58% of US Investors Would Invest in Bitcoin via ETF: Major Hedge Fund

58% of American investors would prefer to invest in Bitcoin via an exchange-traded fund (ETF), a formal survey found.
Conducted by Bitwise Asset Management, a San Francisco-based crypto hedge fund, the survey saw participation from 150 financial advisors in the US market. When asked what would make them allocate Bitcoin in their client portfolios, 54% of them said “better regulations” and 35% said “the launch of an ETF.”
Investors Looking for Easy Access to Bitcoin
Bitcoin’s value dropped by three-quarters in 2018. The retail investors that fueled the rally of the digital currency fled during the crash, leaving behind early-adopters and traditional firms to protect its remaining value. Now, there is an adequate supply of discounted Bitcoins available in the market, but with inadequate takers.
Meanwhile, in the same bearish year in 2018, more high profile investors started bridging the gap between crypto and traditional finance. The relationship between the two distinctive industries improved when:

CBOE and CME launched and settled the world’s first bitcoin futures;
Fidelity became the first Wall Street firm to offer cryptocurrency custody and trading services;
The endowment of prestigious US universities, including Harvard and Yale, included cryptocurrencies in their funds;
ICE-backed Bakkt announced the launch of the first regulated physical bitcoin futures;
Nasdaq announced that it would launch Bitcoin futures 2.0 in early 2019.

Such an institutional breakthrough could change the future course of Bitcoin, predicted financial experts from both mainstream and crypto space. A Bitcoin ETF, according to them, could serve as the stepping stone for a tropospheric crypto adoption among the mainstream investors.
“The answer is that ETFs are a well-understood construct that is plug-and-play with the existing software platforms, paperwork, processes, and workflows that professional investors and firms use,” wrote Bitwise in Anthony “Pomp” Pompliano’s Off the Chain newsletter. “At a 0.25%-10% allocation, crypto isn’t a deep focus of most investors, and most aren’t going to reinvent the wheel [just] to access it. They need it to be easy.”

The team at @BitwiseInvest dropped knowledge bombs in today’s free installment of Off The Chain newsletter.
Everything you need to know about crypto ETFs. Read it and learn https://t.co/SaMCVeLGbl
— Pomp (@APompliano) January 22, 2019

US Government Shutdown
Pomp, also a founder and partner at Morgan Creek Digital, also said that a true capitulation would happen when a Bitcoin ETF will get approved or when crypto regulations will become more transparent.
“I think our target from August of 2018 has been $3000, we came close once already, so we may just actually go back there or somewhere close,” he told BlockTV. “Along with that, over a long period of time, I tend to think that some of the bigger numbers that are thrown out will likely be accurate.”
Now, the ETF applications of both VanEck and Bitwise remain under review at the Securities and Exchange Commission (SEC). The US securities regulator would likely announce its decision the VanEck’s Bitcoin ETF by February 27. However, the ongoing government shutdown led by President Trump has furloughed 94% of SEC staffers. Bitwise believed that the political situation could prompt SEC to delay its decision on VanEck’s Bitcoin ETF.
“The likelihood of giving the filing a complete review is in doubt,” the company wrote. “Bitwise’s own filing is complicated by the shutdown as well.”
In the same breath, Bitwise maintained its optimism, saying that political delays would not impact the growth of the crypto ecosystem.
“Each day brings greater regulatory clarity, improving custody options, greater futures trading volume, more established exchanges and trading venues, and more widespread understanding,” it said.
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Why a Major VC Investor Believes Bitcoin Will Overtake Market Cap of Visa at $302 Billion

“Long Bitcoin (BTC), short the bankers” has long been the war cry of crypto’s diehards, known for their use of rhetoric to convey a point. While many cynics cast aside these enthusiasts as near-religious zealots, blinded by “magical internet money,” these anti-establishment tones were validated on Tuesday, as reports arose that a legendary financial services provider was slapped with a fine. And it wasn’t any old fine, it was a $650 million one.
Related Reading: Bitcoin is Criminal Money Says the Media While Deutsche Bank Gets Raided for Laundering
Mastercard Slapped With $650 Million Bill
On Tuesday, the Wall Street Journal divulged that the European Commission, a regulatory facet of the E.U., hit Mastercard with a hefty €570.6 million fine, which equates to about $648 million U.S. dollars. Europe’s antitrust entity claimed that the New York-headquartered payment giant, valued at $206 billion on the public stock market, “artificially” raised credit and debit card fees in the Union’s nations.
The Wall Street darling purportedly accomplished this by preventing European retailers from accessing the bargain bank offerings outside of their home country, leading to higher prices overall for merchants and consumers alike. The E.U.-backed entity added that this act limited competition across borders, stunting economic growth in the bloc. Margrethe Vestager, an antitrust powerhouse in the E.U. who has tackled multi-billion dollar cases against Google and Apple, said on the matter:
“By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the EU.”
Funnily enough, Mastercard representatives said that the $650 million fine is an “important milestone for the company,” claiming that the closure of this questionable bit of its history is welcomed. In fact, the firm had suspected that such a charge was flying its way, revealing that it collaborated with the European Commission to get a 10% reduction on its jaw-dropping fine.
Across the pond, in Mastercard’s home stadium, the conglomerate’s regulatory prospects haven’t looked much better. In September, the company paid $108 million for setting fees and card acceptance rules that favored banks processing transactions, rather than the merchants accepting transactions.
In the case, it was argued that merchants were subject to exorbitant fees that weren’t reasonable. Mastercard competitor Visa, whose CEO has been hesitant to comment on cryptocurrencies and related technologies previously, was also involved in this case.
With credit card companies often charging an average of 1.5% in interchange fees for each and every transaction, it makes sense why some forward-thinking futurists are turning to crypto and Bitcoin.
Crypto Pundit Believes Bitcoin To Surpass Visa’s Market Cap
Anthony “Pomp” Pompliano, the founder of Morgan Creek Digital Assets, is one of those futurists. The former Snapchat and Facebook employee, who has downed the crypto red pill, recently took to Off The Chain, a crypto-centric publication he founded, to draw attention to his thought process that the market cap of Bitcoin could surpass that of Visa and Mastercard in 36 months’ time.
Citing data from blockchain research unit Diar, Pomp explained that Bitcoin’s miners were“paid a total of $5.8 billion in revenue (fiat value of BTC produced) in 2018.” While the Morgan Creek head acknowledged that the $5.8 billion sum wasn’t entirely accurate, considering depreciation of ASICs, operating costs, and other nuances, he noted that this “top line revenue figure” would help put Bitcoin “into context.”

Pomp remarked that from a revenue multiple (revenue to market capitalization) perspective, BTC is undervalued when compared to Visa and Mastercard, which both operate a slightly higher multiple than the flagship cryptocurrency. The cryptocurrency investor, known for his incessant touting of anti-establishment rhetoric on Twitter, added that Bitcoin was never meant to be valued by revenue multiple ratios, but that this figure accentuates the network’s performance and growth potential.
In fact, he claimed that “given the fast growth rate and historical premiums” of promising upstarts and networks, the cryptocurrency could begin to make a move on Visa’s and Mastercard’s valuations. Pomp quipped:
“Today, it is 1/4th the market cap of Mastercard and 1/6th of Visa, but it wouldn’t surprise me if Bitcoin surpasses both within the next 36 months. The legacy networks were built for a world that we no longer live in and the decentralized network is built for the future.”
Featured Image from Shutterstock
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Novogratz: Billionaires Disappearing In China Presents A Bitcoin Bull Case

The world’s your oyster. No, no it’s not. Since capitalism became the norm, every common Joe and Jill, whether confined to suburban sprawl or trapped in rural farmland, have had dreams of making it big in the world. However, for many, these vision of grandeur are quixotic — out of reach for all but the luckiest. And as such, joining the billionaires (or even millionaires) club has become a raison d’etre for many materialists. But maybe not for China’s hopefuls. However, that’s where Bitcoin and crypto step in.
Related Reading: How Brian Armstrong, CEO of Coinbase, Became a Crypto Billionaire
China’s Wealthy May Not Be Living The Dream Life
In 2011, Ray Kwong, a Forbes contributor, dropped an article that changed the world’s perception of China’ rapidly swelling upper-upper class. Kwong, citing data from local news outlets, claimed that China’s crème de la crème have fallen victim to a number of “unnatural deaths.” The Forbes contributor even joked that China’s then-current billionaires “should be more than a little nervous.”
Kwong revealed that from 2003 to 2011, the mortality rate of billionaires had spiked, and in a suspicious way at that. 15 were flat out murdered, 17 supposedly took their own lives, seven died from out of the blue accidents. 19 also died from a handful of illnesses and health conditions, while 14 were executed.
While murder, suicide, accidents, and illnesses aren’t uncommon, the fact that so many of these qualms befell such a small group of individuals left Kwong intrigued. Kwong was even intrigued to the point where he speculated that the “homicide toll” for billionaires may be much higher than local media suggests.
While these statistics are old, with new reports indicating that there are now over 800 billionaires housed in the Asian powerhouse, supposed disappearances have still occurred. In mid-2018, Fan Bingbing, China’s most famous actress presumably with hundreds of millions, if not billions, suddenly disappeared. Her Weibo account, followed by dozens of millions local and abroad, effectively became a ghost town, with daily posts whittling down to pure silence.
Four months later, after her fans feared the worst, Fan resurfaced, revealing that she had pled guilty to tax evasion, with China’s courts and authorities mandating her to pay the equivalent of $181 million in Chinese yuan. While she didn’t die, disappear forever, or fall victim to some unexplained illness, her career has come to a screeching halt.
What Does This Mean For Bitcoin?
But what does China’s seeming billionaire debacle have to do with crypto & Bitcoin?
Mike Novogratz, chief executive at Toronto-listed Galaxy Digital, a crypto-friendly merchant bank with a number of facets, recently put it best on Twitter. Novogratz, a long-time Bitcoin bull and visionary, noted that the statistics cited in the Forbes article are “scary,” adding that they make him bullish on Bitcoin, but also worried about China.

These are scary stats. Makes me more bullish Bitcoin and more worried about China. https://t.co/srjuQTaia7
— Michael Novogratz (@novogratz) January 22, 2019

As this statement was nebulous, Novogratz was required to further explain his innocuous comment in a sub-tweet, writing:

“My assumption is if there is that much instability in having wealth, people are probably trying to move at least some portion offshore and BTC is part of that.”

The Galaxy Digital founder, a former institutional investor, is likely referring to the control that Beijing has on China’s cash flow, especially the assets of billionaires who aren’t exactly aligned with party policy. In fact, in recent years, China’s authorities, under the leadership, mandate, and direction of president Xi Jinping, have begun to make moves against those that aren’t working with Jinping’s agenda, creating an environment rife with distrust and banking debacles.
And with rumors indicating that Bitcoin has played in big role in the lives of China’s wealthy, with the seemingly newfound crackdown, the asset’s value proposition in the region as a pseudo-offshore bank may continue to swell into the future.
In one of the most-watched crypto interviews of all-time, Ryan Selkis, chief executive at Messari, also touched on the value that Bitcoin presents to offshore banking. Speaking to Bloomberg TV, Selkis made it clear that Bitcoin is best used as digital money, adding that if the cryptocurrency captures “a single quarter of offshore banking and emerging market fiat reserves,” then it alone will swell to a $10 trillion valuation. And considering Alex Krüger’s Twitter thread on fiat multipliers, the exact valuation may be far above a low-double-digit trillion sum.
Yet, if history is any indicator, the Chinese government, which recently doubled-down on its crackdown against Bitcoin and blockchain, will do its utmost best to stop capital from leaving the country.
Featured Image from Shutterstock
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Bitcoin [BTC] could soon see an imminent breakout due to recurring bear pennant pattern

The price of Bitcoin is currently in a consolidation phase after formation of a recurring pattern twice within the span of a month. The current price of Bitcoin, at the time of writing, was $3,580, with the market cap hovering at $63 billion.
1-hour
Source: TradingView
Bitcoin’s price action, as seen in the chart above, is the best example of history repeating itself. The overall trend of Bitcoin is a downtrend as it has consistently been forming lower lows as seen in the hourly charts.
Pennant
There is a clear formation of a pennant in the price action chart, which breaks out to the top and then moves in a sideways fashion before dropping to retrace the same pattern all over again. However, it will be in a slightly lesser proportion compared to the one before.
Pennants usually show how the price gets caught up between forming lower lows as they head towards the peak of the pennant, where they have no more room, thus causing a breakout.
The first pattern started its formation on December 27, 2018, and it proceeded to ricochet between the trend lines consistently. The price broke out of the pennant pattern caused a massive spike of 6.56% as the prices rose from $3,838 to $4,090, The spike was followed by a sideways movement, which caused a sudden collapse in prices.
Fibonacci Retracement
The sudden collapse in the prices took place in two distinct steps, which occurred at the 0.618 Fibonacci level. The 0.618 level or the 61.8% level is deemed as the most important level by most traders. The price drop happened from $4,026 to $3,618, making a pit stop at $3,812, which, in total, was a drop of 10.13%. By observation, it can also be noted that the second collapse was almost half of the first one.
The second pattern that formed, followed the footsteps of the previous pattern and the price broke out of the pennant at $3,625 and reached $3,728, which was a total percentage increase of approximately 3%, which is half of the previous breakout. This followed by yet another sideways/downtrend movement, which collapsed again at the same Fibonacci level as the previous pattern. The collapse took place from $3,689 to $3,514 with a stop at $3,587 at the 0.618 or 61.8% Fibonacci level. The total decline was 4.74%, which is approximately half of the previous collapse.
Moreover, before the formation of the second pennant, the sideways movement of the prices found support at 0.886 or 88.6% Fibonacci level of the first pattern which was eventually broken as the prices fell lower.
At the moment, the prices are being supported at the 0.86 or 88.6% Fibonacci level of the second pattern, which is at $3,514, a perfect correlation. If the prices ever decide to break below this support, there is going to be a collapse.
1-day
Source: TradingView
The one-day chart also shows a consistent downtrend with prices forming lower lows, indicating a strong bear trend for Bitcoin. Bitcoin’s fall into the abyss is currently being supported by two supports, the first and the imminent support is at $3,477, which was tested multiple times. The second support is the lowest that Bitcoin reached in 2018, which is at $3,139.
Volume 
The volume indicator shows a very important indication of decreasing volume that has been in play since mid-November, which confirms that the price will undergo a massive and sudden change in the future.
The change, as per the technicals, indicates that the price should move downwards, however, the prices could go either way.
The Relative Strength Index also shows a declining trend, indicating that the selling momentum for Bitcoin is increasing.
Conclusion
The one-hour chart shows a recurring pattern in which the prices are being supported at the 0.86 Fibonacci level. If the price ever decides to drop to below the current support it would face the next immediate support at $3,136. In a worst-case scenario, the price would go into a free fall until $1,900 and the price was last seen at this point on July 14, 2017.
If the breakout happens to the upside then the price would have no resistance until $4,422 to $5,000, where the prices will be tested before it moves up. However, the one-day chart shows a declining volume trend, which indicates a strong movement in price that might happen in a few days.
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Source: AMB Crypto

Bitcoin [BTC] and other cryptocurrency exchanges are not money transmitters under MTA, says State of Pennsylvania

The State of Pennsylvania has released a statement on Bitcoin and other cryptocurrencies on their official portal. This guidance is in relation to the Money Transmitter Act [MTA] aka Money Transmission Business Licensing Law applicable to virtual currency exchanges.
The official statement also reveals that the Department of Banking and Securities [DoBS] of Pennsylvania has received multiple inquiries from businesses engaged in providing services related to buying, selling and trading cryptocurrencies. This was followed by the DoBS stating that the guidance is being published as they will not be addressing all the requests on a case-by-case basis.
According to MTA, money is defined as currency or legal tender that is recognized as a medium of exchange. To add on, the law of Pennsylvania stated that currency issued by the US government is only recognized as money in Pennsylvania. Due to this, Bitcoin and other cryptocurrencies are not classified as money according to the act. The statement also points that in the US, there has been not a single jurisdiction that has declared digital currency as a legal tender.
“…Thus, in order to “transmit” money under the MTA, fiat currency must be transferred with or on behalf of an individual to a 3rd party, and the money transmitter must charge a fee for the transmission”
They stated that a majority of the requests related to guidance on the applicability of the MTA were from cryptocurrency exchanges that were web-based. This was further followed by the DoBS deeming that these platforms are “not money transmitters” under the Money Transmitter Act.
“The Platforms, while never directly handling fiat currency, transact virtual currency settlements for the users and facilitate the change in ownership of virtual currencies for the users. There is no transferring money from a user to another user or 3rd party, and the Platform is not engaged in the business of providing payment services or money transfer services.”
The DoBS also gave an official statement on Kiosks and ATMs. They said:
“In both the one-way and two-way Kiosk systems, there is no transfer of money to any third party. The user of the Kiosk merely exchanges fiat currency for virtual currency and vice versa, and there is no money transmission. Thus, the entities operating the Kiosks would not be money transmitters under the MTA.”
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Source: AMB Crypto

Bitcoin and other cryptocurrencies must migrate from PoW, says Bank for International Settlement in a research paper

Bitcoin’s search volume for the global market as a whole piqued in Q4 of 2017 when it’s price hit an all-time high of ~$20,000.
This search volume for Bitcoin far exceeded that of Gold, Silver, US Dollar. Much of the appeal/attraction for Bitcoin or other cryptocurrencies comes from the fact that there is no central controlling authority and the fact that one can be their own bank.
As exciting and promising Bitcoin sounds, a paper published by Bank for International Settlements says otherwise. The paper titled “Beyond the doomsday economics of “proof-of-work” in cryptocurrencies” mentions how Bitcoin’s Proof-of-Work [PoW] consensus mechanism has two flaws. The paper also touches on the economics of Bitcoin and PoW, whilst imploring what the future might hold for Bitcoin and other cryptocurrencies that are based on similar consensus algorithms.
The first limitation that the paper stated was that Proof-of-Work axiomatically requires high transaction costs to ensure payment finality.
As per Satoshi Nakamoto, double-spending is an attack by a large miner controlling a significant fraction of the network’s computational power. The paper stated:
“Nakamoto’s definition of payment finality (although not explicitly spelled out as such) is thus operational: the deeper a payment is buried in the ledger, the less likely an adversary with given computational resources will succeed in a double-spending attack.”
Double-spending on such a network of nodes would actually be more profitable than mining, hence, the blockchain for Bitcoin includes “economic payment finality” –  the instant that payment to another party is completed, at which point the receiving institution has irrevocable access to the money.
This can be avoided by incentivizing miners with a very high required ratio of income as compared to the transaction volume [the amount that can be double-spent].
Moreover, the paper provided a rough example that the mining income must amount to 8.3% of the transaction volume, which is a multiple of the transactions fees in today’s mainstream payment services.
The second limitation that the paper stated was that the system cannot generate transaction fees in line with the goal of guaranteeing payment security and that the system either works below capacity and users’ incentives to set transaction fees are very low or the system gets congested and suffers scalability issues.
Furthermore, the paper noted:
“Underlying this is a key externality: the proof-of-work and hence the level of security is determined at the level of the block one’s transaction is included in, with protection also being provided by the proofs-of-work for subsequent blocks… While each user would benefit from high transaction fee income for the miner, the incentives to contribute with one’s own fee are low.”
The paper concluded that PoW can only achieve payment security if mining income is high, but the transaction market for Bitcoin will not be able to generate an adequate level of income. As a result, the liquidity is set to deteriorate substantially in the future.
The paper stated:
“A simple model suggests that ultimately, it could take nearly a year, or 50,000 blocks, before a payment could be considered “final”.”
Moreover, the research indicated that the second-layer solutions for Bitcoin and other PoW-based assets like the Lightning Network or Sidechains can improve the economics of payment security but they in themselves still face scaling issues.
Due to the above-mentioned facts, the liquidity of Bitcoin and other digital assets that have forked from Bitcoin and PoW based cryptocurrencies will eventually need to migrate from PoW consensus algorithm to a more fitting and evolving consensus algorithm.
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Source: AMB Crypto

Bitcoin Price Watch: BTC Runs Into Crucial Resistance, What’s Next?

Bitcoin price climbed higher sharply after diving below the $3,480 support level against the US Dollar.
Yesterday’s highlighted key bearish trend line is intact with resistance near $3,600 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The price is facing a crucial resistance near $3,600, above which it could rally towards $3,700 or $3,750.

Bitcoin price is showing positive signs above the $3,520 level support against the US Dollar. Having said that, BTC is struggling to clear the key $3,600 resistance level.
Bitcoin Price Analysis
Yesterday, we discussed the chances of more losses below the $3,500 level in bitcoin price against the US Dollar. The BTC/USD pair did decline below the $3,500 and $3,480 support levels. The pair spiked towards the $3,450 level and later bounced back. Buyers were successful in pushing the price back above $3,480 and $3,500. It can be considered as a false break since there was no hourly close below $3,480. The recent recovery was solid above $3,550 and the 50% Fib retracement level of the downside move from the $3,700 swing high to $3,465 low.
However, the price ran into a significant resistance near $3,600 and the 100 hourly simple moving average. More importantly, yesterday’s highlighted key bearish trend line is intact with resistance near $3,600 on the hourly chart of the BTC/USD pair. Finally, the 61.8% Fib retracement level of the downside move from the $3,700 swing high to $3,465 low is also acting as a hurdle. Therefore, there are two possible scenarios, with the pivot level at $3,600. First, the price breaks the trend line and $3,600 to start a solid upward move. Second, buyers fail to gain traction above $3,600, resulting in a drop back to $3,500.

Looking at the chart, bitcoin price seems to be trading near a crucial juncture at $3,600. There are high chances of more gains, but it won’t be easy for buyers to clear the $3,600 barrier.
Technical indicators
Hourly MACD – The MACD for BTC/USD is slowly moving back in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently placed nicely above the 50 level.
Major Support Level – $3,500
Major Resistance Level – $3,600
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Bitcoin will Remain in Consolidation Most of 2019, Crypto Analyst

With Bitcoin currently trading in a tight range around $3,500, it is seeing the similar scenario as of October when Bitcoin took a sharp dip after trading sideways. Crypto trader and analysts see the major part of 2019 to go through consolidation.
Bitcoin all sold out
Bitcoin price is currently seeing the longest stretch of range bound activity in three months. The price movement has been restricted between $3,500 and $3,700, to the most part since mid-January.
At the time of writing, Bitcoin has been trading at $3,585 with 0.08 percent gains in the past 24-hours, according to the data provided by Coinmarketcap.

BTC 1-month price chart, Source: Coinmarketcap
According to a crypto technical analyst and trader, the Bitcoin market might have seen its last sell-off in November 2018 and now the next year is expected to be a long consolidation period.
After dropping from about $4k to $3,500, Bitcoin price has been staying stable at around $3,500 in a tight range. This puts the leading cryptocurrency at the longest stretch in this narrow range, since October end.
That time when the Bitcoin market hits its lowest in 18 months, prices stayed between the range of $6,350 to $6,500 in a 12 days period. The following day saw a drop in crypto prices and after a period of sideways bitcoin fell below the crucial support of $6k. Now, it is possible Bitcoin might end up with a move to the downside, hitting the December low around $3,100. Bitcoin could hit the bottom as experts are predicting it to be by retesting this level.
Crypto Trader, Moon Overlord took to Twitter to share the ongoing sideways movement Bitcoin is making which means it is close to its bottom,
“The longer this sideways action takes place the more I think the bottom is in. November was one of the worst monthly candles in history. It’s very possible that was the last of the major selling and now we’ll have a consolidation period that lasts most of 2019.”
Earlier this month, Bitcoin proponent, Anthony Pompliano had shared similar sentiments as he said, “I think that it’s likely we kind of just go sideways for a while right. You know, if you look at Bitcoin’s price, I don’t know maybe somewhere between like 2500-4500 for a good portion of the year is probably likely based on what we’re seeing”.
On the weekend, Bitcoin dropped to $3,450 after rising to $3,700. Since then bitcoin has recovered and trading above $3,500 which is expected to stay that way for the rest of the week.
Hsaka, a cryptocurrency analyst, stated,
“Inside Bar; Low that was taken out (3480) holding as support; Continue leaning neutral here, can’t short HTF support, will wait for a break (even more so when confluent with that CME gap).”
Meanwhile, with the ongoing US government shut down the decision on Bitcoin ETFs and Bakkt has been in the lurch that are considered as the catalysts for upward momentum.
 
The post Bitcoin will Remain in Consolidation Most of 2019, Crypto Analyst appeared first on Coingape.
Source: CoinGape

BOE Advisor: Crypto Fails Fundamental Tests, But Banks Face Growing Competition from FinTech Companies

It’s no secret that those who are heavily involved in the world’s traditional banking systems have a disdain for crypto, likely because of the many ways the relatively young technology challenges the traditional notions of banking.
While offering a somewhat cliché opinion about the cryptocurrency markets, Huw van Steenis, the senior advisor to the Bank of England Governor Mark Carney, said that cryptocurrencies fail fundamental tests that mark a solid and successful financial tool.
Although this assessment is dreary, the ever-growing innovation of FinTech companies is leading many traditional banks to see a growing amount of competition, much of which is coming from crypto-friendly companies like Robinhood and Revolut.
Van Steenis: I’m Not Worried About Cryptocurrency
Many proponents of cryptocurrency believe that it could one day drastically alter the way the world’s traditional financial systems, including banking, work. The nature of decentralized currencies, like Bitcoin, would shift a significant amount of power away from institutions and into the hands of individuals if they were to be widely adopted on a global scale.
That being said, Van Steenis told Bloomberg in a recent interview at Davos, Switzerland, that he isn’t worried at all about cryptocurrencies posing a threat to traditional financial institutions because they “fail the basic tests of financial services.”
“I’m not so worried about cryptocurrencies. They fail the basic tests of financial services. They’re not a great unit of exchange, they don’t hold value, and they’re slower,” Van Steenis explained.
FinTech Companies Becoming Competitors to Traditional Banks
Revolut was just recently granted a European Banking License by regulatory authorities.
Van Steenis further added that the Bank of England’s (BOE’s) biggest concern at the moment is how to regulate new, technology-based, entrants to the banking system.
Examples of FinTech companies that are entering the banking industry and are rapidly changing the way customers interact with banking services are Robinhood and Revolut, who are both rapidly expanding their offerings of traditional banking services with a digital twist.
Revolut was just recently granted a European Banking License by regulatory authorities, which will allow them to offer Europe-based customers a significant amount of digital banking services typically found at traditional institutions.
It is important to note that both Robinhood and Revolut offer users a gateway to purchase a variety of cryptocurrencies. Presently, Revolut offers users the ability to gain exposure to five cryptocurrencies, including Bitcoin, Bitcoin Cash, Litecoin, Ethereum and XRP.
As these digital banking services continue gaining traction and expanding their customer base, it will likely introduce a significant amount of investors to cryptocurrencies, which will further validate their usefulness as both tools and investments.
Van Steenis said that if traditional banks fail to innovate and digitalize as quickly as their FinTech-based counterparts, they could lose out on customers.
“What I love when meeting with Fintechs is their obsession with customers. The challenge is will they get customers before the traditional banks can innovate,” he said.
Featured images from Shutterstock.
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Bitcoin (BTC) Climbs Slightly as Crypto Markets Experience Mixed Trading Session

The past several days have been particularly volatile for the cryptocurrency markets, with Bitcoin (BTC) surging to highs of nearly $3,750 on Saturday before fully retracing to lows of $3,550. Despite this volatility, Bitcoin has been able to hold $3,550 as a level of support and has led the entire crypto markets to rise slightly today.
Analysts are now saying that the market’s ability to hold above its recently established support levels may lead to further gains in the near future.
Bitcoin (BTC) and Crypto Markets Hold Steady
The recent volatility the crypto markets have experienced put their recently established support levels in jeopardy, but they have been able to stabilize above these key levels.
At the time of writing, Bitcoin is trading up less than 1% at its current price of $3,600. Over the past few weeks, BTC has bounced each time it entered the $3,500 region, signaling that buying pressure exists at this price level.
Similar buying pressure has been seen for most major altcoins, which have all established certain levels at which they see strong support.
Trading Room, a popular cryptocurrency analyst group on Twitter, discussed these support levels earlier today, noting that Bitcoin, Litecoin, and Ethereum could all see a bounce if they are able to continue holding steady above their respective levels of support.
“$BTC $ETH & $LTC are holding Key Support Area… Next Target 100 & 200 MAs on Topside (Moving Downwards)… Check #Bitcoin #Ethereum #Litecoin Targets if we get that bounce… I am not gonna speculate on topside breakout or downside breakdown. Will react based on Breakout/Breakdown,” they explained.
Furthermore, Trading Room said in a later tweet that they will only enter new long positions for the aforementioned cryptocurrencies if they are able to break above key price levels by the end of the day.
“All key levels holding across $BTC $ETH $LTC… Price tried to break below key support but violently rejected so far. However will re-enter Longs only after we get a daily candle close above: 3675 #Bitcoin… 123.50 #Ethereum… 32.15 #Litecoin… Trend is your friend, allow it to develop,” Trading Room said.

All key levels holding across $BTC $ETH $LTC
Price tried to break below key support but violently rejected so far. However will re-enter Longs only after we get a daily candle close above
3675 #Bitcoin123.50 #Ethereum32.15 #Litecoin
Trend is your friend, allow it to develop https://t.co/xpT00k5CMx
— Trading Room (@tradingroomapp) January 22, 2019

Altcoins Rise Slightly
Most major cryptocurrencies have risen slightly in price today.
Most major altcoins are trading up marginally today.
At the time of writing, Ethereum is trading up over 1% at its current price of $119.1. Ethereum has climbed slightly from its recent lows of $115 that were set earlier today but is down from its weekly highs of nearly $126.
XRP is trading flat today at its current price of $0.3198. Earlier today, XRP dropped to lows of $0.314 before quickly bouncing back to its current price levels.
Bitcoin Cash is one of today’s best performing altcoins, as it is currently trading up just under 6% at $130. Bitcoin Cash clearly has strong buying support at $118, as this was the price at which it surged after touching it earlier this morning.
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Why Bitcoin Won’t Fail the “Tests of Financial Services” Forever

In an interview at the World Economic Forum in Davos earlier, the senior adviser to the governor of the Bank of England weighed in about the threat posed to the current financial status quo by Bitcoin and other cryptocurrencies. Huw van Steenis largely dismissed the blockchain-backed fintech innovation on the grounds that Bitcoin had not yet achieved the kind of traction that more traditional forms of value storage or mediums of exchange had.
Van Steenis stated that he did not see Bitcoin as being capable to pass the “fundamental tests of financial services”. However, what he seems to be missing in his rudimentary analysis is that Bitcoin has emerged in a post-internet world meaning that all it will take mass adoption is a solid track record of greater utility and enough information reaching the global public to dissuade them away from ascribing value in government-issued fiat currency.
Technological Adoption Occurs Faster than Ever Today, Why Will Bitcoin be Different?
The main reason Van Steenis cites for his stated lack of concern over Bitcoin’s ability to threaten his very raison d’être is that it does not serve as a means of exchange and does not hold value well. Presumably, although not mentioned explicitly in the interview, the Bank of England adviser prefers government-issued fiat currency over Bitcoin in terms of its ability to serve these monetary functions.
However, if we look closely at how fiat currency works, we see many more issues with both the premise that it serves as a good store of value and that it is a suitable medium of exchange. Firstly, the idea fiat currency is a solid store of value is questionable at best. Think about your own life. How much have you seen basic commodities increased in price over the years?
The alpine town of Davos, Switzerland, where the WEF is held each year.
Banks print money both directly and indirectly through lending, enriching themselves at the expense of the population. That is Van Steenis’s institution’s entire business model. The purchasing power of the pound, dollar, or yuan is perpetually decreasing. It may go up slightly from month to month but over a long-term chart, the trajectory is always downwards. How again is this to be considered a store of value?
Compare this to Bitcoin’s sound monetary policy. It requires much more than a banker authorising the printing of currency or to make loans with money the bank never had to create additional Bitcoins. In terms of a basis for a store of value, this is far superior to anything we as a species have known before. There is nothing in the world that people can categorically say how many there will ever be with reasonable certainty – apart from Bitcoin.
Of course, the purchasing power of Bitcoin swings wildly at the moment. This is to be expected since people are still coming to terms with the technology and perpetually questioning whether something so new and innovative could really replace fiat currency. The more people learn about Bitcoin and the longer it successfully serves its purpose as a peer-to-peer, decentralised value transfer system, the greater faith will be generated in it. Taken on face value, it is far easier to trust open-source code that anyone can verify than it is a global network of shadowy banking elites making deals us mere mortals will likely never know about.
Thanks to the internet, there has never been as much information that directly challenges the status quo either. This is encouraging the formation of a society that is much more equipped to question those things taken as norms – one of these is money itself.
However, it is not just in terms of a potential future store of value and sound money that Bitcoin outperforms fiat currency. Even as a medium of exchange, the financial innovation trumps government-issued money. Of course, you cannot send funds from one side of the planet to the other in minutes using the current legacy financial systems. Even when it appears you have done just that, in reality you are relying on a massive network of trust. One bank allows you to access the money sent before it is really there because they trust where it is coming from.
With Bitcoin, many people complain that it does not allow instant value transfer. Yet, if you are willing to exercise the amount of trust that banks do every day, it is as close to instant as is feasible using today’s technology. Think how long it takes to see that an “unconfirmed transaction” has appeared in your Bitcoin wallet- just seconds.
If you trust the sender, zero confirmations might be enough for you to be happy you have indeed received funds. Alternatively, if you lack trust in the party sending the money, you can elect to wait for as many confirmations as you like. Even if you were to wait for hundreds of confirmations, the BTC would have still arrived in your wallet much faster than a fiat currency could ever move from bank to bank.
However, fiat currency can also be used in a peer-to-peer fashion (for now) in the form of cash. People will say that Bitcoin can never travel as fast as when you had someone ten bucks in a bar or shop. However, in reality, it already serves this purpose far better than paper money can. People blindly trust most peer-to-peer cash transactions. Do you spend any time checking a bank note that you receive from a supermarket in your change? Of course you do not. However, there are many fraudulent notes in existence, perhaps if we were to receive a pile of high value notes, we would be more careful but for small value transactions, people take convenience over security and get on with their day without rigorously checking their money for authenticity.
With Bitcoin, we are at the beginnings of a massive experiment in decentralised cash. Given market price discovery dynamics it would be frankly ridiculous and immensely reckless for enough value to have swamped into the market to make prices as stable as the dollar, pound, or yuan. That is not to say that it will never. As discussed, the fundamentals of Bitcoin are sufficiently strong to make it a real threat to the current financial status quo, whether Van Steenis has realised this (or cares to admit it) or not.
 
Related Reading: Messari CEO: Killer Use Case For Bitcoin Is Still Money, Digital Gold
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Bitcoin Price Analysis: BTC Lift Off, Cross-Hairs at $4,500

Bitcoin Price recover, bulls bounce back
Market leaders set positives in Blockchain and crypto
There is a jump in market participation level. Volumes swell in the 4HR time frame

After Jan 20 drops, BTC is finding support at around $3,500—the lower limit of our support zone. As a result, there is a likelihood that Bitcoin prices will rally in coming days.
Bitcoin Price Analysis
Fundamentals
Jerry Yang has been a longtime fan of blockchain and cryptocurrencies. So, his recent comment at the Nikkei Innovation Asia Forum held in Singapore is nothing new. At the Forum, he said blockchain is a perfect fit for banks and trading.
Yang is particularly impressed by the type of infrastructure in progress saying it shall have a long-term implication. However, this is not the first time he has endorsed this nascent technology.
In a CNBC interview back in late 2017,  the Yahoo Co-founder said he was a firm believer in cryptocurrencies and the efficiencies it tags goes a long way in benefiting the society not only from transactions point of view but from it does create a transparent system.
As we know, banks’ operations are often opaque, and it is common to hear of large settlement after being held accountable for facilitating money laundering or defrauding customers.
Candlestick Arrangements

At spot rates, BTC prices are stable and positively hovering above the lower limit of our support zone at $3,500. From candlestick arrangement, this is bullish, and if anything, developments, especially in the 4HR chart, is exceptionally optimistic meaning aggressive traders can initiate positions at spot rates.
Behind this optimism is a bullish pin bar—clearer in the 4HR chart—bouncing off Jan 20 lows at the back of above average volumes—5k versus 2k. Increasing demand in lower time frames means there is a similar pattern in the daily chart, lifting investor confidence.
All the same, we shall interpret this as positive, but before we recommend risk-averse traders to buy, BTC prices first need to rally above $3,800 or Jan 14 highs. Only then will traders execute with first targets at $4,500 with liquidation level at around $3,500-700.
Technical Indicators
There is a rejection of lower lows and backing this resurgence is increasing demand for BTC as aforementioned. The double bar bull reversal pattern in the 4HR chart is at the back of high trading volumes—5k versus 2k. Because of this, risk-off traders can buy at spot rates, but it is ideal if there is confirmation as a spike in market participation drive prices above $3,800.
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VCs are Expecting Crypto Market to Deliver Massively in 2019, Will Price Reflect it?

To many onlookers, the crypto market is unpredictable as the weather. No one expected the jaw-dropping Bitcoin price rally in late-2017, nor what played out afterward. Yet, a recent quip from a leading cryptocurrency investor claims there may be an underlying rhythm to this industry — a multi-year heartbeat, if you will, that is slow but consistent. As the old adage goes, “history doesn’t repeat itself, but it does rhyme.”
Related Reading: Will History Repeat? Bitcoin Price Patterns Repeating Previous Market Cycle
Crypto Industry May Move In Four Year Cycles
After a painstaking 12 months, 2019 has finally arrived. In terms of valuations, 2018 was a dismal year for cryptocurrencies en-masse, as the aggregate value of all digital assets fell by ~87%. However, many optimistic industry enthusiasts have applied the cliché — “new year, new me” — to crypto. And while much of this is unbridled hope from dreamers, infused with copious amounts of so-called “hopium,” maybe this optimism isn’t all too zany after all.
Chris Burniske, a partner at Placeholder Ventures, an investment group working to “decentralize data, wealth, and power,” recently took to Twitter to drop a mind-boggling message. Burniske, who wrote a primer on crypto, fittingly named Cryptoassets, noted that this industry may be moving in four-year cycles, oscillating between crashes and frenzies.

Crypto Markets & Development
2013: Frenzy & Over-Promise2014: Crash & Under-Deliver2015: Consolidate & Ship2016: Lift & Refine for Adoption
2017: Frenzy & Over-Promise2018: Crash & Under-Deliver2019: Consolidate & Ship2020: Lift & Refine for Adoption
2021: Frenzy…
— Chris Burniske (@cburniske) January 13, 2019

Drawing attention to the crypto space’s status during 2013 through 2016, he noted that the passing of each year hails in a new developmental stage. The four stages are as follows: frenzy & promise, crash & under-deliver, consolidate & ship, lift & refine for adoption.
By this logic and pseudo-schedule, the crypto sector just left a year rife with under-delivery and crashes — accentuated by internal struggles at a handful of preeminent startups, like Blockfolio, ShapeShift, Bitmain, Huobi, and ConsenSys. Although Burniske noted that his comments were an over-generalization, the former ARK Invest executive noted that he expects for prominent projects to ship product in 2019, just like how Ethereum launched in 2015.
The Placeholder partner added that his followers should keep an eye on Bitcoin “and friends” heading into 2020 — the year of liftoff and adoption — explaining that development is “much richer than many realize.” Burniske didn’t elaborate on this comment, but this could be in reference to the network’s booming fundamentals, which haven’t been reflected in the asset’s fiat valuation. In fact, it could be said that fundamentals were a contrarian indicator for the Bitcoin price, as downward pressure barely abated in 2018.
2019: The Year For Consolidation & Delivery
Burniske isn’t the only industry insider that expects for promising products, platforms, and services, to go crypto’s version of mainstream during fiscal 2019. Per previous reports from NewsBTC, Kyle Samani, the managing partner at Multicoin Capital, a Texas-based crypto fund with a $75 million capital injection, told Business Insider that he expects notable platforms to launch in 2019.
Samani first drew attention to decentralized exchanges (DEXs), noting that Binance’s newfangled platform, slated to launch into beta in Q1 or Q2, may catalyze a revolution for this innovative form of trading. The Multicoin Capital executive explained that once Binance successfully launches its DEX and in-house blockchain, the startup’s competitors may follow, launching platforms of their own.
Samani then noted that he expects a number of “high profile blockchain products,” which are likely to attract a mass of institutional and retail users, to go live. He specifically drew attention to Tari, an open-source venture built on Monero and backed by Riccardo Spagni. With Monero-based code, Tari will be able to facilitate the issuance and management of non-fungible tokens, like entertainment tickets, loyalty points, and video game items — colossal markets that crypto could easily tap.
Fred Wilson echoed this sentiment, explaining that unfulfilled promises from 2017 will begin to get fulfilled in 2019. Wilson, the co-founder of Union Square Ventures, exclaimed that he expects for big name projects, like Filecoin and Algorand, to begin to ship. The investor added that he expects for Cosmos, a yet-to-be-released smart contract platform, to begin to eat up a portion of Ethereum’s market share.
Bunriske’s recent inquisitive tweet storm comes just days after the leading investor claimed that the mainstream consciousness has almost lost sight of Bitcoin. Yet, if Burniske’s pseudo-prediction comes true, the public may begin to acknowledge this nascent industry yet again, but not in the context of a bull rally.
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Bitcoin Has All the Chances to Become the New ‘Digital’ Gold, and Here’s Why

CoinSpeaker

Bitcoin Has All the Chances to Become the New ‘Digital’ Gold, and Here’s Why

Bitcoin has good chances to win a competition with gold and become the premier alternative economic option in the world.

Bitcoin Has All the Chances to Become the New ‘Digital’ Gold, and Here’s Why

Continue reading at Coinspeaker
Source: CoinSpeaker

Bitcoin Growing As A Platform and Has Many Features Beyond Store of Value Says Tuur Demeester

Its been 10 years since Bitcoin’s genesis block was mined and the first transaction on Bitcoin’s blockchain was completed. In this past decade, Bitcoin has matured from just being a cryptocurrency or a store of value to a full-fledged platform with multiple features, according to a tweet put forward by Tuur Demeester.
Bitcoin is becoming a protocol stack with many features feels Demeester
While there has been a lot of debate on Bitcoin’s features, use case and its comparison to several altcoins, Tuur Demeester, founding partner at Adamant Capital, in his recent tweet has put forward that Bitcoin is slowly becoming a platform which has multiple features beyond being a currency and store of value.

BTC/LN ~ TCP/IP Bitcoin is becoming a platform—a protocol stack with many features: – store of value – low trust wealth transfer – confidential transactions– tokenized securities – high volume payment network– microtransactions– smart contracts / programmable money
— Tuur Demeester (@TuurDemeester) January 21, 2019

It is an interesting thought like the majority of mainstream attention has focused on Bitcoin as a currency and how it can challenge the current monetary system. If one clears the air and looks at a wider picture Bitcoin may have a much interesting future as a protocol than just a currency. At the core of it, Bitcoin and its blockchain are after all digital ledger that is continually updated and synchronized in real time.
Any participant that uses this blockchain can make an entry in the ledger and record transactions In this way, Bitcoin provides an unalterable framework for Proof of Ownership that can be used not only as currency, but also in a range of interesting applications like voting, property, contracts, domains, and securities.
These transactions could be confidential, will be executed on the low trust of centralized authorities and could be processed in high volumes in a shorter time.
Demeester further states in the following tweets that with innovation and invention of sidechains, Bitcoin as a platform can now possess capabilities of smart contracts / programmable money, something that could be very similar to any other platform such as Ethereum or Tron.

Issued assets on liquid sidechain, Lightning will allow for smart contracts too, bullet proofs, …
— Tuur Demeester (@TuurDemeester) January 21, 2019

While Bitcoin’s capabilities are yet to be tested at the fullest as a platform, the innovation around it is definitely making Bitcoin a better platform as well. The ultimate aim for Bitcoin is to find acceptability among common people and one can easily see bitcoin gaining more foothold by utilizing its “platform features” along with its “money” features.
How do you prefer Bitcoin- as a platform or as a store of value? Do let us know your views on the same.
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Source: CoinGape