No Demand for “Highly Speculative” Altcoins: Analyst

Thousands of spinoffs of the world’s leading cryptocurrency Bitcoin are expanding into the void, according to market analyst Josh Rager.
The Bloockroots.com co-founder on Sunday said the demand for “highly speculative” alternative cryptocurrencies, or altcoins, is falling. The analyst noted that institutional investors now look at bitcoin, the first cryptocurrency, as their preferred choice of investment. At the same time, altcoins receive attention typically from highly-active traders within the entire cryptocurrency market.
“Outside of trading majority of altcoins aren’t worth holding,” Rager said on his Telegram channel. “More and more come out into this already illiquid market every week.”
He added that, for large investors, an altcoin equipped with higher-grade technology, team, and even community remains unattractive. Excerpts from his statement:
“There is no demand [for] highly speculative assets such as the majority of altcoins. Regardless of how awesome the tech, team, community, if large players and institutions aren’t interested in an asset it’s not a good sign.”
Altcoins Dip
Altcoin projects typically attempt to solve the underlying problems of Bitcoin. Litecoin, one of the first known cryptocurrency projects, did it by twisting the bitcoin’s code to introduce faster transaction processing. At the same time, Ethereum became an entirely different blockchain by facilitating peer-to-peer contracts and applications via its currency Ether. Bitcoin, on the other hand, started as a peer-to-peer payment system supported by a token of the same name.

Choose your altcoins wisely
The tech can be awesomeThe team can be the top of classThe community can be an army
But in the end…
The market decides the monetary value of your altcoin assets
Not the tech, team, or community https://t.co/tyPYI598LL
— Josh Rager (@Josh_Rager) August 18, 2019

Investors who missed the Bitcoin’s supersonic price rallies during the first six years of its existence looked at altcoin projects for its similar opportunities. While some did return massive profits, a majority of them – more than 90 percent – turned out to be either failures or frauds. The growing mistrust in the new altcoin projects diverged investors’ interest into a handful of altcoin projects.
But given a recent boom in the popularity of bitcoin, even excellent altcoin projects are finding it hard to impress investors outside the cryptocurrency space.
Fleeing to Safety
MVDALC, an index which tracks the performance of top hundred cryptocurrencies by market cap, noted that bitcoin and other ninety-nine projects registered about 114 percent in year-to-date gains as of the press time. Meanwhile, the mid-cap and small-cap coin posted a dwarfed 7 percent and 18 percent YTD profits.
Large Cap Cryptocurrencies Returning Better Profits than that by Mid- and Small-Cap | Image Credits: MVIS
“If 98 percent of [altcoins] went to crap, the 2 percent would leave around 50 to go on to [actually] be the outliers that end up returning,” said noted trader Cantering Clark. “Since this day last year – Total Alts in circulation increased by 65 percent [and] Total Alt-Market Capitalization dropped by 22 percent.”
Rager supported Clark’s analyst and recommended investors to choose their altcoins wisely.
Bitcoin’s cryptocurrency market dominance surged to its YTD high of circa 70 percent this July. At it’s yearly worst, it was close to 50, according to data provided by CoinMarketCap.com
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Bitcoin Rises as Investors Anticipate Economic Stimulus

Bitcoin was trading higher on Monday morning as investors digested the possibility of new economic stimulus announcements later this week.
The benchmark cryptocurrency rose by more than 4.5 percent to $10,753.30 on San Francisco-based Coinbase exchange. The move brought its local bottom-rebound to a slightly above 13 percent, explicitly driven by Bakkt. The Intercontinental Exchange arm announced on Thursday that it would launch its custody and physically-delivered daily and monthly bitcoin futures contracts on September 23.

We have some news https://t.co/ykUvQ31cGz
— Bakkt (@Bakkt) August 16, 2019

Bitcoin has surged by more than $1,000 after Bakkt’s announcement on Friday. That helped push the cryptocurrency’s interim bias into a bullish territory, where it would now be retesting psychological resistances towards $11,000, $12,000, and whatnot.
Bitcoin Flips Technical Narrative to Favor Bulls | Image Credits: TradingView.com
Intraday Booms
The bitcoin price surge also coincided with the possibilities of new economic stimulus programs. Investors anticipated a fresh wave of money-printing actions as a measure to tackle the worsening financial growth across the world. Central bankers will meet on Thursday at their annual Jackson Hole meeting in Wyoming. They would discuss the warning signals of a recession and how their measures could support the global economy.
Asian markets trended upward on such hopes, with Japan’s Nikkei and Kora’s Kospi rising by 0.7 percent and Australia’s S&P/ASX 200 gaining 1 percent at the same time. Meanwhile, riot-hit Hong Kong and Chinese stocks also rallied on Monday after the People’s Bank of China announced that it would replace the current benchmark lending rate with a market-friendly one.
Shanghai Composite Index (SHCOMP) Trends Higher on Stimulus News | Image Credits: TradingView.com
Stimulus hints also drove European stocks up, with Frankfurt leading with a recovery from its six-month low established last week. The pan-European STOXX 600 index was trading 0.9 percent higher ahead of the market open. European banks also registered intraday profits, with a starkly-hit Deutsche Bank went up with a relieving 3 percent. HSBC, meanwhile, surged by 1 percent.

World markets start the week off strong with stimulus chatter $SPY $QQQ $DIA pic.twitter.com/RV9JoLiyL7
— HWB (@HWBTrader) August 19, 2019

Investors looked confident across the Atlantic Ocean as well. US stock futures also began the week on a higher note after President Donald Trump and team issued encouraging comments on trade talks.
Dow Jones Industrial Average futures rose 1.2 percent, or 305 points, to 26,212, while S&P 500 futures gained 1.2 percent, or 34 points, to 2,925.50, and Nasdaq-100 futures added 1.4 percent, or 105.25 points, to 7,716.50.
Bitcoin This Week
The bitcoin price lately formed an interim positive correlation with the global stock markets, while its behavior with similar, perceived safe-haven assets flipped entirely.
“People thought at certain points in the last year or so that cryptocurrencies would become the flight to safety trade,” Matt Maley, an equity strategist at Miller Tabak, told Bloomberg. “The cryptocurrency is losing some of that luster of being considered a safe asset.”
According to Scott Melker, a renowned cryptocurrency market analyst, bitcoin is more reactive to its technical confines. He noted the cryptocurrency is currently trending inside a massive bull flag on weekly charts. He tweeted:

$BTC Weekly
Still a massive bull flag. Price still trading above the EQ of the flag. A second potential hidden bull div after the first one was confirmed weeks ago. Requires a weekly close next Sunday with a definitive elbow up on RSI. Still looks bullish. pic.twitter.com/kHnIgmUwRw
— The Wolf Of All Streets (@scottmelker) August 19, 2019

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Don’t Trade Bitcoin, TexasWest Capital Analyst Tells Investors

The recent sell-off in the bitcoin market has brought the price down by more than 15 percent in just five days. The downside action has appeared against the backdrop of a dwindling global economy, shaking the beliefs of many who consider bitcoin as a safe-haven asset against gloomy macroeconomic sentiments. The absence of big hedging moves is strengthening the cryptocurrency’s bearish bias in the near-term.
But, says Scott Melker of TexasWest Capital, a downside move in bitcoin charts should not become one’s instinct of panic-selling their holdings. The cryptocurrency analyst stated today that it is time for investors to do nothing: neither sell nor buy – not until the market establishes a clear bias.
“Don’t get chopped up trying to trade bitcoin right now,” said Melker. “Best to wait for a clear move on a higher time frame and not swim with the whales while they’re playing games. This price action is likely to abuse bulls and bears alike.”
“Nothing confirmed” as Bitcoin struggles near the $10,000 Level | Image Credits: Scott Melker
The analyst noted that bitcoin is making a Bear Flag, a bearish pattern reflecting an asset’s minor surges while pursuing a broader downtrend. An overhead resistance near the $10,300 level is capping bitcoin from declaring a stronger interim bull bias. Melker said he wants to see at least the cryptocurrency breaking above the midline of the Bear Flag. In the absence of such price actions, bitcoin will remain in a bias-conflict.
“I see no reason to trade this at the moment,” he added. “That said, watching a potential bear flag forming with price struggling to break above the EQ (midline). Also, I still view the $10,300 area as a key level that I would like to be above, not below. Nothing confirmed here for me.”
Bounce Back Calls
Bitcoin trending inside bull pennant | Image Credits: TradingView.com
The broader price strokes in the bitcoin market show the asset trending inside a Bull Pennant structure. The pattern typically forms after traders catch their breath after a big upward move before they continue the price rally. Before the pennant formation, bitcoin had surged by over 200 percent in an aggressive bull run. As of now, the cryptocurrency appears to be catching a break.
That said, the price, like the previous times, is testing the Pennant support, awaiting a bounce back towards the Pennant Resistance. Bitcoin would likely bounce between the two trendlines until it reaches the apex of the Pennant structure. After that, the price could attempt a breakout at least equalling the height of the Pennant. That could take it much above this year’s peak of $13,868.44.
But, as Melker noted, it is wise to test the wait-and-watch approach. A break below the Pennant support can confirm the analyst’s bear flag theory, meaning bitcoin would likely continue its downside correction.
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This Haven Asset is Beating Bitcoin amid Recession Fears

This year’s run-up in the bitcoin price has been attributed to numerous factors: the US-China trade war, bold monetary easing by central banks, a weakening Chinese Renminbi, Facebook’s plans to launch its cryptocurrency, as well as market manipulation via Tether’s USDT stablecoins. But a recession is still not one of those catalysts.
The benchmark crypto-asset continues to trend in the negative area as rating agencies send high alerts for the US economy. The BTC/USD instrument this week toppled by as much as 17.94 percent to $9,470 on San Francisco-based Coinbase exchange. At its year-to-date high, the pair was trading at $13,868.44.
Bitcoin looking to close the week on double-digit percentage losses | Image Credits: TradingView.com
The downside move appeared despite a constant projection of bitcoin as a safe-haven – assets which attract investors in times of dwindling price behaviors in the US economy. Supporters believe that bitcoin, which is a non-sovereign, non-correlated asset, would serve as a perfect hedge for investors looking to offload their risks on haven assets. Nevertheless, its performance this week did not reflect any resembling sentiment.
US Treasuries Beating Bitcoin
On the contrary, US Treasuries became a hot property for investors lately. They appear to have shunned risk assets – which might include bitcoin – and are prompting debt instruments to register their best month since 2015.
The Yield on US 10 Year Treasury Note Falls to 2015 Levels | Image Credits: Bloomberg
The yield on the benchmark US 10-year Treasury note has dropped by 46 basis points – 0.46 percent – so far in August. That indicates growth in demand for medium-term debt trades from investors, especially after trade-exposed economies of China and Germany have posted weak economic data which sent yield of US 10-year government bonds below that of shorter-term maturity debt. It’s a sign of a deep recession, based on historical market behaviors.
The trend shows investors are willing to put their money in low-risk havens. Bitcoin, despite its higher returns in 2019, is still looked at as a very volatile asset, with a higher risk-reward ratio than other safe-havens. Adding to the fact that the cryptocurrency has not witnessed a recession in its 10-year of existence, it explains why investors are avoiding the test-and-see approach.
“It’s like maybe BTC is strong enough to swim in the pool right now but not in the ocean,” said Travis Kling, the founder of Ikigai Asset Management. “Maybe BTC can rally with gold when it’s about tariffs but not when its about global growth slowdown.”
Trust Boost
Despite bitcoin’s shortcoming, many on Wall Street still sees the cryptocurrency as a perfect safe-haven against the macroeconomic slowdown. Fundstrat Global Advisors’ Tom Lee referred to the socio-political turmoils taking place in Argentina and Hong Kong. He said that bitcoin is already acting like a hedge in those regions, adding:
“You can see it in the markets. Where there’s turmoil, the local Bitcoin prices tend to surge and trade at a premium, because people are trying to find ways to protect their money.”
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Bitcoin Eyes Demand as Hong Kong Protestors Announce Bank Run

Bitcoin is hoping to become a hot property in Hong Kong.
The region’s political crisis has swept over its banking sector, which is now seeing protestors withdrawing large bundles of cash out of ATMs.
The move is the latest tactic to reduce People’s Bank of China’s influence on the Hong Kong economy. Protestors have warned that they would withdraw as much Hong Kong dollars (HKG) as they can. They would further exchange their cash holdings for the US dollar as a strategy to protect their assets and to show the Chinese government that they are in full control.
Cryptocurrency evangelists believe the disturbing scenario could fuel bitcoin’s demand in Hong Kong. Influential Twitterati Rhythm Trader said on Wednesday that protestors would eventually want to park their cash in non-sovereign assets like bitcoin.

BREAKING: Hong Kong activists are calling for a run on Chinese banks tomorrow, asking that everyone withdraw their money on the same day.
One of the best ways to peacefully protest, the next step is buying bitcoin!
— Rhythm (@Rhythmtrader) August 15, 2019

HK$70 Million Out of Chinese Banks, Already
The Hong Kong student who launched the “peaceful protest” claimed that protestors have already withdrawn more than HK$70 million. Meanwhile, many participants shared their withdrawal receipts on a Telegram channel dedicated to Hong Kong protests, which has over 1,500 members already.
“This may work because Carrie Lam and the PRC care much about the economy,” the Hong Kong student told Insider, adding that he and others like him would stop if the Chinese government fulfills their five demands. They are:
“Completely withdraw the extradition bill; retract the proclamation that the protests were riots; withdraw criminal charges against all protesters; thoroughly investigate abuse of powers by the police; dissolve the Legislative Council by administrative order, and immediately implement dual universal suffrage.”

LIHKG, a Chinese version of social media platform Reddit, saw mounting discussions about the proposed Hong Kong bank run. One of the posts, written by an activist, discussed how the Hong Kong dollars would continue to remain pegged to the US dollar this year. But eventually, a more massive capital outflow would disturb the balance between the two currencies, damaging the HKG.
“If you want to protect yourself, you must first convert most of the assets … in order to maintain value in US dollars or other reliable foreign currency,” the post read.
Bitcoin Trading Up
Chinese banks are likely to push their ATMs out of order to circumvent the protestors’ withdrawal requests. The state could also seize the cash upon arresting its holder on a typical suspicion of causing riots. That has left Hong Kong protestors with a few options to safeguard their money from the police, which is bitcoin.
A portion of money already out of the banking system has landed itself in the emerging cryptocurrency markets, according to LocalBitcoins.com. The peer-to-peer crypto marketplace noted a spike in trading volume coming from the Hong Kong region. Within a few weeks, the volume surged from HK$3 million to HK$6 million. That sparked rumors that Hong Kong wealthies were tunneling their capital offshore by using Bitcoin’s decentralized asset-transfer infrastructure.

nice spike in notional HK LBC vol
wonder why that is … pic.twitter.com/mOM9NHBDYQ
— Josh Olszewicz (@CarpeNoctom) June 16, 2019

The bitcoin trend is hoping to leak down to everyday citizens as they participate in the bank run. Nevertheless, there is no evidence that could prove that they would.
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Falling Renminbi Serious Use Case for Bitcoin: DBS Chief Economist

A weakening Chinese Yuan (Renminbi) is helping to fuel the bullish sentiment of bitcoin, according to Taimur Baig of DBS’ Singapore unit.
The chief economist told Financial Times that the recent run-up in the bitcoin price took place after the People’s Bank of China (PBoC) forced the value of the renminbi below $0.14 for the first time since the last financial crisis. The move increased the demand for bitcoin and similar perceived safe-haven assets – such as gold – higher.
“We have seen a big rally,” said Baig. “A falling renminbi is a serious use case for crypto. From now on it is another thing for markets to watch.”
The comments received support from the data provided by Babel Finance. The Beijing-based cryptocurrency bank reported a 50 percent volume increase in the regional bitcoin market over the past ten days. The firm also stated that the cryptocurrency volumes are on their way to the upside from over a month already.

What's driving bitcoin lower at the moment?
Could it be Yuan devaluation, trouble in Argentina, central banks, or other factors?
I have no idea, but here's a discussion I had today with @BLOCKTVnews that I hope you find helpful.https://t.co/r238UsTGtB
— Mati Greenspan (@MatiGreenspan) August 14, 2019

Bitcoin: Destination or Tunnel?
Chinese financial regulators have banned the trading of bitcoin and similar crypto-assets, leading to the shutting down of several cryptocurrency exchanges. But that has not deterred investors in China from speculating on bitcoin. They continue to trade the cryptocurrency either by offshore accounts in Hong Kong and Singapore.
Investors’ reason to hedge their capital into bitcoin remains unclear. Many believe they want to circumvent the state-imposed capital control by using bitcoin, a non-sovereign asset, as a tunnel to convert a weaker yuan into a relatively stronger US dollar. At the same time, others think investors are long-term bullish on bitcoin, believing it is going to become the leading gold-alternative in terms of store-of-value.
Bitcoin is Up More than 200% in 2019 | Image Credits: TradingView.com
Bitcoin has been given a boost this year by a string of strong monetary policies. In addition to the US-China trade war, a dovish stance of the US Federal Reserve, as well as the European Central Bank’s plans of quantitative easing, is turning investors away from weakening national currencies.
“Bitcoin as a hedge against runaway fiscal and monetary policy has – sort of – becoming the dominant paradigm,” Matt Hougan, global head of research at Bitwise Investment, told Barron’s. “I do think it is acting in that way.”
Hype
On the other hand, some analysts believe bitcoin’s growing correlation with the mainstream financial markets is false-talk. Peter Schiff, CEO of Euro Pacific Capital, said last week that Chinese are not buying cryptocurrencies as a measure against a weakening market outlook. The American stockbroker added that the speculators were manipulating the bitcoin prices to fit the macroeconomic narrative.

CNBC is trying its best to dupe its audience into buying Bitcoin. Despite gold being a much larger market, CNBC devotes far more airtime to Bitcoin. The Chinese aren't buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven!
— Peter Schiff (@PeterSchiff) August 5, 2019

At press time, the bitcoin price is heading downwards below the $10,500 level after establishing its August high towards $12,325 on San Francisco-based Coinbase exchange. The move downward appeared amidst the Donald Trump government’s plans to delay imposing tariffs on some of the Chinese goods, including laptops, cellphones, and video game consoles.
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2% of Bitcoin Addresses Control 80% of Wealth: Research

Over the past years, many bodies have published data on massive wealth concentration in an otherwise decentralized Bitcoin network. Some of these reports have identified that less than five percent of all bitcoins addresses hold about 95 percent of all bitcoins. Research published in 2017 by How Much showed that 1 percent of those addresses had control over half of the bitcoin market.
Joining the ranks of those studies is TruStory, a platform for users to research and validate people’s claims online. The startup’s Founder and CEO Preethi Kasireddy on Tuesday shared new statistics about bitcoin’s so-called wealth disparity problems. She noted that now 2 percent of addresses control 80 percent of the cryptocurrency’s supply.

Bitcoin wealth distribution: 2% of addresses control 80% of the wealth.
Ouch. pic.twitter.com/MtNe3nKf5K
— Preethi Kasireddy (@iam_preethi) August 13, 2019

Statistical Liberty
Penned by Saurabh Deshpande, an analyst at TruStory, the report derived its conclusion by using the Lorenz Curve, a graph that determines wealth inequality. Deshpande admitted that he let go off specific vital parameters that could give a better clarity over bitcoin’s wealth distribution issues. For instance, he observed that cryptocurrency exchanges held a massive number of bitcoins in their cold storage wallets. Deshpande removed those bitcoins from their addresses and mentally reallocated them in addresses holding up to 1 BTC.
“The assumption here is that people with more than 1 BTC would like to store in their hardware wallets,” he explained.
Deshpande took more liberties with data, like introducing an error into the data that considers half of the identified exchange addresses as the newly assumed exchange addresses. He also neglected data for addresses that contain 10–100 BTC, stating it was not available. His adjustments ultimately gave a presumed Lorenz Curve output, as shown below:
Bitcoin Adjusted Lorenz Curve | Source: TruStory
“Though this wealth distribution is better than the first one, I presume the reality might be slightly better,” Deshpande explained. “Despite this, the distribution is nowhere close to being ideal. I hope the scenario changes and the distribution gets better as time passes. Till then, one of the greatest threats to bitcoin is this curve.”
Criticism
The TruStory’s conclusion of bitcoin wealth being hugely centralized met with criticism. Ari Paul, CIO at BlockTower Capital investment firm, said the “percent of addresses” analogy is not meaningful, considering one could create millions of new addresses with dust units in them and disturb the Lorenz Curve output further.
“The problem is that the denominator is [kind of] a nonsense number. What does the total number of addresses mean or matter?” asked Paul. “A more meaningful measure is something like # of addresses with at least 0.1 BTC. Still doesn’t tell us much, but at least here an “address” has some meaning.”

2/ a more meaningful measure is something like # of addresses with at least 0.1 BTC. Still doesn’t tell us much, but at least here an “address” has some meaning.
— Ari Paul (@AriDavidPaul) August 14, 2019

Civic co-founder & CEO Vinny Lingham, on the other hand, supported Deshpande’s report, hypothesizing that people who started mining on the Bitcoin network in its early days [probably] amassed millions of units of the cryptocurrency. It gave them adequate control over the market.
“Three million coins haven’t moved, and they are still in the hands of a few people,” Lingham asserted.
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Chinese are Not Buying Bitcoin: Peter Schiff

The Chinese investors do not think of bitcoin as a safe-haven asset, and they are not buying it, believes Peter Schiff of Euro Pacific Capital.
The statement appeared amidst international media coverages about bitcoin’s price rise against a gloomy macroeconomic outlook. On August 1, US President Donald Trump said that he could impose 10 percent additional tariffs on $300 billion worth of Chinese imports. The move prompted Beijing to artificially devaluate its national currency yuan to its weakest since December last year.
Global stock markets, which was already facing the heart from escalating trade tensions between the US and China, slid further on Monday following Beijing’s yuan cut. The pan-European Stoxx 600 Index plunged by 1.6 percent. The MSCI’s broadest index of Asia-Pacific shares also slipped by 2.5 percent, while the Dow futures were down by about 100 points.

Bitcoin, on the other hand, surged by more than 9 percent on the day to establish a local high towards $11,860. The move prompted CNBC, a US-based business channel, to cover a report connecting yuan’s devaluation with bitcoin’s rise. They interviewed Jeremy Allaire, the CEO of Circle cryptocurrency exchange, on the prospects of Chinese investors using bitcoin as a measure against the state’s capital controls.

"Humanity has now created a non sovereign, highly secure mechanism to store value that can exist anywhere that the internet exists," says @jerallaire on #btc surge amid #TradeWar pic.twitter.com/Lhguui8arb
— Squawk Box (@SquawkCNBC) August 5, 2019

The interview also came ahead of a news report covering the views of analysts who believed yuan devaluation is prompting investors to hedge in bitcoin.
Forgetting Gold
Schiff, a gold bull, complained that CNBC was giving more screen time to bitcoin, which was similar to duping viewers into buying the cryptocurrency. He added that the news channel should have given more time to Gold, another safe-haven asset with thousands of years of credibility. But it didn’t.
“CNBC is trying its best to dupe its audience into buying Bitcoin,” Schiff tweeted on Monday. “Despite gold being a much larger market, CNBC devotes far more airtime to Bitcoin. The Chinese aren’t buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven!”
Nevertheless, another one of CNBC reports which focused entirely on Gold discussed its prospectives against the escalating trade war between the US and China. The news coverage listed quotes of various market experts who favored the yellow metal’s bullish bias. Benjamin Lu of Phillip Futures, for instance, told CNBC that “volatility, growth fears, persistent weakness in economic data will be good enough for risk-off environment” is good of Gold.
CNBC also sourced the quote from Michael McCarthy, the chief market strategist at CMC Markets, who favored gold as a safe-haven asset, saying:
“Gold is certainly benefiting from the global concerns about the outlook for growth, and central banks are likely to maintain their accommodative stance, so safe-havens like gold are in demand.”

No one is right or wrong Peter regards what they buy. It is preference. People who like gold buy gold, people who like BTC buy BTC. Let people decide for themselves! Own research and all that!
— AJS (@AJbithub) August 5, 2019

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Bitcoin Soars Towards $12k as Yuan Hits Decade Low

Bitcoin rose above the $11,800 level on Monday as People’s Bank of China (PBoC) pushed the Chinese Yuan to its decade low.
At around 0740 UTC, the BTC/USD instrument established a local high of $11,860, up 6.67 percent in the past 24 hours. The move upward brought the pair’s 7-day gains to 23.93 percent. The price rally stalled ahead of the European market open, with price correcting by as much as 1.35 percent.
Bitcoin Price Up 6.76% in Last 24 Hours | Image Credits: TradingView.com, Coinbase
The move for bitcoin has also been supported by $7.69 billion worth of reported volume in the past 24 hours. At the same time, the “Real 10” 24 Hour Volume notes $1.71 billion worth of trading activities.
Yuan Declines
The gains in the bitcoin market coincide with the decision of US President Donald Trump to impose 10 percent tariffs on $300 billion worth of Chinese imports. The macroeconomic event led the PBoC today to set its daily referential rate for yuan below $7, its worst in a decade. The Chinese central bank said in a statement that it would keep the currency “reasonable and balance,” adding that their move is an act of “trade protectionism” against Trump’s economic warfare.
The latest drop in yuan, says PBoC, is merely a reflection of fluctuating demand and supply.
Chinese Yuan Declines to Its Decade Low against the US Dollar | Image Credits: TradingView.com, ICE
Markets across the globe, meanwhile, are taking a beat. Japan’s Nikkei Index plunged 1.7 percent, and the Shanghai Composite Index fell 1.6 percent. At the same time, South Korea’s Kospi also dropped by 1.6 percent, and in Hong Kong, where a sociopolitical turmoil is unfolding, the Hang Seng Index crashed by as much as 3.1 percent, its worst since October last year.
The US stock futures are also underperforming as China retaliates with a yuan rate cut. S&P 500 Index futures contracts expiring in September fell up to 1.3 percent. Dow Jones contracts also shed 1.2 percent off their capitalization, while those on Nasdaq 100 slid as much as 1.7 percent.
Chris Weston, the head of research at Pepperstone Group, wrote in a research note that yuan depreciation could trigger capital flight from China, adding:
“Fears of yuan depreciation and a currency war have ramped up again; this will likely compound worries across financial markets.”
Bitcoin Turns Safe-Haven
Investors looking for a refuge from the adverse sentiments in the global market are visibly bringing more capital to the bitcoin market. Scott Melker of Texas West Capital believes Chinese are once again driving the cryptocurrency prices up while avoiding to become collateral damage of the US-China trade war.
“If you are looking for narrative on the recent $BTC move, look at what just happened to the Chinese Yuan — absolutely getting crushed. Perhaps the Chinese are scooping up some Bitcoin as a store of value. It’s a fun thought.”

China markets down 0,5%Hong Kong Down 1,5%Dow futures down 125 points.Bitcoin up 5%.
We are entering a new cycle where Investors are moving into Bitcoin when equity markets fall. pic.twitter.com/rZ3xvDEJNh
— Ran NeuNer (@cryptomanran) August 5, 2019

The price of bitcoin has surged 17.54 percent since Trump’s tariff warning.
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Ethereum Market Bias Can Breakup with Bitcoin: Burniske

Investors in the cryptocurrency market consider bitcoin as a benchmark. The world’s leading decentralized asset by market capitalization visibly determines the state of the overall crypto economy. Its price movement prompts other 1,599 active assets – called alternative cryptocurrencies (or altcoins) – to pursue in the same or an extremely opposite direction, showing extreme dependability.
But according to Chris Burniske, who is partners with New York-based venture capitalist firm Placeholder, one cryptocurrency could divorce the bitcoin’s influence in a longer run.
“Ethereum,” Burniske said, “is currently the only asset with an independent and large enough community to break off from Bitcoin setting the pace.“
He added that the change would not come overnight. Recognizing that bitcoin will remain a unit of analysis and liquidity provider in the space, Burniske said altcoins like Ethereum would detach depending upon their integration into broader, global macro adoption and economics of use at scale.
“As of now ETH/BTC continues to play a lead role,” he recognized.

1/ Other cryptoassets go up and down relative to #bitcoin— but if $BTC doesn’t go up in USD terms, nothing does (for the foreseeable future).
— Chris Burniske (@cburniske) July 30, 2019

Ethereum against Other Altcoins
Burniske’s comments closely followed a report from the San Francisco Open Exchange, which stated that Ethereum is becoming an asset with its own distinctive economy. The report further argued that Ethereum is no longer an altcoin since its correlation with bitcoin is now the strongest and highest among all, as represented in the July chart below.
Ethereum’s Correlation with Bitcoin is the Highest | Image Credits: SFOX
“While many sources have noted the increase in Bitcoin’s market dominance, few have observed the fact that BTC’s current correlation with ether (ETH) is markedly higher than its relationships with other altcoins, and has been so throughout July,” SFOX wrote.
“This may support the idea that Ethereum is coming into its own as a blockchain that is publicly recognized as an asset on its own terms, much like Bitcoin. If this trend continues, it may become inappropriate to categorize Ethereum as an “altcoin” on a par with other crypto-assets that are not Bitcoin.”
Largest Blockchain, Highest Number of Projects, and Whatnot
Like the S&P 500 Index, a benchmark to determine the health of the US economy, Ethereum holds promises to become the same owing to its wide-market breadth, with its blockchain encompassing 1,600 decentralized applications, and powering 94 out of the top 100 altcoins (by market cap).
Crypto Asset Management Firm Electric Capital found that Ethereum is also rich in terms of the number of active developers – almost twice that of bitcoin. Excerpts from their report
“Ethereum has the biggest developer team in crypto. On average, 216 developers contribute code every month to Ethereum’s repos. This is undercounting the number of Ethereum developers since we do not include ecosystem projects like Truffle.”
There are, meanwhile, experts that believe Ethereum is an overhyped bubble. Popular Twitterati WhalePanda, for instance, thinks people bought Ethereum only to buy tokens during the notorious ICO mania of 2017.

Bitcoiners are negative about Ethereum for the following reasons:1. Monetary policy is 3 guys on a conference call which is a joke. Predictable monetary policy is essential.2. DAO bailout, losing immunity makes ETH a joke.3. Shady ICO enriching founders goes against BTC ethics
— WhalePanda (@WhalePanda) July 31, 2019

As of 11:35 UTC, the market capitalization of Etherum was circa $22.88 billion, falling behind Bitcoin, whose valuation at the same time was approx $177.85 billion.
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Fed Rate Cut Does Not Influence Bitcoin: Krüger

The Federal Reserve cut interest rates for the first time in almost a decade as it attempted to protect the thriving US economy from increasing global risks. The stock market, in an immediate response, closed lower on the day, with the Dow Jones Index, the S&P 500 Index, and Nasdaq Composite Index each returning intraday losses.
Faraway from the mainstream, bitcoin was also showing signs of growth ahead of the Fed chair Jerome Powell’s press conference yesterday. While it closed the day 5 percent higher, its gains are now getting negated, showing that the impacts of Fed rate cut are wearing off.
But, according to market analyst Alex Krüger, bitcoin is too young to be influenced by global-scale events such as a rate cut. The economist noted that the cryptocurrency saw a minor increase in its rate around 14:00 ET, the time of the Federal Reserve announcement. The US equity market started showing volatile behaviors around 14:37, during Powell’s conference. Bitcoin, on the other hand, remained calm.
“That’s how an uncorrelated asset for which monetary policy is a [very] minor driver trades,” said Krüger. “I’m surprised this is still the case, but it is. Theoretically, the more institutionalized class the asset class becomes, the more it will react to the Fed. Not there just yet.”

Indeed. Today's gain have nothing to do with the Fed. In fact, market thinks the Fed underdelivered today. Traditional assets crashed accordingly during the presser.
— Alex Krüger (@krugermacro) July 31, 2019

The So-Called Correlation
Bitcoin bulls believe that a negated interest rate is good for the cryptocurrency market. When the Federal Reserve makes lending cheaper, it automatically injects more US dollar liquidity in the market. As a result, borrowing goes up, and investors start allocating those acquired fiat units to other assets, including stocks, commodities, and whatnot.
There is a belief that many of those investors would allocate a certain percentage of their portfolio to bitcoin. Thomas Lee of Fundstrat told Fox Business the same: that the cryptocurrency is becoming a sort of haven for people looking to hedge risks outside the scope of macroeconomic events.
“Bitcoin’s becoming increasingly a macro-hedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.”
The most significant catalyst that has backed bitcoin in the last fiscal quarter is US-China trade war. US-based Asset Management Firm Grayscale Investments published a report in June which mentioned that bitcoin outperformed traditional hedge assets as the two superpowers clashed over a yet-unsolved trade deal.
Bitcoin rose by 47 percent as US and China imposed billions of dollars worth of tariffs on each others’ goods, noted Grayscale, adding that the next best-performing asset was Japanese Yen, which surged by a dwarfed 2.1 percent.
Bitcoin Will React to Rate Cut
Bitcoin’s no-reaction to the Fed rate cut announcement does not reflect a non-correlation, believes Mati Greenspan. The senior market analyst at Tel Aviv-based eToro told BlockTV that bitcoin has a lagging effect – it takes time for the cryptocurrency to digest upon macroeconomic catalysts. He cited parallel market movements of Dow Jones and Bitcoin during the monetary easing cycle in the last decade. He also noted that both DJI and Bitcoin reacted to the prospects of a rate cut in a similar manner.
“Bitcoin has a lagging effect,” said Greenspan. “As central banks continue to talk about easing, we did see a rise in bitcoin […] I believe we’re gonna see a reaction from the cryptocurrency this evening when Fed decides they do want to cut interest rates.”

Time to begin #stackingsats? @MatiGreenspan believes #bitcoin price will react quickly and positively to #FederalReserve #interestrates cut. Watch his thoughts on #Cryptonomics here https://t.co/IDlYgydIyR pic.twitter.com/LeFivAbK8K
— BLOCKTV (@BLOCKTVnews) July 31, 2019

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Countries will Adopt Bitcoin at Some Point: Pompliano

Countries that embrace bitcoin would be frontrunners in the financial technology space, according to Anthony “Pomp” Pompliano of Morgan Creek Digital Assets.
The co-founder & partner told CNBC Squawk Box during a panel discussion that some nation would one day decide to adopt bitcoin. He cited Game Theory, a study of strategic interactions between rational decision-makers. In the case of bitcoin, those decision-makers are the countries that compete with each other to gain an advantage in a particular area. Pomp believes bitcoin is quite like an industry that creates regulatory competition among nations across the world. So even if one country goes easy on it, the others are likely to do the same to maintain the so-called contest.
“Look at Singapore.” Pomp explained. “If they say, bring it on; we’re going to provide fair rules. We will give your clarity because we want companies here.”

How will the crypto market shake out with regulation? @apompliano & @melt_dem discuss the great #btc debate pic.twitter.com/5CRB8gMYrH
— Squawk Box (@SquawkCNBC) July 30, 2019

Bitcoin and US
The statements appeared amidst growing tensions in the US crypto regulatory space. It started with the introduction of Facebook payment cryptocurrency Libra, which prompted US lawmakers to raise concerns about its intention to replace sovereign currencies. Libra’s underlying nature and technology took inspirations from Bitcoin. That prompted regulators, lawmakers, and the US President himself to consider both as the same.

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019

On July 15, the US Treasury Secretary Steven Mnuchin called bitcoin “a national security threat.” He later appeared in an interview on CNBC and – as many noted – calmly hinted that he would wipe the US cryptocurrency industry from existence in the next five or six years.
“I would bet even in five to six years I won’t even be talking about bitcoin as Treasury secretary,” Mnuchin said.
Regulating Bitcoin Intermediaries
CoinShares’ Chief Strategy Officer Meltem Demirors, who appeared alongside Pomp in the CNBC panel discussion, believes the US is all about rules. The former World Economic Forum councilwoman said regulators in the US have no problems with people who use bitcoin as long as they follow the law.
“One of the most important things for most of the hardcore Bitcoiners is that they have a choice,” Demirors said. “They can choose what they want to do with their bitcoins – who to transact with, who to interact with. This whole movement is about eliminating our dependence on intermediaries.”
Meanwhile, she added that US regulations are more about protecting people who interact with third-party companies to access bitcoin services. Excerpts:
“We see large scale systematic risks coming from these institutions so the idea of bitcoin doing away with intermediaries is good one. But, in fact, we have become more dependent on them than ever. Just the fact they were able to obtain user accounts from Coinbase is a great example.”
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Bitcoin Price Looking at a Hundredfold Jump: Analyst

Bitcoin could touch the $370,000 high in the future, according to famous quantitative analyst PlanB.
The Twitterati said on Friday that each bull cycle in the bitcoin market started at so-called difficulty bottoms. The term reflects a stark drop in the bitcoin mining difficulty, which happens when miners start switching off their rigs. They do it because of unprofitability. A lower bitcoin rate, mostly, pushes small miners out of business — the ones who continue operations sell-off their bitcoin holdings for fiat money.
PlanB calls the phenomenon “miner capitulation.” In a broader market, traders call it bubble burst, which means a massive supply of bitcoin becomes available at cheaper rates. The speculators buy and pump the market once again, blowing another bubble. Miners, now looking at a higher bitcoin rate, turn their mining rigs on. The hash rate and difficulty, as a result, go up, and everything comes back to normal.
The current price action reflects the same pumping scenario, noted PlanB. Bitcoin formed a bottom last December, after which its price has surged by more than 200 percent already. A similar bottom-reversal situation historically pumps bitcoin by a hundredfold. Insofar, the cryptocurrency has just quadrupled from its previous cycle low, as shown in the chart below.
Bitcoin Bull Markets following Difficulty Bottom Formations | Image Credits: PlanB
“We saw difficulty bottoms (miner capitulation) in Dec 2011 ($4.6), May 2015 ($230) and Dec 2018 ($3691),” wrote PlanB. “Price continues to rise from these bottoms until ATH around 100x .. implying a continuing uptrend until $370K ATH.”
Halving Accumulation
A lot has been discussed who would put money to pump bitcoin to the tropospheric levels as predicted by PlanB. The quant analyst believes investors would first read the negative signals on macroeconomic scales. Countries undergoing severe hyperinflation or the ones with predatory governments, millionaires/billionaires hedging against quantitative easing, and institutional investors on a lookout for the best performing asset would inject capital into the bitcoin market.
That, says PlanB, is because bitcoin is scarcer than gold. Its supply rate keeps getting reduced by half periodically – an event known has halving – and history so far has favored such dynamics.
Bitcoin Price Model | Image Credits: PlanB
“The predicted market value for bitcoin after May 2020 halving is $1 trillion, which translates in a bitcoin price of $55,000,” wrote PlanB. “That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”
The upside bias somewhat turns miners into holders, for they speculate a reduction in bitcoin supply to be bullish against a potential increase in demand. The phenomenon, overall, supports a seven-figure valuation for the cryptocurrency.
Criticism
Researchers from algorithmic trading software company Strix Leviathan differs with PlanB’s evaluation of the market. Nico Cordeiro and Ava Masucci writes in their report, titled The Myth of Cryptocurrency Halving Events: A Deeper Analysis, think bitcoin’s rise post halving is a myth. They reason by saying:
“An asset’s return distribution prior to and following a halving is statistically the same as the rest of its return distribution with a high degree of confidence, suggesting that there is no evidence of abnormal pricing action from a shift in supply and demand dynamics.
“We did not find evidence that a halving event results in abnormal pricing action. And, we are dealing with a circumstantial illusion.”
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Bitcoin Looks Up to August to Decide its Yearly Bias

The month of August sets the bias in the bitcoin market for the remainder of the year, Timothy Peterson of Cane Island Alternative Advisors found.
The founder & portfolio manager studied the cryptocurrency’s performances in the said month throughout its trading history. He noted that August acted like a needle for bitcoin. If the month saw the cryptocurrency trending in positive territory, then it remained bullish for the rest of the year. Similarly, if the month returned negative returns, then the cryptocurrency remained in a bearish bias, at least until the year’s close.
“Historically, $BTC returns in August have set the tone for the rest of the year,” tweeted Peterson. “If August is [positive], then #bitcoin for Aug – Dec is very strong. If August is [negative], August-December is lackluster. This relationship doesn’t seem to exist for other months.”
Cosmic Patterns
Data provided by BitStamp exchange confirmed Peterson’s analysis. In 2011, bitcoin closed August after dropping by more than 26 percent – a negative yield. The cryptocurrency ended the same year on an overall 57.98 percent loss, calculated from August’s open of $10.9 to 2011 close of $4.58.
The next years also noted a similar pattern. The August of 2012 returned 9.48 percent gains; the year, meanwhile, closed 139 percent higher from the open rate. Likewise, the very recent August of 2018 saw bitcoin dropping by more than 9.1 percent. The remained of the year carried the bearish torch, closing at a loss of 73.3 percent.
Bitcoin Post August Performances Throughout It’s Trading History | Image Credits: Timothy F. Peterson
Between 2011 and 2018, every time, August acted as a decider of bitcoin’s yearly bias. It leaves traders under a spell of the month’s cosmic powers, especially when its – cough – just five days away.
Opinion: August 2019 Looks Bearish for Bitcoin
As of 11:00 UTC, bitcoin was 163.4 percent up on a year-to-date basis. The impressive upside, nevertheless, has hit a wall lately, with price correcting by as much as 34.80 percent upon establishing a year top near $13,880. Leading analysts believe bitcoin could correct even lower than where it is now, eyeing targets as down as $7,500.
Bitcoin Price in Bearish Correction Cycle | Image Credits: TradingView.com
Bitcoin may fall towards those downside levels in a week from now. It is also plausible that the cryptocurrency would take an entire month to test them. In either way, August is the month that would – logically, not cosmically – decide the interim bias of bitcoin.
That means a close in the positive territory, even if it’s by a mere 1 percent, could prompt bitcoin to pursue an uptrend at least until December 2019 — or a vice versa could happen. The analogy, despite its historical accuracy, as noted by Peterson, remains idiosyncratic.
The reason is an expected buying sentiment near the $7,000ish range. Analysts consider the next year’s halvening event, institutional adoption, gloomy macroeconomic outlook, and more clarity over crypto regulations as some of the significant factors that would drive investors to bitcoin.
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Indian Bureaucrat Who Favored Bitcoin Regulation Quits Finance Ministry

The bureaucrat who favored the creation of a bitcoin regulatory framework in India quitted the Ministry of Finance on Wednesday.
IAS Subhash Chandra Garg, who served as the Economic Affairs Secretary and Finance Secretary of India, accepted transfer order to the Ministry of Power. A day later, Garg applied for voluntary retirement from service with effect from October 31.

Handed over charge of Economic Affairs today. Learnt so much in the Finance Ministry and Economic Affairs Dept. Will take charge in Power Ministry tomorrow. Have also applied for Voluntary Retirement from the IAS with effect from 31st October. Last tweet from this handle.
— Subhash Chandra Garg (@SecretaryDEA) July 25, 2019

Garg’s transfer came days after Business Standard reported that he was in favor of regulating bitcoin in India. The bureaucrat considered the cryptocurrency as an “economical phenomenon,” and believed its regulation would yield great results for the Indian technology and finance sector.
His views, nevertheless, did not sit well with the Reserve Bank of India (RBI). The Indian central bank had earlier imposed a banking ban on regional cryptocurrency firms, including exchanges and blockchain companies. The minutes of the meeting between the Garg-led interministerial panel and RBI showed the latter demanding an outright ban on cryptocurrencies.

The central government was initially in favor of "regulating" cryptocurrencies instead of imposing a Ban. DEA Secy Garg pressed for accepting virtual currencies as an economic phenomenon. According to Business Standard @someshjha7 #BitcoinSahiHai #IndiaWantsCrypto pic.twitter.com/QmmQWk53hS
— Sohail Merchant (@inkparadox) July 23, 2019

Last week, the panel released a draft bill recommending a prohibition on holding and trading of bitcoin, which followed by a message from Garg on his official Twitter handle.
“Committee is very receptive and supportive of distributed ledger technologies and recommends its widespread use in delivering financial services,” he wrote, adding:
“It also opens up door for a possible official digital rupee. Private crypto currencies are of no real value. Rightly banned.”
Lower Profile
Garg’s transfer and subsequent announcement of retirement also followed the approval of Prime Minister Narendra Modi’s maiden union budget for 2019-2020. The finance secretary reportedly assisted the government in developing the annual bill, in addition to preparing the proposal of bitcoin ban in India.
The Economic Times reported that the Indian Power Ministry is a lower profile for a bureaucrat as experienced as Garg. Nevertheless, the agency also mentioned that the former Economic Secretary was just a year short of his retirement age, which could have influenced him to consider a mildly-pressured ministry and an early bid-adieu, especially after a tiring budgeting process.
The major bureaucratic reshuffle saw Atanu Chakraborty, Department of Investment and Public Asset Management (DIPAM) Secretary, replacing Garg as the new Economic Affairs Secretary. Chakraborty’s stance on bitcoin and other decentralized cryptocurrencies remains unclear as of this time of writing.
Bitcoin Hearing Delayed, Meanwhile
On the sidelines of Garg’s transfer, the so-called Crypto vs. RBI case remained pending in the Supreme Court of India. India-based crypto news source Crypto Kanoon reported that the hearing got postponed due to other listed matters. The court may hear the affair tomorrow, which would see RBI defending its decision to bar bitcoin firms from accessing banking services and the crypto sector questioning the judgment as unconstitutional and biased.
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