Category Archives: Bitcoin
Family Offices Finally Accept the Benefits of Investing in Bitcoin – Cointelegraph
There is a lot of chatter going on about the uncertainties of cryptocurrency and how an attempt to tame the raging seas of the crypto market could spell doom for investors. As expected, in the middle of this conversation is Bitcoin (BTC), whose popularity continues to grow in the investment world.
Although Bitcoins volatility is well-documented, this has not stopped investors from adopting cryptocurrencies as a way of effecting a diversified investment strategy. Interestingly, the volatility narrative is somewhat losing its potency as Bitcoin slowly establishes stability.
Hence, I will use this piece to analyze the growing affinity for digital assets and how Bitcoin is fast becoming a viable investment asset class for institutional investors and family offices.
The origin of Bitcoin might have caused many to doubt its efficacy. In a world grounded in a centralized culture, it is understandable that people would initially fight off an anomaly that could uproot the foundations of their belief system. At one point, people did not dare to imagine a world without a stratified institution made up of banks and governments that govern the dissemination of money and information. Now that decentralization is finding its way to even the most traditional industries, it is clear that crypto is here to stay.
Nonetheless, there remains an ounce of doubt surrounding the viability of Bitcoin as an asset class. Some believe that Bitcoin emerged out of nothing. Therefore, it is impossible that the digital asset would retain its value. However, from my recent analysis of the history of money and the various theorems that established the origin of money, it is evident that Bitcoin fulfills the core requirements that other forms of money have passed.
Interestingly, one could argue that the United States dollar, gold and other precious metals have no intrinsic worth market sentiments brought about their valuation.
Institutional investors are aware of the risks that come with allocating a large percentage of their funds to a particular asset or market indices. For one, the downturn of such a market or asset would have a crippling effect on their returns. The same is true for investors that allocate the majority of their portfolio to asset classes that have strong correlations to one another. Hence, adopting a strategy that allows the allocation of funds to different asset classes, with little or no correlation, is the appropriate solution. This is where Bitcoin excels.
VanEckpublished a study that highlighted some of the factors that aided Bitcoins ascendancy as a viable investment product. One of these factors is the digital assets correlation to major market indices. In the study, VanEck noted that Bitcoins apparent disparity from established and emerging markets makes it a suitable portfolio diversification option.
This argument holds after considering the correlation of Bitcoin to other markets from January 2012 to July 2019. While other markets had moderate correlations to one or two traditional asset classes, Bitcoin maintained a very weak correlation to all of the asset classes examined. In other words, Bitcoin could fit nicely into an investment portfolio and boost returns.
VanEcks study went further to prove Bitcoins eligibility as an investment option. This investigation entailed the assessment of the asymmetric return of portfolios allocated to varying percentages of equities, bonds and Bitcoin from January 2012 to July 2019. A portfolio with 58.5% of the fund distributed to equities, 38.5% to bonds and 0.5% to Bitcoin generated returns that surpassed that of a portfolio allocated solely to the S&P 500 by over 150% as of July 2019.
From the basic principle of supply and demand, a commodity tends to retain or increase its value when its supply does not match its demand. In other words, maintaining or increasing the demand for an asset while reducing its supply would eventually cause the price of such an asset to skyrocket. This phenomenon has played out throughout the history of Bitcoin. Bitcoins protocol automaticallyhalves its supply roughly every four years. It is also important to note that it is only possible to create new coins, or mine, a maximum of 21 million BTC, and a total of 18 million BTC has already been mined.
What all these facts and figures mean is that there is a possibility that the price of Bitcoin will continue to soar. And this might have spurred enthusiasts to predict ridiculous price possibilities. One popular crypto supporter in particularasserted that the next halving, scheduled for May 2020, could cause one Bitcoin to sell for $1 million.
Though this prediction sounds over the top, price history shows that the price of Bitcoin has always experienced a surge whenever the reward for finding new blocks undergoes a 50% cut. The last time this happened was in 2016, which led to the unprecedented bull run of 2017. Before this, a Bitcoin was selling for $657. Just over a year later, the price climbed to around $20,000 per coin. Without any doubt, the halving slated for the coming year will affect the price of Bitcoin. Although it is still unclear how much of an impact to expect, I bet that a majority of institutional investors will be closely watching the unfolding drama.
Developers are beginning to understand that sustained adoption will never come to fruition until they resolve the issues battling the efficacy of blockchains scalability and security. Hence, the development recorded in this space is nothing short of remarkable. For one, theLightning Network, designed as a sidechain to the Bitcoins blockchain, could improve scalability and reduce the cost and time for transacting. This, and more, are some of the reasons why the prospect of Bitcoins adoption is looking good.
For what its worth, the advantages of allocating a fraction of ones investment portfolio to Bitcoin trump the disadvantages.
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Constantin Kogan is a venture partner at BitBull Capital, a board member of ABOTMI and has been a cryptocurrency investor since 2012. He has over 10 years of experience in corporate leadership, technology and finance. He contributes to the digital asset space as well as the sharing and value economies.
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Family Offices Finally Accept the Benefits of Investing in Bitcoin - Cointelegraph
Bitcoin price plunges 5 percent to $8,100 within hours – Decrypt
Bitcointhe worlds largest and most popular cryptocurrency by market captoday dropped by roughly 5 percent within just a few hours. It is currently trading at around $8,100 per coin.
Bitcoin opened the day trading for roughly $8,520 but has since dropped in price by as much as $400. The price of Bitcoin hasnt been this low since late September, when Bakktthe Bitcoin futures exchange backed by the owners of the New York Stock Exchangedebuted to a slow start.
At the time, Bitcoin was trading for a solid $9,500, though Bakkts dismal introduction to the market led the cryptocurrency to fall by more than $1,400 just days later.
The price of Bitcoin recuperated somewhat in late October following positive comments about blockchain from Chinas president, Xi Jinping. China's president stated that he believed blockchain could potentially revitalize his countrys economy and infrastructure, and that he would be pushing blockchain innovation in the coming months.
In the weeks since, Bakkt has seen a boost in its business, trading more than $18 million in bitcoin futures contracts during the final week of October. Bitcoin then seemingly recovered, spiking to around the $10,000 per coin mark briefly before falling back into the $9,000 range.
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And while the price has, of course, continued to bounce up and down within the last few weeks, today marks the most volatility that Bitcoin has experienced in some time. And the rest of the market is feeling it too.
Bitcoin Cash (BCH), EOS (EOS) and Litecoin are all currently down by roughly six to eight percent, according to data from Messari.
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Bitcoin price plunges 5 percent to $8,100 within hours - Decrypt
Bitcoin price prediction: BTC/USD bulls have a hard time staying above $8,000 abyss Confluence Detector – FXStreet
BTC/USD hovers marginally above $8,000 after a short-lived dip to $7,990 on Tuesday. A sustainable move below this psychological barrier will trigger a sharp sell-off and take the price to $7,800-$7,7000 area. At the time of writing, BTC/USD is changing hands at $8,060, mostly unchanged both on a day-to-day basis and since the beginning of Tuesday.
Looking technically, there are a lot of barriers clustered above the current price, which means that the recovery may be limited. Lets have a closer look at the technical levels that may serve as resistance and support areas for the coin.
$8,150 - 38.2% and 61.8% Fibo retracement daily, the middle line of 1-hour Bollinger Band, a host of short-term SMAs (Simple Moving Average)$8,350 - SMA100 1-hour, 161.8% Fibo projection$8,500 - SMA50 (Simple Moving Average) daily, 61.8% Fibo retracement monthly, SMA200 1-hour$8,700 - 38.2% Fibo retracement weekly
$7,900 - Pivot Point 1-week Support 2, the lower line of 4-hour Bollinger Band$7,500 - Pivot Point 1-month Support 1$7,300 - The lowest level of the previous month.
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Bitcoin price prediction: BTC/USD bulls have a hard time staying above $8,000 abyss Confluence Detector - FXStreet
Bullish Bitcoin Signal That Preceded Previous Price Increases Identified by Analyst – BeInCrypto
The long-term Bitcoin price has given a positive signal which suggests that a new market cycle has begun.
Cryptocurrency analyst and trader @CryptoCowJones stated that the Bitcoin price has given a signal which has never previously failed. This is an upward breakout of the Kumo cloud.
The Kumo cloud represents resistance. It is created by two lines whose relationship is very similar to a long- and short-term moving average (MA). Therefore, if the short-term line is above the long-term one, the cloud is green while when the opposite is true the cloud is red (grey in the tweet).
Lets analyze this signal.
The first time the Bitcoin price broke out from the cloud was in January 2013. An 8357 percent price increase followed until we fell below the cloud. The second time, in 2016, a 4633 percent increase ensued.
If we make a projection for the next increase with an upper limit of 8357 percent and a lower limit of 4633 percent, we get a high between $60,000 $90,000.
There are two bullish indications about the current break:
Looking at the daily cloud we can see that the Bitcoin price is trying to break out from a short-term downtrend.
While the Bitcoin price broke out from the wedge, it failed to increase past the resistance of the cloud and is now inside it.
A very positive movement would be a pump out of the cloud followed by the use of the green cloud as support. This would go in the footsteps of the hypotheses laid out in the weekly analysis and suggest that a new market cycle has begun.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of TradingView, Twitter.
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Bullish Bitcoin Signal That Preceded Previous Price Increases Identified by Analyst - BeInCrypto
Galaxy Digital Capital launches two new Bitcoin funds to court the wealth of America – Decrypt
Galaxy Digital Capital yesterday launched two Bitcoin funds: the Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin fund. Mike Novogratz, CEO and Founder of Galaxy Digital told Bloomberg the funds are targeting the wealth of Americathose aged between 50 and 80 who have so far been hesitant to invest in cryptocurrencies.
Novogratz said the new funds capitalize on Bitcoins popularity, which has drawn in high-net-worth individuals to the crypto space. There are probably 20 billionaires I could name that made their money outside of crypto and are in crypto now.
The next wave will come from the wealth advisers, maybe with endowments and small foundations participating, he added.
The Galaxy Bitcoin Fund has quarterly liquidity, and the minimum investment is $25,000. The Galaxy Institutional Bitcoin Fund has weekly liquidity, though the minimum investment is a higher, undisclosed amount.
Galaxy Digital Capital Management is a New York-based multi-service merchant bank dedicated to cryptocurrencies and blockchain. It holds over $337 million in assets, and offers two other funds: the Galaxy Crypto Index Fund, and its ecosystem funds.
"The Galaxy Bitcoin Funds help accredited investors mitigate the complexities and risks of managing direct bitcoin investments, said Galaxy Digitals Steve Kurz, Head of Asset Management in a press statement. Kurz will manage the funds with Galaxys portfolio manager, Paul Cappelli. Kurz told Bloomberg the new funds have been seeded with Galaxys own funds, as well as funds from its existing investors.
Is Galaxy Digital lost in its own crypto bubble? It's absolutely not madness, Eric Wall, Head of Research at crypto investment fund Arcane, tells Decrypt. The bitcoin is digital gold narrative is perhaps the greatest bitcoin story of all time for adoption. It is something people can both understand and tickles their fear of missing out, he says.
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Wall points to Bitcoins growth over the past decadethe nascent cryptocurrency worlds longest and most revered heritage. At some point people get tired of feeling like they're not getting it; that makes them more open to accept narratives that would have seemed like science fiction a few years ago, he says.
The fund aims to undercut rivals like Grayscale Bitcoin Trust. GBTC indeed has quite high fees in a market where the profit margins for third party storage services have shrunk considerably, says Wall. It is possible to do what Grayscale is doing for cheaper, and still earn a profit. This is just a healthy market in action.
Bakkt, the Intercontinental Exchanges crypto assets platform, as well as Fidelity Digital Assets, will assume custody of the funds. Bloomberg L.P., which previously partnered with Galaxy for its Bloomberg Galaxy Crypto Index, will act as pricing agent.
"As institutions and sophisticated investors seek exposure to digital assets through new investment products, they are seeking the highest standards in asset security, said Kelly Loeffler, CEO of Bakkt.
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Galaxy Digital Capital launches two new Bitcoin funds to court the wealth of America - Decrypt
Spotlight on Bitcoin as HSBC Shuts Hong Kong Protest-Linked Account – Cointelegraph
The need for censorship-resistant currencies like Bitcoin (BTC) has been thrown, yet again, into stark relief as HSBC shutters an account reportedly used to fund Hong Kong protestors.
As the Hong Kong Economic Journal reported on Nov. 18, the British multinational bank recently closed a corporate account that was reportedly being used to transfer crowdsourced funds to support protestors activities.
Five months into the Hong Kong protests now reaching an increasingly violent fever pitch the bank presented its decision as a formal procedure, stating that it found the account was purportedly being used inconsistently with the purpose originally stated in its paperwork.
In accordance with a 30-day notice rule, the account which remains unnamed was informed last month that its functionality would cease this week.
In correspondence with Bloomberg, Vinh Tran, a spokeswoman for the bank in Hong Kong, wrote that:
As part of our responsibility to know our customers and safeguard the financial industry, we regularly review our customers accounts. If we spot activity differing from the stated purpose of the account, or missing information, we will proactively review all activity, which can also result in account closure.
London-headquartered HSBC has upheld its strong presence in the city due to alleged pressure to maintain its standing with residents there, Bloomberg writes.
The company derived over 35% of its adjusted revenue from Hong Kong in the first nine months of 2019 and reportedly stated this October that its business in the city remained robust, notwithstanding the political turbulence.
As reported in October days after redoubled protests by Hong Kong residents in the wake of the 70th anniversary of the Peoples Republic of China Morgan Creek Digital co-founder Anthony Pompliano noted that the non-seizability of Bitcoin becomes ever more attractive in moments of geopolitical crisis: faced with a crackdown on civil liberties via emergency powers, anxious residents reportedly flocked to the citys ATMs.
Intermediary cryptocurrency payments processors have also sparked ire for their apparent susceptibility to political pressures, as the recent controversy over BitPay demonstrated, following claims it blocked donations to the Hong Kong Free Press for several weeks.
Yesterday, the former chief financial officer of PayPal revealed that Bank of America (BoA) had chosen to close his account, without a stated reason.
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Spotlight on Bitcoin as HSBC Shuts Hong Kong Protest-Linked Account - Cointelegraph
Top Economist Says That the Way to Kill Bitcoin Is to Keep Price Under $1,000 – CCN.com
Alex Kruger, an economist and trader, took to Twitter to share his thoughts on how anyone can eliminate bitcoin for good. While tech specialists might invest a ton of cash to control 51% of the network, Mr. Kruger says that one does not need to go through that process. The economist claims that any government can kill bitcoin by keeping the price below $1,000.
Mr. Kruger is right on the money. If a government can suppress the price of the dominant cryptocurrency, people will eventually lose interest. That could spell the end of an asset that relies heavily on retail investor interest to keep its head above water. Over time, price suppression will suck the passion out of the most die-hard bitcoin supporters.
In July, a CoinShares research report noted that bitcoins rally from the $3,000 levels to $13,880 this year is different from the 2017 bull run. One defining quality of this years ascent is that the rally was likely driven by institutional money.
The entry of big players is certainly an encouraging development. However, retail investors still dominate bitcoins market share. CryptoFundResearch revealed that there are approximately 804 cryptocurrency funds. These funds account for $18.16 billion of the cryptocurrencys market capitalization.
At press time, the total market cap of all cryptocurrencies stand at over $222 billion. Bitcoin represents $146.9 billion of that total. Therefore, even if the portfolio of institutions is comprised of bitcoin, $18.16 billion accounts for only 12.4% of the cryptocurrencys market cap. If you consider that institutions are also buying altcoins such as Ethereum, it is possible that the institutional share is around 6%.
Therefore, retail investors are still keeping bitcoin buoyed. Unfortunately, retail HODLers are vulnerable to price manipulation. If a government eliminates hope from the equation, retailers are very likely to capitulate.
Many crypto enthusiasts are aware that the price of bitcoin is correlated with Google searches for terms related to the asset. Whats astounding, however, is the level of correlation between the two variables. A new study revealed that bitcoin price is correlated by a whopping 80.8% to bitcoin-related searches.
The correlation is a strong indication that retail traders are highly susceptible to price swings. Should a government suppress the price of bitcoin, interest for the cryptocurrency would likely drop. A drop in interest would probably result in lower prices, making it easier for the government to keep the downward spiral going.
The key for the government to successfully kill bitcoin is time. Alex Kruger talked to CCN about the issue and said,
Price would need to be depressed for a long time though. Time [is] more important than price.
Thats true because even if an entity shakes out almost all retail traders, the hardcore bitcoiners and the HODLers will likely dig in. They will probably fight until the bitter end but their numbers would dwindle over time. Eventually, the number of bitcoin HODLers will reach a point that their existence would not matter.
Fortunately, it seems that governments are more interested in regulating bitcoin than destroying it.
Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
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Top Economist Says That the Way to Kill Bitcoin Is to Keep Price Under $1,000 - CCN.com
BITCOIN: Cryptocurrency is for criminals, says inventor of worlds leading computer code – Express
Danish computer scientist Bjarne Stroustrup invented the language C++ in 1985. Even now, 34 years on, it remains the one of the most commonly used codes woven into systems throughout the world.However, Stroustrup now says his one overwhelming regret over the last four decades is that his work went on to become the code upon which bitcoin is based. When you build a tool, you do not know how it is going to be used, he lamented.
Im very happy and proud of some of the things C++ is being used for and there are some other things I wish people wouldnt do.
Bitcoin mining is my favourite example it uses as much energy as Switzerland and mostly serves criminals.
The 68-year-old a managing director at Morgan Stanley in New York has spoken before about his dislike of cryptocurrency, but this is the first time hes expressed remorse over his code being used in the creation of BTC.
Speaking on the highly popular Lex Fridman podcast, the University of Cambridge graduate enthused over the great achievements made with computer science, but he turned his ire upon bitcoin when he discussed regrets, highlighting concern over environmental issues and criminality.
Almost half of all bitcoin transactions have, according to some studies, connections to criminal activities. It has also been suggested that almost a quarter of BTC users are also involved in illegal activity to the tune of $72 billion a year.
Bitcoin also attracts criticism for its negative environmental impact, using up a mind-boggling seven gigawatts of electricity a year and accounting for 0.21 percent of the worlds supplies.
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BITCOIN: Cryptocurrency is for criminals, says inventor of worlds leading computer code - Express
Bitcoin Upside Potential At $8k Is Far Greater Than the Down – Bitcoinist
As a novice Bitcoin trader, it may seem logical to think that long and short trades are pretty much equivalent. You decide if you think price is going up or down, and long or short it accordingly, right?
But that ignores the asymmetrical nature of the two options, as Scott Melker, a trader at TxWestCapital tweeted yesterday. Even a short from all-time high to bottom was less profitable than a long from that bottom back up to $6.5k.
And of course, even that isnt the whole story.
The first thing to consider is that short and long trades are not equal in every respect.For simplicity, lets look at a starting bitcoin price of $5k.
Now sure, you can choose to either short or long that price, and if the price goes down (or up), say $500, then you get a tidy 10% dollar profit, on either option.
But you arent content with 10%. You want to double your money, which means if you are shorting, Bitcoin price needs to drop to zero, and at that point you hit a limit. If you are going long, however, then price has to rise to $10k, from which point it can keep going and further increase returns.
This is why a short from the top of the market to the bottom (around $20k to $3200, or 84%) would have netted you less profit than a long from $3200 back to $6500 (103%). If you consider the (currently hypothetical) long from bottom back to $20k, then you are looking at 525% profit.
As pointed out in some of the replies to Melkers original tweet, however, this doesnt tell the whole story.
Whilst the dollar profit in the above example is certainly greater for the long option than the short, a successful short ends with a lower bitcoin price, hence your profit would be substantially more in terms of bitcoin. 84% of $20k would buy 5.25 bitcoin at $3200, whereas 525% of $3200 would only buy you 0.84 bitcoin at $20k.
So if you held the gains in bitcoin then the potential profit (after another swing in price) favours an initial short and thats before you even start looking at leverage.
But Melker does state that Shorting can be massively profitable when well timed and managed by a professional trader. However, for the majority of us, it is far easier to buy a dip and hold in a generally upwards trending market.
So at $8k, bitcoin has far more potential to the upside than the down.
Do you agree that Bitcoin has a better upside potential at $8,000? Add your thoughts below!
Images via Shutterstock
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Bitcoin Upside Potential At $8k Is Far Greater Than the Down - Bitcoinist
Bitcoin Mining Firms Whinstone, Northern Bitcoin Merger Announced; Creates World’s Biggest Mining Farm – International Business Times
A merger agreement between Northern Bitcoin (BTC) and Whinstone US Inc. could set the stage for the largest BTC mining facility in the world.
Northern Bitcoin, a German company that focuses on BTC blockchain technology, announced the merger via press release on Monday. The deal that involves their American competitor brings more experience and resources since the Whinstone Group has been in the blockchain industry in as early as 2014 with a successful track record in operating mining facilities in the Netherlands, Sweden and the U.S.
The mining farm that the merger was based off on is already being built by Whinstone, and it boasts a capacity of one gigawatt on an area over 100 acres in Texas.
Cryptocurrency market downfall has resulted in several miners selling their equipment at significantly low prices as they are facing huge losses. Here, two construction workers inspect the area at the bitcoin mining company Bifarms in Saint Hyacinthe, Quebec, Canada, March 19, 2018. Photo: LARS HAGBERG/AFP/Getty Images
"With this merger, we are catapulting ourselves faster than originally planned to the top of the world in Bitcoin mining. Whinstone's team has done a great job over the past few years and is proving its leadership in the blockchain industry by building the world's largest mining facility," said Mathis Schultz, CEO of Northern Bitcoin AG.
"Together, we have a dominant leadership position in this fast-growing industry and are well-positioned to benefit significantly from the future development of blockchain technology," he added.
The two companies expect the first phase of the construction to be completed in the first quarter of 2020. By then, they anticipate it to house 300 megawatts of capacity, which they estimate will rank them number one in the world.They expect to be at full capacity by Q4 of 2020.
Competition
Northern Bitcoin was founded in 2018 as a sustainable BTC miner as its mining operations in Norway rely on renewable energy sources, and along with Whinstone, they are up againsttwo other companies that are constructing mining farms in Texas.
Last month, startup company Layer 1 received $50 million from PayPal co-founder Peter Thiel, Shasta Ventures, and other investors to establish their mining farm that is located 150 miles west of Midland Texas.
Following the announcement of Layer 1, China'sBitmain also set its agenda for establishing a BTC mining facility in rural Texas just a few days after.Bitmain's power size will be at 25 to 50 megawatts that could go up to 300 to what it termed as the largest in the world -- a far cry now from what Whinstone and Norther Bitcoin targets.
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Bitcoin Mining Firms Whinstone, Northern Bitcoin Merger Announced; Creates World's Biggest Mining Farm - International Business Times