Weekend trading for Bitcoin has been bullish but things really started to take off during Asian trading this morning. As BTC tapped a twenty four day high, it is now only $2k away from its 2019 peak and reaching it this week is not out of the question.BTC Taps $11,800Bitcoin has not looked back since it passed the psychological $10k barrier late last week. Over the weekend it hovered just below $11k but during Asian trading this morning BTC surged almost 10 percent powering up to a high of $11,800. The move has sent prices to a 24 day high as volume surged 50 percent to over $21 billion.BTC price 24 hours – Coinmarketcap.comTotal crypto market capitalization has climbed back above $300 billion again but as usual, the altcoins are not sharing the love. There is now only $2,000 to go before a new 2019 high is made and BTC could be on track to do that this week.Bitcoin is currently at resistance with the next being at $12,400. After that it could surge to $13k and then on to surpass its previous peak. It is also the seventh day in a row that BTC has registered a green candle which is a strong indication that the correction is over and a new uptrend has formed.Factors and TrendsThe fundamentals appear to be originating in Asia at the moment. China’s central bank has devalued its currency by setting its daily reference rate for the Yuan/Dollar at 6.92 this morning. The move has been part of ongoing efforts to counter renewed trade tariffs imposed by the Trump administration.The escalating trade war clearly has the People’s Bank of China rattled and its response was clear today. As a result the Yuan hit a ten year low against the greenback which appears to have driven an exodus into Bitcoin.Even though crypto trading is technically banned in China, investors can still access OTC and peer-to-peer platforms to load up on Bitcoin and other crypto assets. With decades of oppression and internet censorship, the people are quite used to circumventing state controls to access what is freely available elsewhere, crypto included.Protests in Hong Kong are also escalating which could be another factor driving BTC price at the moment. Gold investor Peter Schiff has turned bullish on Bitcoin and tweeted on what could be driving the current momentum.“If you aren’t paying attention to what’s going on with China’s banks and currency, Hong Kong’s imminent takeover, Japan’s central bank albatross, the ECB’s downhill slide, and our domestic pressures to print money and cut rates, this is your wakeup call.”If you aren’t paying attention to what’s going on with China’s banks and currency, Hong Kong’s imminent takeover, Japan’s central bank albatross, the ECB’s downhill slide, and our domestic pressures to print money and cut rates, this is your wakeup call. Buy some fucking bitcoin.— Relevant Peter Schiff (@RelevantPeter) August 5, 2019If this momentum continues, which is likely at the moment, BTC could revisit its 2019 before the week is out, and even surpass it.Image from Shutterstock
Archives for August 5, 2019
Litecoin (LTC), currently the fifth-largest cryptocurrency by market capitalization, has just reduced its block reward for miners by half.
The litecoin blockchain reached block height 1,680,000 at 10:16 UTC on Monday – a major threshold for miners, as the litecoin network is designed to reduce its mining rewards by half every 840,000 blocks (roughly every four years).
Mining pool operator BTC.com’s litecoin explorer shows that at block height 1,680,001 produced at 10:18 UTC and broadcast by Antpool, the mining rewards were effectively reduced from previously 25 LTC to 12.5 LTC, indicating a lower inflation rate is now in place.
Given the block production time on the litecoin network is around one block every 2.5 minutes, roughly 576 blocks are produced in every 24 hours with a new supply of 7,200 LTC entering into the market – half the previous daily level of around 14,400 LTC.
As of press time, about 63 million out of the total issuance of 84 million LTC are effectively in circulation, leaving about 21 million LTC block mining rewards – worth $2 billion at today’s prices – available for miners to compete for in the future.
Since early this year, LTC’s price has seen a significant uptick from around $30 in January to as much as $120 in June, but has since then decreased to around $100.
In line with the price increase ahead of the anticipated “halving” event, hash rate computing on the litecoin network and the mining difficulty have both jumped by 200 percent since end of December 2019.
The halving will likely have an affect on the interest in mining participation, as several widely used litecoin mining devices will now have a tough time generating enough LTC to offset electricity costs.
According to a miner profit index from f2pool, one of the world’s largest mining pools by hash rate, the three most profitable LTC miners made by InnoSilicon and FusionSilicon X6 had a profit margin of between 55 and 60 percent before Aug. 5.
Other older models such as Bitmain’s AntMiner L3, however, already had a profitability that was less than 50 percent based on an electricity cost of $0.04 per kWh and LTC’s price before the halving.
Holding everything else constant, reducing the mining revenue by half could lead to a net loss for miners with such older models, as Shixing Mao, co-founder of f2pool, said in a Weibo post:
“With an electricity cost of 0.26 yuan [$0.037] per kWh, miners like L3+ can pretty much just shut down tonight.”
Litecoin mining image via Shutterstock
Payments giant Mastercard is seeking to hire a number of blockchain professionals, including several senior roles, in an apparent effort to develop cryptocurrency and wallet products.
According to the company’s career website, Mastercard is looking for a senior blockchain engineer and engineering lead, director for product development and innovation, vice president for product management and director of product management for cryptocurrency and wallets.
Other senior roles Mastercard is looking to fill also mention expertise in the blockchain tech, for example, vice president of network tech product management, director of payments platform and networks, senior analyst for strategic program management and others.
The director of product management for cryptocurrency and wallets, according to the description, will be expected to “lead the ideation, definition, design, and development of innovative crypto currency solutions, including wallet solutions,” and have an experience in this field.
Along with the director for product development and innovation, vice president for product management, the wallet director is in charge of Mastercard’s patent portfolio and filing new patent applications. Other than that, there are few specifics about the new role, but the job description speaks of the crypto industry quite favorably, asking a potential candidate:
“Do you have the courage to look into the eyes of disruptive forces without fear, and maneuver them to your advantage?
Do you have the desire to work at the cutting-edge intersection of payments and crypto-currencies?
Do you have the ambition to build something which you can narrate to your grandchildren?”
If the answer is yes — Mastercard is the right place for such a candidate, the description suggests.
The new leadership team is further supposed to advocate blockchain concepts within Mastercard itself. According to the description of the director’s and VP positions, they will need to “establish shared vision across the company by influencing and building consensus among the various stakeholders.”
Mastercard is a member of the Libra Association — a loose cross-industry consortium tentatively supporting the launch of Facebook’s upcoming cryptocurrency, Libra. Facebook itself is now actively recruiting personnel for its native wallet, Calibra, but has pledged to allow free competition of wallets inside of the Libra ecosystem during the House and Senate hearings in July.
Mastercard image via Shutterstock
Iran’s government is close to passing a bill that finalizes regulation for cryptocurrencies.
Mining will be allowed inside Iran as long as participant adhere to conditions listed in the bill, including obtaining industry ministry approval. Mining centres must also not be sited within a 30-kilometer (approximately 19-mile) range of all towns except the capital Tehran and major city of Esfahan where tougher restrictions will be applied, the report says.
Regarding devices used for mining, crypto miners must observe rules laid out by Iran’s standardization and communications authorities.
Mining firms also face fees on the energy used as part of the mining process, and will be charged for electricity, or natural gas that can be used to generate electricity, at the same prices as energy exports from the country, the bill reportedly says.
Miners will be taxed at the same level as industrial manufacturing firms, with exemptions for firms exporting mined cryptocurrencies and returning the revenue back to Iran’s economy.
The bill also notably lifts the illegal status of cryptocurrencies in Iran, although it stresses that trades made with cryptocurrencies in the nation are not recognized as lawful.
Further, cryptos will not be recognized as legal tender and the Iranian central bank will not guarantee their value.
The move has been prompted by Iran’s increasing popularity with crypto miners due to its cheap power. The country is also reportedly eyeing the use of cryptocurrencies as a means to circumvent international sanctions.
Azadi Tower, Tehran, image via Shutterstock
Dovey Wan is a partner at Primitive Ventures, a crypto asset investment fund, and a member of CoinDesk’s advisory board.
This essay is presented as a part of No Closing Bell, a series leading up to Invest: Asia 2019 focused on how the Asian crypto markets are interacting with and impacting global investors. To keep the conversation going in person, register for Invest: Asia 2019 coming up in Singapore on Sept. 11-12.
There remains a great deal of confusion surrounding the legal status of cryptocurrency in China.
Between headlines like “China Bans Bitcoin”, “China Bans Crypto Exchanges?”, and “China Bans Bitcoin Mining,” it’s no surprise that most people are unclear on where China stands on cryptocurrency and whether that has any real bearing on how its citizens behave.
We hope to demystify this and offer some insight into the legal status of cryptocurrency and related matters.
In China, bitcoin is legally recognized and protected as virtual property. This has been the law since 2013 and the classification was reconfirmed in the recent Hangzhou court ruling.
However, this does not recognize bitcoin or other cryptocurrencies as legal currency. Hence, any use of Bitcoin as a currency is illegal. Occasional peer-to-peer OTC transactions are acceptable, as long as the behavior remains on a small scale. All mainland financial institutions are barred from any involvement in virtual currencies and foreign entities are also prohibited from serving mainland customers.
China has been progressively restricting more aspects of cryptocurrency within its borders dating back to September 2017, when it began by banning ICOs because of the financial risk and frequent fraud.
Since then, China has not hesitated to prosecute seriously offending ICOs or crypto scams, which were clearly scamming their customers, such as Hero Chain, EOSPLUS, TronDotWallet, PlusToken, MGC, and DOGX. Some of them raised a ton of money from retail and exit scammed, some disguised as wallets or high-yield quant fund. The largest among them is PlusToken, which has scammed over a whopping $3 billion in total. Core team members of PlusToken were arrested earlier this year in Vanuatu with the help of local police and are now facing decades in jail.
The ICO rules also restricted the activity of cryptocurrency exchanges domiciled in mainland China, as they are considered to be facilitating illegal fundraising and financial crimes. To preserve their businesses after the ban, these exchanges restructured and moved overseas to countries such as Japan, Singapore and registered in countries like the Seychelles and Malta.
However, some exchanges, including Huobi and OKEx, continue to conspicuously serve Chinese customers in crypto to crypto trading, and facilitate yuan to BTC/USDT exchange disguised behind a peer-to-peer OTC front.
The regulatory requirements on bitcoin mining are relatively fuzzy, the “ban” was not issued by a legal or regulatory department, but rather came from a “industry structure reform recommendation” from a state planning agency, which usually serves as a guideline instead of actual regulation. Hence, we haven’t seen any material impact on local mining facilities due to this “ban”. While many Chinese miners are currently looking for foreign sites, that is primarily due to fierce local competition rather than regulatory concerns.
The actual handling of cryptocurrency in mainland China in practice doesn’t reflect the letter of the law, however.
It’s no secret that Chinese citizens remain deeply involved in cryptocurrency mining, trading, and ICOs/IEOs. While official figures say that the percentage of cryptocurrency trading attributable to the yuan has dropped from 90% to 1% in the wake of the 2017 regulation, this does not account for over-the-counter trading which is where most fiat to crypto volume in China has shifted to since the regulation.
OTC options are offered by exchanges like Huobi as well as by locally managed WeChat groups. These OTC desks take the form of a marketplace where buy and sell orders are offered manually and transactions are done in a peer-to-peer manner. The platform here merely acts as a place for buyers and sellers to discover each other, rather than facilitating trades itself as exchanges do.
Payment can be handled between two parties once they have agreed on a trade through WeChat, Alipay, or banking wire, though China is attempting to crack down on that as well by blocking mobile payment platforms from processing crypto related payments. The biggest risk of peer-to-peer OTC trading is counterparty risk. If you want to buy Bitcoin from someone you have to 1) Agree on the price with that party, 2) Send RMB first, 3) Receive Bitcoin once the other party has received the payment.
For this reason, most of the OTC WeChat groups have very strict rules for dealing with new members and only deal with those who have been in the group for long enough to have a good track record.
To give you a sense of the volume that these desks handle, Huobi OTC has surpassed $100M USD in volume and WeChat OTC groups such as this one report processing a daily volume of $300k a day on average. There are thousands of similar WeChat OTC groups operating at a small scale, but together add up to a significant amount of crypto trading volume originating from China that is not accounted for by official figures.
If one has the desire, buying cryptocurrency in China is by no means difficult. There are plenty of tutorials such as this one outlining various simple ways to purchase cryptocurrencies with RMB. Local liquidity for Bitcoin and USDT are excellent, despite what the regulators’ official statements might suggest.
Once traders have gotten their hands on Bitcoin or USDT, they can then freely exchange that for other cryptocurrencies on exchanges, even ones that try to block Chinese customers, by using the credentials of people from other countries. KYC materials can be obtained for a mere $75 online and allow Chinese citizens access to exchanges as well as IEOs and ICOs. Crypto-to-crypto volume on exchanges like Huobi, OKEx, and Gate.io are still very dominated by Chinese retail, and OKEx derivatives trading is also dominated by Chinese whales and traders.
As a result of the ban, different trading behaviors and selections of assets have emerged on these Chinese dominated exchanges compared to those on US exchanges like Bittrex, Bitstamp and Kraken.
After the ban, China took to using Tether ($USDT) as a substitute to yuan in trading pairs. Tether has since developed into a USD replacement in even some non-crypto cross-border business cases. This is one possible explanation for why Tether has been so resilient to negative press such as the Tether-Bitfinex $850 million cover-up and over 60% of newly issued Tether is traded in Chinese background exchanges —it is supported by the crucial role it plays in the huge amount of crypto trading that depends on it in China.
Because of the central role it plays, people in China don’t care whether it’s fully backed by reserve, as long as they remain able to exchange USDT for Yuan with local counterparties.
China’s legal actions against cryptocurrency certainly had a huge impact on crypto activity within its borders. It changed the landscape of crypto trading in China and caused many crypto companies to move overseas. But the resilience and perseverance of Chinese crypto entrepreneurs are remarkable, which clearly manifests “what doesn’t kill you makes you stronger”.
Cryptocurrency is still alive and well in China.
China flag image via Shutterstock
Bitcoin price rallied more than 8% and climbed towards $11,500 against the US Dollar.The price traded as high as $11,646 and it is currently correcting gains.There is a key bullish trend line forming with support near $10,900 on the hourly chart of the BTC/USD pair (data feed from Kraken).The price is trading with a positive bias and dips remain well supported near $11,500 and $11,200.There were solid gains in bitcoin price above $11,000 against the US Dollar. BTC price is up more than 8%, broke the $11,200 hurdle, and it tested the $11,500 resistance area.Bitcoin Price AnalysisIn the past two days, there was a steady rise above $10,500 in bitcoin price above $10,000 against the US Dollar. The BTC/USD pair settled above the $11,000 resistance and the 100 hourly simple moving average to move into a positive zone. Moreover, the price broke the $11,200 resistance and tested the $11,500 resistance (as discussed in the weekly forecast). The recent rise was strong as the price traded to a new weekly high at $11,646.At the outset, the price is consolidating gains near the $11,500 level. An immediate support is near the $11,500 and $11,450 levels. Moreover, the 23% Fib retracement level of the recent rally from the $10,841 low to $11,646 high is also near the $11,450 level to act as a strong support. If there is an extended downside correction, the next support for the bulls could be near the $11,200 level.Additionally, the 50% Fib retracement level of the recent rally from the $10,841 low to $11,646 high could also provide support near the $11,250 level. The main support zone is near the $11,000 level, which was a resistance earlier and now it could provide support. More importantly, there is a key bullish trend line forming with support near $10,900 on the hourly chart of the BTC/USD pair.Therefore, if there is a downside correction, the price might find strong bids near $11,250 or $11,000. On the upside, an immediate resistance is near the $11,650 swing high. A successful break above $11,650 might open the doors for a move towards the $12,000 level.Looking at the chart, bitcoin price is showing a lot of positive signs above the $11,200 and $11,500 levels. The price action suggests that there could be a short term downside correction before more gains above the $11,650 level.Technical indicators:Hourly MACD – The MACD is placed heavily in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower from the overbought zone.Major Support Levels – $11,450 followed by $11,200.Major Resistance Levels – $11,650, $11,800 and $12,000.