Traders Plan for Correction as Crypto Market Falls Below $100 Billion

Traders Plan for Correction as Crypto Market Falls Below $100 Billion

Traders Plan for Correction as Crypto Market Falls Below $100 Billion

The total value of all publicly traded cryptocurrencies may be at an all-time high, but trader confidence isn't keeping pace.

After rising more than 1,500% from just over $7bn on 1st January, the market is beginning to show signs that its rapid ascent in 2017 may be slowing.

According data from CoinMarketCap, the cryptocurrency asset class fell from a high of $117bn yesterday to just under $100bn today, a period in which more than 80 of the top 100 cryptocurrencies have seen double-digit declines.

While this decline may just be a speed bump in the world of cryptocurrencies, some analysts report it is sufficient enough that they are beginning to reassess their positions in light of recent activity.

Hedging for a crash?

Indeed, several traders spoke with CoinDesk about the strategies they're currently using to hedge against a potential decline in cryptocurrency prices, with some indicating they're employing simple strategies by reducing their holdings.

For example, Charlie Shrem, a bitcoin entrepreneur and over-the-counter (OTC) trader, is in this camp. He reported he's been buying more bitcoin lately, with "less than 10%" of his portfolio in alternative assets.

Marius Rupsys, a cryptocurrency trader and co-founder of fintech startup InvoicePool, took a bolder approach, telling CoinDesk he liquidated his entire cryptocurrency portfolio and has started shorting bitcoin, actively betting its price will go down.

Rupsys predicted:

"There should be larger correction at some point which will cause altcoins to fall and bitcoin to fall at the same time."

While several traders identified portfolio management and active trading strategies as ways to hedge against a cryptocurrency price crash, cryptocurrency trader Kong Gao offered a different solution.

One way to hedge against this decline, he said, is to begin mining on alternative asset protocols, and simply hold the coins they receive instead of selling them.

Irrational exuberance

Elsewhere, Rupsys spoke to how he believes the increasing price has been largely caused by highly optimistic newcomers, a prospect that leads him to believe the bull run could soon fade.

"Many of these new traders are retail traders that have little knowledge of crypto-assets or trading in general," Rupsys told CoinDesk.

He added, many people have contacted him interested in getting rich quick.

Tim Enneking, managing director of cryptocurrency hedger fund, Crypto Asset Management, also spoke to the exuberance in the market.

While cryptocurrencies have been experiencing sharp gains, they will reverse direction at some point, Enneking predicted. Crypto Asset Management has set up stop loss orders to liquidate positions in certain cryptocurrencies should these digital assets suffer an "abrupt crash", he said.

And according to Charles Hayter, co-founder and CEO of cryptocurrency exchange CryptoCompare, a crash is likely. The attention alternative asset protocols have gained lately have highlighted some of this overconfidence, he said.

While there may be no clear signs yet, Hayter is still putting his money where his mouth is, noting CryptoCompare is going so far as to reallocate its active positions in the market.
 

David Ogden
Entrepreneur

 

Author: Charles Bovaird

David

Is Bitcoin or Other CryptoCurrency a Good Investment

Is Bitcoin or Other CryptoCurrency a Good Investment

Is Bitcoin or Other CryptoCurrency a Good Investment

Despite all denials of the techies, the Bitcoin continues to fly under the pressure of marketing that makes it a form of Russian roulette that benefits those who know the manipulation. Since March 26, the Bitcoin has increased from $ 973 to $ 2,795. A real explosion of prices which can only be explained by fraudulent maneuvers. It went from $ 16 billion to $ 43 billion.

But behind this surge, there are formidable manipulators who have means that are the exchanges of bitcoins of which several leaders are in prison. The founder of the world’s largest depository based in Bitcoins, now based in Zug, Switzerland, predicts that the value of a Bitcoin will surpass the million dollar mark in 10 years, taking by surprise the whole assembly and even the most Optimists in the sector. Some see the replacement of gold. We are in full delirium.

On several occasions, these dramatic increases came from the conversion of dirty money into Bitcoin. We do not know what causes these mood swings that fall quickly. Do they pose a fundamental question: Beyond the technology behind the object, from where comes the value of $ 32 billion?

No regulation of false rumors or manipulations

There is a lot of talk about the Bitcoin right now, as well as a few other crypto-currencies, but are they really good investments? Recently I read research which describes why Bitcoin are a good investment for the future. They also provide detailed analysis and data to showcase their study. So I am exploring based on that and my personal opinion on crypto-currencies.

I will divide this question into three points:

1. Are crypto-currencies really an investment?

2. What currency crypto choose?

3.Are crypto-currencies really an investment?

Nowadays, virtually everything is called an “investment”. In the case of crypto-currencies, trading (trading) and investment are again confused, even by financial professionals.

 

An investment is when you buy an asset that produces something, and that by extension creates income.

For example, if you buy a tractor and lease it, it will allow someone to dig to then put the foundation of a house, pull farm machinery, and much more. In exchange for the productivity of your assets, you receive an income.

The question is, therefore: does the crypto-currency produce something?

The main added value of crypto-money is that it can make anonymous transactions, so it increases economic activity (albeit generally illegal).

That said, it produces nothing tangible for you because its overall productivity is drowned in the pool of all transactions.

Your only hope is therefore that its overall productivity in the form of a currency function is growing so that you can “freak out” your crypto-currency.

Basically, crypto-currency does not produce income for you, and your only option to make money is that its demand increases.

When a profit is generated not by production but by the difference between the purchase price and the selling price, it is called trading and not an investment.

What does it actually mean that it is trading and not an investment?

Trading is speculation and it’s not complicated, 95% of people lose at this activity.

Investing is a much safer way to get rich. You simply need to be aware of what you are doing with your money, and not speculate in thinking that you are investing.

Which crypto-currency to choose?

Bitcoin? Zcash and Zcoin? SafeCoin? Syscoin?

Admitting that you understand that you are speculating, the only crypto-currency I would negotiate personally is the Bitcoin, for two reasons:

 

Reason # 1: Everyone knows the Bitcoin

This point seems banal and simplistic. However, it should not be forgotten that the value of crypto-currencies is based on people’s trust. Indeed they are “fiat currencies”, like the Canadian dollar, the US dollar, and virtually all currencies in the world.

People have a tremendous confidence in the Canadian dollar and particularly the US dollar, which is the world’s reserve currency. What about crypto-currencies?

How do people trust you, the Bitcoin, the Zcoin, or the Syscoin? Obviously, people have more confidence in the Bitcoin, and one can easily assume that it will only go by increasing over time.

However, there is always resistance, and people do not have enough confidence in the Bitcoin to move away from the Canadian dollar or the US dollar.

In particular, the critical point or the Bitcoin could explode in price is when people will have enough confidence to use another function of the currency: the reservoir of value.

When people have confidence in Bitcoin to use it as saving, as an entity where they can retain the value of their work, then everything will change.

But how could the Bitcoin reach this level? How to develop this trust? These questions lead me to the second reason.

 

Reason # 2: The Bitcoin is the only crypto-currency that has a real chance

The Bitcoin is the only crypto-currency that has a real chance of what? To become an official currency, endorsed by the government and the financial system.

A strong and unshakeable confidence in the Bitcoin can only exist if governments and the financial system give it their approval.

In fact, it seems that in Canada the government is increasingly ready to incorporate the Bitcoin into daily transactions. This is not cast in concrete, and the future is still vague at the legislative level.

One of the barriers to official currency status for Bitcoin is that the government cannot legalize a private currency, which would limit its ability to tax transactions.

Can another crypto-currency based on the blockchain possibly be adopted rather than the Bitcoin? Yes, but precisely, there lies the whole aspect of speculation: we must try to predict the future.

In summary, invest in crypto-currencies or not?

Honestly, the majority of people do not even have $ 2,000 in an emergency, according to an article I read, so I do not see myself buying Bitcoins.

In this situation, I would buy stocks, bonds, gold, and real estate well before buying Bitcoins.

So unless I have a full RRSP and a TFSA, stuffed with income-producing assets, I cannot justify buying crypto-currencies.

I understand the desire to hit a home run with the Bitcoin, the desire to make 10 times his initial bet. This may be suitable for some people, but I cannot endorse this strategy because it makes a lot more losers than winners.

The strategy to get rich that works for me and in general is to get rich in the long run, walking by walk, so surely find myself at the top of the stairs.

 

Aashish Sharma

 

The article above is quite interesting but many people do not realise you do not need to to purchase a wholw bitcoin, there are ways and means to earn bits for free completing surveys, or by investing in Trade Coin Club

David Ogden
Entrepreneur

 

David

Is China Waking up to Ethereum

Is China Waking up to Ethereum

Is China Waking up to Ethereum

On May 27, Huobi, one of the three leading bitcoin exchanges in China alongside BTCC and OKCoin, officially integrated support for Ethereum trading. The Huobi development team announced that users will be able to trade Ethereum starting from May 31.

In its announcement, Huobi revealed that the company has come to a consensus to integrate support for Ethereum due to its exponential growth, high market liquidity, stability and increase in the demand toward Ethereum in both China and internationally.

Local sources including CNLedger reported that Huobi’s integration of Ethereum was an important milestone for the Chinese Ethereum community and market as the market liquidity for Ethereum within China was substantially low due to the lack of support from local exchanges.

Previously, exchanges including OKCoin did express their enthusiasm toward Ethereum and hinted at the possibility of integrating Ethereum support in the near future. In fact, OKCoin representatives told CNLedger that OKCoin has been planning to list Ethereum and that the company plans to integrate Ethereum at an appropriate time.

Thus, it is likely that other major bitcoin exchanges such as OKCoin will soon integrate Ethereum support following the footsteps of Huobi, which serves millions of users in China alone.

Although Ethereum has been enjoying an exponential growth in Asian markets including Japan and South korea, Ethereum is relatively unknown to the majority of Chinese cryptocurrency traders that have been investing in bitcoin and Litecoin. Cryptocurrency traders have only begun to take interest in Ethereum after the formation of the Enterprise Ethereum Alliance and the Ethereum Foundation’s visit to the country.

Earlier in May, Consensus Systems (ConsenSys) head of global business development Andrew Keys attended the Global Blockchain Financial Summit with other members of the Ethereum Foundation including Ethereum co-founder Vitalik Buterin. Prior to the Global Blockchain Financial Summit, Keys and the rest of the Ethereum Foundation visited Ethereum communities in Beijing, Shanghai, Nanjing and Hangzhou.

Keys discovered that the Ethereum adoption throughout China has been increasing at a rapid rate. Large conglomerates have started to build applications on top of the Ethereum protocol and universities have been researching into Ethereum’s potential within the finance market.

Even government-owned companies including the Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, have started to utilize Ethereum to digitize the RMB. Keys explained that the Royal Chinese Mint is currently utilizing the ERC 20 token standard and Ethereum smart contracts to digitize the RMB.

More to that, CryptoCoinsNews also reported that Ant Financial, the subsidiary company of e-commerce giant Alibaba, is also utilizing the Ethereum protocol to develop various applications and platforms. Ant Financial is the company behind the $60 billion financial network Alipay, which is used by 450 million users in China.

Keys noted:

“The services provided by Ant Financial and its affiliates cover payment, wealth management, credit reporting, private bank and cloud computing. Ant Financial is experimenting with Ethereum technology to improve their global payment platforms.”

The rapid rise in the demand toward Ethereum and the adoption of the Ethereum smart contract technology could allow China to become one of the larger Ethereum exchange markets in the world. At the moment, South Korea is the largest Ethereum exchange market with over 40 percent of the global market share. If China continues to sustain such growth rate, it will see its Ethereum market outpace other regions.

Ethereum Foundation members including Vitalik Buterin are actively encouraging companies and users in China to utilize the Ethereum protocol to build decentralized applications.

 

David Ogden
Entrepreneur

 

Author:Joseph Young

David

Bitcoin is going wild — here’s what the cryptocurrency is all about

Bitcoin is going wild — here's what the cryptocurrency is all about

Bitcoin is going wild — here's what the cryptocurrency is all about

Bitcoin is a currency just like the US dollar or Mexican peso. It's also back in the headlines after soaring in value. One bitcoin was worth $2,800 on May 25, up from $1,200 at the end of April.

In countries that accept it, you can buy groceries and clothes just as you would with the local currency. Only bitcoin is entirely digital; no one is carrying actual bitcoins around in their pocket.

Bitcoin is divorced from governments and central banks. It's organized through a network known as a blockchain, which is basically an online ledger that keeps a secure record of each transaction all in one place. Every time anyone buys or sells bitcoin, the swap gets logged. Several hundred of these back-and-forths make up a block.

No one controls these blocks, because blockchains are decentralized across every computer that has a bitcoin wallet, which you only get if you buy bitcoins.

Why bother using it?

True to its origins as an open, decentralized currency, bitcoin is meant to be a quicker, cheaper, and more reliable form of payment than money tied to individual countries. In addition, it's the only form of money users can theoretically "mine" themselves, if they (and their computers) have the ability.

But even for those who don't discover using their own high-powered computers, anyone can buy and sell bitcoins, typically through online exchanges like Coinbase or LocalBitcoins.

A 2015 survey showed bitcoin users tend to be overwhelmingly white and male, but of varying incomes. The people with the most bitcoins are more likely to be using it for illegal purposes, the survey suggested.

Each bitcoin has a complicated ID, known as a hexadecimal code, that is many times more difficult to steal than someone's credit-card information. And since there is a finite number to be accounted for, there is less of a chance bitcoin or fractions of a bitcoin will go missing.

But while fraudulent credit-card purchases are reversible, bitcoin transactions are not.

21 million

Bitcoin is unique in that there are a finite number of them: 21 million. Satoshi Nakamoto, bitcoin's enigmatic founder, arrived at that number by assuming people would discover, or "mine," a set number of blocks of transactions daily.

Every four years, the number of bitcoins released relative to the previous cycle gets cut in half, as does the reward to miners for discovering new blocks. (The reward right now is 12.5 bitcoins.) As a result, the number of bitcoins in circulation will approach 21 million, but never hit it.

This means bitcoin never experiences inflation. Unlike US dollars, whose buying power the Fed can dilute by printing more greenbacks, there simply won't be more bitcoin available in the future. That has worried some skeptics, as it means a hack could be catastrophic in wiping out people's bitcoin wallets, with less hope for reimbursement.

The future of bitcoin

Historically, the currency has been extremely volatile. But go by its recent boom — and a forecast by Snapchat's first investor, Jeremy Liew, that it will hit $500,000 by 2030 — and nabbing even a fraction of a bitcoin starts to look a lot more enticing.

Bitcoin users predict 94% of all bitcoins will have been released by 2024. As the total number creeps toward the 21 million mark, many suspect the profits miners once made creating new blocks will become so low they'll become negligible. But with more bitcoins in circulation, people also expect transaction fees to rise, possibly making up the difference.

 

David Ogden
Entrepreneur
 

Chris Weller

David

Billion Dollar Cryptocurrency Club Swells to Six Members

Billion Dollar Cryptocurrency Club Swells to Six Members

Billion Dollar Cryptocurrency Club Swells to Six Members

Bitcoin’s market cap surpassed $37 billion today when the price hit $2271.16, commanding more than a billion in trade volume in a 24-hour period, according to coinmarket.com. The total value of the coin market is now at $81.3 billion, as the last two days added more than $10 billion to the capitalization.

Bitcoin’s value has almost doubled in the last month, even while its market share has fallen below 50%, thanks to the gains of other cryptocurrencies. Bitcoin’s gains have been steadier than most of the altcoins, but collectively, altcoins are rising at a faster pace.

Asian Trading Remains Key

Rising demand for bitcoin by Chinese and Japanese investors combined with falling stocks and other factors to push bitcoin to new heights. Because the Japanese yen holds the largest share of bitcoin trading, Asian trading pushes the prices higher.

The Nikkei Asian Review today reported, “Bitcoin going mainstream as Japanese business signs on,” signaling bitcoin’s growing popularity in Japan, which recently recognized bitcoin as a method of payment.

Asian interest in bitcoin increasingly carries over to other currencies, as indicated by the gains for Ripple and NEM, the two most popular altcoins in Japan in terms of demand and trading volumes.

Japanese regulators also decided to abolish the 8% consumption tax on transactions of bitcoin bought from exchanges, which is set to go into effect in July this year.

Progress On Scaling Continues

Today’s announcement that a majority of bitcoin miners have reached a consensus to deploy the Segwit2Mb protocol upgrade for bitcoin also bodes well. Bitcoin’s rise has benefited from an alleviation of the fear that a “hard fork” will be needed – dividing bitcoin into two currencies – to improve bitcoin transaction times. A successful deployment of an alternative scaling solution indicates the hard fork that would have resulted in two separate currencies in order to speed up bitcoin transactions may not be required.

Wences Casares, CEO of bitcoin wallet Xapo and a member of PayPal’s board of directors one bitcoin would hit $1 million before the next ten years while speaking at the Consensus 2017 conference in New York.

Ethereum Continues To Amaze

Ethereum, the largest altcoin, hit more than $16 billion market capitalization with a $179.68 price, followed by Ripple at more than $13 billion. The top three cryptocurrencies — bitcoin, Ethereum and Ripple — are the only players to boast more than $10 billion market cap.

Ethereum has witnessed the fastest growth of any digital currency ever. Not even two years old, the platform is now worth more than $16 billion with its trading spaces consistently attracting more online active users than even bitcoin’s.

Ripple, designed for enterprise use and can be used by institutions for on-demand liquidity for cross-border payments, also continues to post rapid gains. Banks and payment providers that use XRP will secure better access to emerging markets at lower settlement costs.

Ripple recently committed to placing 55 billion XRP in a cryptographically secure escrow account at the end of the year, addressing concerns that it will eventually sell its 61.68 XRP as it seeks to strengthen XRP’s exchange rate against other currencies.

NEM, number four commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion.

There are now six cryptocurrencies with more than $1 billion market caps.

Altcoins Keep Shifting Position

Aside from bitcoin, the rotation shifts fairly frequently among the billion dollar players. A day ago, Litecoin, Monero, and Dash displaced Ethereum and NEM, with gains of 15%, 20%, 25%, respectively.

NEM, number four, commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion. There are now six cryptocurrencies with more than $1 billion market caps.

NEM has also made significant gains over the past few months. A major factor that has allowed NEM to transform into one of the most popular altcoins in Japan is its development team and company composed of Japanese founders and talents. NEM was initially developed and introduced in Japan by Makoto Takemiya, the co-founder and CEO of Soramitsu, the company that has also introduced the Iroha blockchain project to the Linux foundation’s Hyperledger Project.

Litecoin, one of the oldest altcoins, gained visibility this month because of its successful activation of SegWit, a scaling solution that circumvents the need for a hard fork.

 

David Ogden
Entrepreneur

 

Author Lester Coleman

David

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

The price of Bitcoin and Ethereum have exploded in 2017. The question is whether there is sufficient upside potential to consider investing in cryptocurrencies. Stated differently, is it still worth looking into cryptocurrencies as an investment or is it too late?

The key consideration is that Bitcoin is not the only cryptocurrency to invest in. On the other hand, Bitcoin has made cryptocurrencies popular and even more secure. Yes, there were definitely security issues a couple of years ago, but it seems those issues have been resolved. So Bitcoin has helped mature the cryptocurrencies space.

InvestingHaven believes that a combination of price analysis and fundamental analysis is the most appropriate way to make a rational investment choice, and to engage in forecasting the price of cryptocurrencies. With that in mind, we also look into the altcoins space in this article in order to find investment opportunities.

InvestingHaven’s research team has collected 10 investment tips for investing in cryptocurrencies which are useful to investors not very familiar in this space.

Investing in cryptocurrencies: tips, insights and upside potential

1. Cryptocurrencies investments are similar to investing to commodities

Investing in cryptocurrencies is very similar to commodities investing. The fact of the matter is that commodities have two ‘faces’. On the one hand, they are assets that are used in the real world. Base metals, for instance, are used in industry. Softs are used in the food industry. Precious metals are used in the jewelry industry. At the same time, commodities can be invested in, through open market exchanges.

Cryptocurrencies are similar. They are used in financial and insurance applications, but investors can also invest in cryptocurrencies.

From that perspective, it is mandatory to look at usage and added value that cryptocurrencies create in this world when choosing a specific cryptocurrency to invest in.

2. Usage is growing as evidenced by the collective market cap

All cryptocurrencies combined have a market cap of more than $60B meantime. So that includes all cryptocurrencies in existence: Bitcoin, Ethereum, Ripple, Litecoin, and hundreds of smaller and unknown ones.

To put that into perspective, for investors, here are some reference points: Tesla’s market cap is $50B, Boeing Airlines $100B, Coca Cola $180B (rounded figures for April / May 2017).

Note how the volume of real world transactions has gone up together with the market cap which indicates that ‘crypto is for real’.

3. Most people are unaware about cryptocurrencies, an absolute minority uses them
 

If it is important to look at real world usage as a key criterium when considering investing in cryptocurrencies, then there is great news for investors: “you ain’t seen nothing yet”.

According to Statista, who has dedicated a section to cryptocurrencies useful for investing, we see that the number of adults in the U.S. familiar with the most known cryptocurrency (Bitcoin) is only 24 percent. And, by far the most important data point on this graph, the number of Americans that use Bitcoin is 2 percent while the ones thinking of using it in the future is 25 percent.

Investors should get excited when realizing this. Not primarily for Bitcoin, but more so for other cryptocurrencies.

4. Usage is the key criterium for investors

As said in the intro, analyzing fundamental data is the key element in our methodology to identify a decent investment opportunity. So supply and demand data, based on usage in the real world, is what investors should be focused on.

That is also what we used as a method in our Bitcoin Price Forecast For 2017 and our Ethereum Price Forecast For 2017. Note that our Bitcoin forecast got filled meantime, as the price of Bitcoin went over $2000, a forecast we made more two months ago.

As an example, when it comes to Ethereum, we have included the chart which features the number of its transactions, see below. This is proof that Ethereum is being used in the real world.

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

Moreover, the number of Bitcoins in circulation is another proof of cryptocurrency usage, as well as trade volume.

Note also how Ripple, a cryptocurrency which is meant to facilitate payments between financial institutions, and, in doing so, pushes transaction costs down meaningfully, has a great chart highlighting the strong usage of some large accounts along with the long tail of users: Ripple usage statistics.

5. Where are we in the market cycle?

Given the above data points, we consider that we are nowhere near any point close to euphoria according to the traditional market cycle. It is maybe not very useful to consider Bitcoin as an investment opportunity, though prices can go much higher from here. However, there are many other cryptocurrencies which are only now starting to be considered by businesses, governments, and society across the globe.

With that in mind, we believe we are only in the optimism stage in the market cycle.

Note that this market cycle can be considered by individual cryptocurrency as well (we considered all cryptocurrencies combined when we stated that we are in the ‘optimism’ stage). Bitcoin certainly has gone through this cycle, reaching euphoria in January of 2014.

6. Altcoins are similar to the dotcom hype, 80% will not survive the storm

Pareto is one of the few universal principles applicable in all areas of life, including in the investment world.

We see a dotcom type hype arising and, presumably, 80% of cryptocurrencies will not survive the storm. We saw something similar in the dotcom hype. That is simply because, during a hype, users and investors do not focus sufficiently on the real added value that is created.

It is imperative for investors, when choosing cryptocurrencies to invest in, that they acknowledge the added value that is created, from a business and society perspective.

7. A cryptocurrency MUST solve a problem in life

Just buying cryptocurrencies hoping that they will deliver an investment return does not make sense at all. The sweet spot for every investor is the ability to solve a problem: the bigger the problem that gets solved, the higher the potential value.

One of the sweet spots that cryptocurrencies can enable as a problem solver is to provide access to money and basic banking functions like wiring and paying. A fact that is unknown is that a huge amount of people globally do NOT have access to to these traditional banking services. We consider that Stellar Lumens, symbol XLM, is such an enabler. At the moment of writing, Stellar Lumens trades at $0.05. Read on Fortune.com why Stellar has a disruptive potential, especially in the underdeveloped part of the world, and is worth a cryptocurrency investment.

8. Create your investment portfolio with a limited number of cryptocurrencies

As with any other investment, investors should create their own portfolio and work on it actively. Also, they should work on it for the very long term.

Creating a portfolio with some cryptocurrencies is the way to go. Choosing them selectively is imperative. Only invest in things you understand and keep your emotions under control are principles that should always be applied, in every investment portfolio.

9. Crypto to money

Do not forget that your cryptocurrencies can be exchanged for ‘traditional money’. The market is in the process of enabling all exchanges: all traditional currencies will be exchangeable with all cryptocurrencies, sooner rather than later. So the lock-in risk which was present a while back will not be a risk going forward.

Stated differently, your portfolio with cryptocurrencies is just another way to store cash, or exchange crypto for cash (money), over time as market conditions change.

10. Read the right sources

Last but not least, as it goes with every hype, ‘everyone and his uncle’ can become a guru during a hype. Be very sceptical when following people and selecting sources to read. The blogosphere has only a handful of bloggers who are worth following, say maximum 20 percent.

At InvestingHaven, we will do everything we can to offer the best investment insights for high reward / low risk opportunities. You can also follow this upcoming blog which is owned by the same team that runs InvestingHaven: www.BlockchainRevolution.global

This article is brought to you courtesy of Investing Haven.

David Ogden
Entrepreneur

 

David

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

 

Imagine you are slightly late for work, quickly getting a shower, brushing your teeth and all the rest, walking – in an almost running manner – to the tube station, to then find out there are 200,000 people waiting outside to get the train.

What’s more, the train only handles 4,000 individuals and arrives every ten minutes, during which period new individuals arrive at a rate of 4 per second. Now, it’s ok, you’re busy, you can still be one of those 4,000 individuals and get to work if you pay a high enough fee.

So you check out the notice which says the current estimated fee is $1, but since others are seeing the same notice too and paying $1 too, the fee keeps going up every second, with these higher fees paid by the new individuals that come every second, pushing you down the queue.

Tough luck, you can’t make it to work today because your $1 bid is now as good as worthless to the super congested network. The next day you learn the lesson, so instead of bidding what the notice says, you bid 10% or 20% more, but you weren’t the only one who missed work yesterday, almost everyone else did too and they have this genius but obvious idea too, making you miss work again.

The next day you get angry and pay double the fee, but you’re not the only angry one. Now, sure, some in this lottery do get to make it to work, 4,000 every 10 minutes with 200,000 waiting, but a lot don’t, resulting in a bidding war which looks like below:

As can be seen, bitcoin’s fees have gone vertical, which is bad, but if you know you’d get through for x dollars then at least you can evaluate the proposition. Instead, you’re not only paying high fees, but you don’t even know whether you will get the service you paid for because of simple logics.

Let’s take, for example, a statement by Luke Dashjr, a Blockstream “open hash contractor,” who suggested everyone pay a $5 fee and you’ll get through. If we analyze this a bit further, we can start by asking why people are not paying $5 and one good reason is because then everyone would start paying $5 meaning newcomers would outbid them by paying $5.01.

Sure, one or two guys might currently “cheat” and jump the queue by paying $5, but as long as it’s a very tiny minority the rest let it go. If instead, it went to a point where say 1,000 of the 4,000 are paying $5, the other 3,000 will probably quickly start paying $5.01.

This clearly shows ordering transactions by fee is an unworkable idea which is why Satoshi Nakamoto ordered transactions by first seen in the bitcoin clients he/she released, a rule largely enforced by the bitcoin network until full capacity was reached.

The Easy Attack

Still, even the above problems, as bad as they are, might be bearable for desperate bitcoiners, but let’s imagine I’m a wealthy company, say Vusa, or Rapp Labs, or a wealthy guy who just doesn’t like bitcoin.

Just to be very clear, no one is suggesting either of them has behaved in any nefarious way, but say I’m a competitor to bitcoin or recently attracting much hype and attention due to gaining crazy high market cap in just days. You know what I could do with just $2 million?

I could send bitcoin down crashing as far as its sole purpose of moving bitcoins is concerned. That’s because bitcoin’s capacity is limited to around 250,000 transactions, but just to make it simple let’s say it can handle only 200,000 transactions a day.

At $1, it would cost me just $200,000 to take up that space, which is fine, everyone else could pay $1.50. But, at $10 per transaction it would cost me only $2 million to send everyone else at the back of the queue.

Now sure, you can pay $11 or $12, but even at a fee of $20 it would cost just $4 million, as good as nothing considering how much value may flood to the competitors and considering the shock bitcoin would receive if all the sudden everyone is asked to pay $25 per transaction.

There is no evidence to suggest this is happening at scale, but fees went up yesterday from around $1 to around $4 for a normal transaction. It could be ordinary demand, but it could also be someone or some entity which wants to send bitcoin crashing.

They have succeeded as far as bitcoin’s sole purpose of moving bitcoins around is concerned because around 200,000 bitcoins have been stuck for the past 24 hours while fees have gone parabolic pricing everyone out.

Another Obituary?

Bitcoin has only one job – to move data from a to b – and it is failing to do that simple task. A task which is not really rocket science as some claim because everyone and their cat have launched their own bitcoin like network which actually manages to continue performing their one task.

No wonder bitcoin’s market share has now fallen down to around 48%, nearly halved from just a few months ago, but its price has now doubled to more than $2,000 and its market cap keeps going up, so, who knows. Maybe $20 fees and days for one transaction are a good thing?

Or maybe it’s all just because of the recent advertising following allegations Trump’s Press Secretary and an aid to the French President Macron had used bitcoin, combined with the recent ransom global incident.

Or perhaps it’s only because bitcoin is the main gateway to other altcoins, although ethereum has started making inroads on that front due to its own tokens system and clones.

But maybe the market sees value in a limited coin you just buy and lock away in some paper wallet somewhere, forgetting about it, like actual gold and just as difficult as well as expensive to move around.

In which case, “Bitcoin: A Peer-to-Peer Electronic Cash System,” as bitcoin’s white paper describes it, has failed, because the current bitcoin is not a cash system. Cash can be exchanged almost instantly with 0 fee and can be moved around fairly easily without getting stuck for days.

Which might be why the market is giving conflicting signals. On the one hand, it’s falling market share is probably because bitcoin investors and other market participants are looking for the real bitcoin, the cash system, which many think has just changed its name to ethereum while getting some cool new tech like smart contracts.

It may be that these newcomers think bitcoin is still the cash system rather than seemingly having changed into something else, or maybe they like this idea of gold but with very high fees or they’re in markets which have no choice, although even they could easily diversify.

Bitcoin is Dead, Long Live Bitcoin

So, to conclude, bitcoin is definitely in crisis because the real bitcoin as described in the whitepaper does not exist anymore. The real bitcoin uses the first seen rule for transactions, rather than ordering by fee. The real bitcoin never operates at full blocks. The real bitcoin has as good as no fees and confirms almost instantly.

What now is called bitcoin is an aberration, something completely different and planned to become even more different. Far more similar to ripple with its hubs and intermediary banks than to bitcoin.

The real bitcoin, the digital cash, the codable money, the global, inclusive, permissionless network, the innovative powerhouse which has grabbed the world’s imagination, that has changed its name and is now called ethereum.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

 

David Ogden
Entrepreneur

David

Bitcoin Price Breaks $2,000 in Historic All-Time High

Bitcoin Price Breaks $2,000 in Historic All-Time High

Bitcoin Price Breaks $2,000 in Historic All-Time High

 

Bitcoin price has, for the first time in its history, reached $2,000 and beyond during trading on Saturday.

The world’s most prominent cryptocurrency began trading in 2017 at $1,000 per coin, with today’s new all-time high representing a doubling of value for bitcoin. On an average, bitcoin price climbed to $2,040.88 in global trading markets. On the Bitstamp Price Index (BPI), price struck a high of $2,020.

Trading leading into Saturday saw global average prices climb to $1,968.48. A steady period of trading during the day saw prices climb throughout before crossing the symbolic $2,000 milestone at 18:00 (UTC) on Saturday.

“Nearly seven years ago to the day, the first real-world Bitcoin transaction was completed in Florida, when two pizzas were bought for 10,000 bitcoins,” reminded eToro senior markets analyst Mati Greenspan in conversation with CCN. “If you’d invested $100 in bitcoin that day and left it there, you’d be sitting on over $20 million right now.”

He added: “The $2,000 mark is a historical moment for Bitcoin”.
 

Intriguingly, trading over the last 24 hours was led by US markets followed by Japan, the inverse of recent trading trends of the past few months. Bitfinex, GDAX and Bitstamp led the way in the US marketplace, altogether leading to over 35% of trading in the past 24 hours. Trading markets in Japan, China and South Korea combined for over 45% of trading volumes.

Bitcoin prices have gained 50% in May alone, a month that saw bitcoin in the headlines for being abused by ransomware extortionists behind the global WannaCry cyberattack.

“One might have expected that the WannaCry cyberattack – in which hackers asked for payment in Bitcoin – would have had a negative effect on price, but it seems like not even a ransomware attack can prevent the rise of Bitcoin,” Greenspan added.

The analyst also revealed that bitcoin’s soaring gains hasn’t put off existing investors from continuing to invest in the cryptocurrency. “Bitcoin is gaining some serious momentum among investors on our platform, with 88% of Bitcoin traders still buying the asset.”

Bitcoin’s flourish comes during a time of marked gains for the wider cryptocurrency ecosystem, led by the likes of Ethereum, Litecoin and Ripple.

After hitting an unprecedented $100 for the first time on Thursday, Ethereum’s ether token is now trading above $125.

Altogether, the entire cryptocurrency market cap is now valued above $70 billion, up from less than $30 billion a little over a month ago.

David Ogden
Entrepreneur

Author:Samburaj Das

 

David

UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

 

Bitcoin price has been skyrocketing, before this weekend’s cyber attack hiccup, but prices are again on the move upward. How much is a Bitcoin really worth right now? American investors are seeing a true value of more than 70% higher than the market rate this week.

As Bitcoin does not have any real level of mainstream investor access like an ETF, even though that is still a possibility, the next best thing right now is shares in the Grayscale Bitcoin Trust, or GBTC, according to sources. The Grayscale Bitcoin Trust is one of the very few ways to access Bitcoin through a standard brokerage account.

In the case of Bitcoin, its price has moved up about 50% over the last month, and the GBTC has nearly doubled. The extra buying and demand for exposure have pushed a premium onto shares of GBTC. To calculate the premium that you may be paying, you have to take your GBTC shares and times them by about 10.75. According to the company’s website, each share is about 0.093 BTC, as of late last month.

CLOSE TO $3000 BITCOIN VALUE

Just six weeks ago, shares were trading at half the price they are now. April 1st, 2017, GBTC shares were selling for $110 USD, and now they closing at $220, and have peaked at $265 each during inter-day trading. When you multiply these share values times 10.75, you are much closer to $3000 USD than you are the current market prices in the $1700-1800 range. $265 in GBTC shares converts to $2849 in underlying asset value.

This level of a premium price, in the 70% range, means there is a bubble forming, at least in this sector of the over-the-counter market, and now is not the time to buy. Even in markets like India, where Bitcoin currency is high in demand, it is selling at just over 20% over market. It may be advisable to wait until the market settles, which may not be until next month.

Considering these investment market realities, it is not hard to understand the mainstream interest in a future Bitcoin ETF to provide some level of competition. This is also a good indicator that the current price is legit, and a major, sustained Bitcoin price drop is not in the cards anytime soon, at least not in the U.S. market.

 

David Ogden
Entrepreneur

David

Cryptocurrency Bubble?

Cryptocurrency bubble ?

Cryptocurrency Bubble ?
 

Some credible sources are citing a possible "cryptocurrency bubble", as the prices of coins and tokens rocket and the fever for initial coin offerings (ICOs) continues unabated. All this stuff involves the technology known as blockchain, so it's all broadly related, but there are also certain distinct phenomena to consider.

On the one hand, we are seeing a massive increase in the price of Bitcoin, ether, Dash, Z-Cash, Monero, what have you.

Also surging is the ICO trend, which involves many new startups issuing and selling their own tokens (often oversubscribed with speculative buyers) as a way to crowdfund the building of yet another use-case focused blockchain system.

One theory behind the dramatic increase in the value of existing "altcoins", as in alternatives to Bitcoin, such as Dash or Litecoin, is that Bitcoin is approaching its limit and as a result users are now forced to pay increasingly high fees to use the Bitcoin network. Indeed, users are paying transaction processors additional Bitcoins to prioritise their transactions among the many thousands that are queued in a backlog, termed the 'mempool'.

Preston Byrne, COO of Monax and a fellow of the Adam Smith Institute, recently wrote about this: "The cryptocurrency market as a whole is interesting from an economic perspective in that it provides a perfectly transparent sandbox to see what happens when perfectly substitutable goods (Bitcoin clones) that accomplish the exact same thing (unregulated value transfer) in a fully automatic way (distributed state machines which require no human oversight) are placed in a position to compete.

"As far as an end-user of cryptocurrency software is concerned, whether a c-currency is $3000 in Dogecoin or $3000 in Bitcoin is immaterial; the shop round the corner prices its goods in USD/GBP/EUR, so as long as one coin or the other has sufficient liquidity to cash out, this means competition can occur on the basis of speed and transaction fees."

According to trading experts, the crypto ecosystem has been fleshed out lately with more cross pairs and on-ramps from the fiat world. There is a roll in roll out trade from Bitcoin to crypto and back as the markets inflate on both sides of the trade.

Charles Hayter, CEO, CryptoCompare, said: "Last year it was fairly easy to predict buying of Bitcoin through fiat and then into crypto. The cross pairs and markets have matured to offer direct Ethereum and Litecoin buying in a number of fiat pairs and this is increasing the options for traders to enter and exit positions. That said, Bitcoin is still the direct port in a storm for the entire industry.

"You are also seeing the arrival of new nations to the crypto sphere with their own bespoke approach to local regulatory issues et al – South Korea is a perfect case in point as they have taken the number three spot in terms on direct fiat to Ethereum trading.

Hayter said another interesting trend has been the dislocation of markets premia / discounts across pairs have widened. "This has been exacerbated by the Chinese regulatory issues as well as Wells Fargos hiatus on international transfers connected to Bitfinex and USDT. New markets tend to sit at premiums, as direct fiat flow spikes prices with exit routes from dead pools of money trading at a premium for exiting the exchange," he said, adding, "bubble – to an extent."

However, as far as ICOs are concerned, many prominent people in the industry believe this is fast becoming pure bubble territory and will end in tears (and probably some actions by the SEC). Someone who would go the record about token sales is angel investor and author William Mougayar, who is organising the Token Summit in New York on May 25.

He said: "In the history of technological cycles, if you follow economist Carlota Perez's thinking, nothing great happens without overshooting during the installation phase of a given technology, before moving into the adoption phase.

"We are clearly in the installation phase of cryptotech, and there is nothing we can do to prevent this overshooting from happening. It's just human nature at play.

"Of course there are ideas, protocols, start-ups and applications currently being launched that will not make it long term, but out of all this activity, some great ones will emerge."

Byrne of Monax has been as staunch a critic of ICOs as anyone ("the equivalent of selling people rows in a database"). But he concluded by saying that, amid all the froth, the way blockchains perform is truly impressive.

"Even relatively obscure systems with a fairly low level of developer input, such as Dogecoin, continue to survive and thrive under the circumstances. This is a ringing endorsement of blockchain technology as a very capable way of automating financial process flows with maximal security and minimal supervision.

"In the enterprise blockchain space we benefit directly from observing the failings and successes of public blockchain systems, which allows us to deliver more value to our clients in the permissioned/regulated applications they ask us to build. All in all, it's great," he said.

 

David Ogden
Entrepreneur

 


 

By Ian Allison

 

David