Bitcoin price found a strong resistance near the $4,190 level and later declined against the US Dollar.The price declined sharply and broke the $4,000 and $3,900 support levels.There was a break below a major bullish trend line with support at $3,940 on the hourly chart of the BTC/USD pair (data feed from Kraken).The pair traded towards the $3,600 support level and it is currently correcting higherBitcoin price nosedived below the $3,900 support against the US Dollar. BTC bears are in control and it seems like recoveries could face a strong resistance near $3,900 and $4,000.Bitcoin Price AnalysisIn the weekly analysis, we saw a solid upward move above the $4,000 resistance in bitcoin price against the US Dollar. The BTC/USD pair even broke the $4,100 resistance area. It traded to a new monthly high at $4,189, where sellers emerged. It seems like the price was rejected near the $4,190 resistance. As a result, there was a sharp bearish reaction below the $4,150 and $4,100 support levels. Sellers gained pace and pushed the price below the key $4,000 support level.During the decline, there was a break below a major bullish trend line with support at $3,940 on the hourly chart of the BTC/USD pair. The pair even settled below the $3,900 support and the 100 hourly simple moving average. Finally, there was a break below the $3,700 support and the price traded towards $3,600. A new weekly low was formed at $3,624 and later the price corrected higher. It broke the 23.6% Fib retracement level of the recent decline from the $4,189 high to $3,624 low.The current price action is bearish and it seems like upsides are likely to be capped near $3,860. However, the main resistance is near the $3,900 level. Besides, the 50% Fib retracement level of the recent decline from the $4,189 high to $3,624 low is near the $3,910 level. Above $3,900, the price could face resistance near $3,950 and the 100 hourly SMA. More importantly, a break above the main $4,000 hurdle won’t be easy for buyers.Looking at the chart, bitcoin price made a sharp U-turn below the $4,000 and $3,900 support levels. It could correct higher in the short term, but the previous supports at $3,860 and $3,900 might prevent gains. On the downside, an initial support is at $3,680, below which the price may decline below $3,600.Technical indicatorsHourly MACD – The MACD could move back in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently recovering from 20 and it could test 45.Major Support Level – $3,680 followed by $3,600.Major Resistance Level – $3,860, $3,900 and 3,950.
Archives for February 24, 2019
Ripple price failed once again to stay above the $0.3400 resistance and declined against the US dollar.There was a break below a triangle with support at 0.3350 on the hourly chart of the XRP/USD pair (data source from Kraken).The pair broke the 0.3200 and 0.3140 support levels to enter a bearish zone.The price could correct higher in the short term, but upsides are likely to be capped.Ripple price declined heavily and settled below key supports against the US Dollar and bitcoin. XRP/USD is trading in a negative zone and it could continue to decline below $0.2950.Ripple Price AnalysisRecently, ripple price gained bullish momentum after it broke the $0.3200 resistance against the US Dollar. The XRP/USD pair broke the $0.3300 and $0.3350 resistance levels. It even traded above the $0.3400 level, but buyers failed to capitalize. The pair topped near the $0.3420 level and later started a downside move. The decline was sharp as there was a break below the $0.3400 and $0.3200 support levels.To initiate the decline, there was a break below a triangle with support at 0.3350 on the hourly chart of the XRP/USD pair. Sellers gained momentum and there was a close below the $0.3200 support and the 100 hourly simple moving average. Finally, there was a break below the $0.3000 support and the price traded as low as $0.2942. At the moment, the pair is correcting higher and traded near the $0.3000 level. There is also a declining channel in place with resistance near $0.3000 on the same chart. Should ripple break higher, it could revisit the $0.3050 zone. It coincides with the 23.6% Fib retracement level of the recent drop from the $0.3418 high to $0.2942 low.To the upside, there are many hurdles for buyers near the $0.3140 level. The $0.3140 and $0.3150 levels acted as a support earlier and now they could prevent gains. Besides, the 50% Fib retracement level of the recent drop from the $0.3418 high to $0.2942 low is also near the $0.3180 level.Looking at the chart, ripple price moved into a bearish zone below the $0.3200 and $0.3140 support levels. In the short term, there could be a minor correction above $0.3000 and $0.3020, but upsides are likely to remain contained. On the downside, an initial support is near the $0.2940 level, below which there is a risk of more losses below $0.2900.Technical IndicatorsHourly MACD – The MACD for XRP/USD is about to move back in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is currently correcting higher towards the 40 level.Major Support Levels – $0.2950, $0.2940 and $0.2900.Major Resistance Levels – $0.3050, $0.3140 and $0.3150.
ETH price tumbled after it failed to break the $165 and $166 resistance levels against the US Dollar.The price declined and broke the $160, $152 and $140 support levels to move into a bearish zone.There was a break below a major bullish trend line with support at $148 on the hourly chart of ETH/USD (data feed via Kraken).The pair is now trading in a bearish zone below the $140, $144 and $148 resistance levels.Ethereum price made a sharp U-turn against the US Dollar and bitcoin. ETH/USD broke key supports near $148 and $142 to enter a short-term bearish zone, with a negative angle.Ethereum Price AnalysisThis past week, we saw a nasty upward move above the $140 and $150 resistances in ETH price against the US Dollar. The ETH/USD pair even climbed above the $160 resistance to stage a solid comeback. It traded close to the $166 resistance level, where sellers emerged. More importantly, there was a strong rejection noted near the $165 and $166 resistance levels. The price formed a topping pattern and later started a sharp decline below the $160 support level.The decline was such that the price failed to stay above the $152 and $150 support levels. There was a break below a major bullish trend line with support at $148 on the hourly chart of ETH/USD. The pair even settled below the $150 level and the 100 hourly simple moving average. Finally, there was a break below the key $138 and $140 support levels. It opened the doors for more losses and the price traded towards the $130 support. A low was formed at $131 and the price is currently correcting higher.An initial resistance is near the 23.6% Fib retracement level of the last decline from the $166 high to $131 low. It seems like the previous support area near the $140 level is likely to act as a strong resistance for buyers. On the upside, the next main resistance is near the $148 level and the 100 hourly SMA. The 50% Fib retracement level of the last decline from the $166 high to $131 low is also positioned near the $148 level.Looking at the chart, ETH price clearly moved into a short term bearish zone below $148 and $140. If there is an upside correction, sellers are likely to defend the $138 and $140 levels.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is about to move back in the bullish zone, with positive signs.Hourly RSI – The RSI for ETH/USD is currently recovering from the oversold levels, but it is still below the 40 level.Major Support Level – $130Major Resistance Level – $140
A lagging indicator has turned bearish for the first time in four years, suggesting bitcoin’s price may have bottomed out and that a new bull run could begin this year.
As of press time, bitcoin’s 50-week moving average has dropped below the 100-week MA, confirming a bearish crossover – the first since April 2015. Long-term bearish crossovers, however, tend to occur at the end of a big bear move, with prices rallying soon after, as MAs are based on past data.
For instance, the 50-week MA responds to price action seen over the last 12 months, and the 100-week MA tracks much older data. Therefore, the bearish cross of the two is the product of a prolonged bear market – BTC dropped from $20,000 to $3,122 in the 12 months ending December 2018.
Put simply, it takes a great effort on the part of the bears to push the 50-week MA below the 100-week MA. As a result, the bear market is usually exhausted by the time the crossover is confirmed, which seems to be the case with BTC.
The leading cryptocurrency by market capitalization is currently trading at $3,749, up more than 19 percent from the lows near $3,100 seen 11 weeks ago. Further, bitcoin’s historical data shows the previous bear market ended with the 50-week MA falling below the 100-week MA in April 2015.
As seen above, the 50-week MA fell below the 100-week MA in April 2015 – three months after the bear market stalled at lows near $150.
The cryptocurrency spent the following five months consolidating in a range of $200-$300 before breaking higher into a fresh bull market in October 2015. Interestingly, all this happened a year before bitcoin underwent its second mining reward halving in July 2016.
With the third reward halving due in less than 12 months, history looks to be repeating itself.
The latest bearish crossover has happened nearly three months after the sell-off from December 2017 highs ran out of steam near $3,100.
The relative strength index (RSI) has breached the falling trendline, warning the bear cross could trap sellers on the wrong side of the market. Further, the cryptocurrency is now looking north, having witnessed a high-volume bullish breakout last week.
So, there is a strong possibility that BTC will begin a new bull run later this year by violating the bearish lower highs pattern, as represented by the trendline sloping downwards from December 2017 highs.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
Since Venezuela entered its current crisis, Bitcoin (BTC) and cryptocurrencies become a popular subject in the nation. Carlos Hernández, an economist in the strife-filled Latin American nation, recently issued a New York Times op-ed to discuss the matter, elaborating on why the flagship crypto can be a proper hedge against the hyper-inflating bolivar.Related Reading: Naval: Killer App of Crypto is Socialism, Venezuela is a Prime ExampleHolding Bolivars Is Financial SuicideIn the piece, Hernández told his story, proudly claiming that he doesn’t own bolivars. Rather, he keeps all his net worth stashed away in Bitcoin, as keeping it in the local currency, projected to inflate by 3.5% daily (~1,000,000% yearly), would be “financial suicide.” Responding to those who question why he doesn’t utilize U.S. dollars, Hernández claimed that with Venezuela’s currency and capital controls, it is a near impossibility for him to secure a foreign bank account.But, it isn’t that cut and dried, per the economist. Hernández claims that before he can purchase what he (and presumably his family) needs, he needs to convert his BTC to bolivars, through LocalBitcoins.com to be exact. The process is simple: he sends BTC into escrow, receives a bolivar-denominated wire transfer, and runs to the store ASAP to secure foodstuffs. The whole process purportedly takes ten minutes. Not bad.This simple system has purportedly saved his whole family, as he alone covers his family’s expenses, as his brethren make little-to-zero income on their own. His brother tried to make it big, escaping Venezuela with stars in his eyes and the backing of his family. But even after he managed to make it out… alive, the brother, Juan, couldn’t secure a decent job in neighboring Colombia. Thus, Carlos decided he had to bring his brother back, sending him Bitcoin to escape into the nation embroiled in financial and political turmoil. And since then, Hernández has done his utmost to keep his family afloat.While Venezuelans evidently have a natural propensity to hold BTC over bolivars, some are convinced that the flagship digital currency could be a hedge against all currencies, even one as ‘trusted’ as the U.S. dollar or the British pound. Travis Kling, the chief investment officer and founder of the Los Angeles-based Ikigai, recently remarked that Bitcoin is much like a credit default swap (CDS) against central banks’ enamorment with printing money.The Ikigai head, who made a sudden U-turn at the peak of 2017’s crypto boom, as he downed a red pill to foray into cryptocurrencies, added that he’s wary of the build-up of debt on government balance sheets. Kling even stated that the monumental rise of enlisted quantitative easing (QE) strategies is “how you would write the script” for the adoption of cryptocurrencies, especially ones that are fully decentralized, the world over.Bitcoin Matters For FreedomHernández’s recent pledge of allegiance to the Bitcoin cause comes after Alex Gladstein, the chief strategy officer of the Human Rights Foundation, took to Time Magazine to laud the cryptocurrency.Per previous reports from NewsBTC, Gladstein wrote that:“For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange.”Case in point, he drew attention to the role that Bitcoin can play in remittances, noting that Venezuelans can mitigate the jaw-dropping ~56% fees that financial institutions operating in the nation charge, while also shaving days, if not weeks of transaction times. This is far from Bitcoin’s limit, however, as the world’s most secured transaction settlement layer will become even more valuable, especially with the Lightning Network and protocols of similar caliber.Featured Image from Shutterstock
It seems like just yesterday when Bitcoin investors were startled by the news that Mt. Gox, one of the world ’s first Bitcoin exchanges, was in serious trouble.
Five years ago, on Feb. 24, 2014, reports began circulating that the Bitcoin exchange had lost three-quarters of a million bitcoins.
One day later, the company – perhaps the closest thing to a single point of failure in the Bitcoin industry – announced that it was shutting down operations.
— Ryan Selkis (@twobitidiot) February 24, 2014
Mt. Gox initially tried to downplay its woes, but the you-know-what hit the fan when the company filed for bankruptcy protection, first in Tokyo on Feb. 28 and then in the U.S. on March 9.
At that time, Mt. Gox, the world’s largest Bitcoin exchange, was vague about how long it would not allow transactions to be completed. As late as February 2014, Mt. Gox handled more than 70% of all Bitcoin transactions worldwide.
Since those dreadful dates, Bitcoin HODLers have remained steadfast in their commitment to the industry, even throughout the multiyear downturn that followed the Gox collapse.
Many lessons were learned, though some – such as the danger of storing significant amounts of cryptocurrency on centralized exchanges – were not.
Mt. Gox CEO Might Serve Time, But Where’s All the Money?
Mt. Gox’s lifespan was relatively short, lasting just four years, though its shadow continues to loom large in the cryptocurrency industry.
Mark Karpeles, the CEO of Mt. Gox, faces up to a decade in prison on charges of embezzlement. He claims that he is innocent.
Meanwhile, Mt. Gox users have still yet to recoup the funds that they were holding on the exchange when it collapsed.
One crypto influencer hopes to change that – and soon.
Enter Brock Pierce and Gox Rising
CCN reported that Brock Pierce, the co-founder of Blockchain Capital, is trying to revive Mt. Gox.
Pierce’s idea entails a project called Gox Rising. Pierce claims to be the only shareholder remaining in Mt. Gox (Karpeles disputes this). He’s made it a mission to make sure others are paid a fair share of what remains of the Mt. Gox crypto assets, which are worth considerably more today than they were in 2014. Hundreds of thousands of BTC have never been recovered.
By distributing the cryptocurrency currently held by the Mt. Gox estate and reinstating the company’s operations, Pierce wants to reimburse every creditor of Mt. Gox through a process called rising civil rehabilitation, as CCN reported.
Between Bitcoin and Bitcoin Cash alone, the total could be roughly $700 million. Additionally, around $530 million was previously liquidated and is still held by Mt. Gox, for a total of around $1.2 billion in assets according to recent exchange rates.
Odds Stacked Against Relaunch?
As pointed out by CCN, for Pierce to operate a relaunched of Mt. Gox, a license from the country’s Financial Services Agency will have to be obtained. The question is whether the agency would grant the approval for the infamous, now-defunct cryptocurrency trading platform.
The community has responded positively to Pierce’ plans. Naturally, many welcome any initiative that could restore the reputation of the global cryptocurrency sector and reimburse longsuffering creditors.
Here’s a tweet from one supporter.
Hey @brockpierce My losses from MtGox inspired me to create the glass books transparency protocol in 2014 and then launch https://t.co/ZFal4LaVyS to be the most transparent exchange in the world. If you want help in the resurrection let’s talk.https://t.co/NSL3XGEeuM
— Vaultoro J.Scigala (@Vaultoro) February 9, 2019
As Mt. Gox is remembered on the fifth anniversary of its collapse, there are two questions at the back of the minds of Bitcoin investors. “Will this happen again?”, and – of course, “Where is our money?”
Featured Image from REUTERS / Toru Hanai
David Stockman, US budget director during the Ronald Reagan administration, continues to rake current US President Donald Trump over the coals during a whirlwind press tour designed to promote his new anti-Trump book. In his latest diatribe, Stockman calls the president an “unhinged madman” who is waging not one, not two or three, but four different wars on the US economy.
Donald Trump Will Not Make America Great Again
Speaking to Yahoo’s The Ticker, Stockman lambasts Trump as “delusional,” saying that when you have an “unhinged madman in the Oval Office…anything is possible.”
Just days ago, Stockman, who himself once frequented the White House, warned that investors should flee the stock market as an inevitable collapse and recession is imminent. A combination of economic headwinds and an “unhinged fellow” at the helm means that this time a recession can’t be held at bay by monetary forces.
In his latest appearance, Stockman says Trump is conducting a trade war, a border war, a political war on the US Federal Reserve, and, as debt grows, a war on the very solvency of the United States.
“He’s conducting four wars on the American economy, and it’s not going to make it great again.”
Trump’s Four-Front War on the US Economy
Stockman takes Trump to task for the US-China trade war, arguing that it’s really a war on US consumers.
“The trade war is a war on consumers.”
He adds that if tariffs move from 10% – already costing consumers $30 billion per year on imports from China – it is going to “be that much worse.”
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
— Donald J. Trump (@realDonaldTrump) December 4, 2018
The border war, in the former US representative’s expert eyes, is a “war on immigrant labor.” As the nation’s labor force contracts, Stockman says immigrant labor is needed:
“We shouldn’t be having a, you know, silly battle over a wall in a border where there isn’t a crisis.”
The US Federal Reserve constitutes a point of “political war” for Trump. A Fed which Stockman says was finally “getting enough courage up to normalize interest rates” chickened out due to Trump’s nonstop attacks.
“For crying out loud, 10 years, interest rates have been below the inflation rate, which means zero money market costs. It’s been a boon like never before to speculators. It’s done nothing for Main Street.”
The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!
— Donald J. Trump (@realDonaldTrump) December 24, 2018
Lastly, Stockman blasts Trump’s economic spending. He believes the US is in its last months of business growth and that raising the budget deficit at the top of a “business cycle” will only deliver “bad results.”
“He’s conducting a war on the nation’s solvency with a fiscal policy that is more out to lunch than anything I’ve seen since 1970.”
The Trump Fantasy
The title of Stockman’s new book, “Peak Trump: The Undrainable Swamp and The Fantasy of MAGA,” says it all about the Republican heavyweights view on the party’s current leader. But Trump continues to go about the US economy with a veritable sledgehammer of his own self-belief.
…..But if a fair deal is able to be made with China, one that does all of the many things we know must be finally done, I will happily sign. Let the negotiations begin. MAKE AMERICA GREAT AGAIN!
— Donald J. Trump (@realDonaldTrump) December 4, 2018
On trade, Trump calls himself the “tariff man,” sticking to his guns on tariffs and celebrating his progress in trade talks. Yet a study in November 2018 put the cost of tariffs per US household for 2019 at $2,400.
American Apparel & Footwear Association’s president and CEO Rick Helfenbein says tariffs are already hitting retail:
“It’s already baking some inflation into our system.”
Trump argues the border war, specifically his beloved wall on the US-Mexico border, will improve the lives of Americans and prevent crime. The longest government shutdown in history failed to get Trump the full wall funding he desired and may have reduced US GDP by billions, potentially more than Trump’s request.
And, of course, Trump believes he’s an expert on debt. But US national debt reached $22 trillion in recent weeks. That equates to $67,000 in debt per every American citizen.
Rather than Making America Great Again (MAGA), Stockman says Trump is steering the US economy toward something far more ominous: a historic recession that’s been held at bay for three decades.
Donald Trump Image from REUTERS / Carlos Barria
When Bitcoin Cash split into two different blockchains in November 2018, it sent shockwaves through the cryptocurrency space.
The resulting blockchains, Bitcoin Cash (BCH) and Bitcoin SV (BSV), both made major changes to the original code. But in the aftermath of the hash war, which one comes closest to representing Satoshi’s Vision?
Why Did Bitcoin SV Split from Bitcoin Cash?
It all started on August 20th, 2018, when the developers of Bitcoin Cash announced an update known as Bitcoin ABC 0.18.0. This update required a hard fork, and was scheduled for November 15th. It laid out the following changes for the Bitcoin Cash blockchain:
“• A new opcode called OP_CHECKDATASIG that improves the BCH scripting language to permit the validation of messages from outside the blockchain. This will enable uses such as the use of oracles and cross-chain atomic contracts.”
“• The introduction of canonical transaction ordering. This is a technical building block that lays the foundation for massive scaling improvements in the future.”
Not everyone wanted to change Bitcoin Cash’s focus from payments to dApps, but the biggest point of contention was the change from topological ordering to a canonical ordering of transactions – a change critics deemed unnecessary and overly complicated.
CoinGeek CEO Calvin Ayre emerged as a formidable opponent to the update, stating that his mining pool would not mine the BCH chain if the changes were implemented. Joining Ayre was ‘Faketoshi’ Craig S. Wright, and the two eventually came up with plans for their own update: Bitcoin SV.
The other side had their own cryptocurrency mining pool and token rich guy in the form of Jihan Wu’s Bitmain and Roger Ver – both of whom supported the update and intended to see it through. As November neared, neither side backed down. The stage was set for all-out crypto war.
Bitcoin Cash Hash Wars
On November 15th, the respective updates were implemented and the Bitcoin Cash chain split into two – (ABC) and (SV). Now the goal of each opposing team, backed by their own mining pools, was to legitimize their respective chains first by mining the most blocks in the fastest time.
CoinGeek, Ayre, and Wright poured all their resources and computing power into mining the BSV chain, while Jihan Wu, Roger Ver, and Bitmain directed their efforts into BCH/ABC. The hash war, like any war, was messy and underhanded at times. As the owner of Bitcoin.com’s mining pool, Roger Ver redirected mining power from the Bitcoin (BTC) blockchain and targeted it at the BCH/ABC chain to gain an advantage.
Just one week later, both sides had burned through almost $12 million. According to this breakdown from BitMEX Research, it cost $11.8 million just to lease the mining hardware in the week following the hardfork. Taking mining rewards into account, this resulted in combined gross losses of $8.9 million between both groups in just under seven days.
The War Ends: One Cryptocurrency Becomes Two
By November 23rd, Calvin Ayre had called for a truce and decided to initiate replay protection on the Bitcoin SV blockchain. This effectively made each chain its own unique cryptocurrency blockchain, and so there was no longer any need to compete in the hash war.
Note that this was not an outcome anyone wanted. The goal of the hash war was to eliminate the other chain and claim sovereignty over the BCH ticker symbol as it appears on websites and crypto exchanges.
After the dust settled, the hash war was blamed for Bitcoin’s plunge during the last two months of 2018. Whether the market reacted with uncertainty due to the messiness of the hash war, or whether Craig Wright made good on his promise to sell his BTC holdings to fund it, is unclear. Bitcoin sunk 52% in the 30 days following the war, falling from a coin price of $6,500 down to $3,100.
Bitcoin SV – Is it Satoshi’s Vision?
In the end, the Bitcoin Cash ABC implementation retained its BCH ticker symbol on most cryptoasset exchanges, although some also choose to delineate it as BCH/ABC, or simply ABC. Meanwhile, the implementation backed by Wright and Ayre became known as Bitcoin Cash SV (BSV) – an acronym incorporating Satoshi’s Vision.
CoinGeek’s Calvin Ayre suggested BSV resulted from the demands of miners, as laid out in the announcement for Bitcoin SV:
“Because miners should drive the roadmap in the Bitcoin space, CoinGeek and other miners asked nChain to create a professionally-driven implementation of the Bitcoin full node software (for use on BCH) that restores the original Bitcoin protocol.”
The following changes were designed to bring BCH significantly closer to the original Bitcoin protocol:
“• Restoring more original Satoshi op codes: OP_MUL, OP_LSHIFT, OP_RSHIFT, OP_INVERT”
“• Removing the limit of 201 op codes per script”
“• Raising the maximum block size to 128 MB.”
The restoration of those ‘op codes’ is said to allow the Bitcoin SV chain to host various programming languages. This would potentially open up Bitcoin SV to become the thing that Craig Wright claims it must – the money of the internet.
Serious doubt has been thrown on those claims, however, as some have pointed out that Satoshi’s original op codes are no longer compatible with the modern versions of Bitcoin. The block size increase seems largely irrelevant at this point, as neither BCH nor BSV have posted blocks exceeding 1 MB since the depths of the hash war.
What About Bitcoin Cash?
The original BCH didn’t escape the war looking too good, either. The coin price plunged 87% in the month after the hashing contest, from $630 down to $76.
Roger Ver and company also came under fire for activating checkpoints on the BCH blockchain. Fearing an onslaught of hashing power from a hidden mining pool, the checkpoints were added as a failsafe. It meant that any would-be attacker would find it much more difficult to reorganize the entire blockchain to their liking. A BitMEX blog post details some of the risks and rewards associated with blockchain checkpoints.
The Bitcoin Cash community defended the implementation of checkpoints by pointing out that Satoshi Nakamoto planned the same thing in 2010.
The move also drew praise from Ethereum creator Vitalik Buterin, who said:
“I think this is philosophically a very good direction. Miners are the military of a blockchain, not the government, and if a military doesn’t do what the civilian government wants, you fire them.”
The term ‘Satoshi’s Vision’ is no more than a marketing phrase – how could it be anything more? Bitcoin itself has been tweaked and updated numerous times since its inception, and BCH and BSV are both hardforks of hardforks – updates built on top of updates.
BCH and BSV are different enough that their future developments should be watched with interest; however their war added little to the crypto community, and neither can really lay claim on being the true Satoshi’s vision.
Featured Image from Shutterstock
Since Bitcoin (BTC) gained traction in the mainstream media, many skeptics and economists have claimed that the cryptocurrency space resembles the Dotcom boom and bust at the turn of the millennia. Thus, many have argued that the crypto market’s cycles will likely make many reminiscent of the Nasdaq, a tech-centric stock index, in 2000 to 2003. Yet, one analyst claims that this is unlikely to be exactly the case, citing that BTC’s value proposition is much different than that of a technology stock.Related Reading: Dotcom Bubble Burst May Have Been Necessary; What About Crypto?Bitcoin Likely To Move Differently Than Amazon In Dotcom BubbleLeading crypto proponent PlanB recently took to Twitter to note that while Amazon (AMAZ) fell from $105 to $5 during the Dotcom crash of 2000 and 2001, BTC might not be in for the same fate.He explained that BTC falling to $1,000 — a 95% drawdown from the $20,000 all-time high, which would be 75% lower than the current $4,000 level — is likely to occur in the near future, even calling the chances of this occurrence coming to fruition “very low.”Some people think #bitcoin (BTC) will crash to $1000, a 75% drop from current price, and 95% drop from it’s ATH in Dec 2017That would be similar to Amazon’s (AMZN) 95% drop from $105 to $5 during the dotcom crash of 2000-2001Why will BTC be different than or the same as AMZN? pic.twitter.com/pIJQrO3j99— planB (@100trillionUSD) February 21, 2019The analyst added that BTC has already been through its “AMZN style” crash, specifically when it collapsed by 95% in 2011 to a single digit valuation. Since then, the asset’s drawdowns have become marginally less and less severe, meaning that BTC’s recent move to $3,150 may have been it for this market. PlanB added that fundamentally, the uncertainty about the value proposition for Bitcoin, imbroglios like Mt. Gox, and altcoins/ICOs is now gone, cementing that BTC has a future and upside.In related news, PlanB, citing his stock-to-flow (amount of BTC in existence over issuance rate) analysis, noted that BTC is fairly valued at $6,250. While this isn’t much higher than the asset’s current valuation, in separate tweets, he has remarked that BTC could reach $10,000 by the next Bitcoin issuance shift, slated to activate in May of next year.Once the so-called “halvening” goes live, PlanB has claimed that considering the stock-to-flow ratios of other precious metals, like gold, silver, platinum, among others, BTC at $3,500 will be 10 times to 100 times undervalued. So, if PlanB’s thesis is correct, a fair valuation for post-halvening Bitcoin could be between $34,000 and $340,000.The Case For Sub-$2,000 BTCPlanB is near-convinced that BTC won’t fall to lower lows in this market cycles, but some analysts are adamant that Bitcoin could have far further to fall — and much further at that.Murad Mahmudov of Adaptive Capital once noted that the waning presence of Bitcoin-related comments on Twitter should be a cause for concern. The trader explained that tweets regarding the cryptocurrency have reached 2014 levels, lower than any point in 2016, indicating that very few people care about decentralized, sovereign, uninflatable currency. He added that this effectively confirms the thesis that 2017’s parabolic run-up had little effect on the crypto community’s size.Featured Image from Shutterstock
Top hedge fund managers weren’t scared away from the popular FAANG stocks during a dreadful Q4 for the U.S. stock market. Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL) are among the 20 stocks most favored by a select group of over 400 large hedge funds analyzed by WalletHub.
Apple, Amazon, and Alphabet are in the top five on WalletHub’s list for the second straight quarter. All three stocks have gains of at least 400% over the past decade.
Facebook jumps into the top 5 after Mark Zuckerberg’s company fell short in Q3 amid ongoing privacy concerns. Hedge funds appear more confident now that user numbers show the Cambridge Analytica scandal hasn’t stopped the social network’s growth.
Facebook’s daily users in North America are the same size as Snap’s entire user base. But given what we know about Twitter’s MAU to DAU ratio, Snap is most definitely the 2nd biggest social network in North America. pic.twitter.com/aaDZIErlMp
— Alex Heath (@alexeheath) February 5, 2019
Netflix was the only FAANG stock to miss the top 10. Hedge funds have been slow to warm to the streaming site, with some expressing concern about its spending. And that was before Netflix plunked down $100 million for a single year of “Friends.”
Let’s check out which ten stocks hedge funds were betting the most money on heading into 2019.
Hedge Funds’ Top 10 Stock Market Picks
10. Wells Fargo (WFC)
- Market Cap: $230.75 billion
- 2019 Returns (through February 22): +5.58%
Wells Fargo drops from ninth on the Q3 WalletHub list. Warren Buffett is one of the investment bank’s biggest hedge fund supporters, owning nearly $20 billion in shares. The value investing legend isn’t fazed by Wells Fargo’s accounting scandals, telling CNBC it will likely outperform most competitors over the next decade.
9. Bank of America (BAC)
- Market Cap: $281.18 billion
- 2019 Returns (through February 22): +17.35%
Bank of America flips spots with Wells Fargo and is the second of three banking stocks on this list. Warren Buffett owns massive stakes in all of them and bought another 18.92 million BAC shares in Q4.
8. JPMorgan Chase (JPM)
- Market Cap: $349.12 billion
- 2019 Returns (through February 22): +6.20%
JPMorgan rounds out the run of banks that hedge funds love the most. The Fed’s dovish turn was confirmed this week, but rate concerns aren’t slowing banks from enjoying the market’s rebound to start 2019. JPMorgan is the first major U.S. bank to launch a cryptocurrency. It’s also the first major U.S. bank to launch a cryptocurrency that major media outlets have so badly misunderstood, as CCN exposed this week.
7. Visa (V)
- Market Cap: $320.49 billion
- 2019 Returns (through February 22): +8.34%
Credit card companies Visa, Mastercard (MA) and American Express (AXP) all made WalletHub’s top 25. Cash is still king at global checkouts, leaving lots of growth potential for all three that hedge funds appear bullish on. Visa is billionaire investor and best-selling author Ken Fisher’s top stock pick. Fisher is predicting a good year for the stock market, noting among other things its strong historical performance during the third year of U.S. presidential terms.
6. UnitedHealth (UNH)
- Market Cap: $256.30 billion
- 2019 Returns (through February 22): +9.41%
UnitedHealth falls to sixth from fourth on WalletHub’s list. The most popular healthcare stock trades at a reasonable forward P/E of 16 and could be a contender to purchase Magellan Health. Magellan is exploring a sale after activist hedge fund Starboard Value built a 9.8% stake and started pressuring it to sell itself.
5. Alphabet (GOOG/GOOGL)
- Market Cap: $773.66 billion
- 2019 Returns (through February 22): +4.89%
Alphabet remains fifth on the list and begins a run of four straight FAANG stocks. Michael Burry surprisingly reemerged as a Google shareholder in Q4 after not filing for over two years. Burry’s incredible bet against the housing market before the financial crisis hit was documented in “The Big Short.”
4. Facebook (FB)
- Market Cap: $462.03 billion
- 2019 Returns (through February 22): +17.95%
Facebook moves into the top five and has been the best-performing stock on the list in 2019. Facebook is the favorite stock among the 50 largest hedge funds according to Citi Research, being owned by 15 of them.
3. Apple (AAPL)
- Market Cap: $815.60 billion
- 2019 Returns (through February 22): +8.32%
Apple maintains its grip on third place despite several big-name fund managers unloading it in Q4, including George Soros and David Tepper. Warren Buffett’s Berkshire sold a small number of shares (relatively speaking) as well, which made headlines.
“Many investors appear to treat Apple as just a consumer electronics company. In contrast, we see Apple as a more valuable integrated hardware, software and services company, which is both a growth company and a value stock. It sells for just 12 times expected earnings (updated for slowing China demand)—11 times if you value its cash separately. That means investors are, incorrectly in our opinion, pricing Apple as a below-average business.”
2. Amazon (AMZN)
- Market Cap: $801.43 billion
- 2019 Returns (through February 22): +5.22%
Amazon remains stuck between Apple and Microsoft on WalletHub’s list again in Q4. Famed hedge fund manager Bill Miller sees Amazon having top-line growth of 20% to 25% per year over the next three.
1. Microsoft (MSFT)
- Market Cap: $851.39 billion
- 2019 Returns (through February 22): +8.20%
Microsoft remains hedge funds’ most popular stock according to WalletHub’s list, holding off every FAANG challenger in Q4. Microsoft is still growing its cloud business by 75% and is staying out of trouble more than the other tech giants. Add its fortress balance sheet of over $50 billion in net cash, and it’s easy to see why hedge funds love Microsoft.
Hedge Fund Portfolio Crushing the Market by Double Digits in 2019
Goldman Sachs’ “Very Important Position” portfolio of 50 stocks that are popular among hedge funds is crushing the market with 14% gains in 2019. The strategy tracks the top 10 picks of 880 fundamentally-driven hedge funds.
“Goldman’s Ben Snider explains why in this note released Friday: “Recent hedge fund returns have benefited from the outperformance of the most popular long positions as well as the decision to increase net length ahead of the equity market bottom in December 2018.”
Most hedge funds aren’t doing all that well though. The average fund lost 5.7% last year, including 1.9% in December according to preliminary Bloomberg data.
The awful returns did have a silver lining, being enough to beat the S&P 500 (SPY), something hedge funds rarely manage of late. The HFRI Asset Weighted Composite Index also topped the SPY (with dividends) in 2018 for the first time in a decade.
The average hedge fund outperformed the S&P 500 in 2018 for the first time in a DECADE (albeit, only 31 basis points…but still…)
— Leslie Picker (@LesliePicker) January 8, 2019
It’s no big secret the $3 trillion hedge fund industry has collectively stunk up the investing joint since the financial crisis. It’s rarely beaten benchmark indexes, and even passive funds have begun consistently outperforming it, stealing both its thunder and assets under management.
Yet as the Goldman Sachs portfolio shows, dismissing any data coming out of the industry is foolish. Focusing on smaller groups of better performing hedge funds can uncover stocks that yield great results.
Hedge Funds are Cash Printing Machines for Biggest Managers
The biggest and most successful hedge funds all but print cash for their billionaire managers. Jim Simons’ Renaissance Technologies charges performance fees of 44% on the returns its Medallion Fund generates. He was the top-earning hedge fund manager last year, pulling in $1.6 billion.
Investors aren’t complaining about the high fees RenTech’s signature fund charges though. It’s returned 40% each year on average since its 1988 inception, after fees.
All those fees raked in by 2018’s other top-earning money managers also paid off for their clients last year. The flagship funds of Ray Dalio’s (2018 income: $1.26 billion) Bridgewater Associates and Ken Griffin’s ($870 million) Citadel Advisors were up by 14.6% and 9.1%, respectively, in 2018.
Hedge Fund Legend Takes $4 Billion Hit
A stock which didn’t make the top 10 is Berkshire Hathaway (BRK-B), which has fallen to 25th on the list. Berkshire is investing legend Warren Buffett’s holding company, and the 88-year-old billionaire isn’t immune to huge losses either, as CCN reported Friday.
Berkshire Hathaway has taken a hit of over $4 billion this week based on the number of Kraft Heinz (KHC) shares it owned on December 31 (over 325 million). KHC shares are down by 27% since Thursday’s close, devastating Berkshire’s $15.7 billion position. Berkshire’s own stock has fallen by 2% in response, shaving $10 billion from its market cap.
Kraft stunned the market Thursday afternoon by taking a $15.4 billion impairment charge in its Q4 results and slashing its dividend payments. Some of Kraft’s brands haven’t aged well in the changing food landscape, especially Kraft itself and Oscar Mayer.
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