Both Ethereum and XRP, the two biggest alternative cryptocurrencies, are about to end 2019 in the red zone.

Amsterdam-based cryptocurrency trader Michaelvan de Poppe believes that 2020 could start on a high note for alternative cryptocurrencies that have been struggling throughout the previous year.

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Van de Poppe points to the fact that Ethereum historically tends to rally at the beginning of the year. For instance, the ETH price skyrocketed by more than 52 percent in February while Bitcoin was in limbo.

Hence, there is every reason to believe that Ethereum could continue its Q1 winning streak in 2020. Other top altcoins might piggyback off Ether's strength and post significant gains.

As reported by U.Today, XRP and Stellar (XLM) turned out to be the worst-performing coins of2019, shedding 39 percent and 50 percent of their value respectively.

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The trader also states that the dominance of altcoins usually bottoms in Q1. That means that Bitcoin could cede ground to smaller cryptocurrencies.

At press time, BTC is changing hands at$7,215 with its dominance index hovering just above the 68 percent mark, CoinStats data shows.For comparison, the leading cryptocurrency was responsible for only 52 percent of the total market capitalization at the beginning of 2019.

However, Wall Street vet Tone Vays is certain that the dominance of Bitcoin could reach up to 98 percent.

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This Bitcoin Halvening Could Be Drastically Different, According to Bloomberg Analyst - U.Today

The last five years have been a test phase for bitcoin derivatives, which began tentatively when Bitmex eased into life in 2014. Now, as the cryptoconomy prepares to enter a new decade, derivatives products will play a pivotal role in price discovery. 2020 will be a big year for bitcoin and for the futures markets where billions of dollars will be won and lost, and the next bull market will begin.

Also read: South Korea Imposes $69M Tax Obligation on Crypto Exchange Bithumb

In 2019, crypto futures volumes approached those of spot trading. In 2020, futures are on course to blow right past spot levels and keep on trucking. The success of derivatives platforms Binance Futures and Bitmex, as well as new products from the likes of FTX, Dydx, and Synthetix, has convinced many that 2020 could be the Year of Derivatives. And U.S. regulators are lending credence to the notion: Commodities and Futures Trading Commission (CFTC), the independent regulator that governs the countrys futures and options markets, recently hinted that it could approve a new crypto-based derivative product backed by Ethereum in the course of 2020.

Out-of-the-box products serve to attract new players and new capital to the crypto derivatives market. But will the spate of novel products capture sufficient volume and play a role in shaping bitcoins price action in the coming year? And if so, who stands to benefit most?

Singapore exchange Bybit is planning to move into Thai, Turkish, Vietnamese and Spanish markets, Okexs new USDT-margined Perpetual Swap Trading is likely to gain traction, and decentralized derivatives products are expected to see broader usage as defi adoption continues. Synthetix the second largest defi app in the Ethereum ecosystem has just announced a partnership with Chainlink, meaning it no longer needs to rely on centralized price feeds for its derivatives trading mechanism.

Todays traders are now spoilt for choice, with bitcoin futures trading platforms feeding their appetite for high leverage on an array of digital assets. Traders arent limited to BTC and ETH, either: they can long or short altcoins such as cardano, enjin, tomo, and stellar if theyre feeling bold.

Improved fiat-crypto gateways such as Plutus virtual bank account and debit card have also increased the appeal of derivatives exchanges to retail investors, who are no longer locked into tether (USDT). Enhanced crypto-fiat conversion means traders can spend or reinvest their profits without needing to jump through multiple hoops. Services like Plutus enable crypto and fiat to be changed within a single app, forming the launchpad and off-ramp for traders seeking exposure to the broader cryptoconomy. Better fiat connections are often overlooked when assessing the health of derivatives markets, but these gateways are vital in driving capital in-flows.

In terms of institutional interest in bitcoin futures, the U.S., where much of the innovation is happening, will dictate matters. One platform seeking to play a major role is Bakkt, which launched bitcoin options and cash-settled futures in the U.S. at the tail-end of 2019. While the former is the first regulated bitcoin futures contract rubber-stamped by the CFTC, the latter will initially be available via the ICE Futures Singapore exchange. In December, open interest on Bakkt bitcoin futures reached an all-time high of $6.5 million and with the ascension of CEO Kelly Loeffler to the U.S. Senate, the next 12 months are shaping up to be interesting.

Bakkt isnt the only platform contributing to a market that has evolved greatly since traders first sought to profit from falling prices during the 2018 downturn. Binances bitcoin derivatives surpassed the volumes of its spot offering at various times in 2019, leading the juggernaut to invest an undisclosed sum in derivatives platform FTX. This after it had already acquired spot and derivatives exchange JEX, a move which enabled Binance to add options and futures to its platform.

Speaking of bitcoin derivatives, CME Groups Tim McCourt recently celebrated the two-year anniversary of the exchanges operations in this field. In a short article noting the markets forward curve, he revealed that CME had traded over 2.4 million contracts with a notional value exceeding $92 billion from 12.5 million BTC. Some speculate that the growing interest of trading exchanges like Bakkt and CME stems from reduced BTC volatility in comparison to previous years. In any case, the preponderance of such platforms gives derivatives traders plenty of options.

As derivatives players vie for market share, battlegrounds are coming into clearer focus. Blade, the San Francisco-based exchange supported by Silicon Valley venture capitalists, just announced its commitment to zero-fee trading a flagrant affront to perpetual swap titan Bitmex. UMAs Bitdex specification also presents a possible route to non-custodial perpetual swaps, though more work is required to develop this concept.

So what does all this surging activity mean for bitcoins price? According to Meltem Demirors, chief strategy officer of Coinshares, the growth of the crypto derivatives market means that bitcoins price is becoming less relevant which will keep it in check even after the halving. Demirors believes that bitcoins evolution into an investable asset will, in effect, decouple its price from both its value and supply and demand. With the crypto derivatives market coming to wider attention, a greater number of investors may also choose to hedge their positions via derivatives to manage price risk, leading to less volatility.

All told, the bitcoin derivatives market looks to be in rude health, even if it remains small when compared to other commodities markets. For one thing, traditional investors are likely to be enticed into crypto as a consequence of their familiarity, since derivatives are routinely used in regular financial markets. In fact, a great many institutional traders have thus far been reluctant to engage with crypto due to a paucity of tools to hedge trades and manage risk. 2020, then, and the decade it heads should bring greater leverage for crypto derivatives, including those in the defi ecosystem, greater liquidity, and greater competition from players old and new.

Do you think derivatives markets will dictate bitcoins price action in 2020? Let us know in the comments section below.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He's previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

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Bitcoin's Next Decade Will Be Shaped by Derivatives - Bitcoin News

With equities still on a bull run like no other, it would be reasonable to say that commodities might not be top of the buy list for private investors.

But if you are looking for a slug of diversification to add to your portfolio there are three commodities that might attract the interest of savvy investors.

Top of the list is gold, which has had a fabulous run in 2019, returning 21%. That progress may not continue at such an elevated rate, but expect further appreciation.

Less keenly followed but definitely one to watch is precious metal palladium which is now more expensive than gold.

And then theres the wildcard play: rare earth minerals. In fact, the ores of the metals collectively known as rare earths arent actually that rare; rather, the deposits with high enough concentrations of the 17 rare earth elements to make it economic to mine are few. Recent moves in the US to secure a home-based supply chain prompt interest here.

We will come back to our three picks later. But first, what of other commodities such as oil and agriculture?

To begin with, some general considerations. Demand and supply for the stock of the commodity in question is the key consideration when trying to judge where prices are headed. The US currency is another moving part to bear in mind. We may be at peak strong dollar. Because many commodities are priced in dollars, any weakening in the worlds dominant reserve currency tends to raise commodity prices, most of which are priced in dollars.

- Golden returns in 2019, but is it too late to profit?

To make a call on what 2020 has in store for the oil price requires an assessment of the general direction of the global economy and how that impacts both industry and consumers as well as extraneous factors such as how the weather influences demand.

However, the latter is more a concern for traders as opposed to investors taking a longer view, so lets concentrate on the other factors regulating supply and demand.

Although the non-OPEC US is the worlds largest producer of crude, it is the cartel-like OPEC that potentially has greater sway over prices in its attempts to co-ordinate cuts in production or to opens the taps.

On that front it has not had much success in flow regulation. According to the Bloomberg Commodity Outlook published in November, prices are expected to continue to trade in a range between $50 and $60, with bulls pressuring prices lower at the upper range of that band where price resistance forms.

Although stock markets could be set to power higher going into 2020 following the calming of nerves around the US-China trade dispute and the return of political stability to the UK, that doesnt mean the global economy will deliver the sort of industrial production surge that could drive crude prices higher or those of other cyclical commodities such as copper, stuck in a downtrend since May 2018.

JPMorgan Asset Managements Year Ahead report thinks industrial metals will stay neutral given sub-trend global growth, citing Chinas property sector as a key demand driver but where the government is reluctant is ease current real estate restrictions.

The effects of backwardation, where the spot price is higher than the forward price, should also bear down on the oil price, further stunting any bullish rallies.

JPMorgan underlines the possibility that geopolitical tensions in the Middle East (Iran and Saudi Arabia, Syria) could result in episodic oil price surges in 2020, but concludes that softer demand growth and sufficient spare capacity globally should curb a sustained rise in oil prices.

US production of natural gas continues to expand, so dont expect any substantial price appreciation next year, regardless of the possibility of some improvement in global demand, especially from Asian emerging markets.

A key industrial input is copper and as such it is the commodity deemed most susceptible to the ebbs and flows of industrial activity.

Again, where the price goes is predicated on the direction of the global economy. Even though the trade war truce is bullish for copper and the US economy is still seeing healthy payroll growth, the situation in China remains far from encouraging, with GDP barely above the 6% required for the economy to maintain forward momentum assuming you hold store in the accuracy of the official data.

A quick word on agriculture. Prices have been trading sideways for key soft commodities that feed the world, such as wheat and corn. Cotton too hasnt done much but that could change with better news on the US-China trade war front if the truce turns into lasting peace.

The largest agriculture ETF, Invesco DB Agriculture (DBA), is down 7.3% year-to-date and -8.8% over five years, having suffered falling returns since 2011.

A better way of playing agriculture could be the VanEck Vectors/Agribusiness ETF (MOO). It invests in areas such as fertiliser, animal health, seeds, irrigation, farm equipment and machinery.

It is trading up 19% as the year draws to a close. It is well-diversified but nevertheless has substantial exposure to fertiliser producers, which could see it benefit from trade peace.

For 2020, we expect a full rebound in US acres planted and the recent recovery in palm oil prices to remain in place. Both factors should bode well for potash demand in 2020, says data provider Morningstar.

The bright spot for commodities continues to be in precious metals.

Although gold has come off the boil recently, currently trading at $1,513 (on 30 December)after hitting a six-year high at $1,560 in early September, its safe-haven properties will likely still be in demand in 2020. The yellow metals prospects are helped by a continuing low-yield environment and the ever-present possibility of a resurgence in unconventional monetary policy intervention by central bankers and the continuing geopolitical risks emanating from the Middle East, Hong Kong and the likes of North Korea, to name but three hotspots.

And although political risk has lessened dramatically in the UK with the large Conservative majority in parliament, the same cannot be said for the US, which enters the presidential election year with its head of state facing an impeachment trial in the Senate.

Swiss investment banking giant UBS in its Year Ahead 2020 report is backing gold over cyclical commodities, echoing the reasons stated above: Muted economic growth and now lower interest rates reduce the opportunity cost of holding gold, which does not offer a yield. Political uncertainty could send safe-haven flows into gold. And since gold is priced in USD, a weaker dollar would in turn push gold prices higher.

The palladium market brings to mind the old investment adage dont fight the trend. Since 2016, the price of the metal has been trending relentlessly higher, currently priced at $2,000 per troy ounce, making it more expensive than gold.

Two variables are at work here highly constrained supply and rising demand caused by the ongoing tightening of regulations to reduce emissions from carbon-burning vehicles.

Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, emphasises the fact that the normal scenario for commodities, where rising prices leads to an increase in production that pressures prices lower, does not apply in this market. In most cases, the cure for high prices is high prices, but not for palladium, he explains.

There doesnt seem to be any new, ready supply at any reasonable price. So, it could continue to move higher from here, though perhaps with more volatility, adds Wong.

Palladium is used in catalytic converters and regulations on emissions are set to tighten further, with the replacement of carbon-burning vehicles by electric variants many years away.

WisdomTree Physical Palladium (PHPD) exchange traded product will cost investors 0.49% to hold and provides direct exposure to the metal, with HSBC bank the custodian of the palladium.

Our third commodity pick, Rare earths, are being used by China as a bargaining chip with the US in their trade dispute. China accounts for 80% of supply to the US and 70% of global production. The minerals are used to make key components in electronics for both civilian and military end users. There are 17 rare elements.

The US Army announced it plans to fund the processing of rare earths, an industry that was originally founded decades ago in the US.

The VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) has been struggling this year but one way to leverage the US Army decision is by seeking those US companies lining up for a piece of the action.

There is arguably a new entrant in the commodities world that warrants a mention bitcoin.

Although touted as a digital currency, it is not used as such, or not very much. Instead, some see it either as a form of digital gold because of its supply being limited to 21 million (currently 18 million have been mined) or as a hedge against unconventional monetary policies.

Jan Van Eck, chairman and chief executive of ETF provider VanEck, leans towards viewing bitcoin as a hedge against central bankers. Its not exactly like gold [but] its a form of private money that will act as a hedge against central bank inflation, he said in a recent Financial Times interview.

The reward that miners receive for doing the bookkeeping on the bitcoin blockchain will be halved in May 2020, a mechanism that kicks in every four years. Miners currently receive 12.5 bitcoins for each block they verify. This is the way that new bitcoins come into circulation.

Constraining supply in this way should lead to price appreciation. However, bitcoin is dominated by speculation so there is no certainty here, to put it mildly.

Add to those technical considerations working in bitcoins favour is the expectation of further geopolitical uncertainty ahead and the continuing absence of a full-blown recovery in the global economy.

But that wont happen before the momentum from the stalled Facebook Libra crypto launch fully dissipates, with the price at the time of writing just above $7,000. Bitcoins Libra-induced high in 2019 was $13,700.

Read more from the original source:
2020 predictions for gold, bitcoin and other precious metals - Money Observer

BTC/USD has been moving to and fro in a tight range amid low trading activity. Many traders are off for a holiday season, which makes the market vulnerable to sharp movements; however, no sharp movements have been registered so far. At the time of writing, BTC/USD is changing hands at $7,180, mostly unchanged both on a day-to-day basis and since the beginning of Friday. Bitcoin's market dominance settled at 68.7% as many altcoins failed to recover to the levels that preceded the sell-off.

From the technical point of view, the coin may be vulnerable to range-bound trading until we pass the New Year borderline. Strong technical barriers are located above the current price, which means the downside is the path of least resistance for now. Let's have a closer look at them.

$7,200 - $7,230 - a host of short-term SMA (Simple Moving Average) levels, SMA5, SAM10, SMA50 on 1-hour, SMA10 and SMA5 on 4-hour chart, the middle lines of the Bollinger Bands on a daily, 1-hour and 4-hour charts, SMA200 1-hour and 4-hour, SMA50 4-hour, 23.6% Fibo retracement weekly and monthly$7,600 - the upper line of the daily Bollinger Band, Pivot Point 1-day Resistance 1$7,700 - SMA50 daily, 38.2 Fibo retracement monthly

$7,000 - 161.8% Fibo projections daily, Pivot Point 1-day Support 2$6,800 - the lower line of the daily Bollinger Band, Pivot Point 1-day Support 3$6,550 - the lowest level of the previous month.

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Bitcoin Price Prediction: BTC/USD directionless ahead of New Year Confluence Detector - FXStreet

On the most recent episode of the Bitcoin & Co. podcast, Jan Capek and Pavel Moravec, CEOs and co-founders Braiins, the company operating the worlds first Bitcoin mining pool, Slush Pool, joined host Anita Posch to talk about Bitcoin mining, what it affects and what affects it.

When asked about the energy cost of Bitcoin mining, Capek and Moravec explained how it is inevitable because proof-of-work is probably currently the best way to reach a decentralized way of consensus.

People dont look at the energy spent as something that provides us value, but it actually provides large value it makes Bitcoin.

They added that while it is a heated topic, the lack of a better alternative leaves miners with no other options. Further, they said that this pushes miners to find the cheapest electricity prices in the world, ending up in places where there is no other way to spend the electricity, which tends to be renewable because its cheaper to make it.

If you look at the complete electricity bill, for the whole Bitcoin network, a large part of it is just the energy which would not be used for anything else.

They also explained how today, there are not too many ways to store energy, and that though batteries could theoretically be used, they are economically unfeasible. According to the pair, Bitcoin looks like an interesting alternative to storing this energy which cannot be used in any other way.

The Braiins co-founders also spoke about the relation between electricity prices and Bitcoin value, stating that they are only related in the sense that both directly influence how much hashrate is connected to the network.

Some people argue that the hashrate is following the price, others argue that price is following the hashrate. There is probably truth somewhere in the middle.

Subsequently, Capek and Moravec spoke about how the electricity price used by the biggest miners is much lower than what a normal person can easily achieve, making them much more profitable and pushing the difficulty of mining higher. This makes it very difficult for normal users to profit through mining, as the miners with the highest electricity prices are pushed out of the zone of profitable mining.

Somebody could do it as, for example, a heater, because the electricity would be spent either way, so having a miner producing heat and mining during the process is a nice contribution. But making a major difference in the mining world for normal users is basically impossible today.

However, the pair agreed that larger mining farms were not contributing to centralization of the network. According to them, centralization would only occur if several of the largest farms were owned by a single entity and if mining hardware manufacturing was controlled by a centralized authority.

What we need for centralization is to have different mining hardware manufacturers, so they are competing against each other and selling the machines to independent mining farm owners.

Read more:
Bitcoin mining mostly uses energy that otherwise wouldnt be spent - AMBCrypto