Bitcoin Failed As Money, And That Is Great News For Crypto
The original use case for bitcoin might have fallen flat, but the innovation it unleashed continues to push blockchain implementation forward.
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Blockchain and cryptoassets were developed, which at this point is well known, to disrupt, disintermediate, or otherwise topple the incumbent financial infrastructure. Democratizing access to financial resources and information, the argument went, was a slam dunk idea in the aftermath of the financial crisis. That said, and despite the billions of dollars invested, thousands of individuals working on the issue, and the media focus on this potential, bitcoin remains a medium of exchange only used for a small portion of its total trading volume.
Trading volume across different exchanges for bitcoin and other cryptoassets may total in the tens of billions, but utilization of bitcoin as a legitimate fiat alternative remains slower than might have been anticipated. Reasons as to why this has occurred have been documented extensively, so let’s just summarize them briefly. This is not to say that bitcoin will never catch on, but as of June 2020 that simply is not the case.
First, price volatility and the near obsession over price levels discourage both retail investors and merchants from using bitcoin as an effective medium of exchange to conduct transactions. Second, and even though bitcoin is thought of as anonymous, the reality is that transactions and holdings can (and have) been traced back to real world owners. Lastly, but perhaps most importantly, the lack of understanding and the lingering association of crypto with criminal activity may lead many non-experts to steer clear.
So why is all of this good for the crypto space at large? If the flagship cryptoasset, and regardless of personal views, bitcoin has received the most coverage and is the most well known cryptoasset, falters in its initial use case, how can this be a positive? It is a positive because, and exactly because of the faltering adoption of bitcoin as a fiat alternative, the cryptoasset space has grown and developed so rapidly as a result. Bitcoin, without a doubt, is a tremendous innovation that will be celebrated for decades to come, but the issues forestalling wider adoption are being addressed by new market entrants.
Fixing the issues
The great thing about competition and free markets is that there does not need to be one singular answer, winner, or solution for every market participant. Simply because bitcoin has not caught on as a widely used fiat alternative as of 2020 does not mean the entire space will collapse and fade away. To the contrary, several separate cryptoasset sectors have emerged, and continue to grow rapidly seeking to address some of the very issues that have kept bitcoin from breaking into the mainstream.
Stablecoins have been widely discussed, but it is important to remember the fundamental issue these cryptoassets seek to address. Tether, Circle USD Coin, Paxos, and the Gemini dollar are simply the tip of the iceberg of a market that has grown to be worth billions of dollars since its introduction. Price volatility can destroy the use case of any medium of exchange, and by stabilizing these cryptoassets, stablecoins seek to lead the way to mass market adoption.
Privacy coins seek to address the fact that, even though bitcoin is pseudo-anonymous, it is definitely possible for transactions to be traced to wallet addresses, IP addresses, and eventually the participants behind these transactions. Monero and Zcash are two of the largest coins that seek to both remain in compliance with anti-money laundering (and other) regulations, while improving the privacy of cryptoasset transactions.
Central bank digital currencies may be the most recent entrant into the cryptoasset space, but despite that, the ripple effects are already being felt. Issued and governed by a central bank or other governmental entity, these cryptoassets (in theory) would operate in compliance with all applicable regulations. Better yet, the implicit backstop of governmental support would encourage individuals and merchants alike to use these cryptoassets as a legitimatized medium of exchange.
The bitcoin blockchain changed the technology, accounting, and financial markets world; that can be said without a doubt. Despite this impact, however, crypto in its original form has not been able to gain much of a toehold among consumers and business owners. Like any free market, entrepreneurs and innovative organizations continue to launch and develop new iterations of cryptoassets specifically designed to address these existing flaws.
Bitcoin’s original use case may have fallen flat, but those stumbles opened the door to an entire ecosystem of innovative solutions, and that is a great thing.
Author: Sean Stein Smith
- Number of Ripple Whales Spikes to New All-Time High as XRP Eyes $0.20
- Dow ends 170 points lower, snaps 3 days of gains, as coronavirus concerns drag indexes lower
- Apex Crypto News – Binance CEO CZ Explains Why He Disabled Twitter Comments
- Top Crypto Strategist Predicts Bitcoin (BTC) Will Surpass $20,000 in Just Two Months – With Ethereum Leading Next Altcoin Rally
Number of Ripple Whales Spikes to New All-Time High as XRP Eyes $0.20
Ripple’s XRP stole the spotlight of the cryptocurrency market after the former chairman of the U.S. Commodity Futures Trading Commission (CFTC) Christopher Giancarlo affirmed that it does not qualify as a security. Instead, the so-called “Crypto Dad” argues that the cross-border remittances token can be considered a currency like any other sovereign currency.
“Ultimately, under a fair application of the Howey test and the SEC’s presently expanding analysis, XRP should not be regulated as a security, but instead considered a currency or a medium of exchange. The increased adoption of XRP as a medium of exchange and a form of payment in recent years, both by consumers and in the business-to-business setting, further underscores the utility of XRP as a bona fide fiat substitute,” said Giancarlo.
The former CFTC commissioner’s remarks may hint that the Securities and Exchange Commission (SEC) could be close to finally clarify the legal status of XRP. This could be the reason why the number of the cryptocurrency’s whales is skyrocketing.
Santiment’s holder distribution chart reveals that the large investors behind XRP seem to be preparing for something big. The number of addresses with millions of dollars in XRP, colloquially known as “whales,” is rising substantially.
Indeed, the number of addresses with over 10,00,000 XRP has done nothing but shoot up since the March market meltdown. Santiment shows that currently, 473 addresses are holding over $2 million worth of the cryptocurrency, which is the highest number ever recorded.
Although Giancarlo is no longer part of the CFTC, his remarks carry a lot of weight since he is a reputable figure within the U.S. regulatory agencies, according to Mike Dudas, the head of The Block. But the former CFTC commissioner currently serves as a counsel to Ripple Labs and “relied on certain factual information provided by Ripple” for his statement.
For this reason, Giancarlo’s comments must be taken with a grain of salt despite the bullish activity seen among large investors.
From a technical perspective, the cross-border remittances token appears to be consolidating within a narrow trading range. Its price action is contained between the $0.186 support level, and the $0.212 resistance over the past month.
This stagnation phase forced the Bollinger bands to squeeze on XRP’s 1-day chart. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.
The inability to determine the direction of the next major price movement makes the area between the lower and upper band a reasonable no-trade zone.
A spike in demand or supply that pushes XRP out of this critical zone will determine where it is headed next.
In the meantime, investors must wait for a clear break of the support or resistance levels previously mentioned before entering any trade. This strategy can help minimize losses and expand opportunities for sustainable profits.
U.S. stocks slumped in the final hour of trade Wednesday to end three days of gains, as investors monitored signs of a revival of the coronavirus pandemic in some U.S. states and China, while still hoping for a quick economic recovery as business activity resumes.
Investors also parsed the second day of Congressional testimony by Federal Reserve Chairman Jerome Powell in which he underscored the lasting toll of the pandemic.
On Tuesday, the Dow rose 526.82 points, or 2%, to end at 26,289.98. The S&P 500 index added 58.15 points to close at 3,124.74, a gain of 1.9%. The Nasdaq Composite Index advanced 169.84 points, or 1.8%, to end at 9,895.84.
The Dow and S&P on Wednesday snapped three straight sessions of gains, while the Nasdaq extended its win streak to a fourth day and eked out its fourth highest close on record.
Investors monitored the trajectory of new coronavirus cases, as business activity resumes after lockdowns, along with a fresh outbreak in China, but the focus remains on the path to economic recovery, amid some progress in developing therapeutic drugs and vaccines against COVID-19.
Fed Chair Powell’s testimony on Wednesday underscored that Hispanics, African Americans and women have been hit particularly hard by the pandemic, since they are more likely to have low-wage service sector jobs dealing with the public, during day two of his Congressional testimony.
Powell also said some form of unemployment insurance should continue past the expiration date of July 31, and defended the central bank’s more than $2 trillion slate of emergency funding to keep credit flowing during the pandemic.
“The Fed’s really focused on jobs. And getting people back to work,” John Kaprich, Aware Asset Management’s investment director, told MarketWatch. “They don’t want corporate entities to worry or to do anything that would hinder that.”
Recap: Powell testifies to Congress — second day
New York Gov. Andrew Cuomo said Wednesday that New York City is slated to enter “Phase 2” of reopening on Monday, which would allow restaurants and bars to offer outdoor seating, hair salons to reopen, and some professional services, like finance and insurance, to return to their offices.
Meanwhile, Arizona, Florida, Oklahoma, Oregon and Texas all saw record increases in new cases on Tuesday, while hospitalizations in Texas, Nevada and Florida hit records, according to Reuters.
Investors still think local and state governments will be loath to reinstate lockdown measures that have proven punishing for businesses and households, but airlines and retail stocks, which would benefit from the economy reopening, lost ground Wednesday while technology stocks gained.
But China canceled flights to and from Beijing, restricted movement of people, and closed schools in the capital city, after 137 new cases were reported in recent days. The fresh outbreak may have originated from Xinfadi, a produce market in the southern part of the city, Reuters reported.
“If COVID-19 were to get so bad this fall that the economy had to totally shut down, stocks would fall and fall hard. But right now, even with a surge, the general consensus is that the economy won’t completely shut down again,” said James Meyer, chief investment officer at Tower Bridge Advisors.
Read:Investing legend who called 3 stock-market bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’
Recent economic data has investors hoping for a so-called V-shaped, or quick, recovery from the current recession. Reports from the U.K. of successful outcomes from a steroidal treatment for severe cases of COVID-19 also have supported that view.
In U.S. economic news, housing starts rose 4.3% in May to an annualized pace of 974,000 from a five-year low of 934,000. But economists polled by MarketWatch had forecast starts to rise to a 1.13 million. On the more positive side, building permits increased by 14.4% to an annualized pace of 1.22 million.
John Cunnison, chief investment officer at Baker Boyer in Washington state, said that fresh economic data points to “an economy that’s creating all sorts of pent up demand,” including in the housing market where record low rates on 30-year mortgages are enticing more millennials to consider home ownership.
But he also pointed to “woefully slow” progress in terms of comprehensive testing and tracking of COVID-19 cases across the U.S., as likely thwarting any quick economic recovery.
“If we get on the other side of this virus, there are reasons for being fairly bullish,” he told MarketWatch.
Check out: ‘The dollar is going to fall very, very sharply,’ warns prominent Yale economist
Mark DeCambre contributed reporting
Author: Joy Wiltermuth, Sunny Oh
Apex Crypto News – Binance CEO CZ Explains Why He Disabled Twitter Comments
Known for his social media-involved leadership of crypto exchange giant Binance, CEO Changpeng Zhao, or CZ, said he disabled Twitter comments on his posts to weed out the scammers.
“To better respond and engage,” CZ told Cointelegraph he partially disabled the ability for the public to comment on his tweets. “This is a new feature from Twitter,” CZ said on June 11. “It seems it’s only rolled out to a small percentage of people.”
As an industry based primarily on digital technologies, much of the crypto and blockchain community interacts daily on various social media platforms such as Twitter. CZ upholds a significant presence on Twitter, allocating roughly 20% of his time to community interaction on the platform.
In light of Twitter’s new option, CZ expressed enjoyment in testing fresh functionalities, describing himself as an early adopter, hence his recent experimentation with comment disable setting.
“Twitter is not a perfect platform by any means,” CZ said, noting that scammers, trolls and the like can make genuine community interaction difficult on the platform.
“To clarify, my intention for using the new ‘people you follow can reply’ feature is not to cut off people’s opinions,” CZ said. “I welcome people to voice how they are feeling and also challenge me or our services so we can be better.”
CZ said he wants the community to keep suggesting follow-worthy Twitter accounts. “There’s a lot of great voices in the crypto space that I hope to capture more.”
Under CZ’s purview, Binance has become one of the largest companies in the industry, with more than 1,000 employees. Cointelegraph’s list of the top 100 people in crypto and blockchain shows CZ as the most influential person in the industry.
Top Crypto Strategist Predicts Bitcoin (BTC) Will Surpass $20,000 in Just Two Months – With Ethereum Leading Next Altcoin Rally
Crypto analyst Nicholas Merten says Bitcoin may be only a couple of months away from surpassing its all-time high of $20,000.
On a new episode of DataDash, Merten looks at the boom and bust cycles of the king cryptocurrency and says BTC is well-positioned to begin a parabolic rally.
“There’s a really interesting similarity that I’m seeing here when I take a look at the monthly chart of Bitcoin and the sense that has given me confidence that we’re just a couple of months away from getting back above $20,000.
The first thing I want to focus on is the longer-term chart, the expanding cycles. We talked about this: about how each new cycle usually expands by around 11 to 13 months. In this case, we added 12 months for the previous one just to keep it neutral and we’re expecting sometime in November 2022 to be the peak around $100,000.”
The crypto strategist says that his $100,000 BTC prediction is conservative, especially in comparison to other analysts who forecast Bitcoin surging as high $500,000.
Once BTC begins printing new highs, Merten believes a rising tide will lift all boats and spark a new altcoin season. The analyst says that the Bitcoin dominance chart is already flashing signals that are similar to the 2015 – 2017 altcoin bull market.
“I think this historical similarity is a good sign that we could be in an early stage of an altcoin cycle coming up here very soon. And not to mention, during this time period, even though the broader altcoin space hasn’t really kicked off yet, we have got from 72% to 66% for market dominance for Bitcoin. That’s gains for the altcoin space in general…
If you are in the right place here even in these early moves, you can benefit quite greatly if you start to make the right calls.”
Merten believes that the new altcoin spring will be spearheaded by Ethereum. He says the second-largest cryptocurrency is primed to erupt in a few months.
“What we want to look for is an eventual breakout above this wedge and a continuation of higher lows and higher highs. It looks like we’re formulating for that sometime around in the fall to the winter of 2020, lining up pretty close to our general estimations from what we can tell about altcoin dominance as well as Bitcoin.”