$1 Million: IBM Crypto Chief Sets Massive Bitcoin Price Target

IBM VP of Blockchain and Digital Currencies Jesse Lund is bullish on Bitcoin – so bullish, in fact, that he set a long-term $1 million price target.

Bitcoin Price Has Million-Dollar Potential

Lund revealed his long-term Bitcoin price target at the recent Think Conference, in an interview with Fred Schebesta.

The IBM executive pointed out that the higher the price of a crypto asset, the more utility it has. Therefore, he thinks people should focus less on the moving prices of crypto assets and more on their utility.

“If the price of Bitcoin were higher, there would be more liquidity on the network, we could be having a really different discussion with banks right now,” he says.

He adds that speculators are hurting the value of cryptocurrencies “because they’re thinking about it wrong.”

Lund sees the Bitcoin price rallying by more than $1,000 before the end of 2019.

Later in the interview, Lund made an astonishing remark as to the future of cryptocurrencies. By New Year’s Eve, he predicts the price of Bitcoin will be $5,000. However, his long-term outlook is much different.

“I have a long-term outlook. […] It goes back to that discussion about the utility of the network with a higher price. I see Bitcoin at a million dollars someday. I like that number because if Bitcoin’s at a million dollars, then the satoshi is on value parity with the US penny. And that means there’s over $20 trillion of liquidity in this network. Think about $20 trillion in liquidity and how that changes things like corporate payments.”

Lund’s view is that when the Bitcoin price gets high enough, serious banks take more interest. When this happens, the utility of the token increases at its core value proposition – less-expensive transfers of value. Both IBM and R3 Corda are working hard on creating solutions for cross-border payment solutions using multiple digital assets.

It’s not every day that someone from the old world of technology predicts such a high price for Bitcoin. The $5,000 figure may even be debatable from here, as speculators make anything possible.

Lund: Stellar is a ‘Viable Settlement Instrument’

stellar
IBM exec. Jesse Lund praised Stellar’s utility for settlement. | Source: Shutterstock

IBM recently launched its World Wire product, which in part relies on major cryptocurrency Stellar. Lund explained that Stellar is useful for cross-border payments, despite its smaller market cap.

“There’s no technical reason or technical barriers that should prevent money from flowing the same way [as information]. […] The architecture of World Wire is really a cross-border payment network, the magic of which, if you will, the novelty of it, is the ability to send payment instructions saying, ‘Hey, I’m sending you something, get ready.’ And on the other end, the receiver is making sure that who you’re sending it to is not some nefarious actor or bad actor.”

“Once that happens, and that happens really fast, then we send the value along with it. That transfer of value is made possible by digital instruments, settlement instruments, of which Lumens is one. So we see Lumens as a viable settlement instrument in this ecosystem of cross-border payments.”

Lund believes that a variety of assets should be available when making cross-border settlements. Most blockchain protocols outside of smart contract platforms don’t allow for the transfer of multiple assets. In essence, IBM’s World Wire is an alternative to R3’s Corda settlement layer, which in part uses Ripple.

Featured Image from Shutterstock. Price Charts from TradingView.


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Author: P.H. Madore
Image Credit: Source: Shutterstock

Bitcoin Investors Are Abandoning Crypto for Gold during the Bear Market: Vaneck CEO

Bitcoin investors are abandoning crypto in favor of traditional commodities like gold amid the prolonged market slump. That’s the observation of Jan Van Eck, the CEO of investment management firm VanEck Associates.

Van Eck says this is a reversal of the trend he saw in 2017, when the then-sizzling bitcoin pulled demand from gold during the crypto bull market.

“I do think that bitcoin pulled a little bit of demand away from gold in 2017,” Van Eck told CNBC (video below). “Interestingly, we just polled 4,000 bitcoin investors. And their No. 1 investment for 2019 is actually gold. So gold lost to bitcoin [before], and now it’s going the other way.”

‘Bitcoin Sucked the Life Out of Gold’ In 2017

Tim Seymour, the founder of Seymour Asset Management, agreed. “There’s no question that bitcoin sucked life out of the gold market [in 2017].”

However, Seymour says bitcoin has its limits as a long-term investment because it’s so volatile and is not a store of value.

“Not only have we lost all liquidity in the underlying [commodity], but truly outside of the existential blockchain argument, it’s been very difficult to argue [that bitcoin is a] store of value. Gold is a store of value, and there’s no disputing that.”

If gold is climbing, this is good news for Jan Van Eck, because his firm launched the first gold equity fund in the United States back in 1968. And in 2016, it rolled out the first gold miners ETF.

An informal Twitter poll conducted by Gabor Gurbacs ― VanEck’s director of digital strategy ― indicates that 41% of the almost 5,000 people who voted in the survey plan to invest in gold and other commodities in 2019.

VanEck Plans to Refile Bitcoin ETF Application

Separately, Jan Van Eck said he decided to withdraw VanEck’s bitcoin ETF application last week due to the 35-day US government shutdown. He thought it was wiser to withdraw the application than have it get rejected.

He also conceded that the SEC had concerns about VanEck’s inability to solve the custody problem and the fact that most bitcoin is priced overseas. However, Van Eck plans to re-file its bitcoin ETF application once the SEC resumes normal operational capacity.

“We will refile and re-engage in discussions.”

On January 25, President Donald Trump signed a temporary spending bill that will reopen the government until February 15. After that, if Trump and Congress are still unable to negotiate a solution for border wall funding, it’s possible (though unlikely) that another shutdown could occur.


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Author: Samantha Chang 
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How the US Government Shutdown Is Halting Crypto Progress on Wall Street

The longest government shutdown in U.S. history is hurting the crypto industry, too.

As the impasse in Washington stretches into its record-breaking fourth week, the closure of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has put key developments – namely, the approval and launch of products and services involving cryptocurrencies – on hold.

Notably, the launch of Bakkt’s bitcoin futures market was delayed in part by the company’s inability to secure approvals before Dec. 22, 2018, when the shutdown began. The platform, created by Intercontinental Exchange (parent of the New York Stock Exchange), is in a holding pattern until regulators can open a 30-day public comment period. A new launch date for the platform, which most recently was set for Jan. 24, has yet to be announced.

This lack of approval has not deterred Bakkt from building up its platform: the company announced Monday it was acquiring parts of independent futures commission merchant Rosenthal Collins Group (RCG) to bolster its regulatory compliance chops.

“We made great progress in December,” Bakkt CEO Kelly Loeffler wrote in post published on Medium on New Year’s Eve, “and we’ll continue to onboard customers as we await the ‘green light.’”

Other startups are in a similar state of limbo.

ErisX, a trading platform that recently raised $27.5 million from prominent investors, is also waiting for furloughed federal employees to return to work. The platform aims to be a regulated futures market and clearinghouse, which requires approval from the CFTC.

“ErisX’s interaction with the CFTC has been both positive and productive,” CEO Thomas Chippas told CoinDesk, adding:

“During this government shutdown we have continued our platform development efforts. We look forward to this current impasse being resolved and re-engaging with [CFTC] staff on our DCO [derivatives clearing organization] application.”

When ETF?

Exchanges aside, even certain products are now potentially at risk.

Perhaps one of the most highly anticipated bitcoin-related products is an exchange-traded fund, or ETF. The SEC currently has one rule change proposal sitting before it, filed by VanEck, SolidX and Cboe.

The proposal has already been delayed a number of times, and now faces a final deadline of Feb. 27. If the SEC does nothing, under existing law, the proposal would be approved. Specifically, Title 15 of the U.S. Code states that any proposed rule changes “shall be deemed to have been approved by the [SEC] if … the [SEC] does not issue an order approving or disapproving the proposed rule change.”

However, some legal experts say an approval-by-default is unlikely to happen, even if the shutdown drags on.

Ethan Silver, chair of the broker-dealer practice at law firm Lowenstein Sandler, anticipates that, should the shutdown continue, any staffers who remain on duty would reject the application.

“I think if they were forced to deal with it, they would sooner deny it than be put in a position [where it is approved on a technicality],” he said, explaining that the regulator would likely cite “market integrity” or a similar emergency contingency as a reason for the denial.

Similarly, Jake Chervinsky, a lawyer with Kobre & Kim, said on Twitter that the SEC would likely find some way to reject the proposal during a protracted shutdown, a view also shared by attorney David Silver of the Silver Miller law firm.

The commission has yet to approve any crypto ETFs, rejecting nearly a dozen in 2018. That has not yet deterred companies from trying to be the first to bring such a fund to market, however. Just last week, Bitwise Asset Management announced its intention to launch a bitcoin ETF with NYSE Arca.

While the company has filed an initial registration form, NYSE Arca has not yet submitted the rule change proposal, and so the SEC cannot yet consider the ETF.

Please advise

Beyond launches, the crypto space – at least in the U.S. – is still waiting for increased clarity and official guidance on how to safely handle digital assets.

Vince Molinari, co-founder of the regulated trading platform Templum, told CoinDesk that initiatives the SEC may have planned, such as guidance on custody, are likely to be delayed.

“I think the entire space gets pushed back,” he said. “It could be a quarter or two before things go back, it could be longer depending on how long the shutdown’s in effect.”

Compounding the issue, he noted, is that even after the shutdown ends, staffers have to catch up on anything they missed during the furlough.

“There’s talk about the [initial public offering] calendar being pushed back,” he said.

Mining manufacturer Canaan is at least one crypto firm reportedly considering a U.S. IPO. While the company is said to be in the early stages of this decision, Molinari believes an extended shutdown could postpone IPO approvals “indefinitely.”

The issues mirror those faced by the financial technology sector in the U.S. more broadly, as noted in an analysis piece published by Roll Call, a news site focused on the U.S. federal government.

Roll Call noted that the CFTC, which has requested information on ether and the ethereum network, is unable to review any comments already submitted. In its request for information, the CFTC noted that any submissions would “advance [its] mission of ensuring the integrity of the derivatives markets,” which may indicate the regulator is assessing a potential ether futures market.

Eyes on the Hill

As regulatory activity slows to a halt, a crypto industry group is focusing its efforts on Capitol Hill, where lawmakers in the House and Senate are still open for business.

“We’ve been making real progress engaging with lawmakers and regulators on the merits of the token economy in the last several months, but the shutdown puts the handbrake on some of those conversations,” Kristin Smith, director of external affairs for the Blockchain Association, told CoinDesk.

She added:

“There are pressing concerns on a number of fronts – taxes, SEC guidance, Treasury guidance – and the shutdown, at the very least, pushes those issues to the back burner for the foreseeable future.”

The SEC could not be reached for comment. When contacted via email, a spokesman’s auto-reply explained:

“Due to a lapse in appropriations for the federal government, the U.S. Securities and Exchange Commission is currently closed. I am currently out of the office, and will return to the office once an appropriation has been enacted. During the closure, I will not be monitoring or responding to my emails. Thank you.”


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Author: Nikhilesh De, Zach Seward 
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Volume of Crypto is Dropping, is Bitcoin Headed Below $3,000?

In the last 48 hours, the volume of the crypto market has dropped from $15 billion to $13 billion as the Bitcoin price fell below the $3,600 mark.

Analysts have started to demonstrate concerns regarding the declining volume of digital assets and the potential scenario of cryptocurrencies free falling without significant sell pressure from bears.

Is $3,000 Inevitable For Bitcoin?

Generally, traders in the crypto market expect a lackluster year with low volatility, at least until cryptocurrencies escape the last stage of a 12-month-long bear market and initiate a strong accumulation phase.

In the short-term, however, many traders envision most cryptocurrencies including Bitcoin testing key support levels in a low price range.

A cryptocurrency trader Josh Rager wrote:

As the volume continues to slowly descend Bitcoin could see more sideways ranging This could last for days or weeks until a decrease in buyers, currently holding up the market, at these levels. Nice support below $3,000 with lots of buyers waiting there.

Currently, following an intense sell-off on January 11, the crypto market is demonstrating stability in the range of $122 to $124 billion.

But, the combined valuation of all cryptocurrencies in the global market is down nearly $100 billion since November 2017 and the asset class is struggling to demonstrate signs of a trend reversal.

Considering the lack of momentum of cryptocurrencies and the inability of dominant digital assets in the likes of Bitcoin and Ethereum to breakout of important resistance levels, a cryptocurrency technical analyst DonAlt suggested that 2019 may turn out to be a boring and a low volatile year.

“I’ve been relatively inactive this year – for one reason – there just hasn’t been too much to trade. I wouldn’t be surprised if ’19 plays out like this, boring, choppy and frustrating to trade. The worst thing you can do is force trades when your system doesn’t give you any,” the analyst said.

As Bitcoin approaches the low $3,000 region, similar to its corrective rally in mid-December, it may initiate a relatively sharp recovery triggered by big buy walls on major cryptocurrency-to-fiat exchanges such as Coinbase and Bitstamp.

How About Other Cryptocurrencies?

If Bitcoin continues to fall below $3,500 and possibly to its 12-month low at $3,122, cryptocurrencies with low market caps and daily volumes are expected to experience intensified downward price movements against both Bitcoin and the U.S. dollar.

Digital assets that have shown strong upward price movements in the past several weeks due to product launches and protocol upgrades including TRON and Ethereum have already begun to drop in value, affected by the negative sentiment surrounding the short-term trend of the cryptocurrency market.

The price movement of Bitcoin, until the January 11 correction, was seen as a positive short-term breakout above $4,000. But, based on the intensity of the sell-off over the past week, it will likely have a minimal impact on the performance of the asset class in the weeks to come.


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Author: Jimmy Aki
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Federal Reserve Blames Altcoins for Dragging Down the Bitcoin Price

The Federal Reserve Bank of St. Louis has released an article today about Bitcoin. In it, the bank notes that the price of Bitcoin has three potential futures: indefinite, infinite appreciation; zero; or somewhere in between. They believe it will be somewhere in between.

The authors, David Andolfatto and Andrew Spewak, conclude that one of the factors dragging down the price of Bitcoin is an ever-expanding supply of alternatives. Bitcoin is an inherently speculative and volatile asset. A fixed supply doesn’t mean an ever-increasing value. Demand determines value, after all. Other tokens are frequently launched which have properties attractive to a portion of the market. If Bitcoin was still the only cryptocurrency, something which was only the case for a very brief time in its history, this money would probably go into Bitcoin.

Bitcoin Maximalists Ignore Important Realities

However, the Bitcoin maximalist argument that Bitcoin will simply usurp any improvements by other tokens has never come to fruition. There are even fewer dApps and users of dApps via Bitcoin’s blockchain than much later entrants like Tron.

The Federal Reserve economists write:

Consider the following thought experiment. A restaurant selling meals for $10 will happily accept payment in the form of one Hamilton bill ($10) or two Lincoln bills ($5). That is, the nominal exchange rate between Hamilton and Lincoln bills is 2:1. Now, suppose that the supply of Lincoln bills is increased but the supply of Hamilton bills remains the same. The exchange rate remains unaffected […] That is, the increase in the supply of Lincoln bills has led to a decline in the purchasing power of both Lincoln bills and Hamilton bills, even though the supply of Hamilton bills has remained fixed. Might an expansion in the supply of Altcoin have a similar depressing effect on the price of Bitcoin?

There are other complicating factors to the price of Bitcoin. On the one hand, it is the cryptocurrency with superior liquidity. This makes it the on-ramp and off-ramp for many other cryptocurrencies. Does anyone remember when ICOs were primarily conducted for Bitcoin? Nowadays Ethereum performs that function. Importantly, ICOs fueled demand for Ethereum through 2017 and 2018. Ethereum has a large supply and may never stop producing new units. Therefore, its lower values make sense: the more available something is, the less value it is.

Federal Reserve on the Intrinsic Value of Cryptocurrencies

The article also speaks to “intrinsic value.”

Consider now the bearish case for Bitcoin. This outlook is based on the view that Bitcoin has no fundamental value and that sooner or later the market will recognize this fact. In our view, one can accept that Bitcoin trades above its fundamental value without claiming that its fundamental value is zero. In fact, many securities trade above what might be considered their fundamental value. Gold, for example, trades above its value as measured by its industrial applications.

As noted before, Bitcoin’s actual utility is a secure digital store of value and transfer of the same. Other blockchains have taken and dominated the “blockchain” aspect of cryptocurrency. Despite the global chaos, demand for cryptographically secure payment systems isn’t necessarily popping. But it is feasible that people will come into contact with blockchain technologies through banking applications as well as other decentralized applications. Such things will generate demand for tokens that underpin those blockchains. Tokens like Ethereum, TRON, NEO, Aelf have a long-term technical proposition that Bitcoin has long been lagging on.

Smart Contracts Change The World

Bitcoin as a smart contract platform is probably a dream at this point. For one thing, it’s significantly more expensive to use. For another, at this point, other platforms simply do it better. The trend of alternatives taking up more and more of the total cryptocurrency market capitalization is likely to continue. Bitcoin maximalists rest on flawed arguments such as “network effect.” These arguments conveniently ignore historical examples where superior technology and marketing overtook dominant networks.

Bitcoin is likely not to trend downwards toward zero. The economists acknowledge this as well. But the odds are that an increasing amount of cryptocurrency market capitalization will enter through and be invested in alternatives with growing demand based on their usefulness.

After ten years, Bitcoin remains more a speculative asset and store of value than anything. The trend the Federal Reserve economists identify is representative of that. There are numerous factors that go into an actual downturn in the price of Bitcoin. A good percentage of holders will not sell at a loss. Another good percentage will not sell at all. These people hold the coin’s price at a certain level. But active trading can eventually reduce the price without regard to these people’s philosophical or strategic holding patterns.

No One Knows the Actual Value of Bitcoin

The Bitcoin price, at the time of writing, was $3,641, but what is the asset really worth?

Bitcoin and all other cryptocurrencies very much remain in a price discovery phase. Some believe Bitcoin was overbought in the hype bubble of 2017, which inherently raised the price of nearly every other crypto available. Others believe it was just a fluke. Institutional money is still only just entering the picture. The utility of Bitcoin is only one aspect of its value, but it will play an increasingly important role as others develop more advanced and attractive feature sets.

As the Federal Reserve economists said:

We think the future price path is more likely to remain bounded between these two extremes.

Zero? No. Endless incline without significant change to the demand climate? Certainly not. Look out, Bitcoin. The 2000s called and they want their basic crypto design back. The era of smart contracts is dawning. Whoever does it best will see the most demand. It’s probably that simple.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.


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Author: P. H. Madore
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Bitcoin Price Teeters around $4,000 — Which Way Will it Break?

The bitcoin price held onto its gains this Monday as the trading session across the Asian and European markets expressed its calm.

The bitcoin-to-dollar pair is trading at $4,009, down 1.93 percent from Monday’s high. The correction appears natural to an overperforming asset, and its significance should be weighed in when it extends as far as 10 percent from the recent peak. As bitcoin heads into an interim sideways trend, the asset has attempted to pierce below $4,000 on five separate occasions today. It seems that there is a decent upside sentiment near the level that is failing the bears.

BITCOIN 1D CHART | SOURCE: COINBASE, TRADINGVIEW.COM

Fundamentally, bitcoin is in a strong month thanks to the upcoming launch of Bakkt, an ICE-backed bitcoin futures trading platform. The best we could see is a third scenario, in which bitcoin would keep consolidating sideways and breakout ahead of the Bakkt launch. That’s fairly optimistic.

Bitcoin Price Technical Indicators

The interim sentiment is leading bitcoin to two possible scenarios. In the first scenario, bitcoin would initially hold its gains and extend its rally to post fresher higher highs. Another one is a complete reverse, in which bitcoin would erase all its gains owing to its long-term bearish bias.

BITCOIN 1D CHART (ZOOMED) | SOURCE: COINBASE, TRADINGVIEW.COM

The daily chart shows bitcoin has broken out of the confinement of a bullish pennant structure, now attempting an extended run towards $4,244. The falling trendline in blue, which was the breakout target of the previous inverse head and shoulder pattern formation, meanwhile is capping the said attempt. The Relative Strength Index – the momentum indicator – similarly is capping the buying sentiment from flourishing beyond 58 since July 2018. It would be advisable to keep an eye on the RSI for any breakout action above 60, which would mean that bitcoin would likely extend its rally in terms of dollars.

The failure to break above the blue falling trendline could bring $3,567 as a potential support target. Some accumulation action could also be expected near the 50-period moving average as bitcoin goes down.

Bitcoin Price Intraday Targets

Nothing much has changed in terms of our intraday targets since we posted our previous analysis. Excerpts:

Our first position begins with a long order towards $4,244 with our stop loss target placed near $3,900. We are also looking for a potential downside correction, which would have us wait for bitcoin to break below $4,000 first. When it does, we will open a short order towards $3,885 while maintaining our stop loss 1-pips above the entry position.

A breakout attempt from $4,244 will have us enter a long position towards $4,420, our upside target and the resistance level from November 29 price action. A stop loss just 1-pip below the entry position would minimize our losses if the pullback action occurs.

Trade safely!


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Author: Yashu Gola
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First to Worst: Bitcoin Ridiculed as Most Disastrous Investment of 2018

FinExpertiza, a network of Russian auditing and consulting firms, has lambasted Bitcoin as the least profitable investment instrument in 2018.

Russian newspaper Rossiyskaya Gazeta requested a report on the investment ranking of 14 instruments from FinExpertiza. While precious metal palladium turned out to be the most profitable investment, Bitcoin losses were noted to be 71.15% at the time the report was compiled.

Bitcoin’s price surged in the past which led people to believe that it was becoming “digital gold.” One of these advocates included Alex Gurevich, former JPMorgan executive and Mathematics professor, who said that time was working for Bitcoin despite the recent drop in price. He said, “Every day it doesn’t disappear, it gets one step closer to a permanent status of digital gold.”

However, FinExpertiza’s research put Bitcoin below silver, platinum, and gold, which only lost 15.37%, 15.16%, and 5.91% this year.

Two Sides to a Story

Bitcoin significantly under-performed palladium and other precious metals in 2018.

Currently, the internet is saturated with articles claiming that Bitcoin is as good as dead. The comparisons made between its price in December 2017 and this month are plastered everywhere to warn people from investing in the cryptocurrency.

However, Bitcoin hasn’t performed as badly as various researches including FinExpertiza have concluded. According to Bloomberg, when BTC’s price in 2017 and 2018 is compared with its price in 2011 and 2013, this downturn appears to be consistent with the flagship cryptocurrency’s normal market cycles.

When looking at the price plunges in the recent months, many would re-consider buying the cryptocurrency. But it must be remembered that BTC declined by 87% in November 2013 and it took almost four years for it to gain its momentum. In the same month in 2017, its lowest price was recorded as $5,555.55. Later, the price went on to break records and reach a maximum of about $20,000.

Bitcoin isn’t Dead

99Bitcoins has recorded that BTC has been pronounced dead 91 times in 2018. This figure is still not close to the 125 times Bitcoin was termed an utter loss in 2017.

Jeff Sprecher, chairman of New York Stock Exchange (NYSE), has said that despite living in a “swamp” and dropping in price, Bitcoin has still survived. “Often times in finance, it’s not about being the best — it turns out to be about being the broadest and the most commonly accepted and for whatever reason bitcoin has become that,” said Sprecher.


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Author: Habiba Tahir
Image Credit: Price Charts from TradingView.

Bitcoin Price Begins a New Ascent Inside Giant Bear Pennant

Bitcoin price on Friday surged more than 7% against the US Dollar on a 24-hour adjusted timeframe.

The bitcoin-to-dollar rate noted sudden spikes at the beginning of the US session after spending the day inside a narrow trading range. The move occurred just near $3,600, the resistance of said narrow range, giving the market a minor breakout scenario in its own way.

The US Dollar fell broadly Friday as investors predicted Federal Reserve policy to be bearish for the greenback next year. The conclusion got derived from the Fed funds futures which showed that the odds that the central bank would raise interests by the end of Q4 2019 are less than 1%., showing a 32% decline.

BITCOIN 1D CHART | SOURCE: COINBASE, TRADINGVIEW.COM

It now looks that some part of dollar weakness is heading inside the bitcoin space, because the digital assets is unable to provide any interim fundamental to expain the rally. Bitcoin is likely to retest $4,000 as its potential resistance, while eyeing the pre-Christmas peak of $4,236 on Coinbase.

Technically, the price is seemingly coming to the end of a bear pennat formation, a brief pause of consolidation before bitcoin reasserts itself towards further downside action. The theory comes closer to the currenct price action while compliment the RSI momentum price indicator which, once again, is showing signs of aggressive reversals from 55-60 neutral range.

Bitcoin/Dollar Intraday Targets

The hourly chart has put Bitcoin already inside its oversold area, according to the RSI inidcator. It has allowed us to begin the day with a short trade, while keeping our parameters fixed between $3,903 as interim resistance and $3,824 as interim support.

BITCOIN 1H CHART | SOURCE: COINBASE, TRADINGVIEW.COM

That said, we are first entering a short towards $3,824 on a bounce back from $3,903. At the same time, we are maintaining our stop loss just $5 above the entry point to ensure we keep the risk low.

If bitcoin attempts a break above $3,903, then we will switch our strategy and open a long position towards $4,000, our psychological upside target. A stop loss just $5 below the entry point will meanwhile minimize our losses in case the bias reverses.

Coming to the $3,824-support, a bounce back would signal us to open a quick long towards $3,903 while placing a stop loss order at $3,819. In the event of a breakdown action, we will open a short position towards $3,571 with a stop loss just $10 above the entry point.


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Author: Yashu Gola
Image Credit: Charts from TradingView.

“Investors Carried Out Mental Gymnastics to Justify Bitcoin Prices” – Bloomberg Editor-in-Chief

Bloomberg co-founder and former Editor-in-Chief, Matt Winkler has likened speculation-driven bitcoin price movements to the dotcom boom of the mid to late 1990s, comparing the excuses given by investors for irrational market optimism at that time to the reasons given by modern day cryptocurrency speculators.

Speaking to Emily Chang on Bloomberg Technology, Winkler explained that cryptocurrency investors have attempted to use non-traditional methods to ascertain and justify optimistic valuations for digital assets, which according to him is actually nothing new.

Bitcoin Market Compared With Dotcom Crash

Referring to a valuation metric used in the dotcom boom called ‘Cash Earnings’ – essentially an estimate of future revenues and profits for companies that sometimes did not even have a finished product – Winkler revealed that use of flawed arithmetic to arrive at a desired outcome is in now way new or unique to the crypto market.

In his words:

So [with regard to] Cash Earnings and Bitcoin, there is a comparison that I think is valid, which is that where people can’t find standard ways to measure value otherwise known as intrinsic worth, they do all kinds of mental gymnastics to do that. Bitcoin is a really good example of how everybody tried so hard to justify what it was doing when the closer they looked they couldn’t find it – even Warren Buffet said its a joke. So we’ve been in this picture before and I think the dotcom bubble that burst in 200 is a good example.

Asked whether bitcoin will recover unlike most dotcom stocks 2 decades ago, Winkler stated that while he is not clairvoyant, it is possible to reasonably predict future price movements by looking at the fundamentals and arriving at a roughly scientific picture of how much value it provides versus demand, and thus how much it should be valued at in the marketplace.

According to Winkler, the current state of volatility in the crypto market is a sign of “noise”, which means that the market is having difficulty finding the signal that indicates exactly how the assets should be valued. This situation he said, is going to persist and even intensify in the immediate future as the “noise” gets louder with increased cryptocurrency market activity taking place alongside regulatory ambiguity and a measure of existential doubt over the future of he asset class.

Winkler rounded up his interview by pitching his tent with the “blockchain over bitcoin” camp, stating that the utility of the blockchain as a tool that people can use is in itself a definite and identifiable intrinsic value. This point of view is one that is shared by a number of prominent market voices. Earlier in December CCN reported that Morgan Creek CEO Anthony Pompliano stated that the  use as the world’s most secure transaction settlement layer means that it “cannot be worth zero.”


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Author: David Hundeyin
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Bitcoin Price Driven More by Speculation Than Utility: BitPay CEO

BitPay CEO Stephen Pair has stated that speculation drives a substantial part of bitcoin’s current valuation, while the actual use of the crypto market leader as a currency is responsible for only a relatively small fraction of its price. Speaking on CNBC’s Squawk Box, Pair revealed that BitPay intends to change this situation significantly over the next few years.

In his words:

“A very big component of the price is certainly speculation. It’s investors speculating on the future usage and adoption of this technology. A small component of the price is actual utility, and that’s what BitPay is focused on — using the platform and delivering products to our customers that they find valuable.”

Expected Predominance of Blockchain Payments

Speaking further, Pair stated that BitPay believes that mass adoption is a key driver of the future price of bitcoin, and it is focused entirely on building supporting infrastructure to make this possible. Responding to a question from the host about his opinion on the impact of the long-awaited bitcoin ETF on the asset’s price, he said that he there are many catalysts for bitcoin to hit the highs of late 2017 apart from ETF adoption or launches.

In his view, BitPay’s current transaction volume of about $1 billion a year should ideally grow to $10 billion or $100 billion annually in a few years as more and more customers begin to expect cryptocurrency payment support across a wide range of everyday retail and transaction applications. When this happens, according to him, the bitcoin price will be driven to highs comparable to December last year.

BTC/USD | Bitstamp

Significantly, Pair revealed that in his opinion, blockchain adoption would expand far beyond the cryptocurrency space and become accepted as the default database style. Within a three to five year time frame, Pair said, everyday users will be able to go into a restaurant or retail establishment and reasonably expect support for a blockchain payment.

He also predicted that this would extend beyond bitcoin as more and more blockchain-hosted assets would become default means of storing and transferring value.

In his words:

“Our thesis at BitPay is that most digital assets will be issued on a blockchain and most payments will be issued on a blockchain. We are building a platform for that future. Remember this is not just about bitcoin or the various tokens that we see today. It’s also about issuing dollars or euros on a blockchain. So we’re not just talking about payments denominated in bitcoin terms when we speak about blockchain payments. We’re talking about all kinds of digital assets that could be used for that payment.”


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Author: David Hundeyin
Image Credit: Charts from TradingView