Category Archives: Bitcoin
Proving That Tether Manipulated Bitcoin 2017 Bull Run Wont Be Easy – Cointelegraph
The iFinexTether market manipulation lawsuit continues. Last week, Judge Katherine Failla of the Southern District of New York selected Roche Cyrulnik Freedman as interim lead plaintiff counsel, and four civil actions were consolidated into a single class action: Leibowitz v. iFinex Inc.
In the complaints, iFinexs subsidiary, Bitfinex, and related stablecoin Tether (USDT) are charged with manipulating the Bitcoin market in 2017 something the firm strenuously denied.
This isnt shaping up as an ordinary civil action. As Failla observed in announcing her lead counsel decision on Feb. 27 via a telephone conference call, she claimed that the case combines old and new:
The cryptocurrency law is quite novel [with] lots of issues and not a lot of resolution, but there is a lot of established law out there as well with respect to pleading requirements, with respect to traditional antitrust issues and RICO and the Commodities Exchange Act.
The case has reached an inflection point where the plaintiff groups that had been competing among themselves for primacy must now coalesce and confront iFinex Inc. directly. Its a good time to ask: What sort of challenges await the litigants?
Felix Shipkevich, an attorney specializing in cryptocurrency-related legal and regulatory matters at Shipkevich PLLC, told Cointelegraph: I am pessimistic that they [i.e., plaintiffs] will be able to overcome the hurdle of proving market manipulation of a decentralized currency like Bitcoin.
The scope of market manipulation can differ from industry to industry, said Shipkevich. Its one thing to prove market manipulation with commodities futures but another to prove it with equity securities. Cryptocurrencies are still so new that it isnt clear which way the courts will lean with regard to market manipulation.
Price manipulation claims under the Commodity Exchange Act (CEA) are difficult to prove, according to a statement to Cointelegraph by Anne Termine, an attorney with Covington & Burling LLP and former chief trial attorney for the United States Commodity Futures Trading Commissions (CFTC) enforcement division. She added: Proving a price manipulation charge where Bitcoin is the underlying commodity just adds another layer of complexity.
In proving market manipulation, there are typically four prongs, or factors, that have to be taken into account, said Shipkevich. Two of these may be problematic for the plaintiffs: Was there deceptive intent to manipulate the market? In other words, did people collude to move the price of a commodity up or down? Because of the decentralized nature of crypto exchanges and ledgers, this could be difficult to prove in the case of Bitcoin.
Another factor is market dominance. A firm typically has to be able to dominate a market to manipulate it. If one buys up all the crypto in an initial coin offering, thats a closed loop, and the path to dominating or monopolizing that market becomes a real possibility, said Shipkevich. But how do you prove price dominance with regard to BTC, which had a market capitalization of $166 billion on March 6? It might be difficult. Termine added to the notion:
Price manipulation requires proof of the ability to create/cause artificial prices and proof that the defendants, in fact, caused the price of the futures contract the Bitcoin futures contract, in this case to be artificial. While facts can be used to establish the requisite specific intent and the ability to cause artificial prices, proving an artificial price did, in fact, occur can often be a difficult and technical but-for analysis.
What seems clear, however, is that Tether continues to play an outsized role in Bitcoin trading. In December 2019, BTC trading into USDT represented 76.2% of total BTC volume traded into fiat currencies or stablecoins, according to CryptoCompares Exchange Review December 2019. Its been even higher in the past and suggests at least the possibility of leverage if not dominance. As Ohio State Professor John Griffin told Newsweek in November: Crypto can be pushed around easily by big whales. In a statement sent to Cointelegraph, Tether General Counsel Stuart Hoegner vehemently denied any wrongdoing:
Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing. All Tether tokens are fully backed by reserves and are issued pursuant to market demand and not for the purpose of controlling the pricing of crypto assets.
Sidharth Sogani, founder and CEO of Crebaco Global Inc., a crypto and blockchain credit rating and audit firm, told Cointelegraph that stablecoins, in general, are detrimental to both cryptocurrencies and fiat currencies because they create manipulation and creation of artificial wealth, resulting in economic inflation.
As for Tether, specifically, the company is incorporated in the British Virgin Islands, which doesnt inspire confidence from a regulatory compliance standpoint, Sogani said. The British Virgin Islands and the Cayman Islands country risk assessment is Category C, per Crebacos standards, adding:
There are more chances of frauds, MLMs [multi-level marketing schemes] and scams arising out of these countries due to the lack of regulations for digital assets.
Since 2014, iFinexTether has been essentially self-regulated. In its intelligence reports, Crebaco uncovers serious flaws in USDTs compliance, reserves and circulation throughout many exchanges and wallets, Sogani informed Cointelegraph.
In October, Shipkevich told Cointelegraph that he was not surprised that a class-action lawsuit had been brought forth against both Tether and Bitfinex, considering the legal pursuit these entities have been facing by the New York attorney general over the past year.
The New York State Attorney Generals office has been investigating the company for potential securities and commodities fraud after the company allegedly moved Tether reserves over to affiliate exchange Bifinex after it lost $850 million earmarked for user redemptions. In a Dec. 13 filing, lawyers for Bifinex and Tether said that the NYAG didnt have the authority to investigate the companies because Tethers are not securities or commodities.
The issues in the current case arent entirely clear, and this may have figured in Faillas selection of Roche Cyrulnik Freedman as lead plaintiff counsel. According to the transcript of the telephone conference, the judge had four criteria in mind for picking a lead counsel: The work that counsel has done, the experience of counsel, the knowledge of the applicable law, and the resources that have or will be committed. Here, any of the three competing firms would have sufficed, she said.
Related: Top Cryptocurrencies Are Exponentially More Liquid Than Ever Before
The definition of the injured class differed among some of the firms, however. As reported by Cointelegraph, two of the vying legal groups Roche Cyrulnik Freedman LLP and Kirby Mcinerney LLP defined the class action of their respective injured parties in a broad sense, while a third, Robbins Geller Rudman & Dowd LLP, restricted its class definition to investors in Bitcoin and Bitcoin futures. According to Brian Cochrane of Robbins Geller:
Roche defined it as anyone who owned crypto over the last six years. Thats overwrought much too broad. Bitcoin and Bitcoin futures are closer to my definition of the class. Not all cryptos should be included. That would simply be taking money from real victims and giving it to others.
Failla, however, decided against this more restricted definition of the injured class: I can't agree with a class as narrow as that initially defined by the Robbins Geller firm, and my concern here is they're cutting off the line too soon into the matter. Robbins Geller was thus eliminated. Next, Failla had to choose between Roche and Kirby.
This was close a call, she recounted, but after looking at the firms work products in other cases, the judge felt that the Roche firm would best illuminate the issues, new and old, that I believed are going to be implicated by this litigation So, I am granting their motion for appointment as interim lead plaintiff counsel.
Is this likely to be a significant case for the crypto world? Generally, yes, answered Shipkevich, but not as significant as some other cases, like Telegram or others involving the Securities and Exchange Commission, CFTC or the states. This case is in such an early stage that it is difficult to say if it will be a precedent case for market manipulation in the crypto world.
According to Sogani, USDT remains the largest stablecoin by far and is listed on all the major exchanges and wallets. Any [court] decision will impact the industry directly. Furthermore, Termine told Cointelegraph:
There are some courts that have found that Bitcoin is a commodity in interstate commerce, but it is by no means a settled issue. It does help that the agency responsible for enforcing the CEA, the CFTC, has publicly taken the position that Bitcoin is a commodity. How a jury will see the issue is not a certainty. As such, any decision by the court on each of these issues will be closely watched by the industry.
The case is complex, Termine added, and the charges here go beyond price manipulation they also include fraudulent manipulation. Then, what has to be alleged and proven in private lawsuits, like this one, is often different from what is required when a government agency like the CFTC brings an action.
Related: Tether Stablecoin: Can the Crypto Market Live Without It?
Shipkevich wouldnt venture to say whether a settlement as opposed to a court decision in this case, is likely. But if I were Tether, Id be litigating until I ran out of money. To settle would be to declare open hunting season, he told Cointelegraph. The firm could expect to be besieged by lawsuits.
One can expect that the defense, led by Walden Macht & Haran LLP, will now file a motion to dismiss the case. This process, which would culminate in an oral argument before Failla, might take six months.
If the defense prevails, iFinexTether wins the case. If the plaintiff group survives the motion, however, things could really heat up. Plaintiffs take depositions, they gain access to trading data, and all sorts of scenarios could emerge. When Cointelegraph asked iFinex Inc. to comment for this story, a company spokesperson replied:
We have no further comment at this time beyond our most recent statement and look forward to putting the facts before the court, and addressing the baseless allegations in the judicial forum.
The SEC and CFTC both agree that Bitcoin is a commodity and should be regulated as such and there is established law to determine if and when the price of a commodity has been manipulated.
However, Bitcoin isnt a material commodity like oil or silver, and as recently as October, CFTC Chairman Heath Tarbert speculated that a cryptocurrency could move from being a security to a commodity and change back and forth. Cryptocurrency law, too, is still novel, as Failla observed i.e., it is a work in progress. It comes as no surprise, then, that proving price manipulation in regard to something as elusive as BTC might be a challenging task for the aggrieved parties in this case.
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Proving That Tether Manipulated Bitcoin 2017 Bull Run Wont Be Easy - Cointelegraph
Bitcoin Price Analysis: Elliott Wave Theory suggests price could fall further – FXStreet
So if you are not familiar with Elliott Wave the chart below can seem confusing. Here is a link that could help you understand what is going on (https://www.fxstreet.com/technical-analysis/elliott-wave)
Going back to the chart now, the price is still in a 5 wave low pattern but it is important to work out which wave the pair is currently in. The wave 1-2 is now set, this can often help you determine where wave 3 will end up as we can use Fib projection (blue). The Fib projection for waves 1-2 is telling us that the price has gone past the 261.8% projection so this could easily be wave 3 at the moment.
Wave 3 usually subdivides into smaller waves. This is also a 5 wave pattern lower following the rules of Fibonacci. I have marked these waves in red as it will be easier to follow. The wave pattern down in red might not be over. At the moment we are at the red 161.8 Fib extension. In theory, this can reach 261.8% so there could be another leg lower.
That is not to say there will not be some small retracements in the meantime. As you can see from the chart these Fib waves are pretty accurate and offered some great counter-trend trade opportunities. Having said that catching the waves in the direction of the prevailing trend is the best strategy.
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Bitcoin Price Analysis: Elliott Wave Theory suggests price could fall further - FXStreet
Tezos Price Makes Gigantic Steps Eyeing $3.0 As Bitcoin Price Deals With Rejection At $8,000 – Coingape
Tezos price is leading recovery in the cryptocurrency market, especially in regards to the top ten digital assets. XTZ/USD is up 3.83% in the last 24 hours while Bitcoin price has grown by 1.78% in the same period. In the last seven days, Tezos has lost 7.89% of its value while Bitcoin is down 9.76%. The biggest loser among the top ten cryptoassets is Bitcoin SV, after dumping 18.80% in the last seven days.
Bitcoin price recently sunk from levels above $9,000 to test the support at $7,600. A recovery ensued on Tuesday where BTC advanced past the resistance at $8,000. The bulls pulled the price higher but they lost steam short of $8,200. A reversal followed with the price diving back under $8,000. At the time of writing, Bitcoin is trading at $7,904 amid struggles to sustain gains past the $8,000 level.
The 4-hour chart for XTZ/USD shows the price gearing up to tackle the sellers congested at the confluence created by the 50 SMA and the 100 SMA. The groundbreaking milestone for Tezos would be a jump above the hurdle at $3.0. Other technical indicators such as the RSI suggest that the bulls are largely in control. The MACD is advancing towards the positive region while the bullish divergence from it signals that buying pressure is on the rise.
However, the formation of a pennant pattern threatens to end the upside action and force a continuation of the recent downtrend. If the breakdown occurs, support is expected at $2.50, $2.25 and $2.00.
Spot rate: $2.61
Relative change: 0.0259
Percentage change: 1.00%
Trend: Bullish
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Tezos Price Makes Gigantic Steps To $3.0 As Bitcoin Price Deals With Rejection At $8,000
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Tezos price bulls defy the selling pressure on the market to post over 3% gains in the last 24 hours.A formed pennant flag pattern hints that a reversal is possible in the coming sessions.
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John Isige
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Coingape
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Tezos Price Makes Gigantic Steps Eyeing $3.0 As Bitcoin Price Deals With Rejection At $8,000 - Coingape
Interlay Receives Web3 Foundation Grant for Bridging Bitcoin to Polkadot – Cointelegraph
Interoperability project Interlay has been selected to receive a Web3 Foundation grant to continue its work on Polkadot. The money will be used to develop a parachain on Polkadot that will connect to the Bitcoin (BTC) blockchain.
According to the March 5 announcement, Interlay is one of the recipients of Web3 Foundations fifth wave of grants deliberated in Q1 2020.
The Web3 Grants program funds teams and projects working to improve Polkadot in a variety of contexts. Each grant is for a maximum of $100,000 and is tied to the execution of specific proposals, though the foundation does not disclose the final amounts granted for each.
The funding is primarily earmarked for software developers building infrastructure for Polkadot. Key areas of focus for software are parachains and integration with other projects, testing tools, new wallets and UI development.
The foundation will also fund research efforts into Polkadots security, benchmarking and protocol, as well as educational initiatives.
Interlay calls itself an interoperability project for decentralized finance (DeFi). It has developed an interoperability framework called Xclaim with the purpose of creating assets backed one-to-one across different chains. The company has been working on a blockchain-agnostic implementation of Xclaim since 2018.
The Xclaim relies on collateralized intermediaries to facilitate the transfer of funds from one chain to the next. The system also allows users to become its own intermediary, similar to how atomic swaps would work.
The developers argue that Xclaim is 95% faster and 65% cheaper than atomic swaps based on Hash Time Locked Contracts (HTLC).
The Polkadot project is led by Parity Technologies, a company co-founded by Gavin Wood, who previously co-founded Ethereum (ETH). It aims to be an implementation of a sharded and interoperable blockchain, directly competing with Ethereums platform.
The project has been in the news for several high-profile integrations of ecosystem players that are primarily oriented toward Ethereum. On Feb. 25, it announced an integration with Chainlink to provide Polkadot-based oracles a key feature for enabling DeFi.
A few days before that, a strategic collaboration with Celer Network was announced to bring its layer-two sidechains to Polkadot.
With the Interlay grant, it appears that the project has now set its sights to bringing Bitcoin over as well.
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Interlay Receives Web3 Foundation Grant for Bridging Bitcoin to Polkadot - Cointelegraph
Bitcoin’s $9,000 Price Stays Steady as Sentiment Stays Positive – CoinDesk – CoinDesk
As global equity markets continue to get pummeled, bitcoins return to the $9,000 level may have been driven by some of the same forces causing a rally in bonds a desire for respite from a coronavirus-plagued markets.
After sharp gains in price Thursday, bitcoin (BTC) has been trading steadily in a range between $9,000 and $9,200. For the past 24 hours, bitcoin's price change has been minimal, down half a percent as of 18:00 UTC (1 p.m. ET).
Traders see bitcoins jump back into the $9,000 range as another sign bitcoin is trending upward in 2020 while traditional markets stumble. Year to date, bitcoin is up over 26 percent while the S&P 500 stock index is down 9 percent. Cryptocurrency sentiment appears bullish as prices remain above significant moving averages.
Although traders seem to be open to viewingthe cryptocurrency markets as a safe haven from stock market turmoil, more volatility is possible ahead of Mays halving, an event that will slash in half the reward bitcoin miners obtain.
It's a relief rally. In my opinion, we have a likelihood of sweeping another low before the post-halvening rally, said Mostafa Al-Mashita of Canadian crypto brokerage firm Secure Digital Markets.
I believe gold and BTC are safe havens, said Henrik Kugelberg, a Sweden-based crypto OTC trader. As coronavirus has just started to spread, I believe a strong market will last well until the halving will have effect. To me it seems plausible that we can hit an all-time high this year, perhaps within six months.
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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Bitcoin's $9,000 Price Stays Steady as Sentiment Stays Positive - CoinDesk - CoinDesk
Novogratz On Bitcoin & Beyond: Redefining The Digital Assets Ecosystem – Forbes
Michael Novogratz, CEO & Founder, Galaxy Digital
Julie Cooling, Founder & CEO,RIA Channelinterviewed Michael Novogratz, CEO and Founder ofGalaxy Digital, a merchant bank dedicated to digital assets and blockchain technology. In 2018, Galaxy launched the Bloomberg Galaxy Crypto Index (BGCI), an index set to track the performance of the larger, liquid cryptocurrencies such as bitcoin, Ethereum, and XRP. Galaxy recently launched the Galaxy Bitcoin Funds, which provide simple and secure bitcoin exposure for institutional and accredited investors. They currently manage over $350 million in assets.
Blockchain is a proven technology of peer-to-peer networks actively used today by some of the largest institutions in the world to digitize their businesses and improve efficiencies. In order to transact within a decentralized environment via any blockchain technology, cryptocurrencies are required. Many cryptocurrencies are used as a means of exchange, while bitcoin is widely regarded as a store of value and an alternative to other hard assets such as gold. The IRS classifies cryptocurrencies as assets, and its perfectly legal to use bitcoin to transact business.
As more and more mainstream companies embrace digital assets and invest in infrastructure to support it, the overall system should become safer and company values within this asset class should increase. Fidelity now offers custody of cryptocurrencies, for example. Facebook recently announced Libra, a new cryptocurrency set to release in 2020 to facilitate global payments and empower consumers with low cost, easily accessible capital. Some investors are concerned about the recent volatility of bitcoin and the overall value of digital currencies. Warren Buffett has been quite outspoken on his disdain for cryptocurrencies, calling them an elusion, and claiming he will never invest bitcoin.
While skeptics sideline their investments, Novogratz points to younger generations that maintain a higher comfort level in the digital ecosystem and who are actively investing in bitcoin, blockchain companies, and modern payment platforms. Novogratz further points to the asset class as a whole as being non-correlated with equity and bond markets, adding diversity to portfolios and thus lowering overall portfolio risk. A macro hedging expert, Novogratz is no stranger to risk, and considers bitcoin and the entire digital assets universe an opportunity with many unknowns. As investor education, transparency, custody and access points improve, Novogratz plans to participate by investing methodically and wants to bring his investors along with him.
For more information on Galaxy Digital, watch the recent RIA Channel webcast:Diversifying with Digital Assets.
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Novogratz On Bitcoin & Beyond: Redefining The Digital Assets Ecosystem - Forbes
Stop Treating Bitcoin as Risky. It’s a Safer Asset Than Most – CoinDesk – CoinDesk
Jill Carlson, a CoinDesk columnist, is co-founder of the Open Money Initiative, a non-profit research organization working to guarantee the right to a free and open financial system. She is also an investor in early stage startups with Slow Ventures.
People think I got into bitcoin (BTC) because I have a high risk tolerance.
Actually, I got in because I have a low risk tolerance for worst-case scenarios.
Bitcoin is often touted as a risky bet. It is nascent. It has only been around for about a decade. It is poorly understood by mass markets. It is an experiment. It could still fail. All of these claims are true. In many ways, the risk profile of bitcoin resembles that of an early stage startup. Bitcoin appears to be hovering between the trough of disillusionment and the slope of enlightenment. This means that most people continue to view cryptocurrency as kind of crazy. Its a gamble.
These dynamics mean that investors often bucket bitcoin as a risk asset. It gets put in the same category as high-growth stocks, high-yield debt, high-beta exchange-traded funds, venture capital investments and emerging markets.
Markets broadly have two modes: risk-on and risk-off. In risk-on scenarios, when markets are confident and things are moving higher, risk assets tend to outperform safe havens. When the markets are risk-off, safe-haven assets like gold, treasury bonds and cash fare better, and are often the only investments trading higher as investors sell out of their riskier positions.
Whether a financial product is a risk asset or a safe haven depends on a number of properties. In some cases it depends on the fundamentals of the asset. Share price is a reflection of the projected future cash flows of the business, which in turn depend on dynamics like customer demand. The dynamics can make companies more or less subject to movements of the markets. In other cases, the categorization of a given asset might depend on supply and demand dynamics. Gold, with its relatively fixed supply and consistent demand from entities like central banks, is resilient to market cycles and downward shocks. In all cases, however, I would argue that what matters most in understanding asset correlations and behavior is market perception. Do traders and investors view the asset as a good place to hunker down in volatile markets? Or do market participants view the investment as vulnerable to the downside, but also prime to participate in boom cycles?
The markets certainly still seem to view bitcoin as the latter. And as far as the price of bitcoin is concerned, and as far as any market correlations are concerned, that perception is all that matters.
This perception misses bitcoins most important properties. Bitcoin is, in many ways, the ultimate safe haven asset. It can be self-custodied, so even when systems of trust and rule of law breaks down, it can be held. It is open and borderless, with relatively liquid markets in every country in the world. It is censorship-resistant, meaning no government nor institution can, practically speaking, prevent investment or transaction in bitcoin. Bitcoin has a fixed supply, much like gold. Bitcoin is digital, which makes it practical to hoard, hold and transport. For doomsday preppers, dystopian sci-fi fans and apocalypse predictors, there is a lot to like about bitcoin.
Yet, if we look at the behavior of the bitcoin price over the last couple of weeks, as concerns over a global pandemic have ramped up, it is clear that bitcoin continues to behave more like a high-risk investment than like the safe haven which it promises to be.
Do the markets have it wrong? Should bitcoin be more correlated with gold than with Apple stock? Maybe. But as John Maynard Keynes put it, The markets can stay irrational longer than you can stay solvent. The road to having bitcoin understood and viewed as a safe haven is a long one, demanding deep investment in education. What matters is the narrative around the asset, and right now the narrative around bitcoin is that it is an early-stage, high-risk bet. As far as the markets are concerned, that perception is reality.
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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Stop Treating Bitcoin as Risky. It's a Safer Asset Than Most - CoinDesk - CoinDesk
Bitcoin, Uncertainty and the Ultimate Narrative – CoinDesk – Coindesk
Noelle Acheson is a veteran of company analysis and CoinDesks director of research. The opinions expressed in this article are the authors own.
The following article originally appeared in Institutional Crypto by CoinDesk, a weekly newsletter focused on institutional investment in crypto assets. Sign up for free here.
If there ever was a week when crypto narratives got confusing, it was last week.
Those who believe in bitcoins safe-haven narrative (fewer in number by the hour) are struggling to make sense of the correlated slump which left the bitcoin (BTC) price down even more in percentage terms over the past two weeks than the S&P 500 (-15 percent vs -12 percent). Gold, bitcoins analog counterpart, actually went up (4.5 percent).
Those that maintain it is a risk-on asset (growing in number by the hour) are transfixed by the jump in correlation between bitcoin and the S&P. Whatever happened to the pitch on the importance of having an uncorrelated asset in your portfolio? (True, its still at a low level, but its no longer negative.)
While analysts and fund managers produce arguments for bitcoin being both risk-on and risk-off at the same time, the bigger crypto story is happening beyond our markets. And it is worth paying attention to.
The stock market's shellacking last week seems to have been triggered by concerns about the economic impact of supply chain disruption and production slowdowns caused by coronavirus prevention measures. While these factors are unlikely to have a big impact on bitcoin fundamentals (no matter how delayed mining equipment deployment gets, the protocol will keep doing its thing), in times of fear investors exit riskier assets. They also exit liquid assets, and bitcoin is probably easier to offload than other high-risk holdings such as thinly traded stocks or private equity.
Supply chain impact
Moving beyond markets,the disruptions will have a deeper and longer-lasting impact on global supplychains. This threat, combined with building tensions elsewhere, couldeventually consolidate cryptos risk-off status, and endow it with the use casethe market has been waiting for.
Unless the coronavirusspread is quickly contained, global supply chains will need to be reconfiguredto more local variations. This will most likely accelerate the already-presentunwinding (due to trade tensions and increased border controls) of the globalizationtrend in manufacturing that had led to lower costs all around.
This unwinding will mostlikely push up costs for consumers, as low-cost manufacturers (usually based inAsia) are replaced by less efficient or more highly taxed local suppliers. Thiscould finally produce the inflation that central bankers have been longing for.
However, this inflation could manifest just at the time central banks are yet again lowering rates and flooding the markets with new money to combat the market slump. Last weeks fall may be temporary but it was the largest since the 2008 crisis, which is understandably ringing alarm bells.
Running in parallel, we have political uncertainty. The market rout, if it continues, could end up having a significant impact on the upcoming U.S. elections. A large driver of Donald Trump's support has been the strength of the S&P 500. Should that evaporate, support could swing. And an increased likelihood of a victory for Bernie Sanders, for instance, could further spook the markets, perhaps making that victory even more likely.
Climate of uncertainty
Uncertainty in theU.S., both economic and political, is likely to spill over into other regions,perhaps pushing countries further towards populism as economies struggle and localtensions escalate.
You see where Imheading with this? Its not towards a fog of doom and despair. Its toward the growingrealization that there is an alternative. The mix of rising inflation, moreprinting of money and growing populism should heighten global interest in analternative asset that is immune to inflation, monetary depreciation andpolitical manipulation.
The likely eventual outcome,after tragic suffering and wealth destruction which is never a good thing, willbe a new type of narrative, one with greater clarity and acceptance, not tomention urgency.
Bitcoin may be a risk-on asset now, as uncertain narratives, contained liquidity and limited awareness put it in the optional bucket of most portfolios. But as its use case becomes even more obvious, given macro developments that highlight the vulnerability of fiat-based finance, it could finally rise to become the safe haven or necessary hedge that we have been talking about. This is the kind of scenario that bitcoin was created for.
Disclosure: the author holds a small amount of bitcoin and ether, and no short positions.
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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Op-Ed: Why You Should Hold Bitcoin Over Government Fiat? – Bitcoinist
The Bank of England governor-designate earned himself a place in Bitcoiners hall of shame alongside Peter Schiff and Warren Buffett. Bitcoin has no intrinsic value, he said. Anyone who wants to buy it should be prepared to lose all your money. Yet, amid weak forex markets and a global contagion, BTC is holding its own. Heres why you should hold Bitcoin over government fiat.
As the coronavirus brings Chinas economy to its knees and causes global stock markets to fall, Donald Trump urges the Fed for more quantitive easing.
While Chairman Jerome Powell stands by the policy saying in no sense this is QE!, we all know what happens when governments print money at will.
Just take a look at the purchasing power of the U.S. dollar over the last 100 years. If you had a $100 bill in 1900, that would be worth around $3.48 today. Your $10,000 would only leave you with $348. Thats a 96.4% decrease in its buying power.
Bitcoins purchasing power on the other hand, with its built-in scarcity and limited supply, will not erode, but increase over time. This makes bitcoin a far superior store of value when compared to government fiat.
As the world braces for the next global economic recession, it pays to remember that this time around you have a choice. Bitcoin emerged as a response to the 2008 financial crisis in which excessive risk-taking by banks caused global economic dismay and widespread government bail-outs at the taxpayers expense.
If youre holding government fiat and the banks begin to collapse one by one, do you have a guarantee of being able to access your savings? No one can seize your bitcoin or initiate irresponsible monetary policies to control its price.
Unlike fiat, it also has an excellent chance of yielding a dramatic rate of return when compared to 0.01% in your savings account.
When faced with statistics like these, the Bank of England governor-designate doesnt have a leg to stand on. In fact, if youre holding government fiat now, it looks far more likely that you will lose all your money over time.
Do you think bitcoin is a better bet than government fiat? Let us know your thoughts in the comments below!
Images via Shutterstock, Twitter: @MMcrypto, @cz_binance, ObservationsAndNotes
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Op-Ed: Why You Should Hold Bitcoin Over Government Fiat? - Bitcoinist
Coinbase CEO Says Bitcoin (BTC) May Lose Cryptocurrency Race to Altcoins Heres Why – The Daily Hodl
Brian Armstrong, CEO of digital currency exchange Coinbase, says Bitcoin (BTC) may be surpassed by other digital coins as the crypto industry evolves into maturity.
In a series of tweets, Armstrong highlights the parallels between the early internet and cryptocurrency. He says challenges that early internet developers faced are comparable to those that hound todays young crypto industry.
At Netscape, they were working with early internet protocols. Things werent very scalable (dial up modems), you had to be somewhat technical to figure out how to get online, and early websites were pretty basic (static sites, looked like toys).
Sound familiar to crypto at all??
They figured theyd try making a shopping cart (see if they could build a first party app).
There was no way to save state or create a session (for instance, to make a shopping cart), so they created the concept of cookies.
Then, next problem was that nobody wanted to put a credit card into the internet, because everything plain text over http. So they went and invented SSL/HTTPS.
Armstrong says that just as early internet users came up with better web tools, the 11-year-old crypto industry is also gearing up toward new solutions.
Slow internet speeds/dial up models reflect early challenges in scaling blockchains.
SSL and HTTPs are similar to some of the privacy coin efforts.
Based on the parallels of the two industries, Armstrong cites the features that digital coins need for the crypto industry to reachmass adoption.
For me, the biggest areas of development I see that I think we need to get right as an industry are: 1. Scalability we need blockchains that can get to at least thousands of TPS to get mainstream adoption of crypto (similar to broadband internet being a big unlock on the web)
2. Privacy perhaps a contrarian view, but I think well need privacy coins, just like we needed HTTPS as the default on the web, for many use cases in crypto long term. Everyone deserves access to financial services, and financial privacy.
Transaction scalability and privacy are two features that Bitcoin currently lacks. Because of these deficiencies, Armstrong says there is ultimately an opportunity for an altcoin to become the dominant crypto asset in the future.
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Coinbase CEO Says Bitcoin (BTC) May Lose Cryptocurrency Race to Altcoins Heres Why - The Daily Hodl