Analyst: Stellar (XLM) Decreasing Supply Could Increase Chances of Exchange Delisting

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

I wonder how long it will take for them to realize that burning 50% of the supply actually makes you even more a security and increases the chances of getting delisted on exchanges. $XLMhttps://t.co/4KiR9wVA9r
— WhalePanda (@WhalePanda) November 5, 2019

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

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

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

 
 
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Decred, Stellar Post Massive Gains as Bitcoin Uptrend Halts

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

Politeia, Decred's off-chain governance platform for managing the network treasury, has been updated with a complete frontend overhaul. Go check it out at:https://t.co/X7EkVqdeqk pic.twitter.com/II8VixSqxx
— Luke Powell (@lukebp_) October 29, 2019

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Bitcoin Eyes Gains as Pound Drops on Brexit Uncertainty

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

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

Last night, @Binance Launches P2P Trading, starting with China. Most of CT probably can't use it yet, but 1.4 billion people can. We will expand the service to other regions soon.
Anything that makes it easier to get #crypto.https://t.co/GX1sPK8Hql
— CZ Binance (@cz_binance) October 9, 2019

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

Buying $BNB here
– First target is slightly open for me as I think this has some nice room to run off this consolidation. pic.twitter.com/8hzJySZsNg
— Jacob Canfield (@JacobCanfield) October 7, 2019

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

$BNB looks ready to have a go#ihaveabag pic.twitter.com/m4oMy64qCv
— The Crypto Dog (@TheCryptoDog) October 9, 2019

If the Falling Wedge analysis is valid, BNB could rise towards 45,393 sats – a 113 percent increase from the price at the time of this writing.
 
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Latest Bitcoin Drop Proves SEC’s ETF Concerns: Chervinsky

The US Securities and Exchange Commission (SEC) is right about their decision to reject bitcoin exchange-traded funds, believes Jake Chervinsky of San Francisco-based Compound Finance.
The general counsel on Thursday said the US securities regulator has valid concerns about bitcoin’s price volatility. He referred to the cryptocurrency’s latest price drop, wherein it plunged by as much as 20 percent in the matter of a few days. Chervinsky cited reports that showed how unregulated cryptocurrency exchanges operating outside the US played a crucial role in crashing bitcoin.  It is the same concern that made the SEC hesitant to allow an ETF focused on a mostly unregulated Bitcoin market to make its way to the public.
“Bitcoin drops 20% over a few days; there’s no simple explanation for why; the drop made big money for offshore unregulated margin trading platforms; trading on those same platforms might’ve caused the drop in the first place; you’re still wondering why the SEC has concerns?” – noted Chervinsky.
Too Risky
ETFs are investment vehicles that track the performance of particular assets. It allows investors to diversify their investments without needing to own the asset. A Bitcoin ETF, therefore, will enable investors to speculate on the bitcoin price without needing to go through the complicated process of storing and managing the cryptocurrency physically.
To the crypto world, a Bitcoin ETF is good news since it adds a more accustomed, regulated layer atop the cryptocurrency market. That could bring more investors – both retail and institutional – to the bitcoin market, which could make them a crypto holder.

SEC, nevertheless, has rejected more than ten Bitcoin ETFs in the last two years. The regulator sees the cryptocurrency’s underlying market as a hub of price manipulation, money laundering, and risky volatility. While essential players in the bitcoin market are gradually catering to those concerns, a full-fledged ETF remains a far-fetched reality mainly when the cases of extreme manipulations are still occurring.
BitMEX
Chervinsky, in his comments, was referring to BitMEX, a Seychelles-based bitcoin derivatives exchange that offers traders with 100x leverage. Analysts believe that the controversial firm executed margin calls and liquidated contracts worth more than a billion dollars. The so-called Long Squeeze saw investors selling their Long positions in a falling bitcoin market. That led to a further crash, bringing bitcoin to as low as $8,100.
Bitcoin drop extended after BitMEX liquidated larger contracts | Image credits: TradingView.com
Many also believe that investors dumped bitcoin while taking cues from the launch of Bakkt. The Intercontinental Exchange-backed digital asset platform introduced two physically-settled bitcoin futures contracts on September 23. On the day, the trade volume was low, which, coupled with a 30 percent hashrate drop, could have influenced traders to exit their Long positions. Nevertheless, for Chervinsky, the sum of all analysis remains the same: the SEC won’t approve a Bitcoin ETF.

Sure, reasonable, but some other guy says it was "sell the news" on the Bakkt launch, & another guy says it was the hashrate drop, etc. Even if you're right & they're wrong, try telling the SEC, "don't worry, it's not manipulation, we can explain it all by technical analysis."
— Jake Chervinsky (@jchervinsky) September 26, 2019

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More Troubles for Bitcoin as Trump Fuels Trade Hopes

Bitcoin was trading in the negative zone on Thursday as US President Donald Trump raised hopes for a potential trade deal with China.
The benchmark cryptocurrency plunged another 0.34 percent to $8,408.01 on San Francisco-based Coinbase exchange. Earlier this week, it had experienced a massive sell-off that sent the price down by more than $1,500 in a day. Analysts blamed BitMEX, a controversial bitcoin derivatives exchange, for causing the said crash, accusing the firm of liquidating Long positions worth more than a billion-dollar. Bitcoin has stabilized ever since but remains under the fear of slipping further.
Bitcoin consolidating sideways but downside risks remain | Image credits: TradingView.com
That is partially due to a lack of institutional interest as investors switch positions between mainstream risk-on and risk-off assets. On Thursday, they maintained refuge in equities after Trump raised hopes for a peaceful trade negotiation with China. The president said that the end of US-China trade war “could happen sooner” than one thinks. The comments came after he signed a partial trade deal with Japanese Prime Minister Shinzo Abe.
Investors also reacted positively to the release of a transcript that contained telephonic conversation between Trump and his Ukrainian counterpart Volodymyr Zelensky. It provided no evidence that the US president threatened to withhold a $400 million aid to Ukraine, an accusation that earlier prompted the Democrats to start an impeachment hearing against Trump – and sent US equities down.
As a result, US stocks rallied on Wednesday and hinted to grow further during the Thursday session. Negatively correlated asset Gold, on the other hand, plunged 1.90 percent. It, as of the press time, is recovering. Bitcoin, which might have fallen due to in-house catalysts this week, is looking weaker.
A Natural Pullback
Bitcoin surged by more than 150 percent in the second quarter of 2019, primarily driven by an escalating trade war during the same period. The positive correlation allowed analysts to treat bitcoin as a safe-haven asset against a dwindling global economy. With Trump now hinting to close the deal on a positive note, and bitcoin lately becoming a no-performer as both risk-on and safe-haven asset, investors could start looking elsewhere.
Nevertheless, to some, bitcoin’s latest price crash has nothing to do with what Trump is doing to China or any other macroeconomic event. For them, the downside move is a technical, bearish correction after the cryptocurrency’s 200 percent gains since the last cycle low of circa $3,100.

First time getting a chance to look at the $BTC chart since the dip.
Bruhh there wasn't even a break out in volume, we're still just consolidating here. Wake me up when we start trending again pic.twitter.com/FYf1DKpD0P
— The Crypto Dog (@TheCryptoDog) September 26, 2019

Thomas Lee of Fundstrat, meanwhile, thinks the next bitcoin upside move will follow that of US equities. That means even a trade deal between the US and China could benefit the cryptocurrency as investors become comfortable with investing in risky assets.
As for now, bitcoin stands clueless as it trends in a troubling, consolidating range.
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Will Bitcoin Mining Confidence Cause A BTC Price Spike To $28k?

Data from blockchain.com shows Bitcoin’s hash rate is at all-time-high. Last week, it peaked at 98.5 quintillion hashes per second. In addition, according to the mining pool, BTC.com, mining difficulty is also at its highest ever level at 11.9 T.
All in all, miner’s confidence, in Bitcoin, has never been higher, which is indicative of a project here for the long term. And, some might say, a bullish indicator.

Confidence In Bitcoin Has Never Been Higher
Hash rate refers to the computing power supporting the network by way of transactional processing. The higher the hash rate, the more secure the network. And Bitcoin’s hash rate has never been higher, having a steady upward ascent since December 2018.
Indeed, as pointed out by industry observers, Bitcoin’s hash rate is eight times what it was in December 2017, the height of the last bull run, demonstrating a growing belief in the original cryptocurrency.

Bitcoin's hashrate is now 8 times larger than it was during price's all-time high of $20,000 in 2017.
— Rhythm (@Rhythmtrader) September 12, 2019

This belief not only takes the form of more miners joining the network, but existing miners are also convinced enough to invest in more up to date equipment.
This comes off the back of Bitmain announcing the release of the new Antminer 17 series. The Antminer S17e and T17e models offer improvements to hash rate by way of upgrades to heat dissipation technology.
And, as claimed by Binance CEO, Changpeng Zhao, as hashing power increases from growing mining confidence, so does price. In a recent tweet, he said:
“Hashrate increase means more miners are investing in BTC, they are bullish. You know what follows?”
Game Theory And Price
This is a belief echoed by the financial reporter, Max Keiser, who, at the start of the month, made a prediction that Game Theory would play out to result in a $28k Bitcoin price.

#Bitcoin hash approaches 90 Quintillion. Per protocol’s hard-coded Game Theory, hash precedes price. $28,000 in play.
— Max Keiser, tweet poet. (@maxkeiser) September 1, 2019

In essence, Game Theory refers to the psychology of how and why people make decisions within a competitive environment. In other words, when applied to cryptocurrency, this relates to how to become the most profitable.
Founder of alternative investment firm, Otis, Michael Karnjanaprakorn put it like this:
“Miners are incentivized to be good actors on the network. If miners want to earn rewards, they have to abide by the rules. Otherwise, miners lose time, electricity, and processing power (costs). This is because mining has a recursive punishment system.”
And so, Game Theory and Bitcoin’s proof of work consensus mechanism, not forgetting the homeostatic mining difficulty algorithm, work in tandem to coordinate the efforts of people to ensure the best possible outcomes for all involved.
Keiser’s reference to Game Theory merely attributes the cumulative combined cooperation of miners to provide a secure network, adding to Bitcoin’s inherent value. And as more miners, and potential miners, take the stance of Bitcoin being a viable alternative to the legacy system, the more we can all benefit.
Photo by Dominik Vanyi on Unsplash
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Bitcoin Bullish Bias Intact despite $950 Drop – Here’s Why

Bitcoin has dropped towards the $9,300 level for the first time in the last 30 days as investors continue to explore traditionally perceived safe-haven assets against global market risks.
The benchmark cryptocurrency plunged by $950 within a matter of a few hours. The move downhill coincided with the expiration of CME bitcoin futures contract, which typically sends the bitcoin prices lowers across the top spot exchanges. It also occurred at the time when bitcoin’s rival assets, including gold, traded near their record highs. Euro Pacific Capital CEO Peter Schiff used the opportunity to portray bitcoin as a bad hedging asset.

Bitcoin has again failed the safe haven test. On Friday, as escalating trade tensions sent global stock markets plunging, investors sought refuge in monetary safe havens. The Japanese yen, Swiss franc, and especially gold all moved higher. Yet Bitcoin plunged by more than stocks!
— Peter Schiff (@PeterSchiff) August 28, 2019

“Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up,” he tweeted. “You can keep looking in the rearview mirror while ignoring what’s happening right in front of you.”
Galaxy Digital Founder Michael Novogratz believed otherwise. He told Bloomberg that bitcoin is bullish despite the short-term setbacks, recalling the cryptocurrency’s explosive upside price rally in 2019. Soon after establishing its bottom near the $3,100 level, bitcoin rebounded by more than 200 percent. It is still trading more than three times higher than its cycle low.
“It has had a huge run, and so I think this is a bit of consolidation.”
Corrections are Normal
Famous market analyst Josh Rager compared bitcoin’s latest downside action to a string of similar movements in the past. The cryptocurrency trader studied bitcoin’s 2017 bull run and found that the asset slipped many times on weekly timeframes. Nevertheless, its monthly bias remained bullish. As of now, the price appears to have been repeating the same behavior.
“Last uptrend Bitcoin has multiple months [with] at least three down weeks in a row,” said Rager. “Price is near weekly support, and on a weekly perspective, I want to see BTC close above $9,533 Sunday or it would form a lower-low.”
Bitcoin price is slipping consecutively from last three weeks | Image credits: Josh Rager
Fundamentally Bullish Bitcoin
All eyes are now on a string of bullish events that promise to at least support bitcoin from falling below crucial support levels. Bakkt, a digital asset platform backed by Intercontinental Exchange, announced on Wednesday that it would launch its bitcoin custodian services on September 6. The deployment would soon follow the introduction of Bakkt’s daily and monthly bitcoin futures contracts on September 21.
“Remember, the hype is bakkt with substance,” said Rhythm Trader, a cryptocurrency commentator on Twitter. “Unlike other futures exchanges, this is settled in bitcoin. Actual bitcoin is paid out, not just the fiat equivalent to the price of bitcoin. The result is better price discovery and liquidity for bitcoin and everyone in the space.”
Bitcoin is also set to cut its mining rewards by half by next May, an event many believe would make the cryptocurrency scarcer and – with growing demand – more expensive.
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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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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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Bitcoin Above $10,000 But Downside Risks Remain: Analyst

Bitcoin has close above the $10,000-level in its interim upside correction, but that does not guarantee an explosive price rally.
Noted market analyst Josh Rager said on Thursday that bitcoin could continue trending upwards until it hits $10,854. The level, as he pointed, is acting as a resistance on the daily timeframe graph. The trader also illustrated it with a chart showing how the $10,854 level earlier halted the upside attempts in the bitcoin market.
Bitcoin Eyes Pullback from Two Strict Resistance Levels | Image Credits: Josh Rager
The statement followed bitcoin’s double-digit recovery from the session low of $9,071, established mid-last week. The BTC/USD instrument since then had surged by 12.28 percent, recorded until the 11:18 UTC today. But if once narrow down the timeframe, the price also appeared 8.34 percent lower from its session top –  or swing high, as termed by Rager.
The reversal from the top made the area around it a wall bitcoin needs to jump across to establish a stronger bullish bias. Rager noted that the probability of a reversal is higher, nevertheless. He also introduced a new barrier in $10,586, a level which coincides with bitcoin’s week open rate.
“A break,” he explained, “above would likely lead to a retest of the weekly open followed daily resistance ($10,854). Failure to break above would lead to restest of support and likely a lower-low. Point being, there are multiple levels to watch but this is certainly helpful when you zoom out to see price react accordingly to these levels on higher time frames.”
Low Volume
The latest surge didn’t have adequate volume, which makes a weaker upside attempt according to textbook definitions of chart-reading.
Another prominent market analyst, Crypto Michaël, believed the vast disparity between a price uptrend and a volume trend increased the probability of sharp reversals. Contrary to Rager, Michaël said bitcoin would not even breach above the $10,300 level.
“I’m still sticking behind the thoughts that we’ve got to make some more movements downwards. Move upwards didn’t have much volume and I don’t think we’ll break $10,300 area,” Michaël said on Thursday, adding:
“If we do and flip support + break downtrend [then] I’m bull.”

$BTC #BITCOIN
I'm still sticking behind the thoughts that we've got to make some more movements downwards.
Move upwards didn't have much volume and I don't think we'll break $10,300 area.
If we do and flip support + break downtrend -> I'm bull. pic.twitter.com/nPyFryOHaM
— Crypto Michaël (@CryptoMichNL) July 25, 2019

The Next Uptrend
A majority of analysts see bitcoin to retest old/flipped supports before it continues its uptrend in the long-term. Given the cryptocurrency’s 175 percent returns this year, the bias is typically bullish, and the quest now is to find the most attractive accumulation area for investors.
The support targets vary. Rager believes $8,975 could attract buyers to the bitcoin market. Michaël, on the other hand, thinks it would happen at $9,289. Some also see the bitcoin spot rate to fill a gap left open by CME Bitcoin Futures. That level coincides with circa $7,200.
Deeper targets are also surfacing due to the US Treasury Steven Mnuchin’s mind games with the bitcoin industry in the US. Nonetheless, they remain unexclusive.
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Kraken CEO Sees Bitcoin Price at $100K-$1M as Bears Cry Correction

The price of bitcoin on Wednesday came close to hitting the $13,000 level for the first time since January 2018. While the cryptocurrency could be on its way to reclaim its all-time high of $20,000, its wild bull run is also increasing the probability of an equally primitive bear correction.
But that does not concern Jesse Powell of US-based cryptocurrency exchange, Kraken. The chief executive officer said today that he is not anchoring his thoughts on an imminent bitcoin correction. Instead, he is looking at a big picture, wherein the cryptocurrency value could reach anywhere between $100,000 and $1 million.
“When I hear people talking about a bitcoin “correction” I’m thinking $100k, maybe $1m. That’s what’s correct,” said Powell.

When I hear people talking about a bitcoin "correction" I'm thinking $100k, maybe $1m. That's what's correct.
— Jesse Powell (@jespow) June 26, 2019

Powell’s bullish sentiment towards bitcoin appears in tandem with a general market viewpoint towards the cryptocurrency’s future. This week, Anthony “Pomp” Pompliano of  Morgan Creek Digital also predicted that bitcoin would reach $100,000 a piece ahead of the 2021 close. The founding partner said that there could be correction periods of 20-30 percent whenever bitcoin hits a new high, but the asset would continue rising, nevertheless.
“These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time,” explained Pomp.
Paper Gains
But not all financial players are big fans of a decentralized cryptocurrency. Prominent US stockbroker Peter Schiff, who was among the few ones to predict the 2007-2008 financial crisis, called the bitcoin’s ongoing parabolic move a “sucker’s rally,” stating that speculators are driving the cryptocurrency’s rate higher without understanding the underlying dangers posed by its lack of intrinsic value.
“It doesn’t matter how high the price of Bitcoin rises unless you sell. Every buyer must eventually sell to realize any benefit from the rise,” said Schiff. “But therein lies the problem. Once HODLERS decide to cash out, the price collapses, wiping out paper gains before they can be realized!”

Bitcoin bugs claim the only reason I am pro gold is that I have a gold company or that one of the mutual funds I manage is a gold fund. Yet they ignore the greater bias of those shilling for Bitcoin, who own huge personal stakes, manage crypto funds, or own crypto businesses!
— Peter Schiff (@PeterSchiff) June 22, 2019

Then, there is Will Harborne, the founder of Ethfinex, a London-based cryptocurrency exchange, who believes the fresh supply of 600,000 tethers (USDT) — stablecoins pegged to the US dollar on a one-to-one basis — is behind the bitcoin price rally. Harborne said in an interview to Decrypt that the over-the-counter exchanges are the biggest buyers of USDT. He explained that a typical OTC handles large-scale bitcoin orders, which sometimes require it to fill the bids with USDT for smooth liquidity.
“An OTC desk might do a large deal selling BTC to a large buyer in the US, and then will convert the dollars to Tether in order to spread the other side of the order across Bitfinex and Binance where there is more liquidity,” he said.
Tether has been a controversial stablecoin for allegedly lacking the US dollar reserves that should back its net USDT supply. In April, the New York Attorney General (NYAG), Letitia James, accused Tether and its associate-exchange BitFinex of hiding an $850 million loss, so to artificially maintain the USDT-USD peg.
Bitcoin Bullish Factors
On the other hand, the bullish sentiment of both Powell and Pomp relies on bitcoin’s scarce economic model. The cryptocurrency’s protocol is set to reduce its supply by half in May next year. At the same time, the demand for bitcoin is allegedly increasing in the wake of an impending geopolitical crisis in the Middle East, and other weak macroeconomic outlooks.
“These,” wrote Pomp, “include large scale institutional adoption, multiple ETF and retail product approvals, increased global instability, lack of performanace in traditional markets, and the continued manipulation of markets, economies, and currencies by governments around the world.”
Bitcoin Price Closing in On the $13,000 Level | Image Credits: TradingView.com
The bitcoin price was trading at $12,583 at the time of this writing.
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Bitcoin Rise May Appeal to Investors amidst Intensifying Geopolitical Risks

The bitcoin price has soared this week on the prospects of Fed rate cut, the Facebook coin, and uncertainty due to the US-China trade war.
The world’s leading cryptocurrency rallied on Saturday, with its price flying past the $10,000 level for the first time since March 8 last year. Investors allegedly bid up bitcoin in expectations of more US dollar flowing into the markets. On Wednesday, Jerome Powell, the chairman of Federal Reserve, indicated that the US central bank would cut interest rates next month, prompting investors to take their money out of the US Treasuries.
From the day of announcement until 1000 UTC today, bitcoin has surged by more than 20 percent to $10,949.

probably one of the most interesting charts out there: Bitcoin vs. UST10Y inverted pic.twitter.com/qEuFqD6JJ9
— Alastair Williamson (@StockBoardAsset) June 21, 2019

The US-Iran Issue
Tensions in the Gulf of Oman touched peak after Iran said it shot down an “intruding” US drone after it entered into the country’s skies. The territory was already under the lens after the US officials blamed Iran for attacking oil tankers last week, with President Donald Trump himself accusing Iran on national TV.
“It was them that did it,” Trump told Fox News.

The benchmark S&P 500 dropped for the first time in an otherwise bullish weak on the news. The Dow Jones, too, closed in red after briefly surpassing its October 3 peak.
David Donabedian, the chief investment officer at CIBC Private Wealth Management, told Bloomberg that the US market had turned its impressive performance this week to an outright flat action owing to the “news coming out of Iran.”
“It’s a testament to how important monetary policy is and how much the market is hanging its hat on the Fed here in the second half of the year.”
Haven Assets in Demand
Anxieties concerning a potential US-Iran military lockdown — coupled with Fed’s dovish stance on the US economy — proved bullish for the leading haven asset gold. The precious metal’s spot price surged above $1,400 for the first time in six years. It could see more upsides, according to Market.com’s chief market analyst, Neil Wilson. Excerpts from his statements to Business Insider:
“The opportunity cost of holding gold is significantly lower as real yields fall, while the rather dubious and risky outlook for the global economy, US-China trade and geopolitical tensions in the Middle East mean there is plenty of reason to be seeking shelter in gold.”
Mainstream investors could also explore alternative hedging opportunities in Bitcoin, whose current market capitalization is 3,746 percent lower than that of gold but, on a year-to-date scale alone, has returned 20 times more gains than the precious metal.
Venture capitalist Barry Silbert believes bitcoin’s higher returns is a sign of new capital inflow. He told CNBC:
“Whatever money is in gold is not going to stay in gold. That gets handed down to millennials — I’m highly confident a lot of that will go into bitcoin.”
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Donald Trump and Fed Chairman Distrust is Bullish for Bitcoin: Billionaire Investor

Bitcoin is going to benefit from the growing distrust between the US President Donald Trump and Federal Reserve Chairman Jerome Powell, believes Mr. Michael Novogratz of Galaxy Digital, LLC.
The billionaire founder said on Wednesday that he is becoming “more bullish” on bitcoin after President Trump reportedly threatened to demote Mr. Powell if he decides against lowering interest rates. The Federal Reserve is set to announce its take on the said matter today at 1400 Eastern Time upon concluding a two-day meeting.

Makes me more bullish $BTC https://t.co/oePdtMT1GD
— Michael Novogratz (@novogratz) June 18, 2019

Bitcoin against Rate Cuts
Economists believe the Fed is not likely to cut interest rate in June despite May’s weak job data and softer consumer price inflation. But, the central bank’s likelihood of decreasing the rates after July 30-31 meeting is higher.
Meanwhile, with an 80 percent approval of a rate cut by traders, the sentiment in the US stock market has turned bullish for the near-term. The June session so far has witnessed the S&P 500 Index, Dow Jones Industrial Average, and Nasdaq Composite posting more than 6 percent profits each through Tuesday’s close.
On the other hand, bitcoin’s month-to-date gains are lower than that of the US benchmark markets — at 3.69 percent by Tuesday’s close. The cryptocurrency’s uptrend went silent on Tuesday after the announcement of Facebook’s token Libra. Nevertheless, bitcoin’s broader bias remains bullish owing to market catalysts like the Hong Kong protests, the US-China trade war, and news related to its potential adoption by mainstream institutions (Fidelity, TD Ameritrade, etc.).
Bitcoin Price has Surged More than 150% in 2019 | Image Credits: TradingView.com
Hand in Hand
The two diverse markets now meet at the crossroad constructed by the Federal Reserve. Investors who have both the US stocks and bitcoin in their portfolios are looking at rate cuts as a hedge against a potential economic slowdown. According to Barclays, the US benchmark markets could witness a surge of as much as 21 percent following the next rate cut. The same theory stands true for bitcoin, which could see an increase in buying sentiment if US dollar borrowing becomes cheaper.
But the interim sentiment holds if only Mr. Powell decides to cut interest rates. An opposite scenario, meanwhile, could hit the bitcoin market in the wrong way — at least according to Robert Leshner, the founder of Compound Finances.
“We’re finally starting to enter an environment of rising interest rates which crypto has never seen before and it’s going to be potentially challenging to the price of a lot of crypto assets just like it will be for a lot of assets in general, including equities.”
Long-Term Sentiment
The following rate cut scenario does not guarantee a soft landing for the US economy, according to Ryan Detrick of LPL Financial.
The senior market strategist noted that the Fed is going to cut interests at a time when a potential recession is looming around. He said the previous two times the Fed slashed the rates were in 2001 and 2017, which eventually cut the stocks cut by half.
“But the reality is if you go back further in time, you can also see explosive rallies after that first cut,” Mr. Detrick said.
Meanwhile, data collected by Barclays shows the S&P 500 records a loss of approx 17 percent when the Fed cuts rates ahead of an impending recession.
Bitcoin’s impressive performance in May against the backdrop of the US-China trade war has proved that investors would likely consider it a hedge under challenging times. US-based Grayscale Investments found plenty of evidence that showed the bitcoin price rising against a string of regional economic tensions, ranging from China’s capital control to the Greece debt crisis. The firm wrote in its report:
“While it is still very early in Bitcoin’s life cycle as an investable asset, we have identified evidence supporting the notion that it can serve as a hedge in a global liquidity crisis, particularly those that result in subsequent currency devaluations.”
That somewhat raises hopes of bitcoin behaving as a perfect hedge for handling a global economic crisis.
No wonder Mr. Novogratz is more bullish on the cryptocurrency.
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