A document unveiled by the New York Attorney General’s (NYAG) office on Thursday has revealed that iFinex, the company behind both Tether (USDT) and Bitcoin exchange Bitfinex, is coming under legal pressure.Bitcoin Loses 2% As Tether Debacle Comes To LightIn a press release posted earlier this hour, the NYAG’s office revealed that iFinex may be violating “New York law” in relation to activities that “may have defrauded” local investors that trade cryptocurrencies. The office even wrote that it is attempting to expose “ongoing fraud” being perpetrated by Bitfinex and Tether, which are two startups that have long been under fire from cryptocurrency’s demographic of skeptics and conspiracists.The suit has also revealed that Bitfinex purportedly sent $850 million to a Panama-based company, failed to secure the funds later, and went on to raid Tether’s cash reserves to satisfy its customers later.According to the official document released by the New York AG’s office, Bitfinex sent $850 million to a company based in Panama, didn’t get it back, and granted itself access to $900 million Tether cash reserves.Official document: (https://t.co/DzQkqtHB4d) pic.twitter.com/rZQL55Cncc— Joseph Young (@iamjosephyoung) April 25, 2019It isn’t clear how this monumental legal situation is developing behind closed doors, but as analyst Moon Overlord quipped: Bitfinexed, a long-standing, extremely staunch critic of iFinex’s businesses, is likely in “complete euphoria.”Bitfinexed in complete euphoria— Moon Overlord (@MoonOverlord) April 25, 2019As a result of this news, Bitcoin has dropped by 5% in a span of under thirty minutes. BTC is currently trading at $5,150 on Coinbase, which is dramatically lower than the $5,520 seen just one hour ago. Altcoins are posting similar losses.Some analysts expect for cryptocurrencies to fall further in the coming hours, and even lower if the suit reveals damning criminal evidence about the operations of Bitfinex and Tether.Featured Image from Shutterstock
For some reason or another, many pundits, both in and out of the crypto ecosystem, have likened Bitcoin’s parabolic rally in 2017 to the Dotcom Boom and Bust at the turn of the millennia.Sure, there are similarities, like the fact that both industries were revolutionary, were initially misunderstood and hated, and were rife with bad actors looking only to turn a quick buck. But, one analyst claims that cryptocurrencies and public blockchains are still early on in their development, meaning that a copious amount of upside may be in store for BTC and other digital assets.Related Reading: Crypto Bear Market Didn’t Affect Abra: What’s in the Future of the Market?Blockchain Space Still Embryonic Nic Carter, a partner at Castle Island Ventures and co-founder of Coinmetrics, recently remarked that the number of consumers utilizing public blockchains currently equals that of the Internet in 1997, at 50 to 70 million users. And out of those 60-odd million, likely only a few million are actively involved in Bitcoin’s and crypto’s day-to-day happenings. This statistic, according to Carter, begs the pertinent question: Why did we have such a large bubble in 2017, when the first notable Dotcom bubble occurred at 300 million users?In terms of adoption by # of users, public blockchains are roughly where the internet was in 1996–1997 (50-70m users worldwide).— nic carter (@nic__carter) April 24, 2019Carter had three hypotheses to answer this question. Firstly, he noted that the Dotcom Bubble remains fresh in the mind of investors, making the crypto bubble a “self-fulfilling prophecy,” in that consumers ‘FOMOed’ into BTC and its brethren en-masse after they recalled the gains that nascent Internet stocks posted. Secondly, the long-standing industry insider, who previously worked with Fidelity Investments’ crypto division, noted that as cryptocurrencies are “inherently a financial phenomenon,” they are more susceptible to bubble-esque behaviorAnd lastly, and most logical in the eyes of crypto’s crusaders, the reason why cryptocurrencies may have exploded as early as they did is that 2017’s bubble was “smaller than people think.” Carter explains that if you really boil the actual metrics down, the cryptocurrency space’s actual market capitalization was less than the $840 billion seen on data aggregators like CoinMarketCap. He looks to the fact that if you summate all mining revenue for Proof of Work (PoW), only $15 billion actually flowed into the space, making the rest of the value somewhat inflated.With the Coinmetrics co-founder’s last point in mind, another question can be posed: if crypto’s latest bubble was small on the scale of traditional markets, does parabolic upside remain?Is There Upside?According to a number of pundits, the answer to the above question is an undeniable yes. Speaking at MoneyConf in Dublin, Joseph Lubin, the co-founder of Ethereum and founder of ConsenSys, told Business Insider that he believes blockchains will be on “orders of magnitude” more disruptive than the Internet, meaning that assets pertained to this space will have that much more upside potential and ability to catch volatility.A countless number of Lubin’s peers would agree. Just recently, as covered in a previous NewsBTC report, Travis Kling of Ikigai Asset Management remarked that the previous Bitcoin rally was the first time the industry actually appeared on the global stage, as previous bubbles only saw participation from fringe groups, the coders, anarcho-capitalists, cypherpunks, and forward-thinking venture capitalists. As Kling remarks:“In late ’16, the vast majority of the world had no idea what any of [crypto] was or what its potential is.”This simple fact led him to the conclusion that when cryptocurrencies rally again, awareness is through the roof, meaning that reflexivity will be “much higher,” setting the stage for an even more volatile, epic surge.Tom Shaughnessy of Delphi Digital agreed. The researcher remarked that the last bull run for BTC was driven around “magical internet money hype.” In the eyes of Shaughnessy, the next time, demand for Bitcoin will primarily be derived from the ever-growing need for an asset that is non-sovereign, capped, is a digital store of value, and can be used in day-to-day transactions with the Lightning Network. This in and of itself should make the next rally that much more accentuated and dramatic.The last $BTC bull run was driven by hype around magical internet moneyThe next one will be driven by an actual macro based understanding of the benefits of a non-sovereign, capped, digital SoV bolstered by lightning ⚡️The next bull run will be bigger 📈— Tom Shaughnessy🦉 (@Shaughnessy119) April 17, 2019What Will Boost Crypto AdoptionMore likely than not, the next cryptocurrency rally will be catalyzed by cryptocurrency products from mainstream institutions, like Facebook’s and Samsung’s digital asset or investment platforms like Bakkt on the retail side and Fidelity Digital Assets on the institutional side.Just recently, The Block, who cited sources familiar with the matter, claimed that ErisX, an up-and-coming, Chicago-based cryptocurrency initiative will soon launch its own exchange platform. This is notable, as TD Ameritrade, a large American retail-centric institution, is expected to support in-house Bitcoin and other cryptocurrency purchases and sales, opening the door for eleven million consumers to finally down the blockchain pill. But will they?Featured Image from Shutterstock
Satoshi Nakamoto, the pseudonymous creator of the Bitcoin (BTC) project, always expressed an inkling of mistrust and cynicism towards centralized institutions, including Wall Street and the incumbent government. This theme was only accentuated when the first ever crypto diehard embedded a Financial Times headline, which pertained to 2008’s Great Recession, into the coinbase of his/her brainchild’s first-ever block.Related Reading: Would McAfee’s Revelation of Satoshi Nakamoto Affect Bitcoin Prices?But over the years, the underlying value proposition of Bitcoin has been misconstrued, especially as ‘get rich quick’ schemes have become a sector mainstay. In fact, many argue that now, BTC’s primary use case isn’t as a media of exchange, but as a speculation instrument, giving its ‘investors’ an asymmetric risk-return profile. However, some are sure that Bitcoin is best suited as a form of digital gold.The Digital World Demands Digital GoldGold has been an integral part of human society for hundreds, if not thousands of years. Although the precious metal does have viability as a component for modern technologies, gold has, is, and will likely continue to be primarily used as a store of value, an asset that allows its holders to keep their wealth over time, rather than lose it due to inflation of fiat monies or the destruction/degradation of purchasable goods.But, a contender to gold’s hegemony as the go-to value store is approaching. And that contender, if you haven’t guessed it already, is Bitcoin. Grayscale Investments, an investment subsidiary of crypto industry conglomerate Digital Currency Group, recently released an extensive report on why Bitcoin might be better than the already good gold.Is #bitcoin ($BTC) the new digital #gold? Check out our recent report: Bitcoin & the Rise of Digital Gold #DropGold https://t.co/0FNfz9r7Zq pic.twitter.com/ZyrITTyIml— Grayscale (@GrayscaleInvest) April 23, 2019Grayscale’s team, known for putting out works on industry trends, such as the impending block reward reduction, first pointed out that gold’s usability has plummeted in the 21st century. The long and short of it was: try purchasing your groceries with gold.Respects were paid where they were due, however, with Grayscale noting that the metal remains a viable store of value against inflation, especially in nations which are stricken with “hyperinflation, currency wars, and imprudent monetary policies.” Gold’s value is only accentuated when you realize that the average lifespan of a government-issued currency is 30 years. No, not 300, but a mere three decades.But Bitcoin may do an even better job than gold. Unlike the metal, BTC is mathematically scarce, capped at 21 million units; BTC is decentralized and verifiable through the Internet; BTC is portable and divisible through digital technologies, and is unconfiscatable. Gold, on the other hand, has an unlimited supply, centralization risks, an inability to be easily divided and moved around, and legitimacy concerns. The chart below from Grayscale sums this argument up fairly well.The benefits that Bitcoin provides has led some, like Gemini’s Tyler Winklevoss to quip that the only thing that gold has over BTC is a “3,000-year headstart.”What A World Where Bitcoin > Gold Would Look LikeLet’s say the world realizes the potential that Bitcoin holds, resulting in the world looking to store their value in BTC compared to gold. What would this hypothetical (yet totally possible) world look like?According to HodlWhale, a Seattle-based cryptocurrency investor, a world where Bitcoin has absorbed all the value of the gold in circulation would see BTC valued at $350,000.If #Bitcoin were to displace the value of gold the current value of a single Bitcoin would be $350K. Bitcoin has the ability to displace value across many financial and technology markets. $BTC is greater than #Gold #BTC350K— HodlWhale (@HodlWhale) April 19, 2019This figure isn’t exactly baseless. As reported by NewsBTC on an earlier date, all gold in circulation is currently valued at approximately $7.83 trillion, while all BTC has a mere $94 billion valuation. If the latter was to fully displace the value of the first, Crypto Voices, an industry analytics and research group, estimated that BTC would swell to a value of a casual $450,000 — slightly above HodlWhale’s estimate.Featured Image from Shutterstock
While Bitcoin (BTC) has always been about improving the world’s financial and political wellbeing, this nascent market isn’t all too kind. Over the course of 2018, retail investors across the board lost their shirts, industry employees were laid off, and crypto’s reputation and presence in the mainstream sadly fell off the map.Related Reading: FUD Storm: Mainstream Media Back Bashing Bitcoin the Moment Markets MoveBut no one entity or investor is likely hurting as much as Masayoshi Son. Reports from mainstream financial news outlets revealed Tuesday that the founder of SoftBank, a multi-faceted Japanese corporate giant, lost over $100 million trying his hand at Bitcoin, uh, investment.Softbank Founder Loses Millions In Bitcoin Investment$130 million — that’s how much Son lost playing at the Bitcoin craps table, according to “people with knowledge of the matter” anyway. These sources claim that Son’s high-ticket run-ins with the cryptocurrency market came in late-2017, literally the worse time possible.The people claim that the Japanese billionaire, who purportedly sports a net worth of a casual $30 billion, bought BTC as it rallied past $19,000, just as SoftBank was acquiring Fortress Financial, crypto fanatic Mike Novogratz’s former stead, for $3.3 billion. Funnily enough, the sources claim that this relationship may have sparked the interesting bet. They tell outlets that Peter Briger, an executive at Fortress, expressed interest in Bitcoin and other cryptocurrencies, potentially leading to Son’s unfortunate feeling of likely FOMO (fear of missing out).It isn’t clear when Son sold his holdings, but if a $130 million loss was sustained, it probably came well after December 2017’s peak and prior to BTC’s recent move above $5,000. Sources add that this heavy loss has led Son to stave away from having the Vision Fund, a SoftBank-backed venture capital giant that has access to $100 billion in principal, from investing in blockchain technologies and cryptocurrencies.Should He Have Capitulated? Should have Son capitulated though? According to many commentators and crypto enthusiasts on Twitter, no, no the SoftBank founder shouldn’t have fled from his Bitcoin holdings. As Twitter user Stephen hints at, the problem with Son’s investment strategy was that he ‘sodled’, not ‘hodled’.Masayoshi Son lost $130 million on Bitcoin. I have identified the problem in his strategy.https://t.co/qBZd7IjCj5 pic.twitter.com/z5bEOLNObr— Stephen (@sthenc) April 23, 2019Jokes aside, some are sure that Son was wrong to sell after a massive sell-off, as all indicators seem to suggest Bitcoin will head higher over the long-term, and fast too. As Adaptive Capital’s Murad Mahmudov, who is 75% sure the crypto bottom is in, suggests, Bitcoin may be nascent, just like when Neanderthals stumbled across unrefined gold, but it will soon become monetized. The prominent trader explains that as the world and society are deeply interconnected and intertwined through the Internet. But if BTC becomes a viable form of money, where exactly could it head?Bitcoin today, monetarily speaking, is only a few steps ahead of where pieces of unrefined gold were when Neaderthals first discovered them in the ground.But its monetization is going to happen >100x faster because we now live in a deeply interconnected & accelerating world.— Murad Mahmudov 🚀 (@MustStopMurad) April 24, 2019Per Anthony “Pomp” Pompliano, the sky’s effectively the limit. As the former Facebook staffer opined in a recent Twitter post, he believes that Bitcoin is the only asset with a ~$100 billion market capitalization that has a realistic chance of going parabolic. In the eyes of the permabull, BTC could see a value increase of 20 to 50 times over the next five years, which would place the value of each coin at $110,000 to $275,000. This six-figure prediction may sound absurd, but the fundamentals and technicals seem to support his reasoning.As popular trader Filb Filb notes, if Bitcoin follows the Internet industry’s historical growth cycles of staggered booms and busts, if the asset continues to see its issuance steadily dwindle, and if global debt continues to increase, his model forecasts BTC trading at $333,000 by 2023.And if Bitcoin rallies strongly to the moon, Son might be left with a rather bitter taste in his mouth. Well to be fair, $130 million is just 5.4% of his reported net worth. So ouch, but not really.Featured Image from Shutterstock
As much as some cynics, such as traditional investor Mark Dow, like to paint it, institutions are heavily invested in the crypto space already. Sure, the Chicago Board Options Exchange (CBOE) recently divulged that it intends to put its Bitcoin (BTC) futures vehicle on the backburner, but investment statistics accentuate that big names are flooding into this space.Related Reading: Binance Research Report Claims That Less Than 7% of Crypto is Owned by InstitutionsInstitutions Are Still Throwing Money At CryptoBusiness Insider reports that “major financial institutions,” coupled with prominent venture capital groups and technology powerhouses, are continuing to catapult money at the cryptocurrency and blockchain space. Data suggests that in the past four months alone, startups in this embryonic space have secured $850 million in 13 large deals.Lesser-known yet respected crypto exchange Liquid, for instance, just closed its Series C funding round, which saw its private value rise to over $1 billion. Liquid saw cheques written from IDG Capital, a prominent Asia-centric venture fund, and Bitmain, the Bitcoin mining space’s most prominent yet controversial player. In the same vein, Bakkt, the cryptocurrency initiative/platform backed by NYSE’s owner, the Intercontinental Exchange (ICE), saw a casual $182.5 million fly its way, kicking off 2019 with a bang.This influx of funding comes in spite of “finance execs’” worries that blockchain as a technological advancement still has an array of drawbacks: lack of regulatory clarity, failure to interoperate, a lack of network continuity, intellectual property concerns, and an inherent inability to scale.If the level of investment keeps its pace for the rest of fiscal 2019, annual funding for blockchain and crypto asset startups will have seen its “second consecutive annual record,” as last year saw $2.4 billion raised in 117 different deals.Interestingly, this figure cited by Business Insider contradicts the $1.6 billion of 2018 funding mentioned by industry analytics unit Diar, but the point is clear nonetheless: big names in finance, tech, and investment are still interested in this industry, 80% collapse aside.Bitcoin Markets Already Have Heavy Institutional InfluenceNot only does the financing side of the cryptocurrency space have a heavy institutional atmosphere, but so does the Bitcoin markets themselves. In fact, on Tuesday, Matt Hougan, the head of research at Bitcoin exchange-traded fund (ETF) hopeful Bitwise, revealed that as his firm’s trade volume provider revealed that the volume of the CME’s BTC futures passed that of the largest legitimate spot exchange, Binance.Yesterday, the volume of CME bitcoin futures exceeded the volume on the single largest spot bitcoin exchange (Binance): $379m vs. $257m. https://t.co/8luckTr0s8— Matt Hougan (@Matt_Hougan) April 23, 2019While the CME’s futures are paper-based, meaning that there is no physical collateral in the form of BTC backing them, this does show that institutions do play a bigger role in cryptocurrency than some think.April 1st’s jaw-dropping surge would confirm this. As reported by NewsBTC previously, analysts and researchers are adamant that Bitcoin’s sudden $1,000 candle was the byproduct of a single trader/entity, rumored to be an institution or large fund located in Hong Kong. Research group CoinMetrics further suggests that the “committed actor,” implying that it was a well-connected whale or institution, played the market like a violin to their advantage, orchestrating trades on multiple exchanges, at times when liquidity was scant, to “maximize price impact.”
Abra has long been a household name in the crypto industry, providing consumers worldwide with financial services and investment opportunities that are centered around Bitcoin (BTC) and other digital assets. NewsBTC sat down with Abra’s chief executive and founder, Bill Barhydt, last month to talk about the future of this industry, his firm, and enterprise blockchain applications.Bill Barhydt, for those unaware, has worked with the CIA, NASA, Goldman Sachs, and Netscape throughout his career. He believes that his expanse of prior stints have helped him come to the conclusion that cryptocurrencies are the future.How’s Abra Been Faring In Crypto Winter?NewsBTC: Charlie Lee argued that the downturn in the cryptocurrency market has allowed him and the Litecoin Foundation to build out their product and vision. But how has the so-called “crypto winter” affected Abra specifically?Bill Barhydt: Well, it hasn’t. People that are in crypto, are in crypto. Abra tends to deal with less of the trader, and more with the investor. The trader is someone who is doing lots of transactions each and every day or week. Abra users tend to come in and out over a few week timespan. So it’s a different type of user. If you compare Abra to a trading site (exchange), our user base tends to grow reasonably steady. [The exchanges’ user base] go up and down, up and down. Not to mention that half the trades, if not more, are bullshit. Look what’s on the crypto-to-crypto sites, and you can’t trust 85% of what’s happening. With Abra, every transaction is on-chain. You can’t spoof that because I’m paying mining fees. Our business model is very different. They’re getting pennies per trade, but we’re getting percentage points per trade on reasonably steady, growing volume figure.
Bulls, it’s been a minute. Over the past few hours, Bitcoin (BTC) has begun to rally again, pushing past $5,400, $5,500, and even $5,600 (albeit briefly) after nearly a week of mundane stagnation. While this move seems to be just another Monday pump, which could be deemed not significant by some, this unexpected bump is monumental from a technical analysis perspective.If you haven’t checked Crypto Twitter for the past week, BTC just printed a golden cross, whereas its 50-day moving average has crossed over its 200-day, signifying that bears might be finally be biting the dust. But funnily enough, some have claimed that this cross isn’t anything to really write home about.Related Reading: Analyst: Bitcoin (BTC) Likely to Soon See Massive Volatility as Golden Cross Pattern FormsBitcoin To Fall After Golden Cross?Golden cross this, golden cross that — over the past few weeks, everyone and anyone in the cryptosphere has been repeating those two words incessantly. As explained earlier, a golden cross is a technical pattern that has historically been a bullish indicator for assets across the board. And as seen just hours ago (and below), this pattern has been printed on Bitcoin’s one-day chart.So why are some analysts now bearish, claiming that a drop is imminent?As NewsBTC explained in a previous report on the matter of bearish golden crosses, each time this pattern came to life on a chart, a rally was not always sustained. Over the past decade, gold has seen a number of golden crosses, four in fact, but only rallied to the upside once — a 25% hit rate. There are a few other examples of such cases, but we won’t bore you. Here are a number of other reasons why analysts aren’t over the moon just yet.First off, BTC has yet to close far above its 50-week exponential moving average (EMA). As analyst Proof of Research points out, this specific moving average has “stopped the run dead in its tracks” multiple times over the past three weeks, acting as a strong local resistance. Although this point is somewhat null in that Bitcoin is currently trading slightly above its 50-week EMA ($5,550 compared to $5,480), as seen in the chart below, BTC’s ongoing move could be a mere wick of a candle that fails to close above this resistance.Biggest impediment to price action moving UPWARD for $BTC #Bitcoin is the EMA-50 on the weekly resolution.I’ve said this before and I’ll say it again – the EMA50 is a *beast*. Look at this picture, you’ll see how the EMA-50 has literally stopped the run dead in its tracks. pic.twitter.com/hXNMcBkKdI— GOAT (@ProofofResearch) April 21, 2019Secondly, Bitcoin’s one-day chart looks eerily like that seen during 2015’s bottoming process, but prior to the second capitulation event. For those not versed in BTC’s price history, the 2013 to 2016 cycle saw Bitcoin fall under $200 once, and then again in what is known as a double bottom. What makes this notable is that the second collapse came after a golden cross.As the ill-titled Magic Poop Cannon explains, Bitcoin’s chart structure, 50-week exponential moving average, 50- and 200-day moving averages, Fibonacci retracement levels, and Relative Strength Index (RSI) readings are effectively identical to that seen in mid-July. Thus, Magic predicts that if historical precedent is followed, BTC will trade in the low to mid $5,000s until May 7th, and will then fall to its 0.618 Fibonacci retracement, which currently sits at $4,025.The Other Side Of The EquationThen again, some are sure that a further rally is in store for the cryptocurrency market, not a rapid 25% decline. On Monday, prominent trader Crypto Rand suggested that BTC is currently trading in a bullish pennant” pattern, marked by a tightening range and higher lows. If the pennant plays out as it does in technical analysis bibles, Rand remarks that Bitcoin will soon see a massive breakout to the upside, potentially “over the $6,000 region” as the analyst explains. This is notable, as the analyst somewhat called BTC’s previous breakout past $4,200 earlier this year.Rand isn’t the only one sure that $6,000 is inbound. Lisa Edwards, the sister of Bitcoin Satoshi’s Vision (BSV) supporter Craig Wright (yes, the Dr. Craig Wright), recently claimed that Bitcoin’s logarithmic weekly chart is currently expressing “a strong bullish divergence and bull flag.” With this, Edwards determined that a move to $6,250 could come to fruition in the short-term.And as trader B.Biddles explains, Bitcoin’s one-week chart still resembles a textbook bump-and-run reversal bottom, which means that a rapid “uphill” run may be in the works for cryptocurrencies across the board.👀 This is feeling like where this shape is confirmed or rejected. We hit 5.65 and are now sitting comfortably in the 5.5s. My leaning is we run, baby. https://t.co/KRfBlPnHVE— B.Biddles (@thalamu_) April 23, 2019Featured Image from Shutterstock
Has Bitcoin (BTC) bottomed? This is the question that has pained crypto investors since BTC plummeted to $3,150 in the middle of December.While some, especially those subscribed to the Hyperwave theory, claim that cryptocurrencies are poised to head lower, a leading analytics researcher claims that if historical trends are followed, the bears have already bit the dust.Related Reading: Bitcoin May Have Bottomed, But Crypto Could Still See A “Black Swan” EventBitcoin Might Just Have BottomedIn a recent Twitter post, PlanB, a pseudonymous industry analyst that hails from the world of traditional finance, recently expressed that Bitcoin may just have bottomed. To back this call, he refers to Bitcoin’s stock-to-flow (SF) ratio, which, for the uninitiated, weighs an asset’s above ground supply (stock) and issuance rate (flow), and how it relates to BTC.As reported by NewsBTC previously, PlanB determined that the market capitalization of commodities, especially silver and gold, can be predicted by plotting their respective SF ratios on a logarithmic graph. He recently discovered that Bitcoin, defined as a deflationary commodity by some entities, fits this model too.New #bitcoin chart: Stock-to-Flow MultipleLike the Mayer Multiple (bitcoin price / 200w moving average), SF Multiple (bitcoin price / SF model price) indicates tops and bottoms.
– ATH 2011, 2013, 2017 is 3-13x
– bottom after ATH = 50%
– after halvings price lags SF model price pic.twitter.com/bqB854rxA3— planB (@100trillionUSD) April 19, 2019And thus, he created the Bitcoin Stock-to-Flow Multiple (BSFM), which puts the actual value of BTC over what the SF model predicts it should be.Per PlanB, the BSFM indicates tops and bottoms in markets. He writes that historically, in 2011, 2012, and 2015, cryptocurrencies found a bottom when the multiple reached 0.5, meaning that BTC was undervalued by 50% of its stock-to-flow model. And guess what? The BSFM entered the 0.5 range in late-2018, which was when BTC fell to $3,150 in what many deemed the final capitulation event.Indeed, in a recent episode of Stephen Livera’s podcast, PlanB remarked that in December, his model predicted that Bitcoin’s “fair value” was approximately $6,200, but that BTC was actually trading at $3,150 on spot markets. That isn’t 50% to a tee, but you get the point.The Pre-Halving Bitcoin RallyAs you well know, BTC is currently trading at $5,200, meaning that according to PlanB’s thesis, it is currently still undervalued, despite early-April’s jump. But, as market analyst GravityWave recently hinted at, the “fair value” derived from the SF model has historically pulled BTC higher along with it, save for nuances like December’s capitulation and 2017’s jaw-dropping rally past $10,000.An alternative view of @100trillionUSD‘s stock-to-flow/price relationship showing how price oscillates around the fundamental prediction of scarcity-based market value. Big thanks to planB for doing the work on that, and to @saifedean for popularizing the SF concept. pic.twitter.com/gl8JJ5pKjT— GravityWave (@gravitywave2) April 19, 2019Thus, if the value of Bitcoin matches the SF model, each BTC would be valued at $10,750 by the time of the block reward reduction, slated to occur in early-May of 2020. And by the end of the year, BTC should be valued in the $9,000s if PlanB’s model is followed. But is this possible?According to an array of prominent traders, BTC reaching quintuple digits by the year’s end is entirely possible. In a recent episode of Ivan On Tech’s “Good Morning Crypto,” a daily segment hosted by a Dutch blockchain programmer, Russian trader Anatoly Radchenko was about whether or not he agrees with the cheery sentiment put forth by Tom Lee and Mike Novogratz, who claimed that BTC could see $10,000.Radchenko agreed, claiming that while BTC will likely take at least three months to rally to $7,000, by New Year’s Eve 2019, the cryptocurrency could see $10,000.
And Radchenko’s peers would agree. In a profanity-ridden installment of “Crypto Trader Digest,” Arthur Hayes, an institutional trader turned the chief executive of BitMEX, explained that he expects for the cryptocurrency market to return as 2019 comes to a close. Egging on CNBC “Fast Money” host Melissa Lee, he wrote that with the influx of venture capital money that will be spawned by the “IPO Frenzy,” the Bitcoin markets could see “green shoots” in early Q4, which will cause BTC to “claw back to $10,000.”
Clem Chambers of Forbes, too, would agree. He recently wrote that as a result of the recent increase in Tether (USDT) supply, Bitcoin could see $10,000 sometime this year. It was explained that the increase in stablecoin market capitalization signals that money, what some call “dry powder,” is flowing into the crypto sidelines for when the time is right. Chambers, the chief executive of ADVFN, adds that over the course of the coming eight months, BTC may begin to take interest away from gold, and could even start to share “a crown with gold” for the store of value market.
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I’m sure you’ve heard the popular adage: “great minds think alike.” While this seems true in scientific contexts, in the case of finance, even cryptocurrencies, this is far from the case. Some of the greatest minds in Bitcoin (BTC) analysis recently convened in a Skype room to discuss if the bottom is truly in.Over eight attended the six-hour call, which was live-streamed to Tone Vays’ Youtube channel, and there were two clear narratives: on-chain fundamentals show that Bitcoin found a bottom at $3,150, and historical technicals show that BTC will establish lower lows in this cycle. Let’s take a closer look at their theories.Is the bottom in, final figures…% probability Bitcoin has bottomed:BULLS@MustStopMurad 75% @kenoshaking 80%@woonomic 95%BEARS@ToneVays 40%@venzen 39%@LucidInvestment 20%https://t.co/k77hCnGAuR https://t.co/97O1eeixq7— Willy Woo (@woonomic) April 20, 2019The Fundamental Bitcoin BullsFirst, the bulls, who primarily based their conjecture off data from the Bitcoin Blockchain, rather than technicals on a chart. This side consisted of Adaptive Capital’s Murad Mahmudov (75% sure bottom is in) and David Puell (80%), independent researcher Willy Woo (95%), and Tuur Demeester (80%), who recently a report claiming that BTC is looking amazing fundamentally.Related Reading: Whales Are Scooping Up Bitcoin As Crypto Seemingly Bottoms, Report ShowsAs explained in a recent tweetstorm, blockchain models, which included fees, Network Value to Transactions (NVT), among other factors, are leaning bullish across the board.Balanced Price from Adaptive Capital’s Puell, for instance, resembled the signal’s action as the 2015 – 2016 bear market came to a close. NVT Signal’s recent action resembles that seen in early-2015, which came after BTC established a long-term floor.Woo’s very own Cumulative Value Days Destroyed indicator, which has historically caught bottoms to near a tee, showed that Bitcoin recently broke out of an upper accumulation band following a strong, convincing bounce off the lower band. And three key iterations of NVT have begun to converge, looking much like they did at 2015’s bottom.New updates to the Woobull pricing model chart. pic.twitter.com/0g193OXVpe— Willy Woo (@woonomic) April 9, 2019Demeester’s assertions were slightly different. He did acknowledge the importance of the aforementioned factors, but instead looked to the fact that the Bitcoin Unrealized Profit/Loss (BUPL) indicator has entered a stage of “hope,” whales are accumulating, and market volatility is low to come to the conclusion that BTC is likely ready to soon enter a bullish state.The Technical Bitcoin BearsSecond, but equally as important, the bears. This subset of traders claimed that per longer-term technical trends, price action seen in historical bubbles, Tyler Jenks/Lucid Investments’ Hyperwave Theory, and some industry developments, BTC could easily fall further than $3,000. This side consisted of former institutional investor Tone Vays (40% sure bottom is in), Venzen Khaosan (39%), Tyler Jenks (20%), and Leah Wald.The group’s primary point was that if Jenks’ proprietary Hyperwave form of analysis continues to play out, Bitcoin’s drawdown to $3,150 was only part of the leg down, not it in its entirety.For those who missed the memo, a Hyperwave is a parabolic trend and a massive drawdown pattern that asset classes/markets with the potential to catalyze large macroeconomic shifts tend to experience at one point or another. Jenks has applied Hyperwave to the Dotcom boom and bust, the growth of Japan’s economy in the 70s and 80s, and, of course, cryptocurrencies.
If Bitcoin finishes its ongoing Hyperwave, which predicted the rally to $20,000 and subsequent drawdown, BTC could fall to as low as the $1,000s. In fact, Lead Wald, a subscriber/student of Jenks’ theories, and Jenks himself recently bet analyst Filb Filb that Bitcoin will hit $1,500 before $6,500.
Venzen agreed but used his own analysis to back his claim that a move to $1,500 isn’t off the table. He claimed that industry fundamentals, like Bakkt or Fidelity running to set up a crypto shop, won’t drive prices, adding that what he calls a “Pi Cycle” predicts BTC will capitulate to $1,000 to $1,500 before rallying into the 2020 halving.
Only time will tell which faction will be right in their analysis.
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In the eyes of analysts across the board, Bitcoin (BTC) decidedly bottomed at $3,150. They cite the fact that at $3,150, BTC was down 85% from its all-time highs, which is where the crypto asset has bottomed in previous cycles, coupled with the idea that industry fundamentals are better than ever.And so far, this call has been vindicated, as BTC now sits at a casual $5,300. However, some pundits fear that a so-called “black swan” event could still strike this market, forcing Bitcoin and other cryptocurrencies to enter a freefall. Let’s take a look.Related Reading: Crypto Professionals Predict $2,400 Bitcoin Bottom, Expect Infrastructure To Spark Bull RunWhy Crypto Could Head Lower From HereAdamant Capital, an Alpha-seeking Bitcoin fund, recently released its latest report about the state of cryptocurrency markets. While the report, titled “Bitcoin in Heavy Accumulation,” had bullish undertones, its authors, which includes prominent analyst Tuur Demeester, weren’t remiss to not mention the cases for lower lows in this cycle.In under 24 hours, over 7,000 investors worldwide read our report online, and over 2,500 downloaded the pdf. Check out “Bitcoin in Heavy Accumulation”here: https://t.co/DkjedcF3RG pic.twitter.com/C4pGG08uGM— Tuur Demeester (@TuurDemeester) April 19, 2019Adamant’s researchers and partners gave three/four cases for a collapse to new lows in the coming months.First, hacks or failures of exchanges and other infrastructure providers. While the unwinding of the 2013 rally was partially a result of natural cycles, some of the drawdown was catalyzed by the decimation of Mt. Gox, hacked for hundreds of thousands of BTC. Adamant postulates that if a similar event occurs in the coming six months, Bitcoin markets could see a negative demand shock.Second, a macroeconomic crash. Although cryptocurrencies have been lauded as non-correlated assets to stocks, it was proposed that a collapse in traditional markets could create a situation similar to the “2008 paradox” of the value of gold falling by 30%, even as demand surged.Last, a “secondary Bitcoin mining capitulation.” Adamant remarks that while miners have already capitulated in this cycle already, if BTC “drifts down” to $3,000, this capitulation could be replicated as miners go out of business en-masse.Bitcoin Looks HopefulMore likely than not, however, Bitcoin has bottomed. As reported by NewsBTC previously, the same report showed clear signs that BTC is in accumulation.It was explained that the Bitcoin Unrealized Profit/Loss (BUPL) indicator, which aims to estimate how much BTC holders’ are cumulatively profiting or losing, is reading at $13 billion in the positive. If the indicator is adjusted for the approximate number of lost coins, however, BUPL currently reads at $3 billion — 3% — of unrealized losses.While this doesn’t sound all too important, as the measure is lesser-known, as Adamant explains, the recent BUPL movements confirms that Bitcoin has exited a “capitulation” phase, entering into a stage of “hope” (and fear). It is important to note that when BTC exited the “capitulation” phase during 2014 to 2016’s cycle, there was strong BUPL uptick, as we are experiencing now due to Bitcoin’s recent rally past $5,000.What’s even more optimistic is that the 60-day volatility chart for BTC is currently sitting at 5%, a level not seen since late-2016, and even fell as low as 2% in early-November 2018. This, as Murad Mahmudov once explained, shows that a Bitcoin rally could be on the horizon.Featured Image from Shutterstock