you think in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Twitter, Dan Popescu,
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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S2F Hopium: Report and Twitter Critics Find Flaws With Bitcoin's Stock-to-Flow Ratio - Bitcoin News
45 Older-Generation Bitcoin Miners Are Unprofitable After the Reward Halving – Bitcoin News
On May 11, the Bitcoin network experienced its third block reward halving, which had chopped the 12.5 BTC reward to 6.25 coins following the event. Its been close to a week later, and data stemming from mining rig profitability websites show that more than 45 older generation devices are not profitable right now at todays bitcoin exchange rates.
Recent research analysis by 8btc columnist Vincent He and the cryptocurrency mining operation F2pool, indicates that roughly 45 older mining devices have been shut down overnight since the reward halving. Statistics from the web portal Asicminervalue.com, also indicate that the estimate of 45 miners is based on the electrical price of 0.35 Chinese yuan per kilowatt-hour (kWh) or $0.049 USD.
The best mining device out of the entire slew of unprofitable mining rigs would be Bitmains Antminer S11 (20.5 TH/s), which still loses $0.09 per day at $0.049 per kWh. Other machines that are not making profits at this rate, include the Bitfury Tardis, Antminer S9 SE, GMO Miner B2, Innosilicon T2 Turbo, Bitfily Snow Panther B1, Canaan Avalonminer 921, and the popular Antminer S9. Data shows that at $0.049 per kWh, Bitfurys B8 released in 2017 with 49 TH/s, suffers a deep loss of more than $3 a day.
According to Vincent He, with the electric charge of 0.3 Chinese yuan per kWh, the electric charge of an S9 can account for 140% of the whole cost. The Chinese mining operation F2pool states:
Now, only when the price of the bitcoin rises to $15,000, can Antminer S9 cover the cost. In the past, even if there were a mining disaster and the price dump of the mining machine, someone would still buy S9. Most of the recipients are the owners of large mining farms. When the bitcoin price recovers, they can mine it by themselves or sell it to others to earn the difference.
Two days ago, the crypto community finally could observe the loss of SHA256 hashrate that followed the reward halving on May 11. On May 11, the overall BTC hashrate was 121 exahash per second (EH/s) and on May 15, 2020, the overall hashrate is around 110 EH/s. However, statistics from Fork.lols 12-hour intervals show the hashpower could be even lower than that today. These statistics would indicate that a number of operations that leverage older-generation mining rigs, likely fell off the map.
Now everyone knows that in places like China, Central Asia, and Iran, some miners can get free electricity or pay as little as $0.02 per kWh. So taking metrics from Asicminervalue.com and changing the electrical cost to $0.02 per kWh, indicates that only eight mining rigs are unprofitable at that energy rate. Mining rigs that cannot profit at 2 cents per kWh include the Whatsminer M3X, Avalonminer 741, Whatsminer M3, Antminer S7-LN, Antminer S3, Antminer V9, Antminer S7, and the Antminer S5. These eight machines are losing anywhere between $0.09 to $0.19 per day respectively at current BTC exchange rates.
Vincent Hes report also notes that the well known Antminer S9 had also dropped in value on secondary markets almost overnight. The Chinese reporter claims that $100 has been removed from most peoples listings and an older generation Antminer S9 will sell for 100 Chinese yuan (about $14). Years ago, the S9s with 13 TH/s or above accounted for more than 70% of the SHA256 hashrate. The report also highlights that a mining operation owner from the Sichuan province sold his small farm with 8,000 mining rigs and six transformers roughly seven days prior to the halving event. The 8,000 mining rig farm owner, Zhou Wenbo, told the columnist that the buyer was not willing to take his older generation Antminer S9s, Avalonminers, and Innosilicon Terminator 2 machines.
If the data is changed back to $0.05 per kWh again, theres a great number of next-generation miners that are still very profitable at todays exchange rates. This includes the Antminer S19 Pro (110 TH/s), Antminer S19 (95 TH/s), Whatsminer M30S (86 TH/s), Antminer S17 (73 TH/s), and the Whatsminer M31S (70 TH/s). All of these mining devices make between $6-15 per day at $0.05 per kWh.
What do you think about the large number of unprofitable older generation miners? Let us know in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Asicminervalue.com, Ebay, Fork.lol, Blockchain.com
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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45 Older-Generation Bitcoin Miners Are Unprofitable After the Reward Halving - Bitcoin News
Bitcoin to Paint 2 Bullish Golden Crosses This Week, as it Eyes $10.5K Close – Bitcoinist
For Bitcoin analysts, $10,500 is a crucial resistance level.
The worlds leading cryptocurrency leaped that mark in early February for the first time since October 26, 2019. But it failed to hold the level for too long as profit-taking, followed by a surprising price crash in March 2020, engulfed the market sentiment. Nonetheless, bitcoin recovered by more than 150 percent, now inching closer to hit the YTD level all over again.
Technical signals are supporting a $10,500-breach. This week, Bitcoin could form two extremely bullish patterns: a Golden Cross on its daily chart, and a similar crossover on its daily MACD, a trend-following momentum indicator. Both indicators have historically influenced bitcoin traders to open new upside positions.
Bitcoins daily short term moving average is looking close above its long-term moving average for the first time in three months, a positive development for investors betting on the cryptocurrencys long-term upside move.
A 50-200 DMA crossover typically behaves as a lagging bullish indicator. The price starts rising long before its formation but signals an extended upside bias after it is confirmed. For instance, bitcoin had surged by circa 73 percent between bottoming out near $3,200 in December 2018 until the Golden Cross formation on April 21, 2019.
BTCUSD Golden Crosses in recent history | Source: TradingView.com, Coinbase
The BTC/USD exchange rate extended its rally by more than 161 percent after the 50-200 DMA crossover, as shown in the chart above. The wild upside move also took cues from a series of positive fundamentals, including the then-escalating US-China trade war, and Facebooks foray into the cryptocurrency sector with the launch of its digital token Libra.
Fundamentals played a crucial role in Bitcoins daily Golden Cross formation in February 2019, as well. The bullish indicator fizzled shortly after its occurrence, as investors panic-sold their bitcoin positions amidst the growing impact of the coronavirus pandemic on global markets.
This week could mark the formation of the third Golden Cross since April 2019. Its occurrence coincides with halving, a pre-programmed event that slashed bitcoins daily supply rate by half on May 11 from 1,800 BTC to 900 BTC. Analysts claim that bitcoins newfound scarcity will make it more valuable.
The Golden Cross formation also occurs alongside the Federal Reserves open-ended stimulus programs to aid the U.S. economy hit by the coronavirus pandemic. The U.S. central bank and Congress together have injected more than $6 trillion worth of cash liquidity into the system, part of which has entered the bitcoin ecosystem.
The other Golden Cross formation is looking to take place in Bitcoins MACD daily chart.
Bitcoin MACD indicator crossover | Source: TradingView.com, Coinbase
The MACD wave (represented via blue) could cross over its signal line (the oranged plotline) this week, which typically acts as a buying signal. Meanwhile, the crossover is prompting the reddish histogram to flip above the baseline marked by ZERO. It validates a bullish momentum.
MACD works better with the Relative Strength Indicator, another momentum-gauging indicator. Readings on the RSI shows BTCUSD sitting near 63. A downside correction would appear imminent once it hits above 70. That gives bitcoin a seven-point room to grow at least.
BTCUSD RSI six points below the overbought area | Source: TradingView.com, Coinbase
Initially, the price could retest $10,000. It could then follow either a small pullback or an extended breakout session. That would push the RSI above 70 an overbought, bearish area. But, at the same time, bitcoins next pullback target would shift to $10,500.
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Bitcoin to Paint 2 Bullish Golden Crosses This Week, as it Eyes $10.5K Close - Bitcoinist
Fund manager: Past 6 weeks have been one of Bitcoins most bullish periods ever – CryptoSlate
Despite the rallies in Bitcoin and the stock market, the past three months have been the worst months for the economy since the Great Recession, maybe even earlier. Dozens of millions have become unemployed, revenues have fallen off a cliff, and there is growing social unrest as different groups address the COVID-19 pandemic in different ways.
In the face of all this, Bitwises global head of research, Matt Hougan, said in an investor letter titled May 2020: Welcome to Cryptos Fourth Era that the past six weeks have been among the most eventfuland bullishin cryptos history.
Backing the strong assertion that the past six weeks have been among Bitcoin and cryptos best, the analyst pointed to a number of trends indicating that the intrinsic values of cryptocurrencies, especially Bitcoin, have risen dramatically over this time frame.
They are as follows:
With the past six weeks being some of the most bullish ever for cryptocurrency as the analyst suggested, the pressing question of what comes next has been raised.
According to Hougan, the recent trends confirm that Bitcoin and crypto are entering their Fourth Era the fourth large market cycle that will see the very fabric of the industry change dramatically.
This was echoed by Andreessen Horowitzs Chris Dixon and Eddy Lazzarin, who postulated on May 15 that the third crypto cycle came to an end in 2019 while the fourth cycle has just begun.
Hougan predicted there will be three core trends that will define this next era:
What he didnt indicate, however, is how these Fourth Era trends will translate into movements in the value of cryptocurrencies, especially Bitcoin.
But there wasnt meant to be a price prediction as a takeaway. As Hougan indicated, the core point of his report is to illustrate that in the coming few years, cryptocurrencies will become mainstream assets and technologies:
By the end of the Fourth Era, we believe bitcoin and other cryptoassets will be treated as normal investments by most investors. They wont be owned by everyone, any more than everyone owns REITs or MLPs or tech stocks or gold, but they will be considered mainstream.
Cover Photo by Annie Spratt on Unsplash
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Fund manager: Past 6 weeks have been one of Bitcoins most bullish periods ever - CryptoSlate
P2P Bitcoin Trade Volumes and Inflation in Latin America Are on the Rise – Bitcoin News
During the last two months since the March 12 crypto market rout, otherwise known as Black Thursday, demand for cryptocurrencies seems to be on the rise in certain regions in Latin America. Various reports published this week have noted that countries like Colombia, Venezuela, Argentina, Chile, Brazil, and Mexico have seen significant bitcoin trade volumes. However, other reports show that even though the volumes are high in these specific countries, they are hard to measure due to inflation or hyperinflation.
A lot of bitcoin trade volume has been taking place in a variety of Latin American countries. Peer-to-peer marketplaces that sell cryptocurrencies are seeing strong volumes in these regions. According to Coin Dance volume statistics, Colombia, Brazil, and Chile have seen significant bitcoin trade volumes on Localbitcoins week after week. Venezuela and Argentina bitcoin trade volumes indicate new all-time highs and the trend can be seen on Paxful, Mycrypto, Local.Bitcoin.com, and other platforms as well. Because of this vast crypto trade volume in Latin America, it had prompted a number of financial news outlets to report that there is significant demand stemming from these areas. For instance, Nikkei Asian Review staff writer Naoyuki Toyama recently wrote that bitcoin shines in emerging markets plagued by falling currencies, and from Bueno Aires to Beirut, investors embrace cryptocurrency as a safe haven.
Despite the reports, a few media outlets like Decrypt, Crypto Globe, and a few others showed a different side of the story. For instance, it seems people are not taking into account that the fiat currencies in these countries are becoming less valuable every day. Yes, the volumes are at an all-time high in Argentina, but inflation is worse than it has ever been for Argentines in three decades. Well before the coronavirus, Argentinas inflation rate hit 53.8% at the end of 2019.
Venezuela is the same way, as the inflation rate for Venezuelans is massive. In February 2020 the inflation rate was 2,910%, but it did fall to 2,430% in March. However, the significantly larger inflation rate in Venezuela makes it the worst inflation rate in the world by a long shot. Despite the fact that Localbitcoins trade volumes in the country are touching an all-time high, it doesnt compare to the trade volumes in 2017 when the bolivar was worth more.
The Covid-19 pandemic has made things worse in these countries as the economies in Chile, Venezuela, Columbia, Mexico, and all the other regions with high BTC trade volumes have worsened. The troubles have gotten so bad in Venezuela, this week President Nicolas Maduro enacted a rent and wage freeze across the whole country. On many occasions, Localbitcoins data has had some discrepancies, particularly when it used to serve Iran. Not too long ago, many individuals and publications said that Iranians were paying $24,000 per BTC.
The problem with that price estimate was a common misconception about the exchange rate in Iran and how it works. At the time, people observed that one BTC was around a billion Iranian rials, but the exchange rate math is entirely different. An Iranian national named Mehran Jalali explained when these $24K per BTC headlines came out, how people can get the market rate using USD, and the Iranian rial. The going market rate for the U.S. dollar to the Iranian rial is one dollar to 136,500 rials, Jalali said this past January. Making things even more confusing, news.Bitcoin.coms Kevin Helms reported on how Iranian lawmakers recently discussed slashing four zeros from the rial. Localbitcoins, however, banned Iranian traders from swapping digital currencies on the platform and residents now have to leverage other options.
Its hard to measure how much demand is stemming from any country based on Localbitcoins volumes alone. Especially when there are huge discrepancies and massive inflation ruining these fiat currencies from various Latin American countries. The same could be said for the U.S. dollar someday, and economists have predicted the end of the USD after the petro-dollar collapse. Analysts forecast that BTC could reach 1 million dollars, at some point in time, and it very well could happen in the midst of hyperinflation in the U.S. if it was to occur. A number of economists think that the demise of USD very well could happen especially amid the Federal Reserve creating trillions of dollars out of thin air. So if you think about it logically and envision BTC touching a million USD per coin Would it be very meaningful if the USD was near worthless?
What do you think about the trade volumes in Latin America taking inflation into consideration? Let us know what you think about this topic in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Coin Dance, Local.Bitcoin.com
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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P2P Bitcoin Trade Volumes and Inflation in Latin America Are on the Rise - Bitcoin News
Market Wrap: Bitcoin Dips as Stock Markets Close Lower on the Week – CoinDesk – CoinDesk
Bitcoins steady price gains over the past few days ended Friday. With the halving in the rearview mirror, cryptocurrency traders could consider the impact of a continued global economic slowdown after new data showed retail sales dropped to record lows and unemployment numbers continue to worsen.
The worlds first cryptocurrency is trading below its 10-day and 50-day moving averages, a bearish technical indicator. At press time, BTC was trading down 3.4% over 24 hours at $9,340 00:00 UTC Friday (4 p.m. ET). Bitcoin had experienced steady gains since May 13, yet stumbled in early trading at 02:00 UTC Friday, quickly dropping 5%. Since then, bitcoin clawed back some gains but continues to trend downward.
Outside events are much more likely to impact bitcoins price, like a possible crash of the economy" because of COVID-19, said Alessandro Andreotti, an Italian over-the-counter cryptocurrency trader.
Uncertainty still exists in equities amid the coronavirus pandemic, and stock markets have performed poorly this week on the murky economic outlook. Data confirmed that: a drop in retail sales by 16.4% in April, the worst since 1992, and U.S. unemployment claims up over 36 million in the same period.
The S&P 500 U.S. stock index closed down 2.2% for the week, its worst performance since late March. In Europe, the FTSE 100 index of largest publicly traded companies ended trading down for the week 2%. For Asia, the Nikkei 225 of Japans largest companies ended the week down overall for the first time since April.
However, not all traditional assets are performing poorly. Gold and silver are looking strong, said Rupert Douglas, head of institutional sales at crypto asset manager Koine. Gold is up 2.8% for the week.
I think bitcoin will be strong, too, Douglas added. While losing some steam Friday, there is confidence among stakeholders bitcoin can turn things around and its price rise steadily.
One trader points to less leverage in the derivatives market as a sign of that. The number of open leveraged positions are down between 25%-50% across major exchanges since March, said Nicholas Pelecanos, head of trading at crypto fund NEM Ventures.
On Seychelles-based derivatives exchange BitMEX, open interest hit as high as $1.1 billion back on February 9. Since March 12s bitcoin price crash caused $700 million in automatic liquidations on BitMEX, daily open interest has dropped significantly. On Friday it was at $596 million.
To be sure, it appears derivatives traders have less of an appetite for leverage positions specifically on BitMEX, where directional bets can be levered up to 100 times collateral.
This gives us a good indication that if a sell-off begins to materialize, it will be of smaller magnitude than what we saw in March, Pelecanos added.
Andreotti, the over-the-counter trader, says that despite his concerns about economic disruptions, he sees the upward trend for bitcoin to return soon. I think its going to maintain the same demand. Prices might go up a little bit, around the $10,000 range, he told CoinDesk.
The $10,000 level is a key price range to pique the interest of traders wanting to hit the buy button, according to Katie Stockton, an analyst at Fairfield Strategies. A breakout above $10,000 level would likely give way to improved short-term momentum, Stockton noted.
Digital assets on CoinDesks big board are in the red on Friday. The second-largest cryptocurrency by market capitalization, ether (ETH), slipped 4.2% in 24 hours as of 20:00 UTC (4:00 p.m. ET).
Losers in 24-hour trading include bitcoin sv (BSV) in the red 4%, iota (IOTA) lower by 3.7% and zcash (ZEC) slipping 3.5%. Ethereum classic (ETC) was the lone winner, up 3.5%. All price changes were as of 20:00 UTC (4:00 p.m. ET) Friday.
Oil was trading rose Friday by 5.8%, ending the week up 20% because crude supply adjustments have been positive news. As major oil-producing countries have inherited the promise to reduce production, the International Energy Agency predicts that the tight supply of crude oil in the second half of this year will support oil prices, said Nemo Qin, senior analyst for multi-asset brokerage eToro.
U.S. Treasury bonds were mixed Friday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 3%.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
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Market Wrap: Bitcoin Dips as Stock Markets Close Lower on the Week - CoinDesk - CoinDesk
Bitcoin Bears Say These 5 Metrics Will Stop BTC From Reclaiming $10K – Cointelegraph
Bitcoin (BTC) sellers are pinning their hopes on continuing to see sub-$10,000 prices in the aftermath of the halving based on five key futures market metrics.
The five measures are open interest, funding, long and shorts delta, bearish divergences, and liquidity grab at $10,000.
The open interest the total amount of long or short contracts open in the market of Bitcoin futures contracts on BitMEX, Binance Futures, Bybit and other futures exchanges is struggling to increase.
On May 10, when the price of Bitcoin abruptly dropped from $9,570 to $8,100 on BitMEX merely hours before the halving, it liquidated around $200 million worth of longs in a single hour.
At the time, the open interest of BitMEX dropped substantially as many long contracts were either liquidated or forced to adjust their positions.
On May 14, the price of Bitcoin similarly rejected at $9,900, dropping to as low as $9,200 overnight. The rapid pullback caused $42 million to be liquidated. Within a five-day span, at least $270 million worth of longs were liquidated on BitMEX alone.
Bitcoin rejects $10,000 and $9,900. Source: Tradingview
Following the two sell-offs, the appetite of investors in the futures market to enter a trade seemingly declined. It could potentially indicate that buyers are showing signs of exhaustion as selling pressure builds up at a key resistance level of $10,000.
Across three major futures exchanges Bitfinex, Binance Futures and BitMEX, long contracts account for approximately 72.37% of total open interest.
As of May 15, around $661.7 million worth of long positions are open but only $252 million in short positions are filed. The large gap between long and shorts at a multi-year resistance area leaves Bitcoin vulnerable to a possible long squeeze.
Total Bitcoin longs and shorts in the market. Source: Blockwhisperer
In the past week, Bitcoin experienced two major long squeezes in short time periods. Yet, the market is still heavily swayed towards longs and that means there is a lot of liquidity to be taken in the mid-$9,000s.
The Relative Strength Index (RSI) is a momentum oscillator that measures whether Bitcoin is overbought or oversold.
According to a technical analyst known as CryptoCapo, when the RSI of Bitcoin decreases while the price rises, it is considered to be a bearish divergence.
A bearish divergence that emerges in an extended price movement suggests that a sizable correction may occur.
Bitcoin shows bearish divergence. Source: CryptoCapo
The declining RSI and the slowing volume of Bitcoin in both the futures and spot markets could lead to dwindling momentum in the near-term.
For large traders, liquidity in a relatively small market is key. The price of Bitcoin typically moves in extreme cycles because whales seek liquidity at a significantly low or high price point.
When the price of Bitcoin rose from the $9,000 to $10,000 range and rejected it shortly thereafter, BTC absorbed large sell orders primarily on OKEx and BitMEX.
The absorption of sell orders at a pivotal range of resistance and two sharp rejections within a five-day span increases the probability of a continued downtrend.
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Bitcoin Bears Say These 5 Metrics Will Stop BTC From Reclaiming $10K - Cointelegraph
First Mover: Bitcoins Hot Again and Crypto Miners Are Hoarding Or Are They? – CoinDesk – CoinDesk
Bitcoin is rallying again, and some analysts are looking at a potential driver of even higher prices: new data showing that mining pools are hanging onto the cryptocurrency rather than sending it to exchanges for a quick sale.
But as with a lot of bitcoin analysis, the interpretation isn't always clear-cut; the data might be seen differently as a sign of a weak market.
You're readingFirst Mover, CoinDesk's daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you dont have to. You cansubscribe here.
Charts provided by the Korean analytics firm CryptoQuant show a slowdown in outflows from cryptocurrency mining pools, which essentially aggregate computing power to increase their collective chance of getting more bitcoin.
The Beijing-based F2Pool, for example, which currently accounts for 17.1% of the Bitcoin blockchains total computing power, witnessed an outflow of 139 bitcoins on Wednesday, the fewest in nearly six months, according to CryptoQuant. Of those, 29 bitcoins got sent to cryptocurrency exchanges, the fewest in at least a year.
Taken alone, the slowdown shows mining pools are hanging onto the bitcoin rather than transferring them to an exchange for a quick monetization.
But what it means for prices is trickier.
One possibility is the miner community might be expecting a big price rally at some point down the road.
Another is miners might be worried the market is looking weak or thin: If they transferred their bitcoins to an exchange en route to cashing out, the heavy surge in sell orders might cause prices to collapse.
Mining pools typically account for the highest percentage of coins sent to exchanges, so they tend to have a big impact on the market.
The dynamic is analogous to the delicate balance some central banks face when trying to build up foreign reserves or intervene in currency markets. Take the Reserve Bank of India, for example. When the market for the Indian rupee is strong and trending higher, its easier for the RBI to buy U.S. dollars without driving down the value of its own currency. If the central bank buys dollars while the rupee market is soft, the sell-off in the local currency only deepens.
The very exercise of studying mining pool behavior highlights the emerging field of on-chain analysis, in which data gleaned directly from the public blockchain network are aggregated, sorted and charted to map out where the money is flowing.
There are a lot of forces at play right now in the bitcoin market. Originally, the cryptocurrency was designed to be used in an electronic peer-to-peer payment network, but increasingly it has become popular among many investors as a potential hedge against inflation.
And while there's the possibly inflationary forces of trillions of dollars of emergency money injections by the Federal Reserve and other central banks, there's also the deflationary impact of the coronavirus-induced recession, the worst since the early 20th century.
With so much to think about, the thinking goes, on-chain analysis can provide additional clues on where prices are headed.
One issue for the analysts is the data can sometimes seem contradictory.
Another on-chain metric is the miners rolling inventory, or MRI.
This gauge measures changes in bitcoin inventory levels held by the miners. An MRI above 100% means miners are selling more than they mine, while a sub-100% reading indicates hoarding selling less than they mine and building inventory.
On Wednesday the MRI stood at 114%, meaning miners were reducing inventory over the past 24 hours by spending more than they mined. The MRIs for one-week, five-week and 12-week periods also are hovering above 100%.
These signals might be an indication miners see the market as strong enough to absorb the extra selling pressure.
Such efforts to scrub the on-chain data and then interpret them show how cryptocurrency-market investors and analysts are scrambling to keep up with fast-evolving digital-asset markets that are in many ways similar to traditional markets, but in other ways fundamentally different.
"Bitcoin is a bit [of an] alternative, and there aren't really established fundamentals for it, Delphi Digitals Yan Liberman said Thursday on a panel at CoinDesks Consensus: Distributed conference, where analysts discussed different ways of slicing on-chain data.
In that context, he said, the specialized practice kind of becomes fundamental for bitcoin.
Tweet of the day
Bitcoin watch
BTC: Price: $9,572 (BPI) | 24-Hr High: $9,867 | 24-Hr Low: $9,262
Trend:Bitcoin is exhibiting high price volatility while heading into the weekend. The top cryptocurrency by market value fell from $9,750 to $9,262 during the 60 minutes to 03:00 UTC, only to rise back above $9,700 during the early European trading hours.
At press time, bitcoin is changing hands near $9,590, representing an over 18% gain from the low of $8,100 observed a day before Monday's block reward halving. As such, traders may conclude that the pullback from recent highs above $10,000 has ended and the broader bull trend from March lows has resumed.
However, chart analysts suggest a convincing move above the $10,074 is needed to restore the bullish bias. "Bulls need to close this week above the previous week's high to remain in full control,"tweeted NebraskanGooner, a popular trader and an adviser to blockchain intelligence firm Glassnode.
Indeed, a weekly close (Sunday, 00:00 UTC) above $10,074 would invalidate the buyer exhaustionsignaled by the previous week's "spinning top" candle and restore the bull trend on the technical charts.
That said, the bullish weekly close may remain elusive if the cryptocurrency fails to hold at or over current levels according to renowned analyst Josh Rager. "A failure to close (the day) above $9,550 would indicate a top has been made,"Rager tweeted.
The cryptocurrency is currently trading above $9,550, having bounced up from $9,200 early Friday. However, the price bounce lacks credence due to low buying volumes and could be short lived. In fact, the entire rise from $8,100 to $9,940 seen earlier this week has been accompanied by anemic buying volumes.
All in all, a re-test of $9,200 in the next 24 hours cannot be ruled out. Acceptance under that level would shift risk in favor of a drop to the next support at $8,980.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
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First Mover: Bitcoins Hot Again and Crypto Miners Are Hoarding Or Are They? - CoinDesk - CoinDesk
How Investors Are Presented With Bitcoin: ‘A New Decentralized Monetary Asset, Akin to Gold’ – Bitcoin News
Bitcoin (BTC) is a compelling investment case for patient, long-term investors willing to spend the time to understand the top cryptocurrency, a new paper by Paradigm co-founder managing partner Matt Huang notes.
The crypto entrepreneur places BTC besides gold, as a go-to store of value, amid unprecedented stimulus spending by governments during the Covid-19 crisis.
Bitcoin is likely to earn a place alongside gold as a sensible part of many investment portfolios, Huang says in a paper aimed at reaching out to conventional investors, Bitcoin for the open-minded skeptic.
It combines the scarce, money-like nature of gold with the digital transferability of modern currency, he added. At the peak of the virtual currencys adoption curve, central banks may come to view bitcoin as a complement to their existing gold holdings.
Huangs paper is not so much premised on novel insights as it is about mapping a future out of BTCs intrinsic features.
Beyond comparing favorably to some cryptocurrencies for its classic money features such as scarcity (at 21 million coins), portability, and broad accessibility, bitcoin intrinsically improves on traditional assets. Its digital format, programmability, universality, and decentralization are a source of alternative appeal.
Decentralization and immunity to censorship afford BTC holders a special kind of confidence: that bitcoin cannot be devalued by arbitrary monetary policy decisions, and that they will always be able to hold and transfer their bitcoin freely, Huang writes.
This becomes especially important at a time when the markets are unusually exposed to politics, not just benign government interventions but also crisis-related protectionism and bilateral hostilities.
A recurring objection to BTC as an asset class is that it is a bubble but Huang turns the same criticism around in favor of the crypto. Citing Nobel laureate Robert Shiller, he notes that BTC is in good company as gold is also a bubble, being an asset class of no immediate utility but rather valuable for popular conviction about a future value that occasionally pushes the prices up.
Bitcoin bubbles of note, 2011, 2013, 2013-15, and 2017 began with high-conviction investors buying when things were quiet on the front, followed by media attention, speculation, further attention, and investor interest.
Although painful for those involved, each bubble leads to broader awareness and motivates bitcoins underlying adoption, gradually expanding the base of long-term holders who believe in bitcoins potential as a future store of value, Huang explains.
Through successive bubbles, bitcoin reaches greater levels of scale in users, transaction volumes, network security, and other fundamental metrics, he argues.
Bitcoins relative ease of access through in-built financial inclusion mechanisms will be useful in growing its market size as people with eroding currencies are more likely to get the digital asset than they are to get gold or other valuables like art or property.
Political considerations may also work in the cryptocurrencys favor. If foreign governments (some of whom already bristle at their dependence on US dollar forex reserves) begin to adopt bitcoin as a complement to existing gold holdings, the market size for bitcoin could expand significantly, Huang adds without committing to a precise estimate.
Huang contrasts the general optimism of his paper with BTC risks such as volatility and regulation. Volatility, however, aids adoption and may terminate when broad acceptance lead to stability, while regulation can be mitigated by bitcoins decentralized nature.
What do you think about Bitcoins comparisons to gold? Let us know what you think in the comments section below.
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How Investors Are Presented With Bitcoin: 'A New Decentralized Monetary Asset, Akin to Gold' - Bitcoin News