Bitcoin Bulls Constantly Exhaust Kraken’s Liquidity Pool: CEO

Bitcoin bulls are constantly exhausting the US dollar reserve pool for opening leveraged Long positions, revealed Jesse Powell of Kraken – a US-based cryptocurrency exchange.
The chief executive officer told Youtuber Ivan on Tech in an interview that the number of traders who believe that the bitcoin price would go higher is more than those who believe in the opposite. The upside sentiment, therefore, prompts a majority of traders to borrow funds from Kraken to increase their Long positions in the bitcoin market. Many a time, the absence of Short traders – those who believe that the bitcoin price would fall, misbalances the liquidity. As a result, the margin pool keeps getting exhausted.
“There is always a broad disagreement about what the price should be. There is always someone who wants to Short bitcoin […] We definitely have a way more demand to go Long Bitcoin. But, we have got only so many dollars in the system. The margin pool for borrowing dollars to buy bitcoin is constantly being exhausted, which proves that people are bullish.”

The Near-Term Effect
Exchanges in the cryptocurrency sector offer traders to leverage up to 100 times than their principal cash balance. That means an investor with, say, only a dollar in his trade account can bet up to $100 in a single trade. In case bitcoin moves in the direction as intended by the Long traders, he/she makes multiplied gains from their $100 position. If not, then he/she loses more than $100 from their one dollar trade account. Overall, the amplified upside potential is why traders find leverage exciting.
Powell indicates that not many traders bet in favor of a bitcoin price fall, which means a majority of them are bullish. The sentiment serves as an indicator that the market prefers the cryptocurrency at a much larger value than where it is today.
Nonetheless, since the leveraged trades are short-term mostly, they cannot determine bitcoin’s long-term bias. The answer to that query lies in the macroeconomy – that in the US dollar shortage.
Travis Kling, the founder & chief investment officer of crypto asset management firm Ikigai, noted in September that a global liquidity crisis is underway. The former Wall Street executive referred to the Federal Reserve’s repo rate program, wherein the US central bank overnight injected hundreds of billions of dollars into the banking system. He added that investors started dumping their bitcoin positions to get as much cash on their hands as they can.

Some smart investors that actually like and respect me say I'm crazy for thinking that Global Macro has a big effect on crypto.
I think they're crazy for thinking these two things are entirely unrelated.
— Travis Kling (@Travis_Kling) September 25, 2019

Dollar Shortage is Good for Bitcoin
With Kraken revealing a higher demand for bitcoin against lower liquidity, and a global dollar shortage issue underway, some analysts also believe traders would not exit their Bitcoin positions as a defense. Game liquidity theorist Majin said that a dollar squeeze is bullish for the cryptocurrency thanks to its low correlation with the dollar-denominated mainstream markets.
“Bitcoin is relatively easier to control versus the huge global regular finance market,” he said.
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Source: New

Bitcoin Stock-to-Flow Model is Massively Overhyped: Analyst

A financial forecasting tool that predicts bitcoin market cap would hit a trillion-dollar valuation is misleading, according to cryptocurrency analyst Alex Krüger.
The noted economist called Bitcoin’s Stock-to-Flow Model (S2F) “massively overhyped” as he criticized it for not assessing certain crucial parameters. In retrospective, S2F is a ratio of a commodity’s stock (the units in circulation) and its flow (the amount produced in a year). That said, the model specifically puts weight on the supply factors without dwelling aggressively on the demand side.
Stock to Flow (Scarcity) | Image credits: PlanB
S2F so far has been instrumental in predicting the prices of traditional assets like Gold and Silver. Quantitative analyst PlanB tested the same predictive mechanism on the bitcoin market in his paper published on March 23. He noted that bitcoin exhibited the same properties as that of traditional commodities: that of scarcity. He said it drives the value of every commodity, and bitcoin is no different. Excerpts from his blog:
“A statistically significant relationship between stock-to-flow and market value exists. The likelihood that the relationship between stock-to-flow and market value is caused by chance is close to zero.”
The Core Flaw
Krüger differed with PlanB in the way the latter stressed hugely on the supply-side factors but completely ignored the role the demand-side plays.
“Bitcoin is a demand-side story,” he said in a tweet. “Supply is fully deterministic. There are no supply-side shocks. Fixed total supply and diminishing supply growth are crucial because these drive demand. It is that simple. Demand is what matters most.”

Amazing how so many bring up S2F these days whenever anyone mentions bitcoin supply. I did not have S2F in mind when I wrote this tweet, and no, I don't think it is very important, it is massively over-hyped.
— Alex Krüger (@krugermacro) November 6, 2019

In his paper, PlanB briefly describes how bitcoin could attract $1 trillion into its market. Speculatively, he mentions that investors with exposure in gold, silver, or assets belonging to countries that are in socio-political and economic crisis, would more likely move their capital into bitcoin. Moreover, central banks’ dovish policies, such as rate cuts and quantitative easing, would further prompt investors to seek safety in safe-havens like bitcoin.
But Krüger sees it a justification by bulls to keep the bitcoin upward momentum alive. He said:
“The Stock to Flow model is to bulls, what the Tether Manipulation paper is to bears. Both based on fancy looking statistical models (more so the latter). Both are flawed. Doubt whoever believes in these extremes will change their minds. The mind believes what it wants to believe.”
Bitcoin S2F 99.6% Accurate So Far
Past performances do not predict future price actions. But that has not deterred S2F supporters from making a case in favor of it. One of the respondents to Krüger’s opinion pointed out how the bitcoin price has so far followed the PlanB’s model with 99.6 percent accuracy. Halving, a four-yearly event that cut bitcoin’s supply rate by half, also served as the biggest reason why the S2F model works as planned in the long run.
“S2f model is in my humble opinion very important since it indirectly reflects miners’ capacity to stay profitable,” said Maros Hajduk, president of BlockYard – a digital asset management fund. “Unprofitable miners=dead network=nothing else matters. There’s direct pressure on [the] price to rise because of the halving events.”
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Analyst: Stellar (XLM) Decreasing Supply Could Increase Chances of Exchange Delisting

The Stellar Development Foundation’s (SDF) unanimous decision to burn XLM’s supply by half could spell troubles for the project, believes noted bitcoin maximalist WhalePanda.
The anonymous trader on Tuesday said the cryptocurrency exchanges could start treating XLM as security, explaining that SDF showed excessive control over the blockchain asset when they cut down its supply from 105 billion to 50 billion. The move increased the chances of getting XLM delisted from exchanges that have been careful about which digital asset they would list on their trading platforms.

I wonder how long it will take for them to realize that burning 50% of the supply actually makes you even more a security and increases the chances of getting delisted on exchanges. $XLM
— WhalePanda (@WhalePanda) November 5, 2019

So Far So Good
The statement came almost a year after the New York Department of Financial Services (NYDFS) allowed a local exchange itBit to list XLM. While the department did not issue any statement regarding the cryptocurrency’s original category, its move indicated that it considered XLM as a security token.
Instances such as these also prompted other US exchanges to list XLM pairs on their trading platforms. San Francisco-based Coinbase started offering XLM trading services from March 2019 all across the US, with the exception of New York City. However, in September 2019, the firm obtained permission from the NYDFS to cater to New York residents for XLM trading.
Part of the reason why exchanges are comfortable with listing XLM was its nonprofit backing. SDF never behaved as an organization that was out to sell XLM for profits. In September, for instance, SDF announced a massive giveaway of $124 million worth of XLM tokens to Keybase – a group messaging, community and file transfer hub.
In contrast, Stellar’s closes rival Ripple was selling off its XRP holdings of hundreds of millions of dollars to boost its adoption. Ripple continues to be in a legal battle with its early investors, attempting to prove that its XRP tokens are not securities.

But WhalePanda thinks exchanges are about to feel cold-feet about XLM’s future prospects on their platform. That is majorly due to the 1946 Howey Test, a benchmark for the US Securities and Exchange (SEC) in determining which assets are securities. The law can see SDF’s decision to cut supply as an effort to boost its prices in retail markets, which makes XLM security. Nevertheless, since the token is not funding a for-profit enterprise, there is always a scope for debate whether it is partial or full security.
XLM Going Up
The reduction in supply, meanwhile, is also boosting the XLM price. The XLM/USD instrument since yesterday has surged by up to 31 percent, thereby becoming the most profitable digital asset on Tuesday. Investors believe scarcity makes the cryptocurrency more bullish – again signifying that SDF’s move is an effort to boost Stellar’s value.

I think it’s just a desperation move to pump up the value of their coin TBH. Guess that means they are throwing in the towel on capturing the market they thought they would. People will probably rush into it but I’m not touching XLM. What the hell is it being used for? Seriously?
— Alltheway08 (@alltheway08) November 5, 2019

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Source: New

Chinese are Not Coming to Bag Bitcoin: Analyst

The bitcoin price climbed by more than 40 percent after China’s President Xi Jinping endorsed blockchain technology in his speech on October 25. Global outlets were quick to correlate the two events, stating that investors [probably] increased their holdings in bitcoin, hoping that the Chinese people would also do the same by taking cues from Jinping’s blockchain support.
But, according to market analyst Alex Krüger, the benchmark cryptocurrency will have a difficult time attracting the Chinese population. The economist on Sunday noted that bitcoin corrected by as much as 14 percent after the last week’s price rally. And it has since trended horizontally, slowed down by less-than-expected volume. The price action does not prove that the Chinese are coming to bag bitcoin anytime soon.
“When markets experience a seismic shift, price, and volume rarely flat-line within a week,” said Krüger. “Instead, one would expect the price to trend for a while [at] high volume. It is what it is.”

Doesn't look like the Chinese are coming for bags anytime soon after all.
— Alex Krüger (@krugermacro) November 3, 2019

Dwindling Volume
Trading data aggregator Bitcoinity shows a similar picture. On October 25, the total bitcoin trades recorded across all the cryptocurrency exchanges were 126,032. The next day, when the bitcoin price surged by circa $600, the total trades too climbed to 207,608.  Nevertheless, the figures started declining thereafter, trending downwards as each day passed. The bitcoin price also started trending sideways within the same period – from October 28 until the press time, as shown in the chart below.
Bitcoin trade volume recorded since October 25 | Image credits: Bitcoinity
Krüger said the fall in bitcoin trade volumes did not show any drastic change in China’s sentiment towards the cryptocurrency. He added:
“If there were a seismic change bringing an important influx of new investors, then likely best to buy and hold and forget about trading in and out, and the sole question becomes “how big do I go in”. Hence why this matters. At least to me.”
Unconventional Markets
A large portion of bitcoin’s trading activities often lies outside the conventional cryptocurrency exchanges. Paxful, a web portal that allows people to exchange bitcoin for fiat directly, offered insights into how the cryptocurrency’s peer-to-peer volumes surged even before Jinping’s blockchain endorsement. As noted by Matt Ahiborg, a researcher associated with DLAB – a New York-based blockchain startup incubator, Chinese people were trading bitcoin at large, with weekly volumes touching even the 2 million Chinese Yuan (CNY) mark.
“CNY volume on Paxful has had three record-breaking weeks in a row. 90% of the volume is to buy Bitcoin from vendors on the platform and the top payment methods used are Alipay and Bank transfers.”

[2/5] greater than LocalBitcoins. There are many reasons for the shift but the most apparent is due to inceased KYC/AML implemented by LB recently. Of note is that volumes across these two platforms still pales to 2017 and much P2P trading has migrated to other Chinese exchanges.
— Matt Ahlborg [] (@MattAhlborg) October 29, 2019

Nevertheless, the massive buying sentiment in the Chinese bitcoin market did not sustain for too long on the global charts. Ahiborg asserted that it was due to people using the cryptocurrency as a tunnel, not a safe destination. Chinese bought dollar-denominated gift cards using bitcoin. Those products later resurfaced on the Chinese markets at a discount.
“Other evidence points to an international web of importing and exporting of goods purchased with these gift cards,” added Ahiborg.
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Decred, Stellar Post Massive Gains as Bitcoin Uptrend Halts

Decred (DCR) and Stellar (XLM) were moving higher on Friday as traders shifted focus from sideways-biased bitcoin.
The thirty fifth-largest blockchain project by market valuation, Decred, today surged by as much as 17.83 percent against bitcoin to trade at 1,755 sats a token. At the same time, the altcoin’s performance against the US dollar also improved, with DCR/USD pair registering up to 19.14 percent gains since the market open, to trade at $18.73 a token.
Decred’s DCR outperforms bitcoin on Friday morning trade | Image credits:
Stellar, the world’s tenth-largest blockchain project by market capitalization, also showed similar upside movements like that of Decred. The firm’s native token, XLM, jumped by as much as 11.94 percent against bitcoin on Friday to trade at 797 sats. Meanwhile, its value against the US dollar was also strong, with the pair XLM/USD registering up to 11.19 percent in session profits.
Stellar’s XLM registers solid gains during Friday trade | Image credits:
The capital outflow from bitcoin to both Stellar and Decred did not affect its intraday bias much. The benchmark cryptocurrency was trading in a positive area on Friday, up by 0.51 percent, as its macro bullish bias remained strong. Bitcoin’s halving event next year, which would see its supply rate cut by half, is particularly prompting speculators to hold on to it. Meanwhile, mainstream financial companies are building a regulated bitcoin trading infrastructure to cater to institutional investors, especially amidst the fears of a recession that could send big monies looking for non-correlated safe-havens.
Gains in Stellar’s XLM appeared shortly after Japanese cryptocurrency exchange Coincheck announced that it would start offering XLM trading from November 12. Yoriko Beal, the co-founder of HashHub – a blockchain community in Tokyo, said after the announcement.
“It’s significant news because this is the first token to be whitelisted by regulator after crypto regulation came into effect.”
XLM’s upside action came also ahead of its annual Meridian conference, showing how traders might have increased their Long positions on the altcoin while expecting short-term profits. That further indicates that XLM might correct heavily to the downside in the coming days against Bitcoin. 2019 is the altcoin’s worst year against BTC; the XLM/BTC pair is down by more than 75 percent on a year-to-date (YTD) basis.
Unlike Stellar, Decred did not show any strong fundamentals that could explain its intraday price rally. The upside looked technical since the DCR token is also down by more than 60 percent against bitcoin YTD.

Politeia, Decred's off-chain governance platform for managing the network treasury, has been updated with a complete frontend overhaul. Go check it out at:
— Luke Powell (@lukebp_) October 29, 2019

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Source: New

This Crypto Related Stock Surged 67% after Xi Jinping’s Blockchain Push

Hong Kong investors increased their exposure in a blockchain firm after China’s premier Xi Jinping endorsed the technology in his Friday speech.
The stock value of Pantronics Holdings Limited (1611:HK), a Hong Kong-based electronic product manufacturing firm, climbed by up to 67.10 percent on Monday. The company did not display any concrete fundamentals that could push its stock price exponentially except its relationship with a cryptocurrency exchange.
Singapore-based Huobi Global, in August 2018, had acquired 74 percent of stakes in Pantronics in a reverse takeover. The exchange, at the time of the acquisition, hinted that it would utilize Pantronics to create equipment for a new blockchain-enabled phone targeting cryptocurrency traders created by the Whole Network, a startup which attracted investment from Huobi’s venture capital arm in 2018.
Pump and Dump on HKEX
The cross-connections between Pantronics and Huobi helped the former attract bulls during the early morning trade. Its stock price surged to as high as 6.50 points on Monday from Friday’s close of 3.89 points. Most notably, the rate opened on Monday at a much higher level than Friday’s close of 5.80, showing that investors had already processed Xi Jinping’s favorable comments on the blockchain technology before the Hong Kong Exchange opened after the weekend.
Huobi’s relative gains from China’s President Xi Jinping’s favorable comments on blockchain | Image credits:
Nevertheless, the Pantronics stock failed to hold up to the enormous profits for too long. Its price started slipping shortly after the HKEX market open – from about 0940 Local Time. The move eventually led Pantronics to establish a Session low down 29.23 percent from its Session high, indicating that the hype was fading.
The company’s overall daily gains were, however, up by 20.82 percent at the time of this writing.
Selfie with Xi Jinping
The same pump-and-dump scenario was visible in the share prices of Meitu (1357:HK). The Chinese photo editor firm, which is creating a blockchain-based facial recognition system, registered a 31 percent spike after the HKEX open; but, its gain began negating in the after hours. As of 1530 Local Time, the price had plunged by 18.06 percent from its intraday peak.
“It’s all because of Xi,” said Pan Shaochang of Dongwu Securities, “but the talk around blockchain is all conceptual. There’s still a long way to go to actually bring it to fruition at an individual and enterprise level.”
“Still, the growth potential is huge”, the equity analyst said.
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Source: New

Lump Sum Bitcoin Investors Makes More Profits than DCA

Investors who put all their capital at once into bitcoin win more than those who invest strategically over some time, according to a study conducted by Shitcoin Ninja.
The crypto researcher noted that Lump Sum – an act of investing everything available at once into bitcoin – works better than the Dollar Cost Strategy (DCA), which requires investors to invest in installments. He reached the said conclusion after conducting two parallel “trial” investments of $10,000 each.

The Lump Sum Investing (LSI), as explained, saw Shitcoin Ninja assuming to invest $10,000 in bitcoin at one go while the DCA strategy showed him putting the same amount into the cryptocurrency but across the span of nine years. The experiment resulted in a win for the lump sum, which beat DCA 67.9 percent of the time. The strategy made profits 60.8 percent of the time in recent datasets. Excerpts from the report:
“Dollar Cost Averaging is a form of smoothing that reduces the volatility associated with investing date. Investing at the ‘wrong’ time can cause a lot of anxiety and wishful thinking, if only I had waited to buy in or if only I sold at the peak. Using DCA, we can alleviate the pressure of worrying that we’re investing at a peak right before a looming cliff. This peace of mind comes at a high cost, though, as we are reducing the statistical average return by more than ~50% compared to Lump Sum strategy.”
Bitcoin Mirrors Global Markets
Similar studies conducted across the global markets provide the same outcomes: that LSI leads to higher portfolio values than DCA does. US investment giant Vanguard, in its 2012 report, found that LSI outperformed DCA by 67 percent in the US and UK market. At the same time, the former did better than the latter by 66 percent in DCA.
“Outside of these studies,” wrote Shitcoin Ninja, “there are also many believers in one or other strategy, that will push it without any data to back it up. Worse, sometimes they pick precisely the data that matches their result (buying at the extremes). When evaluating any investment strategy, it is important to look at the strategy overall and not at a particular point of time, which may never happen again.”

A simple trial comparing a lump sum investment in BTC to dollar cost averaging over a year found that lump sum still won ~68% of the time. Even using a more recent dataset showed that Lump Sum beats DCA ~61% of time.
— Jameson Lopp (@lopp) October 18, 2019

Nevertheless, to some, DCA is not a bad strategy if an investor is looking to secure some retirement money or invest a regular amount each month from personal savings. It is better when it comes to building wealth without going overboard with one-time massive liquidity injections.
“Ultimately, the best solution is the one that gets an investor into an appropriate portfolio, encourages them to stay on track for their long term financial goals, and appropriately manages any behavioral consequences along the way,” states Nathan Faber, portfolio manager at Newfound Research.
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Source: New

Regulators can Shut Down Bitcoin Anytime: Bloomberg Editor

Law enforcement authorities can shut down bitcoin anytime, according to Bloomberg Digital’s executive editor Joe Weisenthal.
The media talent warned institutions against creating bitcoin-based investment products, stating that they could become a tool to take capital from fiat markets. Citing Bitcoin exchange-traded funds, Weisenthal said no regulators would want to approve fiat onramps to pump money into the bitcoin ecosystem. First, the move would make fiat unattractive to investors. And second, it would increase the amount of illicit financial transactions.
Weisenthal thinks bitcoin has only one critical use case: to facilitate trades that the governments and regulators – or “the MAN” – do not want anyone to make. That makes the cryptocurrency an ideal tool designed to serve criminals – and criminals only. Creating new markets to inject more into bitcoin, therefore, would increase the number of financial crimes. So, one way or another, an average law enforcement agency would attempt to get rid of bitcoin once and all.
“If you’re building or launching these institutionally-grade products, how sure are you that down the road regulators won’t come in and shut it all down,” questioned Weisenthal. “There is so much interest in this space, but is anyone thinking this through?”
The Man Will Come After Big Bitcoiners?
The statements were a part of a newsletter that showcased bitcoin as an ecosystem run by two kinds of users: speculators and transactors. Weisenthal said the bitcoin protocol works when certain people expect more massive profits out of their so-called bitcoin investments – or when they use bitcoin to conduct transactions away from the prying eyes of regulators. Both kinds of users, wrote Weisenthal, compliment each other.

In today's @Markets newsletter, I wrote about how the point of Bitcoin is do to the transactions that THE MAN doesn't want you to do (including illegal transactions). And the allowance of a Bitcoin ETFs would essentially be a big subsidy to this market
— Joe Weisenthal (@TheStalwart) October 17, 2019

The introduction of Wall Street-level products, meanwhile, would boost the number in both kinds: speculators and transactors. Weisenthal added:
“If you’re in the business of creating institutional onramps to crypto, you have to be cognizant of the risk that one day regulators wake up and ask: Wait, why did we provide a gateway to provide liquidity into [the] space whose express purpose is to let people evade The Man?”
The Bitcoin Community’s Response
“This is wildly inaccurate,” replied Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, about Weisenthal’s assessment. He added:
“You’re claiming that non-censorship is the only value prop of Bitcoin. What about the non-seizure element? What about the disinflationary monetary supply? Or the sound money element? Or pseudonymity? Please stop writing nonsense & misinformation.”
Larry Cermak of the Block, meanwhile, agreed with Weisenthal, differing only with one point about the “types of bitcoin investors.”
“I would say that there is a third (small) group of people that buy bitcoin (or dollars/dai if it’s available) to hedge against the government’s corruption and inflation. I wouldn’t classify these people as speculators. But I agree with everything else.”
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Source: New

Craig Wright: Satoshi Nakamoto Plagiarized My Bitcoin Paper

Craig S Wright, an Australian computer scientist who claims that he created billions of dollars worth of payment protocol Bitcoin, accused Satoshi Nakamoto of plagiarizing his paper.
The Bitcoin SV founder stressed that he is the original author of Bitcoin’s whitepaper during CC Forum in London. According to eyewitness Toni Vays, a famous cryptocurrency trader, who was also available at the event, Wright did not offer proof that could substantiate his claims. Instead, he said he would need to win a court case before the university allows him to release the so-called real Bitcoin whitepaper.

So CSW "FakeToshi" just admitted on stage that Satoshi plagiarized his paper from 2008 that the university is not releasing until he wins the court case .* I'm sure someone has the video
— Tone Vays [Bali – Financial Summit] (@ToneVays) October 16, 2019

According to Wright’s earlier statements, bitcoin’s creation was the effort of a team, not an individual. He had claimed that he was an integral part of the group that conceived the cryptocurrency. Nevertheless, Wright, on many occasions, failed to provide cryptographic keys of messages signed digitally by the real Satoshi Nakamoto during the early days of Bitcoin. His failure to prove his involvement led many to believe that Wright was a scammer.
In February 2018, the estate of Dave Kleiman (now deceased) also initiated a lawsuit against Wright for allegedly stealing US$5,118,266,427.50 worth of bitcoin. The judge for the case last month ordered Wright to hand all the bitcoin to the brother of Dave Kleiman, Ira. If Wright had produced that bitcoin, he would have proven his involvement in the Bitcoin project. But he did not, leading many to say that he did not even have those tokens.
The case also revealed that Wright forged Dave’s signatures to steal the bitcoin – a similar argument he is now making against Satoshi Nakamoto.
Community Laughs It Off
Wright’s latest stunt drew canny reactions from the cryptocurrency community. A Twitterati joked about Wright’s earlier statements, saying that he claimed he is Satoshi Nakamoto and now he is referring the same name as if it is a third person.
“So he plagiarised his own paper,” wondered JJ.

So he plagiarised his own paper?
— JJ (@lordhodl1) October 16, 2019

Litecoin creator Charlie Lee, meanwhile, added:

So the latest claim is that Satoshi is a fraud?! LMAO
— Charlie Lee [LTC] (@SatoshiLite) October 16, 2019

Word Manipulation
Other eyewitnesses accused Vays of taking Wright’s words out of context. Diego SV, a hardcore Bitcoin SV follower, clarified:
“In the fireside chat, CSW refers to the looming McCormack case and how his paper from 2008 will come out which shows great chunks of this is identical to the 2009 Bitcoin whitepaper. He clearly says this either proves I am Satoshi or Satoshi plagiarised me.”

In the later discussion with Mike Beaver, Tone Vays manipulates this wording of CSW to argue CSW admitted he did not write the whitepaper. I find it beyond belief how such distortion can occur from anyone capable of thought. It’s laughable.
CSW #Bitcoin $BSV Satoshi Nakamoto
— $DiegoSV (@Diegoioisp) October 16, 2019

[Disclaimer: The author holds small amounts of Bitcoin SV after the last year’s Bitcoin Cash hard fork. The author does not trade or speculate on the said assets.]
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Source: New

Bitcoin Eyes Gains as Pound Drops on Brexit Uncertainty

Bitcoin was inching higher on Monday in the UK markets as Pound gave up some part of its last week’s sharp gains.
Bitcoin shows upside sentiment as the Pound drops to 1-month low | Image credits:
The cryptocurrency surged by 0.76 percent against the sterling as of 1005 UTC to trade at £6,627.90. The minor surge came after the pound dropped by 0.68 percent against the US dollar. The sum of all negativities lied with the statements issued by the European Union on Brexit. Michel Barnier, EU’s chief Brexit negotiator, told press on Sunday that UK president Boris Johnson’s plans to divorce Europe by October 31 while avoiding a hard border with Ireland were too complicated.
The statement impacted the UK market as it opened on Monday. With sterling down, UK stocks also gave some part of its last week’s gains. That was unusual for the benchmark FTSE 100, which typically rises when pound slides. Today, that was not the case. FTSE 100 and sterling both fell in tandem, showing that investors were pulling out their capital ahead of Johnson’s first Queen Speech scheduled today.
Strategists associated with ING said in a note that Monday’s drop is a “reality check” for Brexit bulls. Excerpts from their statement:
“GBP gains have, in part, been caused by meaningful short speculative positioning, exaggerating the effect of the news flow. With the market possibly getting ahead of itself, the pound is now vulnerable to a sell-off should the talks break down again.”
Growing Correlation with Bitcoin
Meanwhile, bitcoin’s gains in the GBP markets are coinciding with the GBP’s losses against the US dollar – or vice versa, at least in the last seven days. The most visible correlation is GBP/USD’s gains on October 11 and 12, wherein the pair surged by as much as 4.20 percent. On the same days, bitcoin dropped by up to 7.62 percent against the pound.
GBP/USD shows a negative correlation with BTC/GBP | Image credits:
No other evidence indicates a negative relationship between the two pairs. It might be less likely for mainstream investors to treat bitcoin as a hedging instrument against the Brexit uncertainty. But traders inside the cryptocurrency market could enter open positions after taking cues from the pound’s interim bias. A similar sentiment engulfed the bitcoin market during yuan’s devaluation against the Q2’s US-China trade war escalation.
Pound Eyes Drop
Bitcoin’s probability of striking gains is looking better, with both the EU and noted market analysts predicting an extension for Brexit deal. Holger Schmieding and Kallum Pickering, chief economist and senior U.K. economist of Berenberg Bank, said in an investor note Monday:
“Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. Also, the EU may need a technical extension to ratify the deal on its side anyway.”
An adjunct is the least Johnson needs, for he has promised the UK citizens a deal or no-deal Brexit before October 31. If the Prime Minister goes ahead with the least-favorite route of divorcing the EU, the ramification could fall on the country’s economy. According to estimates from the UK in a Changing Europe, a hard-deal Brexit could reduce the GDP by 7 percent.
That would eventually come to haunt the GBP.
Investors then have a likelihood of parking their capital into stocks, bonds, or perceived hedging assets. Bitcoin, given its recent correlation with the GBP/USD pair, could also get a push from the mainstream market.
[Disclaimer: The opinions expressed in the article are not investment advice.]
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Source: New

Bored Bitcoin Traders Pump Binance Coin (BNB) by 11%

Binance Coin (BNB) was trading in an extremely positive zone on Wednesday as its top rival bitcoin kept underplaying investors’ bullish expectations.
The eighth-largest cryptocurrency by market cap surged by up to 11.73 percent to establish a session high of 2,289 sats. It attracted a similar capital from the fiat market, rising by 11.12 percent against the US dollar or US dollar-denominated crypto-assets. At the same time, it’s market cap touched a sessional peak of $2.734 billion.
Binance Coin (BNB) surges by more than 11 percent against the US dollar and Bitcoin | Image credits:
Backdoor Entry
The gains in the BNB market closely followed the launch of Binance’s peer-to-peer trading platform in China. The Malta cryptocurrency exchange, which backs the BNB asset as its native asset, announced yesterday that it had opened trading of bitcoin, ether, and USDT against Yuan. The declaration arrived atop China’s ban on the trading of cryptocurrencies, catering to those who wanted to remain invested in the non-sovereign assets nevertheless.

Last night, @Binance Launches P2P Trading, starting with China. Most of CT probably can't use it yet, but 1.4 billion people can. We will expand the service to other regions soon.
Anything that makes it easier to get #crypto.
— CZ Binance (@cz_binance) October 9, 2019

Binance CEO Changpeng “CZ” Zhao later claimed that they were looking at “significant P2P trading volumes,” connecting the news to the rise in BNB price. The cryptocurrency touched its session high right after CZ’s statement. An hour after that, he admitted that Binance P2P trading services are compatible with WeChat and AliPay, two of China’s leading payment services.
However, CZ later clarified that Binance has not partnered with either of those firms but is merely enabling them in P2P transactions for payment.
“Some confusion by some news outlets,” stated CZ. “Binance is not working directly with WeChat or Alipay. However, users are able to use them in P2P transactions for payment. Still not a small feat. But words/meaning get twisted as they are passed around.”
Both WeChat and AliPay have warned users about not using its services for selling and purchasing cryptocurrencies.
Bullish Calls for Binance
As active catalysts assisted BNB in achieving a 19-day high against bitcoin, market analysts switched their bias for the cryptocurrency to the upside.
Jacob Canfield, for instance, noted that BNB was trading near the apex of a sizeable Falling Wedge pattern. A Falling Wedge is a bullish reversal indicator, wherein an asset forms lower highs and lower lows – and breaks to the upside upon reaching the pattern’s apex. Canfield stated that he is buying BNB for the very same technical reason.

Buying $BNB here
– First target is slightly open for me as I think this has some nice room to run off this consolidation.
— Jacob Canfield (@JacobCanfield) October 7, 2019

The Crypto Dog believed in the same outcome, as reflected in his tweet below:

$BNB looks ready to have a go#ihaveabag
— The Crypto Dog (@TheCryptoDog) October 9, 2019

If the Falling Wedge analysis is valid, BNB could rise towards 45,393 sats – a 113 percent increase from the price at the time of this writing.
The post Bored Bitcoin Traders Pump Binance Coin (BNB) by 11% appeared first on NewsBTC.
Source: New

Bitcoin Eyes Price Rally as Fed Announces Pseudo-QE

Bitcoin is about to become a hot asset as the US central bank goes ahead with its pseudo-quantitative easing program, believes a few bigwigs.
Travis Kling, the chief investment officer at California-based Ikigai Asset Management, called bitcoin “an insurance policy” against Jerome Powell’s decision to resume Treasury purchases. The Federal Reserve chairman on Tuesday confirmed that they would purchase short-term bonds to expand their balance sheets.
Fed’s move, according to Kling, signals a liquidity crunch in the US market, which means the central bank is injecting a fresh supply of dollar-denominated assets to stimulate the US economy. It is an equivalent of quantitative easing (QE).
“Welcome to QE4,” tweeted Kling.

"I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs."-Jay Powell, today
Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility.
Welcome to QE4.
— Travis Kling (@Travis_Kling) October 8, 2019

Fed: Everything is Fine
Powell refused to call the Treasury Purchase a QE program, stating that it is nowhere the same as the crisis-era program launched after the 2008 financial crisis.
“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis,” he told the National Association of Business Economists.
The weight of the Fed’s decision is going to fall on an oversupplied US dollar – at least in the short-term. Moreover, another factor that could further weaken the greenback is Powell’s inclination towards another rate cut.
The Fed chief coupled his Treasury-buying announcement with another inflationary news. He said the Fed could cut benchmark rates by 25 bps at the next Federal Open Market Committee meeting. That shows that Powell is adding more insurance against market uncertainties caused by, as he said, “trade, Brexit, and other issues.”
Meanwhile, staunch bitcoin skeptic and gold bull Peter Schiff said that Fed’s latest decisions proved that the US economy is in bad shape. The Euro Pacific Capital CEO tweeted:

Within a few months it's likely that the Fed's balance sheet will exceed the $4.5 trillion peak it hit prior to the Fed doing QT. Sometime in 2020 the Fed's balance sheet will grow beyond $5 trillion, and will likely keep growing indefinitely. But don't worry, it's not QE!
— Peter Schiff (@PeterSchiff) October 8, 2019

“If it looks like a duck, walks like a duck, and quacks like a duck, it’s a duck. No matter what Powell claims, the Fed is doing QE, as I predicted it would. The goal is to suppress interest rates to sustain debt and asset bubbles. The only difference is this time in won’t work!”
Unlike Kling, Schiff thinks Gold would beat bitcoin in terms of gains against a weaker dollar.

China’s Most Recent Gold-Buying Spree Tops 100 Tons @schiffgold
— Peter Schiff (@PeterSchiff) October 8, 2019

A “Rocket Fuel” Bitcoin Rally
Sweden-based Youtuber Ivan on Tech sided with Kling on his upside prediction for bitcoin. He said the news of the Fed’s bond purchasing program could “rocket fuel” the cryptocurrency.

FED: starts QEAlso FED: This is definitely NOT QE
This is Bitcoin Rocket Fuel
— Ivan on Tech (@IvanOnTech) October 9, 2019

Meanwhile, Priya Misra of TD Securities stressed that Powell’s program appears a lot like QE, but it is not one.
“This was the only sustainable and permanent solution,” she stated.
The post Bitcoin Eyes Price Rally as Fed Announces Pseudo-QE appeared first on NewsBTC.
Source: New

Bitcoin Directionless as Trade Tensions Ramp Up Before Talks

An unch bitcoin struggled to find its next direction on Wednesday as investors placed their sentiments behind global stocks.
The benchmark cryptocurrency surged by a minor 0.07 percent to trade at $8,185.34 – as of 11:24 UTC. Earlier today, it had established a daily session high of $8,245 but corrected after the European session open. That coincided with early gains in EU’s Stoxx 600. The index surged by 0.5 percent in early morning trade, while the UK’s FTSE 100 was also up by 0.4 percent.
Bitcoin directionless as investors remain focused on trade talks this week | Image credits:
As of the current financial quarter, bitcoin is trending downwards within a wide range (the purple area in the chart above). The cryptocurrency dropped by as much as 44.47 percent from its year-to-date high. Moreover, it is looking to pursue an extended downside momentum, thanks to the evident absence of big buyers.
Trade Talks and Brexit
Speculators have shifted their focus on the two-day meet between China and the United States starting Thursday. Both nations expect to put breaks on an ongoing trade war that has spoiled the global market sentiment since Q2/2019. But with continually fluctuating moods from US President Donald Trump, coupled with China’s refusal to bend down on specific standards, achieving a full-fledged trade deal looks unlikely.

China and the US have perhaps their last chance to end the trade war. Otherwise, get ready for global economic turmoil
— SCMP News (@SCMPNews) October 8, 2019

Topping the economic crisis further is Brexit. UK President Boris Johnson’s efforts to divorce the European Union on October 31 has met with no results. His Conservative Party is facing split over a no-deal Brexit, which, in turn, keeps equity markets as confused as its counterparts in the cryptocurrency space.
Bitcoin does not correlate with the events developing on a global financial scale. But the cryptocurrency’s efforts to attract institutional investors certainly do. Big whales are ideologically switching their positions between risk-on assets like equities and risk-off assets like Gold and US Treasuries. That makes bitcoin a silent spectator, waiting for the economic turmoil to end before anyone even looks at it.
Altcoins Up against Bitcoin
Meanwhile, traders within the cryptocurrency space are moving out of bitcoin. That is evident in the 24-hour data presented by CoinMarketCap. It shows almost all the altcoins in green against BTC, with Binance’s BNB leading the charge with a 10 percent profit.
Binance Coin leads intraday altcoin rally against Bitcoin | Image credits: CoinMarketCap
In the coming days, all eyes would be on the aftermath of the Fed’s expansionary policy. In retrospective, the central bank’s chairman Jerome Powell has announced that they would repurchase Treasury bonds to end an ongoing cash crunch. The move, coupled with a potential 25 bps rate cut, is likely to make the US dollar weaker. Some analysts see the event as a validation to bitcoin’s deflationary nature against fiat. Ikigai’s Travis Kling states:
“Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility.”
But are institutional investors listening? Do tell us what you think in the comment box below.
The post Bitcoin Directionless as Trade Tensions Ramp Up Before Talks appeared first on NewsBTC.
Source: New

Bitcoin Careful as US-China Trade Talk Leaves Investors Dubious

Bitcoin held on to its gains on Tuesday as investors remained dubious about a positive outcome from trade talks this week.
The benchmark cryptocurrency was trading at $8,220.80 as of 1320 UTC, up by 0.14 percent. It widely trended in the middle of a range defined by $8,342 and $8,150, showing no ultimate breakout intentions. That showed traders are waiting on the sidelines for big whales to determine the next interim bias. In a broader timeframe, bitcoin remained in a downside correction, still haunted by the possibility of further slides.
Bitcoin halts after surging more than 3 percent on Monday | Image credits:
An $11,000 Bitcoin
Analysts offered technical explanations for the recent downswing, noting that bitcoin is merely moving in response to psychological levels. Amsterdam-based stock trader, known by the alias ‘Crypto Michaël,’ for instance, said that bitcoin could test the $8,300-8,400 range for the next pullback. At the same time, the cryptocurrency could locate decent support in the field defined by $7,800 and $7,900.
“[I] would probably stick around for a while here,” added Michaël. “If breakout upwards, then [it would be] an accumulation phase and then I won’t be surprised we’ll run back to $11,000.”
Anthony Pompliano, meanwhile, offered some fundamental catalysts that could match up to Michaël’s technical expectations. The  Morgan Creek Digital Assets co-founder believed people in India and Hong Kong would eventually pick bitcoin to sidestep traditional financial systems.

[New Post] Bitcoin is becoming much more important in Hong Kong and India.
It won't happen overnight, but slowly people are reminded why they should own a decentralized digital currency.
— Pomp (@APompliano) October 7, 2019

Macroeconomic Factors
Investors on a larger scale focused their attention on the US-China trade talks starting this Thursday. The Trump administration announced yesterday that it would restrict American companies from exporting goods to 28 Chinese firms. That left analysts confused about a game-changing outcome on the ongoing trade war, which has already sent global markets astray.
Channel 3000 said that the Dow Jones Index and the broader market are set to open trade in a negative area, citing futures data.
“Futures for the Dow are down 0.7%, implying a nearly 200-point drop at the open. S&P 500 and Nasdaq Composite futures are also down 0.7%,” the agency noted.
The downside in US equity markets, meanwhile, is creating opportunities for safe-haven assets. Gold, for instance, surged by 0.81 percent on Tuesday against the gloomy intraday outlook, rising as high as $1,508.748 at one point.
Gold registers modest gains as intraday demand for safe-haven assets go up | Image credits:
A section of cryptocurrency analysts see bitcoin to behave as a hedging asset should the US-China trade deal goes kaput. The cryptocurrency in the second quarter of this year offered a safe-haven to investors against dwindling equity rates and China’s yuan. Simon Peters of eToro told Business Insider:
“Extreme price volatility, hacks, and allegations of price manipulation still weigh on its reputation. However, the correlation with gold on eToro’s platform could be a sign that the overall perception of bitcoin is gradually shifting from speculative towards a lower-risk store of value.”

The post Bitcoin Careful as US-China Trade Talk Leaves Investors Dubious appeared first on NewsBTC.
Source: New

UK Bitcoin Mining Firm’s Revenue Jumps 75% despite Bearish Q3

Subscription-based bitcoin mining firm Argo Blockchain has registered a profitable third quarter even though the asset it deals in witnessed a sharp drop in value.
The UK-based company, whose stocks are listed on the London Stock Exchange (LSE), confirmed its revenues rose to £3.6 million (~$4.42 million) in the three months ending on September 30. That brought its quarter-on-quarter gains up by 75 percent, with a mining margin of 73 percent.
Mike Edwards, the executive chairman of Argo, attributed their increased returns to a string of factors, including competitive electricity costs and a lower operating cost base. Edwards stated that Argo would install another 6,000 mining machines before the end of the year, a move that could propel their production to a new high.
“Our investment in the most advanced mining hardware on the market continues to provide us with a competitive edge even as mining conditions become more challenging,” said Edwards, adding that “a robust balance sheet” would make Argo the world’s largest listed cryptocurrency miner.
Bitcoin Suffers
Argo’s gains came on the backdrop of dwindling bitcoin prices throughout the third quarter of 2019. The period saw the benchmark cryptocurrency plunging by more than 25 percent, according to data gathered by Skew. Analysts attributed the losses to bitcoin’s overbought status after a 150 percent price rally during the first half of 2019. Many even stated that a gloomy macroeconomic outlook led investors away from risky assets, causing bitcoin to crash.
Bitcoin has slipped by more than 45 percent from its year-to-date high | Image credits:
Edwards revealed that Argo periodically converted a portion of its mined bitcoin to fiat to fund its operational costs. The leftover funds made into the company’s balance sheets, which showed why it registered a 75 percent revenue against a bearish bitcoin.
Hashrate High
Argo’s strategy further showed that miners did not turn off their machines when faced with lower bitcoin prices. Even after dropping by more than 45 percent from its year-to-date high, the cryptocurrency continues to be profitable for the network participants. That is also visible in the bitcoin’s rising hash rate.
Bitcoin hash rate chart | Image credits:
As of September 26, the amount of computing power involved in validating and adding transactions on the Bitcoin blockchain had hit above 108.48 trillion hash per second. Against the dwindling prices, the bitcoin network remained attractive to miners. Argo’s decision to expand its mining rigs further came on expectations of a bitcoin price recovery, especially ahead of the next year’s halvening event, which would slash the cryptocurrency’s supply rate by half.
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Source: New