Fuse switches sit inside an electrical supply cabinet inside the BitRiver Rus LLC cryptocurrency... [+] mining farm in Bratsk, Russia, on Friday, Nov. 8, 2019. Bitriver, the largest data center in the former Soviet Union, was opened just a year ago, but has already won clients from all over the world, including the U.S., Japan and China. Most of them mine bitcoins. Photographer: Andrey Rudakov/Bloomberg

The highly anticipated block reward halving of bitcoin is set to occur in May 2020. Despite popular belief, Morgan Creek Digital co-founder and partner Jason Williams said that it would have a minimal impact on the bitcoin price.

Halving unlikely to have immediate impact on bitcoin price (source: Jason Williams Twitter)

A block reward halving is a mechanism that is activated once every four years on the Bitcoin network that reduces the rate in which new BTC is mined.

Theoretically, halvings should eventually lead to an increase in the price of bitcoin, as less BTC flows into the market approaching its 21 million cap.

However, because halvings are anticipated years in advance by both investors and miners, whether bitcoin prices in halvings prior to the events occur remains unclear.

In an interview, Williams said that the cryptocurrency community is well aware of the date of the next halving and that miners tend to prepare before a halving occurs.

As such, he noted that the upcoming halving will not have any major effect on the price trend of bitcoin.

He said:

"For the community that are living this day to day they know the event is there. They even know the date (within a few days). Large miners that are holding BTC will have to sell to cover operational expenses or use cash as revenue halves.

New buyers have to come in to move this market up. So other than a new headline, the halving is being dealt with now by those who are operationally effected by it. Those that dont will be priced out of the mining business."

In previous halvings that occured in November 2012 and July 2016, it took well over a year for the market to start surging in both instances. In 2016, as anexample, after the halving occured, the bitcoin price slumped from $707 to $570.

It wasn't until December 2016 that the bitcoin market started to engage in an extended rally.

While halvings could havea long-termimpact on the price of bitcoin, they are unlikely to have an immediate effect on the short to medium-term price trend of BTC upon activation.

Still, some reports indicate that new investors are generally unaware of bitcoin halvings, which could be a variable as halving nears.

Grayscale, an investment firm under Digital Currency Group that operates the Bitcoin Investment Trust (GBTC), said in a report that many of the market participants it interviewed had no knowledge of halvings.

"The halving is close enough that its time to start talking about it more seriously, but far enough out in the future that its unclear whether its priced into the market efficiently. In fact, based on anecdotal conversations with market participants, we were surprised to learn that many of them were not even aware of this event," the report read.

As a scarce asset with a fixed supply at 21 million BTC, a block reward halving that affects the supply of bitcoin is likely to influence the price. But, based on previous halvings, it may be far-fetched to claim that halvings trigger immediate price reactions and strong rallies in the short-term.

See the rest here:
Prominent Investor Says Halving Won't Have a Big Impact on Bitcoin Price, Here's Why - Forbes

Anybody who has ever traded the bitcoin market is likely well aware of one thingit is notoriously volatile. Events that would barely move other markets can have a dramatic, but typically short-lived effect on bitcoin.

Here, we examine some of the most recent cases of volatility, and posit the possible rationale behind the madness that is bitcoin trading.

The most prominent overreaction in recent months was caused by comments from Chinese President Xi Jinping last month. During a speech made to the 18th collective study of the Political Bureau of the Central Committee, President Xi praised Bitcoin's underlying technology, blockchain, hailing it is an important breakthrough.

Almost immediately after President Xi's remarks were made public, bitcoin spiked from under $7,500, up to almost $10,000rising by a third in less than a dayending more than a month of decline. However, once the hysteria died down, the price of bitcoin again resumed its downtrend, falling back below $7,500, to its lowest value in over six months.

This isn't the first time a president's remarks have significantly influenced bitcoin's price action either. Back in July, US President Donald Trump posted a series of tweets slamming bitcoin, calling it "highly volatile and based on thin air," while remarking that unregulated crypto assets facilitate illegal activities.

That day the price of bitcoin fell from $12,000 to $11,200. But by the next day, the panic was over and the price rose back up towards $12,000.

Other events have similarly caused mass hysteria in the bitcoin market. In June, a flash crash on the Kraken cryptocurrency exchange saw bitcoin briefly fall to $100potentially as a result of a single large compromised account. This resulted in one of bitcoins largest-ever single-day dumps.

And yet again, once people realized the damage was limited, the price bounced back.

Since many cryptocurrencies, bitcoin included, derive much of their value as speculative investment vehicles, it stands to reason that any event that can significantly affect investor sentiment could alter its price action.

But in the bitcoin market, this is taken to the extreme, largely spearheaded by factors described as Fear Of Missing Out (FOMO)people jumping on positive price actionand Fear, Uncertainty and Doubt (FUD)a term used for negative news.

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With the unpredictability of future trends, the crypto market reacts highly emotionally to positive as well as negative news or events, said Gregor Krambs, cofounder of Alternative.me, which builds the Crypto Fear & Greed Index tool used to track sentiment in the crypto market.

The outcome of these mostly irrational decisions are driven by emotions of fear and greed, which get amplified by the vast amount of participants acting in the market, he added.

Prominent trader known as CryptoVince argues that institutions make the most of this, exaggerating the price swings. He told Decrypt, Retailers usually FOMO in upon good news causing a quick increase in price. Institutions countertrade the FOMO and sell/short bitcoin which will dramatically drop in the mid-term.

The exact opposite can also occur when bad news appears, which can explain bitcoin's price action in late October," he said.

As a result, significant good or bad news can cause a sudden rally or drop, as first responders emotionally react to the news, CryptoVince argued. This is then followed by algorithmic responses from higher volume traders, and lastly casual traders catching the back end of the price action.

As the initial hysteria dies down, the price then begins to stabilize, with a trend reversal often following shortly after.

See the original post:
How the bitcoin market always overreacts - Decrypt

A crypto enthusiast who lost four Bitcoin on the Lightning Network in October has now managed to recover most of the missing funds, according to an update post on Reddit.

One of the most interesting projects in the cryptocurrency space, in my opinion, is the Lightning Network protocol (LN).

Even though some traders and analysts have plenty of criticisms regarding the development of the LN, I argue the open-source P2P payment channel technology is here to stay.

The LN not only affects Bitcoin, but the technology can also gap bridges between projects.

In a way, the Lightning Network has the potential to achieve what many other projects can only dream of: to become an interoperable protocol between blockchains.

At the moment, the platform consists of over 10,000 nodes, 35,000 open channels, and over 850 BTC in network capacity.

As discussed in this article, the Lightning Network is a payments channel linked to the Bitcoin network, and is also being developed for use with other cryptocurrency projects such as Litecoin.

Instead of relying on hard forks to upgrade transaction storage per block (block weight), the LN allows for the integration of off-chain payment state channels between nodes.

The LN creates direct off-chain connections between nodes instead of validating all information on the main chain. These connections are opened up by storing Bitcoin on a Lightning channel.

In the graph above, we can see the amount of BTC being stored in Lightning channels, courtesy of bitcoinvisuals.

It is true that the LN had a major spike in adoption in late 2018 and then stabilised around the summer this year. However, in my opinion, this correction is directly linked to lower BTC/USD volumes, which fell over 50% in the same time span.

Just recently, crypto exchange Bitfinex announced it is launching support for the Lightning Network. It therefore seems that the P2P payments protocol is gaining traction by the day.

So what happened to the four Bitcoins that were lost in October?

The problem occurred as a result of a bug in a recently implemented functionality called SCB Static Channel Backup.

SCB is quite important to avoid users losing funds due to hardware problems.

Lets say you have some channels open with local-balance committed, so your BTC is locked in an open channel. Without SCB, you run the risk of losing these funds in the event of a hard-drive failure or the VM crashing.

Terrible issue, right? The LN developers agree, which is why they developed the SCB functionality. However, this implementation had just been released in April 2019. As it was brand new, some issues can be expected.

Even one of the main LN developers, guggero, wrote on GitHub when replying to the user regarding the buggy SCB implementation:

Yes, you are right. Thats why there still is a -beta suffix in each version that we release.

Essentially, the users Bitcoin got locked in a closed channel thanks to SCB as it hadnt been updated correctly.

After looking at the main discussion issue on GitHub, one of the contributors explained what the user had to do.

Simply put, the user had to let the nodes run for a while in order to find the missing outputs. Afterwards, they only needed a quick sweep to find the coins.

Let it run for a week or two if it needs to. Theres a lot of scanning your node has to do. Watch your logs, your listchaintxns and closedchannels, and see what happens, if you like. Because every now and then, it should find a closing transaction that it needs to sweep funds from.

Guggero concluded that theres still around 3.7 BTC that should be claimable by the users node, so it seems that most (if not all) of the lost funds have eventually been recovered.

The post Four Bitcoin lost on the Lightning Network finally recovered appeared first on Coin Rivet.

Link:
Four Bitcoin lost on the Lightning Network finally recovered - Yahoo Finance

A Danish bank has successfully won a court case that means it can now prevent its staff from buying Bitcoin BTC and other cryptocurrencies.

That sounds fine on the surface, but a potential ban doesnt refer to buying cryptocurrency on the job, it extends into employees private lives.

According to a release made by Danish court yesterday, Nordea Bank is now free to prevent its staff from buying and trading cryptocurrencies in their own time, Bloomberg reports. They are also banned from buying crypto on behalf of others too.

How the bank will enforce a ban and what happens if someone breaches the policy remains unclear.

The bank will let its staff continue to hold any crypto they already own, but it is encouraging them to sell what they have and refrain from making future investments.

The dystopia is here.

Nordea bank has cited risks and a lack of industry regulation for its decision to advise staff against messing with the digital assets. But even so, a company dictating what staff can and cant do in their personal lives seems to be overstepping a boundary.

But thats not all.

Nordea will let its staff invest in the banks own cryptocurrency-based products and financial instruments. So thats ok? But regular Bitcoin isnt, go figure.

Product development staff at Nordea will be allowed to make minor investments in cryptocurrency if they have a legitimate business reason for doing so.

The irony doesnt stop there, though. As CoinDesk points out, Nordea bank has previously been investigated for money laundering. Reuters reported earlier this year that the banks headquarters were searched in relation to the claims.

The court-issued press release also says that staff should not conduct trades in financial instruments to the point that it puts their own financial position in jeopardy.

Sure it sounds bad, and the thought of a company dictating what its staff can and cant do outside of work makes my skin crawl, but it would look quite bad for a bank to have employees that appear to make awful financial decisions. It makes sense that a bank wouldnt want its staff taking risks on Bitcoin, it happens to the best of us.

Published December 3, 2019 16:01 UTC

Original post:
Danish bank staff banned from buying Bitcoin with their own money urged to dump holdings - The Next Web