Bitcoin continues to slide, casting doubt as an inflation hedge as costs soar

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New York Post 14 July, 2021 - 12:54pm 46 views

Is Crypto in a bear market?

Cryptocurrencies are likely in a bear market, but it may be a short one. According to Coindesk's latest (June) quarterly review, we are more than 76 days into a bear market (defined as a drop of at least 20%, followed by at least 90 days in which the price does not return to its previous high or low). Moneyweb.co.zaBitcoin's bear market could be a short one

China's Anhui Province to Crack Down on Cryptocurrency Mining, State Media Reports

marketscreener.com 14 July, 2021 - 04:20pm

-- East China's Anhui province will shut all cryptocurrency mining projects to address electricity shortages, according to local state media on ahwang.cn on Wednesday.

-- Anhui will face a severe mismatch between electricity supply and demand in the next three years, the state media said. It added that the province will take various measures including curbing energy-intensive projects to tackle the issue.

Full story: http://www.ahwang.cn/anhui/20210714/2260996.html

Bitcoin Breaks Below $33,000 with Bulls on Life Support

FX Empire 14 July, 2021 - 07:21am

Recent macros suggest the world’s most popular crypto asset faces more downsides in spite of rising inflation at the world’s largest economy as data retrieved from the US Bureau of Labour Statistics’ monthly Consumer Price Index (CPI) show goods and services now costing 5.4% more overall than they did a year ago.

The trading volumes for July had been dragging most especially during the last two weekends, which posted the two lowest volume days.

Chart patterns suggest the bulls are holding refugees at $32.7k price levels which had provided a sort of horizontal support in the first two days of this month. This is followed by $32k, $31.5k price levels.

For the month of June alone, Bitcoin posted a 15% loss, as market pundits argue prices are relatively depressed as the economy went into survival mode.

In addition, the long-kept current trend might stay in play as the flagship crypto trade keeps values in range-bound zones, with growing uncertainty surrounding regulations, Crypto bulls lack the firing capacity to push Bitcoin out of the present range-bound trading zones.

With volatility drained out the most valuable crypto asset by market value, partly due to the record exodus of miners in China, the world’s second-largest economy, the Bitcoin network adjusted to an incredible decline in hash-power during this migration as the protocol experienced the biggest difficulty adjustment in history, adjusting down 27.94%.

The aggregate daily mining revenue now stands around $30 million per day, down from $60 million per day, recorded in April further implying miners’ earnings are going south.

For a look at all of today’s economic events, check out our economic calendar.

Bit Mining to raise $50M to fund out-of-China expansion By BTC Peers

Investing.com 14 July, 2021 - 12:00am

Chinese Bitcoin mining company, Bit Mining, has reportedly raised $50 million to finance its relocation out of China.

In a Monday announcement, the NYSE-listed firm disclosed that it had entered into an agreement with some accredited investors to raise the said amount from the sale of 100 million shares and warrants. Bit Mining will be offering 100 million Class A ordinary shares in a private placement. The price tag has been pegged at $5 per 10 shares. Each share carries a warrant that allows investors to purchase additional shares in the future. The warrants will be exercisable six months from the date of issuance at $6.81 per 10 shares.

The company intends to use the net proceeds of the private placement to build new data centers overseas, buy new equipment, and expand its infrastructure.

Last month, Bit Mining’s Chinese operations were suspended in the Sichuan province. Its move to expand out of China is undoubtedly in response to the government’s ongoing clampdown on crypto mining.The consequence of China’s mining crackdown has seen many Chinese miners seek more favorable markets elsewhere, with Texas being a popular destination because of its cheap electricity.

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Is There a Future for Cryptocurrencies Without Privacy Features? | Hacker Noon

hackernoon.com 14 July, 2021 - 12:00am

The vast majority of crypto assets have no default privacy features, raising questions about how viable this approach is. Everyone in the financial industry can benefit from privacy-oriented solutions, and cryptocurrencies should not be an exception.

There has been a notably higher demand for financial privacy over the past few years. Initiatives such as PrivacyRightsNow illustrate that point perfectly. The goal is to have consumers achieve a higher degree of privacy rather than keep empowering financial institutions and governments. There are many good reasons why financial privacy is a must and should, in theory, be a fundamental right for all humans.

The first significant issue in the current system comes through telemarketers. As if unwanted emails about loans, savings, and other financial services weren't enough, telemarketer calls make things even more problematic. Whether banks and their affiliates sell this information to telemarketing companies will always remain a guessing game. However, there have been incidents of financial institutions and their affiliates sharing customers' financial data with telemarketers for a fee. 

A second issue is the growing threat of identity theft and stalking. As consumers' financial details are exposed online, criminals can leverage these details to perform identity theft. As the sharing of social security numbers is not entirely uncommon, a very serious problem is created. In the United States, it is no longer allowed to share SSNs with other companies, even though there are still over 400,000 identity theft cases every year.  Additionally, there is the threat of stalking, as criminals may keep snooping on one's financials without the victim ever being the wiser. 

Unfortunately, it is complicated to achieve financial privacy through normal means. Banks and governments will not necessarily adjust their operations because a few million people are unhappy. As such, more and more people explore cryptocurrencies, an industry with perceived privacy. Nothing could be further from the truth, though. 

Many people think that Bitcoin, Ethereum, and other public blockchains all offer privacy by default. Unfortunately, that is not the case, although users can be pseudonymous when using wallet addresses. However, thanks to the growing popularity of blockchain analysis firms, linking a pseudonymous wallet address to a real-world identity is a lot more straightforward. As a result, there is no absolute privacy to speak of in most coins, although there are exceptions.

Some currencies provide privacy, either at the protocol level or by having users opt-in. Monero leads the privacy and anonymity race, as it has undergone multiple evolutions to provide financial privacy efficiently. Dash, a currency formerly focused on privacy, is now tackling the payments channel. ZCash, PIVX, and others all have some degree of privacy, with varying success. However, all of these currencies suffer from exchanges delisting them for the sole purpose of being privacy-oriented in some shape or form.

Despite this uphill battle, one should never give up on financial privacy. If the eCash project is an example, there is a future ahead for privacy coins. However, that will only be possible through scaling, censorship resistance, and protection from inflation. Privacy alone may no longer be sufficient in this ever-changing financial paradigm. Building sound money first is essential, and eCash opts for that route while introducing optional privacy for those who want it.

To expand the ecosystem, the team also intends to support the Ethereum Virtual Machine, allowing for the development of financial applications, products, and services. Its proof-of-stake consensus layer removes the need for miners, making it different from Bitcoin and Ethereum.

The biggest change is how it will only have two decimal places instead of eight. Lead developer Amaury Sechet feels that a lower unit price can lead to higher bull market appreciation. Personally, I think eight decimals works fine, even if it is a bit confusing to newcomers at first. Opting for two decimals can make more people acquainted with the concept of digital currency. 

In the current financial industry, everyone who owns money is subject to inflation. Whether one wants to admit it or not is irrelevant. Governments and banks continue to print and spend money like there is no tomorrow. Although that approach can give a short-term boost to domestic economies, it will always lead to inflation. For consumers, that means losing purchasing power, requiring them to earn more money to pay for the same goods and services.

Sound money, on the other hand, will protect users from inflation. Precious metals are often considered a store of value as their prices do not diminish. Cryptocurrencies would be a worthwhile addition to this list were they not so volatile. For me, Bitcoin and other public crypto assets can never be considered a store of value until they achieve the status of "sound money".  Unfortunately, these assets will always be liable to a sudden appreciation of depreciation in value.

Changing that narrative will usher in the next generation of crypto assets. While some may see stablecoins as sound money, they often are not. Most stablecoins are backed by fiat currency reserves, the same currency that is subject to inflation. As such, one's stablecoin holdings are equally subject to inflation. It baffles me how few people seem to grasp that concept today.

Rather than non-privacy coins and stablecoins, building sound money will serve a second purpose. It is crucial to protect consumers from censorship. Giving them a say about how they manage and spend their wealth is very different from today's financial system. banks can prevent customers and corporations from completing purchases for arbitrary reasons.

 Moreover, if one tries to express an opinion online and accepts payments through traditional means, payment processors will stop working with you. WikiLeaks witnessed that first hand, yet Bitcoin offered a viable solution. Imagine if a solution offers optional privacy, sound money, and censorship-resistance all rolled into one? I cannot wait to see what the future holds in this regard.

The future of cryptocurrency will require some degree of privacy to protect consumers from prying eyes and censorship. At the same time, the focus needs to shift to provide sound money capable of avoiding inflation. Creating a new currency that will not act as volatile as Bitcoin or Ethereum - even on a good day - will not be easy, but it is possible with the right fundamentals. 

I expect great things in the field as new infrastructure is already under development. However, although I remain a big fan of Bitcoin, no one can look past its shortcomings and inefficiencies. Better ideas and concepts will emerge, providing consumers with the solutions they require in this digital age. That doesn't mean Bitcoin will go away, as some of these under-development features may be integrated in that protocol over time.

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Why Bitcoin, Dogecoin, and Ethereum Keep Dropping | The Motley Fool

The Motley Fool 13 July, 2021 - 10:55am

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

It's Tuesday, and for the second day in a row, cryptocurrencies are going down. In 10:30 a.m. EDT trading today:

Why is that? As we saw last week, and as we saw yesterday, the answer appears to be government regulation and action -- not just in the U.S. but around the world.

In the United Kingdom, authorities just announced a "significant" operation to seize what they called laundered "proceeds of crime" in the form of cryptocurrency, according to CNN. In what the news organization is referring to as Britain's largest-ever seizure of cryptocurrency -- and one of the biggest seizures anywhere, ever -- London's Metropolitan Police confiscated $249 million worth of crypto (without divulging which kinds, specifically) allegedly linked to international money-laundering operations.  

And although no one can fault authorities for investigating and confiscating any ill-gotten gains, the fact that police forces around the world are working to trace these funds suggests that crypto's untraceability and anonymity -- two big reasons why cryptocurrency got popular in the first place -- are now no longer assured.

Nor is the U.K. the only source of headaches for crypto traders. In South Korea, Reuters reports that a law passed in March will require cryptocurrency exchanges to "partner with banks" and obtain a "security certificate" from the government if they want to keep doing business. The more regulations government piles onto crypto, the less attractive it might be to users -- and the more expensive it will become.  

Indeed, it seems traders' enthusiasm for cryptocurrency may already be waning. According to data from the largest crypto exchanges, trading volumes for Bitcoin, Ethereum, Dogecoin, and other forms of cryptocurrency "fell more than 40% in June," as CNBC reported yesterday. 

"Half the market is gone," a crypto research analyst told CNBC. And with buyers now in scarce supply, there's less bidding to drive prices higher -- or even support them where they're at. Result: Cryptocurrency is now heading into the third month of a "two-month correction period," according to CNBC. Since early May, for example, the value of Bitcoin has fallen 44%.  

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Bitcoin’s Bullish Threat Declines Even As Ethereum’s Rises | Investing.com

Investing.com 12 July, 2021 - 08:31am

This article was written exclusively for Investing.com 

Over the past weeks and months, Bitcoin appears to have handed the bullish baton to Ethereum. That wasn't the case when each cryptocurrency was introduced to markets. Both provided early investors with extraordinary financial rewards.

In 2010, a Bitcoin token was only five cents. On Apr. 14, at over $65,500, a $10 investment at its inauguration would have been worth over $13.1 million. By August 2015, Bitcoin had risen to $261; that $10 investment was worth $52,200 in mid-April.

In August 2017, an Ethereum token was at 75.33 cents. Switching to Ethereum in mid-2017 bought nearly 69,300 Ether tokens. At the May high of over $4,400, the $10 purchase in 2010 and swap in 2017 was worth over $300 million. Of course, hindsight is always twenty-twenty.

Meanwhile, Ethereum may be the cryptocurrency with the second-leading market cap, but its price momentum in 2021 has made it the leader in capital appreciation.

Like shooting stars, Bitcoin and Ethereum came tumbling down in the second quarter as the parabolic rallies imploded. While a text from Elon Musk about the carbon footprint of cryptocurrencies left by Bitcoin mining and Tesla's (NASDAQ:TSLA) decision to abandon accepting the crypto as payment for its EVs stated the selling, China’s ban accelerated the declines.

The chart of Bitcoin futures highlights the decline from a record $65,520 high on Apr. 14 to a low of $28,800 in late June. Bitcoin was around the $33,500 level at the end of last week, a lot closer to the low than the mid-April peak.

Ethereum reached $4,406.50 per token in mid-May before the price dropped like a stone to $1,697.75 in late June. At the $2,136 level on July 9, Ethereum was also closer to the low than the high.

In Q2, Bitcoin fell 42.11% from its closing level at the end of March 2021. Ethereum moved 16.60% higher over the same period.

Over the first six months of 2021, Bitcoin was still 20.09% higher than its closing price at the end of 2020. Ethereum was up 205.19% over the same timeframe. Ethereum has been the star of the top two cryptocurrencies in 2021 as the market has chosen to support the crypto with the second-leading market cap.

As Ethereum moved over ten times higher than Bitcoin on a percentage basis over the first six months of 2021, the market has sent a powerful message.

In markets across all asset classes, analysts and pundits try to explain why one market outperforms or underperforms another. However, the most significant factor is, that it does.

Sentiment or herd behavior is the most critical factor when explaining an asset’s performance. Nonetheless, at the end of the day, the explanations are meaningless. All that matters is price action.

The asset's chart is the single compelling factor; the analysis is secondary. The research becomes stale while price action is a living, breathing, real-time snapshot of sentiment.

Prices move higher when buyers are more aggressive than sellers and vice versa. The price action in Bitcoin and Ethereum over the first half of 2021 validates the market’s pivot towards the latter.

Ethereum was born as a complement to Bitcoin, but it developed into a competing protocol. Blockchain technology is the heart and soul of fintech. The philosophical question—which came first, the chicken or the egg—applies to Bitcoin and blockchain.

However, Bitcoin has developed into a store of value and medium of exchange or a currency with a libertarian twist. Meanwhile, Ethereum embodies the most attractive attributes of blockchain as transactions are far faster and efficient on the Ethereum network than on Bitcoin’s.

As fintech continues to revolutionize the financial world, reducing settlement times on transactions from days to seconds or even shorter, the Ethereum protocol’s value has grown. The ascent of the Ethereum token and its outperformance compared to Bitcoin over the first half of 2021 reflects the value the market is placing on the cryptocurrency with the second-highest market cap.

While Ethereum’s efficiency explains the recent performance, the price action is enough to validate its value.

All cryptocurrencies are a threat to the government’s control of the money supply. Controlling the purse strings is a critical component of power over the masses. Cryptocurrencies are a libertarian means of exchange. A libertarian philosophy seeks to maximize autonomy, political and economic freedom, remove power from governments, and return it to individuals. The central bank and government control of the money supply run counter to libertarian theory.

Therefore, Bitcoin and Ethereum pose a threat to governments. Cryptocurrency prices are a function of the bids and offers for the tokens, nothing else. They have limited supplies, while governments can print fiat currencies to their heart’s content. 

Though governments shroud their policy decisions to expand or contract the money supply with explanations of “stability” or “stimulus,”  it all comes down to control. The cryptos reflect a free-market approach to money without government interference.

We are likely to hear negative comments from governments rise with the market cap of the cryptocurrency asset class as growth comes at the expense of fiat currency’s role in the global financial system. The recent hacks and ransom payments from Colonial Pipeline and JBS, the energy and meat packing companies, will serve as fodder for the government to challenge cryptocurrencies for their nefarious uses.

Governments will strive to increase regulations and control over the cryptocurrency market. They will eventually issue digital currencies they can control using fintech innovations within a framework that achieves their goal of controlling the money supply.

Meanwhile, Bitcoin has been in the crosshairs of governments, but that focus could shift to Ethereum. It is a more robust protocol, achieving market acceptance because of its speed and efficiency, making it a potential target for government regulators and legislators looking to maintain the status quo.

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First condition to get some interest in BTC's long side would be to break above the channel around 34k. Original Post

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