Bitcoin is staging a comeback reminiscent of the 2017 bubble frenzy
It’s been left for dead more than once, written off as nothing but a bubble and denounced as rat poison by one of the world’s most famous investors. Yet Bitcoin is once again staging a comeback reminiscent of the token’s glory days, with evangelists pegging their hopes on a technical event as the new catalyst.
True believers say the gains are driven by Bitcoin’s upcoming halving, when the rewards miners receive for processing transactions will be cut in half as soon as May 12. The internet is glutted with second-by-second countdown clocks and the mania is even spurring a hike in hiring by crypto firms worldwide. Bitcoin has rallied to more than US$9,000 in anticipation from around US$6,000 just a month ago.
“Narratives in the world of blockchain act like the Force in Star Wars — they mysteriously move and shape the market,” said George McDonaugh, co-founder of crypto and blockchain investment firm KR1. “You couldn’t be blamed for getting a little excited about what’s to come.”
Bitcoin halvings, which slow down the rate at which new tokens are created, happen once every four years or so. Its third such event is set to occur next week. Skeptics argue crypto prices are notoriously volatile and often difficult to pin explanations to, positing that any appreciation should be priced in ahead of time. But crypto fans cite historical precedent.
Bitcoin’s undergone two prior halvings — or halvenings, as they’re sometimes called — which saw its price appreciate in the aftermath. The world’s largest token rose from around US$12 to over US$1,000 in the year following its 2012 cut in rewards, and advanced about 1,000 per cent in the wake of the 2016 halving, though that reduction happened at a time when the coin was gaining greater mainstream recognition.
The frenzy around digital currencies took it to near US$20,000 the following year before it crashed, with the coin still trading about 50 per cent below 2017’s all-time highs.
But Bitcoin has historically bottomed 459 days prior to the halving, risen leading into the event and exploded to the upside afterward, according to research from Pantera Capital. Post-halving rallies have averaged 446 days — should history repeat itself, Bitcoin could peak around August 2021.
Wallet growth has also spiked, rising 2 per cent in April, the largest monthly increase since at least November. To Nicholas Colas at DataTrek Research, there’s two possible explanations: bored, locked-down gamblers and sports betters are finding their way into cryptocurrencies amid the coronavirus shutdown, while many are also getting excited about Bitcoin’s halving, he wrote in a recent note.
To be sure, many crypto fans also point to unprecedented monetary and fiscal stimulus unleashed by central banks around the world as a catalyst for prices to advance. Whatever the reason, the recent bull-run hype has ushered in the return of sky-high price targets.
Global Macro Investor’s Raoul Pal projects Bitcoin could reach US$1 million in the next three- to five years. Though the halving isn’t the key driver behind his prediction, it could be a potential accelerant.
“It is already the best performing asset in all recorded history,” Pal wrote in a recent presentation. “It was born out of the financial crisis for exactly what is about to come in this crisis. This is literally what Bitcoin was invented for.”
Jefferies LLC analyst Christopher Wood in his weekly “Greed & Fear” newsletter recommended investors — including institutions — buy Bitcoin ahead of the halving, citing the token’s prior price surges around the event.
“To invest in Bitcoin it is necessary to believe the system has integrity in the sense that the supply is truly limited,” he wrote. The digital token should be a source of diversification “precisely because of its truly decentralized nature,” he said.
Critics can disparage Bitcoin as much as they like, but it’s by far the best performing asset of the past decade
Venture capitalist Tim Draper predicts Bitcoin could hit US$250,000 by 2022 or the first quarter of 2023. “Bitcoin adoption will spread because Bitcoin is simply a better currency than any of the political currencies that are tied to governments and political whims,” he said, citing fiscal and monetary stimulus as possible accelerators for adoption.
To Antoni Trenchev, co-founder and managing director of crypto-lender Nexo, Bitcoin could reach US$50,000 by the end of the year, implying a 470 per cent surge from current levels. Though the halving may already be priced in, it will lead to huge appreciation over time, he said.
“Critics can disparage Bitcoin as much as they like, but it’s by far the best performing asset of the past decade,” he said. “We’re bullish about its future.”
Trenchev is seeing “huge” demand for his firm’s products ahead of the coin’s halving. “We’re not hiring because of the halving per se. We’re hiring because the halving has been lifting Bitcoin and will continue to do so,” he said.
A number of crypto exchanges have also embarked on hiring sprees. Kraken LLC and Binance Holdings Ltd. are expanding their workforces, as are OkEx and Coinbase Inc.
David Janczewski, the chief executive officer and founder of Cardiff, Wales-based Coincover, said any market event that impacts adoption is a positive for his business.
“That’s part of what we see — when the last spike happened, we know that an awful lot of people moved into the market because they felt they ought to get in on the action,” said Janczewski, whose firm offers insurance against crypto thefts and scams. “Ultimately, anything that causes the market to be aware, or wider investment markets to be aware of crypto, tends to be a good thing from our perspective.”
Author: Dan Kitwood/Getty Images files
Bitcoin Pulls Away From Stock Market as Price Staying Above $8,000 Signals Strength – Bloomberg Analyst | News Bitcoin News
Bitcoin (BTC) staying above $8,000 is a sign of increasing momentum and detachment from the stock market beta-pull, according to Bloomberg senior analyst Mike McGlone.
In a new bitcoin report published on May 5, McGlone said that sustaining above this level is necessary to indicate strength.
“Bitcoin is showing divergent strength versus the wobbly stock market,” he said, noting the cryptocurrency’s rapid decline on March 12, when it plunged 27%.
BTC rose past $8,000 for the first time in several weeks at the end of April, largely spurred by the impending halving. At Press time, the coin was up 4.2% at $9,216 over the last 24 hours, according to data from markets.bitcoin.com.
The Bloomberg Galaxy Crypto Index (BGCI) shows bitcoin “recovering above its upward-sloping 52-week moving average, while the same measure of the S&P 500 is turning downward.”
Like gold, McGlone opines, the trend indicates that:
BTC is rapidly transitioning away from a risk asset and gaining credence versus stocks. Relative volatility and momentum measures indicate a firming price foundation for the crypto.
Similar to about 3,000 on the benchmark stock index, $8,000 has been a key pivot point for much of the past year in the cryptocurrency industry, as per the report. The ratio of BTC’s 180-day volatility against the same gauge on the S&P 500 dropped to a measure of 2 this year, a new low.
“The drop to new lows in the relative-volatility ratio indicates a firming bitcoin price foundation versus the stock market,” said McGlone.
The commodity strategist also spoke about how diminishing supply, increasing demand and a favorable macroeconomic situation (overrun by stimulus packages) support a positive BTC price outlook, perhaps even better than gold.
“In May, the daily production of new coins will drop by half, and unlike quasi-currency brethren gold, higher prices won’t be an incentive for more supply,” McGlone elaborated.
He added: “Restricted supply means adoption is the metric that matters, and most indications remain positive in an unprecedented environment where virtually every central bank is aggressively adding liquidity.”
What do you think about the price of bitcoin staying above $8,000? Let us know in the comments section below?
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Author: News by Jeffrey Gogo
Crypto scams are on the rise: 5 ways to avoid them
Bitcoin prices have been hovering around $9,000 for quite a few days making it a lucrative investment opportunity. The biggest challenge with the Bitcoin industry across the globe is regulation. There is still a long way for Bitcoin to become part of the common man’s general investment portfolio.
Ashish Agarwal, Founder at Bitbuddy (a Bitcoin marketplace startup) said, ” The governments themself have a lot of complexity in regulating Bitcoin but they can regulate the exchanges and other crypto service providers. As far as Bitcoin scams are concerned, one should always stay away from any type of lucrative schemes. Before giving any money to a website/mobile app, know the company and founders before. ready about them, check their recognition.”
Mr Agarwal further added, “Never fall for mining schemes, there is no such real business exists. There are more than 5000 identified crypto assets around the globe. 99% of them are scams. People have the common mindset “Bitcoin is very expensive, let’s invest in some cheap price coins.” Please don’t consider just price, look at the maximum supply, circulated supply, market cap, last 24 hours transaction volume, and the most important concept and the team behind the coin. Always be careful, to whom, and what you are investing the money for.
If you are looking to invest in Bitcoin these are the ecessary precautions one should keep in mind
Fake crypto investment platforms
Fake bitcoin exchanges are a real threat! Back in 2017, a South Korean fake exchange was operating under the name of BitKRK. While it looked legit and presented itself as a part of the crypto trading community, it swindled investors and buyers out of millions of dollars before it was intercepted by the South Korean financial authorities.
You must avoid all fake cryptocurrency exchanges. Stick to the reputed and recognized bitcoin exchanges only. Check Bitcoin forums and subscribe to authentic RSS feeds or notifications so you receive the news of fake exchanges on time. or, stick to trustworthy Bitcoin platforms for genuine investment opportunities.
Others less credible cryptocurrencies
After the success and skyrocketing demand of Bitcoin, several new cryptocurrencies have been mushrooming across the globe. It is indeed difficult to keep an eye on the authenticity and performance of each one.
New altcoins can be cheaper, which makes them more of a lucrative investment opportunity to most new investors. The selling idea behind these new currencies is that it’s already too late to invest in bitcoin and one must seize the opportunity to invest in one of the new and upcoming ones to make more money!
Well, that’s not at all true. Always remember that My Big Coin was taken down after it sold fake alt currencies for $6 million to customers.
However, it is important to take a look at the basics of any altcoin including its maximum supply and circulation. For example,Bitcoin maximum supply is 21 million exactly and 18 million are in circulation. Bitcoin is one of the most valued, trusted and most accepted cryptocurrencies across the globe.
Cloud mining allows regular investors without expensive hardware to mine cryptocurrencies. It can be indeed lucrative if you consider that you can mine altcoins like Bitcoin sitting at home without investing in exuberantly priced hardware.
There are a few cloud mining services that allow users to rent server space at a fixed rate for mining altcoins. However, if you are a first-time investor, how do you know which services are genuine, and which ones just want your hard-earned money?
One way to identify the fake ones is by their lofty promises. They promise implausible returns on your investment and never mention the hidden fee that applies on these returns. These servers are smart designs to take money from unsuspecting investors. No authentic companies should be able to guarantee a profit.
Always be vigilant while signing up for cloud mining servers. Think about the security of your data on your system before you go online on a shared server.
Pump and Dump schemes
It is not uncommon for groups of scammers to buy a new altcoin en masse. That increases the market price of the cryptocurrency momentarily and triggers FOMO (fear-of-missing-out) among other investors.
As soon as the new investors begin investing in the new coin and the prices shoot up higher, the scammers sell their share of coins for a higher price.
It is illegal in the securities market, but pumping and dumping are more than common in the grey zone of cryptocurrencies. Avoid pump and dump schemes by choosing more popular and stable crypto options like Bitcoin only.
New investors don’t always understand the ins-and-outs of cryptocurrency before and during investing. This has given several malware programs the chance to evolve. Malware programs now pose newer and bigger threats to people.
Modern malware that targets cryptocurrency users and investors can latch onto the user accounts to retrieve the user’s online wallet balance, drain their account and replace their authentic address with that of the scammer.
Apart from updating your antivirus and system firewall, you need to make sure that you are visiting a secure and trustworthy platform that does not prompt auto-download of .exe files or ask you to download suspicious attachments.
Author: Edited By Tamal Nandi