Cryptocurrency markets are on the move again: Category giant bitcoin has seen its tokens gain 40% in value in 2020 alone, and 155% over the last 52 weeks. If bitcoin was a stock, the "company" would be worth roughly $185 billion today. That market cap would land it right between aerospace titan Boeing and software giant Adobe as one of the 40 most valuable companies on the U.S. stock market.

Bitcoin's founders and supporters see it as "a new kind of money." As such, market watchers on both the bull and bear sides of the cryptocurrency debate often argue that the tokens -- currently trading in the neighborhood of $9,700 each -- will either skyrocket in value to at least $1 million, or bitcoin will collapse and die. There is no middle ground.

If bitcoin achieves a large enough scale and a wide enough acceptance to become a viable alternative to gold, silver, or national currencies as a value store, the cryptocurrency will have a bright future. If not, it's supposedly heading to zero in the end. The same goes for many other cryptocurrencies, and hundreds of them have already crashed and burned.

Image source: Getty Images.

So how big is the total cryptocurrency market as a value store today? Surprisingly small, actually:

Data sources: Coinmarketcap.com, SIFMA, World Federation of Exchanges, Golden Eagle Coin, JM Bullion. The chart uses the latest available value estimate for each category as of Feb. 19, 2020.

The stock and bond markets make the others look tiny. Let's zoom in on the precious metals and cryptocurrencies alone:

Data sources: Coinmarketcap.com, SIFMA, World Federation of Exchanges, Golden Eagle Coin, JM Bullion. The chart uses the latest available value estimate for each category as of Feb. 19, 2020.

Yeah, it's still difficult to see bitcoin and its crypto-peers next to the mountain of gold. I was surprised to see the relative lack of value in silver, but while modern mining companies extract more than 10 times as much silver every year than gold, ounce for ounce, gold is close to 90 times more valuable. And less than 5% of all the silver ever mined is in an investable form today -- coins or bullion. The rest has been used for jewelry, decoration, or by industry -- and a fair share of it has essentially been lost. You learn something new every day.

So where does this leave the cryptocurrency discussion? Well, neither bitcoin nor the crypto market as a whole stand anywhere near the multitrillion-dollar value levels of gold, bonds, and stocks. Investors looking for stable assets would clearly be better served to put their money into any of the three larger asset classes, not to mention alternatives such as real estate or owning your own business.

On the flip side, let's imagine a future where bitcoin (or some better-designed cryptocurrency) becomes a viable alternative to owning gold and reaches a similar market scale. If it's bitcoin, that would require its value to increase at least 40-fold from current levels. We're not likely to see a surge like that in a single upward run; bitcoin only multiplied 21-fold during its historic price run of 2017, and the volatility of investments tends to fall as the assets grow larger.

But many investors/speculators/visionaries/gamblers (pick your preferred epithet) are betting on that bullish outcome in this all-or-nothing asset class. Over a recent 24-hour period, $46 billion of bitcoin tokens changed hands, or 25% of the entire currency. That's huge next to the average daily dollar volumes of trading in Adobe ($734 million) or scandal-stricken Boeing ($2.15 billion). It's even enormous in comparison to trillion-dollar market behemoth Apple, whose average dollar volume clocks in at $8.8 billion.

It takes a lot of traders to move that much bitcoin in a single day, including plenty of deep-pocketed market makers. Bitcoin's trading volumes have never been this overheated, not even at the peak of 2017's crypto-mania, when daily trading topped out near $23 billion.

I wouldn't be surprised to see bitcoin and friends making a big move soon as the higher trading pressure either becomes the new normal or pops and drops. Whether the cryptocurrency market rises or falls, I'm content to simply hold on to my tiny crypto portfolio, which consists of a $20 "let's try this" whim from six years ago.

See the rest here:
Will Bitcoin Ever Be a Serious Alternative to Gold and Stocks? - The Motley Fool

Two leading cryptocurrency analysts say they believe Bitcoin is in a new bull market cycle, but predictions that BTC is poised to soar to $100,000 are far too bullish.

In a recent episode of Trading Bitcoin, Tone Vays and the pseudonymous trader Filbfilb debate the current state of the crypto market and where it may head in the months to come.

Vays says BTC needs to close above $10,450 to signal that a bigger move to the upside is in store. Bitcoin came extremely close to that number on Wednesday, reaching $10,444 before plummeting to its current price of $9,568, according to CoinMarketCap.

Filbfilbs says his target for opening a long position is significantly higher. Hes looking to see if and when BTC can cross $11,500.

As for how high Bitcoin may climb in the next long-term market cycle, both analysts say they expect a new bull market top to hit well below a litany of predictions calling for a parabolic rise to $100k. Says Filbfilb,

I think were going to struggle to get past $60k. I think $60k is going to be a really, really troublesome level to get across. Ill certainly be looking to book in some serious profits at that point.

I think you said it right in Fiji. I think you said the return you get off of these long-term positions versus the risk of you getting it wrong is a terrible trade. So trying to go higher than $60k I think would be a little bit foolish at this point. But certainly around $50k, $60k would be sensible.

Vays says hes looking for BTC to top out at a slightly lower price of around $45,000.

Although the traders say hype around Bitcoins halving is fueling price action in early 2020, they say rising trading volumes and an increasing number of outstanding derivative contracts are key metrics to watch in order to gauge real long-term interest in the space.

Featured Image: Shutterstock/sustainableart

More:
Top Cryptocurrency Analysts Say $100,000 Bitcoin Predictions Way Off Base Heres Where They Think BTC Will Land - The Daily Hodl

Japan has joined the league of countries working on a Central Bank of Digital Currency (CBDC) for a national cryptocurrency. The apex bank in Japan, the Bank of Japan (BoJ) is set to unveil the countrys national cryptocurrency. This development is coming as a result of several meetings and discussions by the countrys financial and monetary regulatory agencies on the development of having a Central Bank of Digital Currency (CBDC) in Japan. The national cryptocurrency is a joint project of the Bank of Japan (BoJ), the Ministry of Finance (MoF), and the Financial Services Agency (FSA).

It is believed that the launch of a national cryptocurrency will establish the Asian country as a force in the crypto industry. This digital currency would give room for quick, secure, and cheap cross-border monetary transactions. The impact of a national cryptocurrency launch in Japan on the global market, which is centered on US dollars, is one of the significant research being carried out by the Japanese financial authorities.

It would be recalled that China has said it is advancing in progress about the launch of its digital currency. Hence, Japanese authorities believe that the country needs the input and support of the United States to favorably compete and counter the efforts being made by China in the global financial system.

Japan recently entered a partnership with the Bank of International Settlement,along with the central banks of Britain, Sweden, Switzerland, and the eurozone on the issue of a potential national cryptocurrency.

The regulatory authorities of the financial market in Japan have so far approved about 21 crypto exchanges under the countrys fund settlement law. The law has made cryptocurrency a legal tender in the Asian country and a means of settling payments.

Featured image by Pixabay.

More:
Japan on the verge of national cryptocurrency? - Cryptopolitan

In a recentWall Street Journalarticle, Mary Anastasia OGrady writes that VenezuelasNational Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the governments new digital fiat currency, the Petro.The Venezuelan government claims its digital currency, which launched in early 2018, is backed one-for-one by a barrel of oil. The petro is also intended to circulate at a fixed exchange rate with the bolvar soberano, the latest iteration of Venezuelas fledgling currency.

Ms. OGrady quotes me summarizing some of the work I have done with Josh Hendrickson and Thomas Hogan, which shows that a government canget its citizens to use its preferred money so long as it issufficiently bigor is willing to levysufficiently large punishments. But she leaves another question unanswered:why would the Venezuelan government prefer the petro? Stays Alive

Three reasons stand out.

Venezuela relies heavily on oil revenues.According to OPEC, oil revenues typically account for around 99 percent of Venezuelas total export revenues. And, historically, much of those oil exports have gone to the U.S. However, its oil exportsfell by a third in 2019, in large part because ofeconomic sanctions levied by the U.S.

To fully appreciate the nature of the problem, it is useful to make a distinction between primary and secondary sanctions. Primary economic sanctions levied by the U.S. government prevent Americans from purchasing oil from Venezuela. However, the U.S. government has also announced that it will impose sanctions on anyone else trading with Venezuela. And these secondary sanctions have been pretty effective.

Why are U.S. secondary sanctions so effective?J.P. Koning is certainly correctwhen he writes that most companies and countries do not want to risk losing access to U.S. markets. But he probably goes too far in claiming this has very little to do with the U.S. dollar functioning as the worlds reserve currency. The U.S. government has a much easier time monitoring international transactions executed in U.S. dollars.

International transactions executed in U.S. dollars are typically cleared in a New York bank. Those banks know their customers and are obliged to hand over transactions data to the U.S. government when subpoenaed or if they suspect a crime is being committed. Related: Texas Oil Production To Rise In 2020 Despite Lower Prices

If the international transaction is executed in some other currency, like euros, the information is a little more difficult for the U.S. government to access. Of course, most European banks will refuse to clear the transaction as well since the U.S. government can require they hand over the relevant transactions data, in which case they would be found to have violated sanctions by processing the transaction, or they would lose access to U.S. markets on grounds of non-compliance; and, since most international transactions are executed in U.S. dollars, a European bank that cannot transfer money to and from U.S. banks will struggle to serve its international transactions-making customers.

Nonetheless, the risk of detection is probably a little lower than it would be if the transaction were made in U.S. dollars. And, as a result, the transaction is more likely to be executed.

The international financial plumbing has a lot of pipes running to and from the U.S. And that gives the U.S. a lot of power to levy sanctions, not just on its own citizens, but also on citizens and companies of other countries interested in international trade.

You can probably see where this is going. If Venezuela were able to create a parallel financial system, one with no pipes going to and from the U.S., it could make and receive international transactions with even less risk of detection than is afforded by other national currencies, like the euro, ruble, or renminbi.

Thats where the petro comes in. As a digital currency, it enables one to send or receive funds virtually anywhere around the world. And, to the extent that those transactions are disconnected from the U.S. financial system, they are much less likely to be detected by the U.S. government.

Again: the sanctions still apply. But, by conducting transactions in petros, they are easier to get around.

Why, then, does Venezuela push the petro at home? Why not just require it for international transactions? For one, few will be willing to accept the petro if there isnt a very big market for petros. Hence, by increasing the demand for petros at home, Venezuela makes it less risky for foreigners to accept them if only for a short period of time.

For international transactions, the petro offers those interested in skirting U.S. sanctions some financial privacy not afforded by traditional cross-border electronic transfers. For internal transactions, in contrast, it almost certainly offers far less financial privacy than hand-to-hand currency.

As Josh Hendrickson and I explain in arecent working paper, hand-to-hand currency cash affords a lot of financial privacy. There are drawbacks to using cash, to be sure.

Cash does not bear interest. It is easier to lose and easier to steal than balances held at a bank and less likely to be insured due to loss or theft. It is more cumbersome for high-valued transactions, since one must carry many notes, and odd-amount transactions, since one must provide the correct denominations. And it typically requires the sender and receiver to be physically present in the same location when funds are transferred. Related: U.S. Administration Discusses Plan To Oust Venezuelas Maduro

But, for relatively small, local transactions where financial privacy is important, cash is still king.

It is easy to imagine, then, why the Venezuelan government might want to push its citizens to swap physical bolivares for digital petros even in the absence of international sanctions. The petro makes it much easier to monitor transactions and punish those conducting transactions inconsistent with the prevailing governments objectives.

It is difficult to mount much opposition without funding. And it is difficult to raise funds for an opposition movement if would-be contributors worry they will be caught and punished. By requiring petro use, the Maduro regime tightens its grip on power. YOUR INBOX

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Finally, widespread petro use would presumably help Venezuela with another one of its self-inflicted problems: cash shortages.

When the money supply (i.e., cash and deposit balances) increases, as it tends to do quite rapidly in Venezuela, the purchasing power of that money falls. As a result, more cash is needed to make routine transactions. But Venezuela does not print its bolivares notes. And, for obvious reasons, the private companies willing to crank out its ever-increasing supply of bolivares notes are not willing to receive payment in bolivares.

This has led to some amusing headlines. In April 2016,Bloombergreported thatVenezuela Doesnt Have Enough Money to Pay for Its Money. In July 2018, theEconomistreported thatVenezuelan cash is almost worthless, but also scarce. The reality on the ground is far from amusing, though. The inability to make routine transactions leads to a decline in production, leaving ordinary Venezuelans even poorer than they already were.

There are two solutions to this problem.

If the National Superintendency for the Defense of Socio-Economic Rights is successful in pressuring stores to accept the petro, it would serve the Maduro regime well. By making it easier to avoid sanctions, the petro enables the government to regain some of its lost oil revenues. By making it easier to monitor domestic transactions, the petro aids efforts to stamp out political opposition. And, by reducing the need to print up so many new notes during periods of hyperinflation, the petro reduces the likelihood and magnitude of cash shortages.

Alas, in helping the Maduro regime maintain power, the petro seems unlikely to improve the lives of ordinary Venezuelans.

By William Luther via Zerohedge.com

More Top Reads From Oilprice.com:

Read more:
Why Venezuela's Oil Based Cryptocurrency Is Still Alive - OilPrice.com

However, IoT is 25-year-old technology but is gaining traction now due to portable devices and seamless connectivity. Before we dig deeper into how cryptocurrency favors IoT, let's understand the fundamentals of both technologies.

Fundamentally, cryptocurrency is an encrypted decentralized currency that works on a peer-to-peer architecture digitally. The exchange of cryptocurrency happens through a blockchain, which includes the whole process of digitally mining currency and exchanging it to peers, which is recorded in a hyperledger. Undoubtedly, the world now knows Bitcoin, which is a leading cryptocurrency known for its immense volatility. Bitcoin is also one of the most successful cryptocurrencies which has gained worldwide recognition and was adopted by various businesses like NameCheap, Subway, Twitch, Expedia, and Wikipedia.

All cryptocurrencies are capped, and the limit determines the price according to demand and supply. The best part of cryptocurrency is that it bypasses all conventional regulations, bureaucracy, and central authority, making it easy to use and highly convenient for all its uses. The scope of fraud and error is next to zero as there is no manual intervention, calculation, or reconciliation in the whole process. All exchanges and maintained in a ledger that can be accessed by anyone; however, the transactions are encrypted in hash format.

Coins

Cryptocurrency coin is the currency unit of a particular technology-based cryptocurrency. For example, Ethereum has an Ether coin, XRP has Ripple coin, and so forth. A unit of cryptocurrency can be called as a coin. The trading of cryptocurrency is performed on a coin basis only.

Wallet

A digital wallet is mandatory for any currency exchange, and in the case of cryptocurrency, it is recommended to save your cryptocurrency in a safe and secure wallet. Most of these wallets have a private key, are secured by Two Factor Authorization (2FA), and has a public address so that anyone can deposit. Many companies also have a combination of QR codes and private keys for enhanced security. A wallet provides a mini statement of user's transactions and also stores cryptocurrency in the most secure manner.

Blockchain

Blockchain is the underlying technology behind cryptocurrency, which is based on a public ledger that records all transaction data throughout the world. No manual manipulation is possible on the hyper ledger, which makes it the ultimate safest route of money transfer.

Cryptocurrency and IoT is a perfect blend for automation in industries like Manufacturing, RPA, Financial Services, and more. The internet of things (IoT) is all about smart automation, which includes devices communicating with each other for a seamless factory unit. With the blend of cryptocurrency, your car can refill and pay through crypto, your fridge can remind that the milk is over, and at the same time, order milk from the nearest store and pay through cryptocurrency. While all this happens, the consumer will only require to input fingerprint for payment authentication. IoT in cryptocurrency is not only limited to consumer applications but is also associated mainly to enterprises and large scale industries, where centralized authority is a priority for a secure infrastructure.

In 2017-18, the world saw a cryptocurrency boom with various people making fortunes and also some of them going bankrupt. However, Facebook and Google banned cryptocurrency ads on their platforms soon, and since then, there has been no volatility in the currencies at all. Below we have mentioned some reasons why Cryptocurrency favors the Internet of Things (IoT) and how it will enhance the overall productivity of various industries.

Worldwide Adoption

For any currency to go mainstream, it requires adoption from both the seller and buyer side. This involves the integration of cryptocurrency in the current payment gateways so that the point of sale (POS) systems can handle these currencies. Enterprises should start using cryptocurrencies in their existing IoT devices for internal payments, pilot this project, and open it for the public domain.

Beneficial for Consumers and Enterprises

Cryptocurrency also makes a lot of sense for the consumer IoT. Devices like Amazon Alexa and Google Home are already ready IoT devices ready for consumer adoption. When these devices are integrated with cryptocurrency, it has the potential to automate online shopping just through voice or whenever the stock gets over. This can also occur for large-scale purchasing within the organization from a centralized zone.

Microtransactions

Currencies blended with IoT can be a boon for the financial systems at the microlevel. Next-level automation is possible through a combination of both technologies, which includes water pumps been shutdown when overflowed, automatically street lights switching off after sunlight, and traffic lights sending penalty receipts to drivers overspeeding.

Blockchain might solve various IoT challenges

The power of digital ledger has various scope in non financial transactions also and which directly impact the IoT atmosphere. Manufacturing and factory setups can benefit a lot, as there are multiple interactions between multiple devices on the premises. The blockchain ledger is distributed, secured, encrypted, and safeguard against any kind of fraudulent. Various hackers currently attack the IoT infrastructure around the world due to unsafe private infrastructures within the company.

With the blend of IoT and cryptocurrency, shortly, we will see multiple hardwares with a decentralized network of software. These IoT devices will act as a host to run the software, which is currently controlled by a centralized cloud network. With crypto, IoT devices will be self-reliant and will host themselves on a decentralized network. The systems can also mine to pay the hefty infrastructure costs.

All enterprise stakeholders and CIOs should carefully analyze the benefits of applying blockchain and cryptocurrency in IoT. The nature of no regulations can be a bane and a boon for the company. The adoption rate of the above technologies is gradually increasing, and there is also less volatility in the cryptocurrency arena. The world in the coming times is going to see various new technologies which are equipped with cryptocurrencies and IoT, making the automated smart living experience possible.

Read the rest here:
How Cryptocurrency Favors Internet of Things (IoT) - HostReview.com