Price volatility and events like the halving make headlines, but overshadow a continuing (and important) trend.
Saying that crypto prices, and specifically bitcoin prices, have been making headlines during May 2020 would be an understatement. Bitcoin volatility by itself, running up and dropping down by double-digit percentages, is a topic guaranteed to generate headlines and media discussion. Add in the recent bitcoin halving and the announcement that Paul Tudor Jones is allocating capital to bitcoin (futures), and the recipe for renewed optimism is complete.
Additionally, round numbers attract attention; the rise and fall of bitcoin around the $10,000 threshold was no exception.
Exciting as this is, and the increases in crypto prices are definitely exciting for investors, it overshadows a larger and more important point. Crypto is continuing to grow and become an established and mainstream asset class that is attracting capital from high profile investors. This might seem like an obvious point, but digging deeper, the increased focus and attention on the price movements of bitcoin and other crypto seems to be resolving what has been an item of discussion since bitcoin burst into the mainstream during 2017.
Are crypto, and specifically bitcoin, going to evolve and be used as an everyday fiat alternative, or will the ecosystem evolve into an alternative asset class? Both are possible in theory, but the focus on price seems to be pushing the conversation in one direction.
The crypto price paradox
Focusing on the prices of bitcoin and other crypto undermines, to mainstream businesses and individuals, the original use case. The likelihood of non-experts feeling comfortable using a medium of exchange that can rise or drop by thousands of dollars in a single day is tenuous at best. Established players, including the very same financial institutions bitcoin was designed to disintermediate, have developed peer-to-peer applications that allow individuals to transfer funds via smartphones and other mobile devices.
Why would merchants and individuals accept payment via a volatile medium when dollars can be transferred via mobile devices, in real time, with the backstop of the banking system?
Bitcoin improvements and more recent applications have made it easier, simpler, and cheaper to exchange crypto on a daily basis, but the appeal of incumbent tools is difficult to ignore. In other words, the very rise of bitcoin and the attention on price levels have led to the development of strong competitors already being used by millions of Americans on a daily basis.
Even positive news for bitcoin holders, like the dramatic increase in prices during 2017, led to a period of slower and most costly transaction processing. This event, among others, contributed to the bitcoin forks that further complicate the use case for non-experts. Forks have since become more a part of the general blockchain conversation, but still remain potentially confusing for non-expert users.
By focusing on the price volatility, crypto bulls and other proponents may have actually shrunk the potential market of daily crypto users, at least for the time being.
Crypto as an asset class
Bitcoin and crypto may not have caught on as rapidly with individuals as was initially hoped, but that is only a partially correct point of view. As an increasing number of institutional investors and large pools of capital allocate funds to bitcoin and other crypto, these cryptoassets become more embedded in the mainstream financial system. Alternative assets have long had an important role to play for any number of investors as hedges, inflation protection tools, and investments in their own right. The most recent headline by Paul Tudor Jones may have reinvigorated the conversation around bitcoin as an investment class, but that is far from the only move in this direction.
Bitcoin may have been the tip of the proverbial iceberg with regards to blockchain and crypto awareness, but that very awareness and subsequent price volatility might have undermined its initial use case. That said, there is an enormous addressable market for alternative assets, and that is a market that bitcoin and other crypto seem well positioned to address. As this market becomes increasingly populated by crypto, reporting and disclosure standards will improve, which in turn will help reduce volatility and increase wider adoption.
Price volatility and events like the halving generate headlines, but the real news might just be the growing acceptance of crypto as a legitimized and mainstream alternative investment class. And that is a good thing for both crypto and blockchain generally.
Author: Sean Stein Smith
Trading tips for beginners in exchange trading in securities
Many people who have learned a little more about trading also want to get into this business. But then the question quickly arises: Can you learn trading? What is the best way to start this business?
Not everyone wants to read the topic for years and analyze stock prices before investing in stocks themselves. Some people want to get into the retail market faster.
You can only get off to a good start if you learn from other traders. There is no trading training, so role models in this area are a good way to learn. Everywhere there is now the possibility to observe other successful traders and to observe them in their actions.
You should see who is successful and orient yourself towards these people.
Without knowledge, you will have no long-term success in trading. There are various ways in which you can acquire knowledge in this area:
Knowledge is very easy to get when trading, so trading is not a big problem for beginners if you learn something. It is important that you observe for yourself whether the topic is really fun or whether interest quickly wanes again.
There are some terms that you should know when trading. So the question should be: What is trading? Be answered directly. You should know the following words:
- Stock exchange
With these terms one should have a more precise idea. For example, a trader is the person who trades in stocks or other trading opportunities. You can do this with a broker. A broker offers a platform on which to trade.
With the help of these providers, trading is possible online. In contrast to the classic stock exchange, the market is on the Internet. A stock exchange basically describes every market on which "goods" are regularly traded. Supply and demand meet.
A price is then the line in the development of a share, for example. In fact, many small individual measuring points are connected to form a line. This then results in a course in which you can see the development very well. This shows highs and lows. To trade stocks you need the prices to be able to analyze them.
Statistics show that only about 5-10% of traders ultimately become successful. Many of them go bankrupt beforehand or give up. First of all, you should internalize that trading is very time consuming.
It is not enough to invest a few minutes a day to be successful in trading. Rather, there must be a basic interest in the topic. Only those who are up to date can buy and sell shares at the right time. You should never make a trade if you are lucky just because you feel like it.
You should also question your own motivation. Do you really want to be successful and make money? Rather, many people trade because they are bored and are looking for a new hobby. However, you need the right motivation to trade well.
So you should have fun checking stocks or other trading options multiple times a day. This takes time and the right motivation. If you have these two things, you can become successful very quickly and understand the business with the shares.
Cryptocurrency Market News: Bitcoin struggles to gain ground after the halving
BTC/USD is changing hands at $8,730, having recovered from the intraday low of $8,534. The coin has stayed mostly unchanged on a day-to-day basis and gained 1.8% since the beginning of Tuesday. Now Bitcoin is trading within the strong short-term bearish bias amid high volatility.
At the time of writing, ETH/USD is changing hands at $188.78. The price tested the low of $185.75 during early Asian hours, but reversed to the upside. The second-largest coin has barely changed in the recent 24 hours. Now ETH is moving within a short-term bearish trend. The volatility is low.
XRP/USD is hovering at $0.1960 after a sell-off to the lower boundary of the current consolidation range $0.2000-$0.1900. A sustainable move outside the range is needed for the momentum to gain traction. XRP/USD is trading within a bearish trend amid low volatility.
Among the 100 most important cryptocurrencies, ReddCoin (RDD) $0.0021 (+39%), Augur (REP) $13.72 (+13.5%), and Unibright (UBT) $0.3010 (+13.2%)
The day’s losers are, 0x (ZRX) $0.3415 (-11.3%), Numeraire (NMR) $27.45 (-10.5%), Aave (LEND) $0.0624 (-7.2%).
Bitcoin’s hash rate decreased by 6%, from 130.47 exahashes per second to 122.64 exahashes per second in seven hours after the halving, according to the data provided by CoinWarz. Despite the decrease, the figure is still above the seven-day average of 120 exahashes per second as calculated by Blockchain.com. Notably, the hash rates of the Bitcoin forks experienced a much severe decline after the halvings.
The US-based cryptocurrency exchange Gemini announced the expansion plans. The trading platform backed by Winklevoss twins will move forward with European expansion this year.
The platform increased its dollar-crypto trading pairs this year by adding Orchid Protocol (OXT), DAI, Chainlink, and BAT. As exchange co-founder Cameron Winklevoss said that it was an obvious step for the exchange. He also added that those coins may soon become available for trading against euro and pounds as well. In the next months and quarters, the company plans to expand into Europe and into Asia as well.
The number of bitcoin-addresses with less than 1 BTC nearly doubled since 2016, whole the wallets with less than 0.01 BTC increased by 235% in four years, according to the recent research published by the cryptocurrency company Glassnode. The number of so-called Bitcoin whales – large cryptocurrency holders with over 1000 BTC – also increased by 13% in the reporting period.
After the next amendment to the XRP ledger, approved by a community-consensus for Ripple last week, XRP users will be able to delete existing wallets. 80% of voters supported “ DeletableAccounts Amendment” that will allow users to remove inactive accounts and recover reserve funds. This will keep the ledger cleaner and avoid the maintenance of inactive wallets
Brian Armstrong, the CEO of cryptocurrency exchange Coinbase supports the cryptocurrency regulation proposal submitted by lawmakers in California. They proposed to exempt certain digital assets from being classified as securities.
According to Armstrong the legislation will allow building the future of finance is built on the west coast.
This would be huge for California if it happens – ensuring the future of finance is built on the west coast. So many startups are struggling with this right now – the current securities laws are well intentioned, but stifling a lot of innovation right now, – he tweeted recently in response to Cointelegraph’s stroy devoted to the new bill.
Bitcoin ‘halving’ could boost its price as more investors flock to cryptocurrencies
New York (CNN Business)Central banks around the world are printing money to try to prop up the global economy. But for bitcoin, the world’s most popular digital currency, the opposite is happening.
The amount of new bitcoins being issued is starting to slow because of a phenomenon known as a halving, or the halvening. Every four years, the amount of new coins that bitcoin investors (or miners, as they are known) receive as a reward for mining a block of bitcoins is cut in half.
Bitcoin prices have surged in the past few weeks in anticipation of the latest halving, which took place on Monday.
As a result, bitcoin miners now receive 6.25 bitcoins instead of 12.5. This is the third time bitcoin has halved in its history. The next halving event will take place sometime in 2024 and will reduce the number of new bitcoins issued to 3.125.
It’s all part of the algorithm behind bitcoin, which is designed to limit the total number of bitcoins that will ever be issued to a finite number of 21 million. There are now about 18.3 million in circulation.
“In this time where governments are printing large amounts of money, the rate of new bitcoins will keep going down,” said Muneeb Ali, co-founder of Blockstack, a digital tokens firm. “But the demand for bitcoins has increased.”
Some investors predicting new all-time highs for bitcoin
Anticipation of the event helped drive bitcoin prices higher in the past few weeks — from a low of around $4,100 in mid-March to just under $10,000 on May 6. But prices have fallen back to about $8,700 now that the halving has actually occurred.
So what’s next for bitcoin?
Several experts say bitcoin prices should go much higher — and even top the all-time high of just under $20,000 from late 2017. The logic? Economics 101.
Demand for bitcoin may increase as investors view it as safer than government-backed paper currencies in the time of Covid-19 and extraordinary easing measures from the Fed and other central banks.
“Imagine if OPEC cut production in half overnight. what would happen to the price of oil? It would go up,” said Zac Prince, CEO and co-founder of BlockFi, a firm that makes loans with cryptocurrencies.
Prince said he thinks bitcoin prices will eventually soar past $20,000 and skyrocket to as high as $40,000 to $100,000 over the next two years.
Legendary hedge fund manager Paul Tudor Jones has also been touting bitcoin lately as a potential hedge against inflation that could be created by central bank stimulus — much like gold.
Crypto investors also point to the fact that bitcoin prices soared in the first few months after previous halvings in 2012 and 2016. That could happen again this year, especially because of what’s happening in the global economy.
“This halving is transpiring at a time when governments are enacting unlimited amounts of monetary and fiscal stimulus,” said Michael Sonnenshein, managing director with Grayscale Investments, a digital currency asset management firm.
“Bitcoins are now viewed as a safe haven — kind of like digital gold. It’s a verifiable scarce asset with predetermined and predictable supply,” Sonnenshein added.
But has the easy money already been made?
Still, digital currencies are incredibly volatile.
“The halving is a temporal and technical event that has no bearing on bitcoin’s long-term value,” said Adam Traidman, CEO and co-founder of BRD, a digital wallet for cryptocurrencies.
Traidman said he expects bitcoin’s price to eventually start rising steadily again but he is not predicting a dramatic increase over the next few months.
Simply put, bitcoin is still too speculative an asset for many investors — and the wild swings in price will limit its attractiveness.
“The problem is that we are looking at the actions of a few speculators,” said Alex Mashinsky, CEO and founder of Celsius Network, another crypto lending firm.
He argues that the price of bitcoin could be stuck hovering around $10,000 for a while until the impact of the halving is fully priced into bitcoin. Others agree.
“There was a psychological impact when we approached the halving due to the significant reduction in supply. But the easy money in bitcoin has been made,” said Gavin Smith, CEO of cryptocurrency exchange Panxora.
The volatility may also limit the allure of bitcoin as a viable currency. How can you use something as a form of payment when its price is so unstable? People will be unlikely to try to buy goods at a store (either a physical one or a website) if the value of a bitcoin is changing so rapidly.
“We’re jumping the gun when talking about bitcoin as a form of payment,” said Daniel Polotsky, CEO of CoinFlip, a bitcoin ATM company. “It’s too speculative and unpredictable to be used as currency.”
That’s why Polotsky says investors need to treat bitcoin or other digital currencies as a long-term buy-and-hold investment.
“I know a ton of people that got into bitcoin in late 2017 at the peak, and I feel for them,” Polotsky said. “But it’s a marathon. You need to own bitcoin for decades. A majority of traders will lose money trying to time market moves.”
Author: Paul R. La Monica, CNN Business