Bitcoin prices just hit another all-time high at $1,722. Most of the reasons why I've been bullish on the digital currency or asset remain in place. Here are six of the most important:

1. Venture Capital is betting big

By now there is $1.5 billion in venture capital backing various cryptocurrency ventures. These are mostly startups working to make blockchain and cryptocurrencies more accessible and or more useful. Payment systems benefit from a network effect, gaining traction is very important. So far this year about $100 million of venture capital went into the space which is slightly behind the pace for 2016.

2. The Network Effect

As I said there is something of a network effect and Back in 2013 there were only 13.000 wallets on Coinbase. Today there are 6.8 million. Coinbase is backed by major names in the venture capital world:

3. Big business adding to the ecosystem

It's not just venture capital that's building out the ecosystem. A big name like IBM (IBM) is issuing a steady stream of blockchain related press releases like this one and this one. Overstock (OSTK) build the first blockchain stock exchange and issued a preferred share through it. Microsoft (MSFT) started accepting Bitcoin.

4. Hedge Funds buying in

The graphs below show Google search interest in Bitcoin, courtesy of Bitcoinist, and interest by city. The interest by city shows heightened interest from the hedge fund communities close to New York City. Which suggests the people living here are educating themselves on cryptocurrencies:

5. Asset management and family offices buying in

Asset management firms and family offices are increasingly acknowledging the potential of cryptocurrencies and so are hedge funds. In a previous article Ive already documented how U.S. asset management firm Horizon Kinetics started a Bitcoin fund for its clients (emphasis mine) and there was a lot of interest:

In 2016, Horizon Kinetics also established a fund that invests in bitcoin. Bitcoin is an example of a cryptocurrency. This asset class will be discussed more fully in the section pertaining to our investment in Digital Currency Group. This asset class did not exist several years ago; it is entirely new. The fund established an investment maximum of $50,000 per client. We are not aware of any other firm that so constrains client contributions. However, we believe it is the easiest and most obvious way to control risk. We simply limit the amount of money that can possibly be lost to an amount that is tolerable. Investment firms often complain about the short-term focus of clients. The short-term focus is more understandable if the investment in failure mode could quite negatively impact their lives. In any case, we rapidly sold essentially every available slot in the fund.

Later I heard from the company they have two funds that are open to accredited investors only.

Ark Invest holds bitcoin through the well known GBTC trust. Their whitepaper is a must read. They hold GBTC in its Next Generation Internet ETF (ARKW) and the ARK Innovation ETF (ARKK). Horizon Kinetics also invests in GBTC though its Kinetics Internet Fund No Load (WWWFX), Kinetics Paradigm Fund No Load (WWNPX) and Kinetics Market Opportunities (KMKAX). When fund buying becomes widespread this can really move Bitcoin in a big way, as I previously wrote:

1) On a global basis there's over $100 trillion in assets under management. Imagine only a 1/10th of 1% getting moved into bitcoin.

2) Institutions holding for diversification or long-term investment purposes may have much steadier hands than the current bitcoin traders, which could help stabilize bitcoin's volatility, which would in turn make it more attractive to other investors and retailers.

6. Bitcoin runway

With Bitcoin now hitting record highs and no clear way to value it many people will be thinking: I guess I missed the boat. One way I think about it is as follows; can Bitcoin, or another cryptocurrency, reach the market cap of Visa? Perhaps displace Visa (V)? Could it become something like digital gold? Can it replace the Dollar as a reserve currency? If your answer is yes to any of these questions it can at least quadruple:

Source: Created by author.

Easy ways to get some Bitcoin:

I use the above-mentioned Coinbase, which is a cloud based cryptowallet. It is very user-friendly. No advanced tech knowledge is required. In addition, you can also hold Ethereum and other emerging cryptocurrencies, which is very interesting and convenient to me.

Disclosure: I am/we are long OSTK, FRMO.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I also have some exposure to Bitcoin and other cyrptocurrencies.

Continued here:
6 Reasons To Buy Bitcoin At Its $1722 Record High - Seeking Alpha

Bitcoin surged past $1,700 on Tuesday, extending an astonishing rally that has seen the total market value of all virtual currencies more than double since the beginning of 2017.

The price of a single bitcoin BTCUSD, +7.86% has gained more than $300 in the past week, to trade as high as $1,747 on Tuesday, according to the CoinDesk Bitcoin Price Index, which aggregates pricing across a handful of the largest exchanges. Meanwhile, daily trading volume has surpassed $1.3 billion for the first time, according to Coin Market Cap.

However, prices varied widely between exchanges. On Kraken, one of the biggest U.S.-based exchanges, one bitcoin recently went for $1,578, while simultaneously trading at $1,742 on GDAX, another popular U.S.-based digital-currency exchange.

Price discrepancies were even wider across different markets, with coins trading on Korean exchanges like Korbit and Coinone in excess of $2,000, valued in Korean won USDKRW, +0.49%

Spencer Bogart, head of research at Blockchain Capital, said the Securities and Exchange Commissions decision to revisit its rejection of the proposed Winklevoss Bitcoin Trust exchange-traded fund was one possible catalyst for bitcoins recent rally.

But he said the massive appreciation in smaller rivals like Litecoin and Ripple has probably contributed to the bulk of bitcoins move: Many of these coins are denominated in bitcoin, so investors who wish to buy them must first have it on hand.

The virtual-currency market has all the trappings of a bubble, Bogart said, though he thinks it could have more room to rise before a correction occurs. A correction is typically defined as a decline in an asset from a recent peak of at least 10%.

Its definitely unsustainable, Bogart said, though I dont know if its in its final moments right now.

Chris Dannen, founder of New York-based cryptoasset fund Iterative Instinct, said the massive wealth creation in the space has fostered a pattern where wealth shuttles back and forth between bitcoin and other alt-coins, or alternative cryptocurrencies.

Though Dannen added that he suspects at least some of the recent run-up could be the result of manipulation by a handful of whaleswealthy traders with large reservoirs of cryptocurrency wealth, who use their relative heft in the marketplace to move prices to their advantage.

Theres a group of whales out there, they kind of bounce around from coin to coin, he said. They clearly have a system. Its almost like the tide is coming in and out; you know theres a pattern.

Continued here:
Bitcoin soars past $1700 - MarketWatch

Adam Davies, consultant at Altus Consulting believes the value of a single bitcoin will reach 3000 by the end of the year. He explains why.

In January, people reacted strongly when Bitcoin passed the $1000 mark. Then in March Bitcoin surpassed the price of gold. So it was hardly a surprise when in May, it reached a new all-time high, trading above $1,400, mostly attributed to strong demand in Japan where it is now deemed a legal means of payment. The price of Bitcoin has tripled in the past year, and I believe it may top 3K in 2017.

The success of the digital currency lies in its universality and convenience, allowing people to do things in an easier way, much like the transport and telecommunications industries. However, just because something is easy does not necessarily guarantee adoption. So what is driving its popularity?

This year, the adoption of Bitcoin will be driven by those who operate in the grey economy and thus experience the strongest barriers to value transfer.

A burgeoning grey market

To use Bitcoins you don't need any proof of ID. Acquiring and transferring them from one location to another is extremely easy. Bitcoin rose to infamy due to its use on the dark web as the unit of currency for sites such as Silk Road, best known as an online market for selling drugs. However, Bitcoin is now being adopted by many people who want to move money across borders and hedge against hyper-inflation and currency restrictions, or as in India, banknote demonetisation. This is happening across the globe. Whereas dark web sites such as Silk Road occupy the dark market, this upswing in Bitcoin usage is known as the grey market. These activities are likely become more and more mainstream in light of the changing political and economic climate, and this will drive a further increase in popularity. Thus Bitcoin is rapidly becoming a safe haven investment, being free from government interference, and with limited supply.

The right environment

Before the Brexit vote, when the world seemed a safe and consistent place, I put forward the theory that Bitcoin would pass gold as the safe haven currency. At the time I realised that given the right conditions digital currencies would only trend up in value. Since then weve seen the right conditions develop; China has a fragile economy, new political direction in the US, the political tsunami of Brexit, and upcoming European elections means we are likely to see more economic volatility.

A consistent value

Almost all currencies are valued by either securing the currency against a commodity or by comparing its value against another currency. Bitcoin is unique; it not created by a sovereign state and without an owning authority. The value of Bitcoin is solely determined by the price someone is willing to pay for it. This is an important distinction from traditional currencies and the key strength of Bitcoin. With traditional currencies, when making international trades electronically you are relying on the availability of supply. If there are not enough dollars, yuan, euros or pounds the value of the currency will increase, or more is issued to cover the shortfall (supply and demand). This means one of two things, either the value of good in transit increases or the currency in question is devalued.

The value of bitcoin is, instead, determined by the value of products within trades taking place. When bitcoin was starting out, there wasn't much trade and therefore there wasn't much value; the value of a Bitcoin was low. Today, as we watch bitcoin becoming increasingly popular, the amount of in-flight trade in goods using Bitcoin mans that the value must increase in order to cover the value of the goods. As there is a limited supply of Bitcoin and the supply will only increase slowly over time to a maximum of 21 million, the increase in trade volumes will result in an increase in Bitcoin value.

So the reason I believe that bitcoin will reach 3k in 2017 is really down to how much the value of trade will increase in 2017. The largest ever bitcoin transaction was on 12th March 2017 at $860K, the largest number of transactions in a single day is a number that increase week on week. This shows a upwards trend of Bitcoin usage, and as Bitcoin is not seen as an tradable commodity by the investment houses, this trend is driven by trade. Which means Bitcoins has to increase in value to meet the demands of higher trade and value volumes and thus higher value transactions.

So what?

The value of Bitcoin transactions, with more increasing adoption and acceptance, underpinned by easy access, growth could actually outstrip the original $3000 prediction. If not by the end of this year, then probably in the next. Bitcoin is one to watch.

Read the original:
Bitcoin set to go boom - Finextra (press release)

Bitcoin price could be due for more gains as it broke to the upside from its short-term symmetrical triangle pattern.

Bitcoin price could be due for more gains as it broke to the upside from its short-term symmetrical triangle pattern.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the 100 SMA lines up with the triangle support, adding to its strength as a floor in the event of another pullback. Also, the gap between the moving averages is getting wider to reflect strengthening bullish momentum.

Stochastic is on the move up to show that there is some buying pressure left but the oscillator is nearing the overbought zone to indicate rally exhaustion. Once it turns lower, selling pressure could return and trigger a pullback to the broken triangle resistance around $1550.

RSI is also heading north so bitcoin price might follow suit. This indicator is also approaching overbought levels so buying momentum could fade at some point. However, if bulls keep charging, bitcoin price could retest the latest highs or even set new ones.

Economic data from the US turned outs stronger than expected on Friday as the economy added more jobs than expected while the average earnings figure came in line with estimates. The Fed labor market conditions index is due today and a rise from the earlier 0.4 reading could support stronger odds of a rate hike in June.

Still, bitcoin price is enjoying support from stronger volumes in Japan as the governments recent decision to accept the cryptocurrency as a legal form of payment has led to increase activity among investors. Expectations for SEC approval for the COIN bitcoin ETF is also driving up demand and price at the moment.

More:
Bitcoin Price Technical Analysis for 05/08/2017 Another Bullish ... - newsBTC

Bitcoin was introduced in 2009 as an alternative network to the global financial system monopolized by centralized institutions and strictly regulated financial service providers. By providing a peer to peer protocol wherein users can send and receive transactions with the absence of intermediaries, Bitcoin essentially became the first decentralized financial platform.

Replicating or being inspired by Bitcoins structure, alternative cryptocurrencies or altcoins emerged. One of the most successful cryptocurrencies that has maintained its market cap and client base over a relatively long period of time is Ripple. It consistently has ranked in the top three altcoin, falling behind Bitcoin and Ethereum. Ripples vision was to provide a more efficient infrastructure for the centralized institutions and the conventional finance industry.

Ripple is significantly different to Bitcoin philosophically and structurally. If bitcoin is described as a decentralized peer to peer network developed to operate as an alternative financial network to that of the existing global financial system, Ripple can be explained as a protocol structured to serve and enhance the existing global financial system. It has partnered with leading banks and major financial institutions to settle cross-border and cross-bank transactions transparently, with strong security measures in real time.

The current global financial system operates on top of an outdated and inefficient IT infrastructure and system. For a transaction to become fully verified and settled, it could take days to weeks with a substantial fee, usually in the range of $30 to $50 per transaction. Often times, transactions initiated by banks through an international financial network such as SWIFT get lost within the system, requiring manual confirmation and a period of weeks for the transaction to be recovered and settled.

Essentially, Ripple utilizes blockchain technology and the concept of digital tokens to simplify global banking. Major banks and financial institutions are in agreement with Ripples vision and strategy and have adopted Ripples system. Most recently, CryptoCoinsNews reported that Spanish banking giant BBVA began to utilize Ripple blockchain for Spain-Mexico money transfers.

This pioneer initiative is a clear demonstration of how payment processes can be vastly improved through the implementation of emerging technologies. These improvements will benefit our clients transnationality, head of digital transformation in investment banking at BBVA stated.

However, an ambiguous component of Ripples services is the necessity of intermediaries. In an email, Ripple representative told CryptoCoinsNews that Ripple executives believe banks arent going away and that bitcoin is getting it wrong. Yet, by growth, bitcoin has evidently appealed to a wider range of users, businesses and investors as it is valued at $23.7 billion at the time of reporting. Ripples market cap is below 10 percent of bitcoins.

`An intermediary such as BBVA utilizing the Ripple network for a customer can be understood as an intermediary using another intermediary to process transactions. Thus, in the long run, one of the two intermediaries could be rendered ineffective. Either users will solely rely on the Ripple network and utilize XRP to make transactions with each other or banks will develop their own blockchain network similar to SWIFT and simply discard its partnership with Ripple.

The issue with banks developing their independent blockchain networks is the necessity of cooperation and collaboration. Hence, by relying on an existing blockchain network structured to serve financial institutions, banks can cut development costs.

Three advantages Ripple offers to its banks is speed, certainty and cost. By utilizing a decentralized blockchain in Ripple, banks can potentially see a reduction of billions of dollars in operating costs. Whether banks will remain with Ripple and work on the development of a cross-bank network or form their own blockchain network like JP Morgan is still difficult to speculate.

Featured image from Shutterstock.

Advertisement:

Read the original:
How Ripple is Targeting an Entirely Different Market to Bitcoin - CryptoCoinsNews