TronWeekly

Crypto World News

You are here: Home / Archives for Bitcoin news

Bitcoin news

Paraguay’s Bitcoin [BTC] Bill Targets Mining and Trading

by

A highly anticipated bill seeking to regulate mining and trading in Bitcoin [BTC] and other crypto-assets in Paraguay finally gets the green signal from the country’s Senate as per a recent announcement. Revealing more about the same, Senator Fernando Silva Facetti, one of the co-authors of the bill, said on his official Twitter handle that the bill will be debated in Paraguay’s Chamber of Deputies in the year 2022.

According to the bill, the Industry and Commerce Secretariat will be overseeing crypto mining in the country, with the help of the Anti-Money Laundering Office and the National Securities Commission. In addition to that, the National Electricity Administration will be involved in the activity’s regulation. Interestingly, the cost of electricity in the South American nation is the lowest in the region costing a mere $0.05 per kilowatt-hour, according to Paraguayan Congressman Carlitos Rejala, who further added that nearly 100 percent of energy output originates from hydroelectric sources.

Earlier in July this year, in an interview with a leading media firm, Rejala gave an insight into the draft bill that was released then. The bill hinted at stronger regulatory control from the country’s regulators in terms of bitcoin mining, as well as providing safety to investors from enterprises that offer bitcoin services.

During that time, Rejala said,

“With this we want to welcome the innovation of cryptocurrencies in Paraguay to the world. This is the result of a very strong and arduous teamwork of many experts in the field, both local and foreign.”

Bitcoin nearing its end?

With BTC price has been laying low, academic Eswar Prasad of Cornell University went on to predict an apocalyptic picture of the king coin’s survivability in the near future. Emphasizing that ” bitcoin is not serving well as a medium of exchange” owing to its high volatility and is environmentally destructive”, eventually leading users to look for other crypto-assets with enhanced use cases.

Well, not all is doom and gloom, in a recent survey conducted by CNBC revealed that a staggering 83% of millennial millionaires own cryptocurrencies and that they’re planning to add more in 2022 despite the ongoing price drawdown in the crypto market.

XRP Fell Only 3% Against Bitcoin’s Value During Last Week’s Collapse

by

A lot went down over the past week in the digital asset ecosystem. Bitcoin and the collective industry shaved close to 18% in market capitalization as the total valuation dropped from $375 billion to $312 billion at press time. However, the moral was still somewhat high in the industry as a complete washout did not take place. Some of the tokens were still consolidating at a higher range, including Bitcoin, hence the situation was not extremely brutal.

According to Glassnode’s weekly update, BTC began the start of last week at a high of $11,622 to plummet all the way down to $10,343. The further decline took the asset as low as $9892 on a couple of occasions.

However, the network health remains in the positive range according to Glassnode’s analysis, and over the past week, liquidity increased by 14 points. The report added,

“Trading liquidity saw a large uptick as Bitcoin flowed onto exchanges, while transaction liquidity went up due to an increase in on-chain transactions from the beginning of the week.”

Although Liquidity witnessed an uptick, the market sentiment seemed to have taken a hard hit as the overall investment sentiment went down due to the decrease in profitability.

Altcoins faltered before BTC

The fate of all digital assets looked grim last week and against Bitcoin, most of them lost quite a bit of value. Chainlink was one of the largest losers in terms of decline losing close to 12.6%, while Litcoin lost up to 11.5% against Bitcoin.

Bitcoin’s forked compatriot, Bitcoin Cash and Bitcoin SV lost 6.2% and 4.4% respectively while Ethereum declined by 4.7%.

Surprisingly, XRP shredded only 3% of its total market cap with respect to Bitcoin. In the past, XRP has always recorded heavy downtrends during a BTC collapse but the token managed to hold its own over the past week. Additionally, the reported stated,

“As the market becomes more volatile, investors appear to be de-risking by moving from lower-cap alts back into more reliable assets such as BTC and ETH.”

Bitcoin’s recovery already on the move?

bitcoin tradingview

At the moment, Bitcoin seems to release off its struggles from the past 7-days, as the asset has breached above the 50-day moving average in the 1-hour chart. If BTC is able to hold a position above the 50-day MA for the current period, there is a chance Bitcoin will be able to reverse the current bearish dilemma quicker than anyone expected.

Bitcoin Struggling at $12,000 is Only a Small Problem

by

Time and Time again, a resistance zone is seemingly getting attention from the community, which becomes Bitcoin’s immediate forward struggle. During the early period of 2020, The resistance set by $10,450 was considered the next big proving point, and right now, the tale is repeating with respect to the $12,000.

Bitcoin and Ethereum hit their yearly high of 2020 together during the last week of July and on the 1st of August. Since then, Ethereum has gone on to eclipse its $400 high, clocking in $423 at first, and then $442 over the past 24-hours. The same hasn’t been the case for Bitcoin, which was still under $11,900 at the time of writing this article.

However, the $12,000 resistance for Bitcoin was fundamentally more dependent on its macroeconomics than the momentum of a bull run, here’s why.

Bitcoin $12,000 will break because of retail and institution

A huge difference between Bitcoin rallies of the past to present is the fact that accredited players are involved in the BTC market at the moment. When Bitcoin dipped down to $11,000 on 2nd August, it was retail and institutional investors who were trying to buying the asset but a large portion of the market was selling as well.

Now, according to a recent report, because of the increasing net position of the CME Bitcoin Futures(Retail), institutional investors were getting forced to play their hand as well in the market.

https bucketeer e05bbc84 baa3 437e 9518 adb32be77984.s3.amazonaws.com public images efa581ad 3505 4498 9fd8 f7a55f9e160a 3245x2101

The improved net position depicted in the chart is a prime example that the trend is moving between unassured investors, to the accredited ones. The report mentioned that over time, the “smart money” from institutions would flood into Bitcoin, raising the net position even more.

The strong fundamental thing attested to the current bullish rally is that investors were not selling off under bearish pressure. During the time of 2017, or mid-2019, when Bitcoin peaked at their highs, the correction was quick to follow because the potential was not evaluated well.

The Open-Interest is a great example of the increased interest. 2020 has seen multiple exchanges registering high all-time high OIs and there is with respect to lack of strong foundation.

2020 has already been a game-changer for Bitcoin. There is no doubt $12,000 will be breached soon as well because the narrative of this bullish rally is far more strengthened than any other rally over the past couple of years.

Bitcoin: NASDAQ Listed-Firm Invest $250 Million in BTC as Part of “Strategic Allocation”

by

Over the past few hours, Bitcoin’s valuation stumbled down to $11,300, as the support line at $11,500 was briefly breached. With the price recovering back up to $11,375 at press time, it is fair to say that the asset is struggling at the moment.

Keeping that in mind, major organizations were hardly getting deterred as some of them saw huge potential in Bitcoin from a long-term scenario.

According to a report by Fortune, MicroStrategy, a Virginia-based business intelligence software organization, they have accumulated a whopping 21,454 bitcoins worth nearly $ 250 million. The business firm worth more than $1.2 billion, also listed on NASDAQ, indicated that the digital asset offered a  “reasonable hedge against inflation” and that, it was a “capital allocation strategy“.

With the dollar economy substantially weakening in 2020 due to the apparent Pandemic and consistent quantitative easing measure, Michael J. Saylor, CEO of MicroStrategy, indicated that they were currently turning their heads towards digital assets. According to him, the company believed that such “alternative investments” allow MicroStrategy to protect that U.S dollar-dominated balance sheet. He added,

“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility and community ethos of bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”

The announcement inevitably gained attention from the Bitcoin community, and none other than Barry Silbert, CEO of Grayscale, responded on Twitter. Silbert conveyed,

Such mainstream investment by a publicly traded firm unheard of in the markets of Bitcoin. Organizations with such credibility usually inject capital into bonds or stocks as part of a capital hedge strategy, so taking the route to Bitcoin only strengthens the legitimacy of the digital asset.

 

Willy Woo suggested Bitcoin is in Major bull phase

Although some of the people were lamenting on the short-term decline of Bitcoin, Willy Woo, popular crypto analyst, and Bitcoin proponent suggested that the digital asset is currently entering a major bull phase.

He suggested that 93.5% of the total Bitcoin supply is currently in profit hence, even though the price under a state of correction, it is all part of the long-term picture.

Previously, Woo had explained that the Bitcoin bull/bear cycle is triggered by the reduction of sell pressure after every 4 years post-halving. Since the beginning, the rally has become more and more stretched out, as the selling pressure from each halvening cycle continues to drop. Therefore, Bitcoin’s current 4-year cycle of the rally may eventually transcend into a traditional rally that may last 10 years.

Ethereum: Vitalik Buterin Dragged into Debate; ETH Supply in Question

by

Underneath the current bull rally, which has led to new yearly highs for Bitcoin and Ethereum, another heated spat is taking place in the ever-active Twitter-sphere. Ether supporters or “Ethereans,” as they say, clash their heads with bitcoin maximalists.

None other than Vitalik Buterin is in the middle of the current conundrum, and the topic of the current argument has been the circulating supply of ETH.

Ethereum’s transaction has skyrocketed exponentially in the past week, leading to a point that Bitcoin proponents have started to accuse Ethereum ‘s ecosystem of being a hotbed of various Ponzi schemes.

A popular Bitcoin maximalist, Udi Wertheimer brought an old incident into the picture from August 2010, when a bug in BTC’s client allowed a specific node to validate an invalid block containing around 92,233,720,368 Bitcoins. Although back then the problem was solved in no-time, Wertheimer, took his shot at Ethereum by stating,

“If it happened in Ethereum, no one would know! Maybe it already happened!”

With the fire already ignited, other Bitcoin maximalists jumped on board and Pierre Rochard indicated the fact that the current supply of Ethereum is actually not known.

With the BTC community piling up on Ethereum’s supposedly shorting-coming, Vitalik Buterin responded. The Ethereum Co-Founder stated,

Now, in hindsight, his response missed putting a nail in the coffin of this argument, as quoting “roughly” was interpreted as in a suspicious manner as well.

However, a software developer from MakerDao, Marc-André Dumas, pictured a bit of clarity in support of Ethereum. Responding to Rochard on Twitter, Dumas suggested after running his code on a quick script to compute the total eth supply, the result was pretty close to the number exhibited by etherscan.io.

Multiple metrics platforms such as Messari, Coingecko, and CoinMarketCap were all suggesting a similar circulating supply that was around 112,000,0000.

Hence, for the time being, the debate seems to be over, but it is never really over between the community members of Ethereum and Bitcoin.

Binance Head Negative to Cryptocurrencies Pumping to Fresh Heights

by

The crypto-currency community has been betting on version 2.0 of the altcoin season. Back in March, a team of researchers at Binance suggested that the crypto market might be approaching the Alt season. A situation where alternative cryptocurrencies (altcoins) pump hundreds of percentages and outperform the leading crypto, Bitcoin.

Well, it’s worth noting that the final alt season took place between 2017 and 2018 after bitcoin hit below-34%. The 6th of March Binance Research Paper hinted at renewed activity across the Altcoin industry. However, Binance CEO Changpeng Zhao recently came out claiming the anticipation that all altcoins are going to rally is too optimistic and should be dismissed by far.

Hot Anticipation of Alt Season in Third Quarter of 2020

Of course, a number of traders expect altcoins to gain by the third quarter of 2020. Looking at several altcoins, including Dogecoin, ChainLink and Cardano, reveals a frantic effort to take over the price charts.

Among the list, however, only Dogecoin has made gains in excess of a hundred percent. LINK scored at least 6.11 percent on the 24-hour price chart, while Cardano pumped at least 26 percent. Both hit a market price of $5.99 and $0.13 respectively. In addition, the market dominance of Bitcoin still stands at 63 percent.

Low Bitcoin Trading Volume in February

The basis of Binance Team Research back in March was a huge decline in the dominance of Bitcoin’s trading volume back in February. After that, it plunged from 40% to 27%. In fact, the researchers suggested that if the bearish trend were to continue, the high appetite for trade-in altcoins would definitely be rooted.

However, while the market can predict a surge across the following altcoins; Dogecoin, VeChain, Icon, Cardano, 0x and Cosmos; not all altcoins will pump. This is also according to a tweet from Binance CEO, an opinion backed by other industry followers such as Jason Calacanis-an investor in Robinhood and Uber. Who, however, claims that at least 99 percent of altcoin projects have no merit.

Meanwhile, according to CoinmarketCap the cryptocurrency market capitalization stands at $271.3 billion.

Bitcoin’s Liquidity concerns highlighted with the instability of Bid-Ask spread

by

The digital asset industry put its best foot forward at the start of 2020.After witnessing a collective bullish rally, which saw Bitcoin surge up to $10,145 by February 2nd week.  Since then, however, an unexpected slump has sparked a series of misfortunes for the biggest digital asset, as on 12 March BTC succumbed to $3800.

In order to understand market conditions, analysis of the bid-ask spread is a common practice. The Bid-Ask spread is the difference between an amount the buyer is willing to pay and the amount a seller is ready to accept. The measurement scale is taken in terms of basis points or bps, where 1 bps=0.01%.

Coinmetrics recent report conducted a study to analyze the Bid-Ask spread in the current market.

Bid-Ask spread indicated absence of Liquidity

According to common consensus, a B/O spread should usually be under 20 bps under normal trading parameters. On observing the chart below, a normal spread in the market can be understood.

Image 1

However, large price movements usually create a ripple effect in the Bid-Ask spread, as the market instantly reacts to market volatility.

During September 2019, Bitcoin‘s price dropped from $9500 to $800 within a 24-hour window and the Bid-Ask spread jumped drastically for a brief period in the charts.

Image 2

As observed in the chart above, the B/O spread spike above 50 bps but as the price attained stability, the spread was under 20 bps levels again in the network.

In light of the above scenario, the situation was significantly different at the present time.

The slump on 12th-13th March inevitably affected Bid-Ask spread as usual but since then, the spread levels have failed to return to normalcy.

Image 3

B/O spread data continued to indicate levels above 20 bps until 23rd March, which is exactly 10 days after the crash. Such volatility in the B/O spread implied the market continued to lose its liquidity.

The community speculated that another reason for the reduction of liquidity is the fact that users expected the turbulence to continue, and they were waiting to improve their spreads in the market.

Lack of Open-Interest in Derivatives Market

An argument can be made that liquidity in the exchanges was dropping due to the absence of exiting market investors. As mentioned before, a significant part of investors conducted a sell-off on the 12th and since then, traders have idealized a cautious approach.

The Open-Interest on major exchanges hasn’t recovered as well, hence the Bid-Ask spread continues to indicate a loss of liquidity.

Is Ethereum’s Price Action Dependent on Bitcoin?

by

The Underlying Correlation Between Bitcoin and Ethereum

The correlation coefficient is the statistical measure of strength that two relative variables have in their relationship. Analysts observed a sync performance between Ethereum and Bitcoin since last year. Both coins have a strong positive relationship. Where their price correlation coefficient is 0.68.

This estimate represents the past 100 days of price action for both assets. The correlation measurement usually has 1 as the strongest positive correlation. -1 represents the strongest negative correlation.

A negative coefficient reveals two prices moving in opposite trends. The positive coefficient, however, shows price actions moving in the same direction.

In this regard, the price of Ethereum has most times depending on the valuation of Bitcoin. Here is why? 

Oftentimes factors such as expert forecasts, calamities and major political events have influenced cryptocurrency market sentiment.

Closely, it turns out that overall cryptocurrency market sentiment has a huge influence on Bitcoin. Therefore it is likely that the price of a couple altcoins could depend on the price action of Bitcoin.

According to Skew, Ethereum posted the highest correlation coefficient with Bitcoin for two consecutive years. The total average correlation is 0.9. While 2019 posted the highest correlation index between both digital assets. 

2018 bear market will go down the books of history given the historic bitcoin price crash. A squashing crypto market bloodbath followed the massive price shed. This indicated a striking correlation between the price of Bitcoin and that of all crypto assets.

The stock market has witnessed a high correlation between the United States Dollar and equity markets. As the US dollar is the largest store of wealth, so is Bitcoin the largest store of asset class wealth. It, therefore, makes sense that the overall performance of crypto markets is pegged on Bitcoin. 

However, most traders and analysts agree the Ethereum – Bitcoin correlation is a natural situation in the cryptocurrency market. Meanwhile, Michael Van de Poppe compared the correlation coefficient in crypto markets to that of commodities. The Amsterdam Stock Exchange trader and market analysts said gold leads in the commodities asset class. Gold’s price sets the pace for other metals. 

It is therefore clear that Bitcoin’s price could change as a result of government policies, high volatility in traditional financial markets; but this change will likely reflect on the entire cryptocurrency market. However, Van de Poppe notes slight variations in this observation. He says: 

“Some parts the correlation is high in which Ethereum outperforms Bitcoin, in some parts, it’s low as Ethereum drops hard against Bitcoin, while Bitcoin trends up against USD. It’s different in different parts.”

Ethereum will not necessarily repeat Bitcoin price movements. A correlation study for the period between June 2017 and December 2019 revealed that 5 of 14 cases indicated a strong positive correlation. While four cases showed a negative correlation coefficient.

However, the correlation between Ethereum and Bitcoin has intensified since the last half of 2019. Nonetheless, researchers at the San Francisco Open Exchange reveal Ethereum’s strong correlation is a result of general failure.

Particularly the failure to launch Ethereum 2.0 in 2019. Several studies have also been trying to establish a correlation pattern between cryptocurrency and equity markets. Sadly, none was identified and traders have been quick to suggest that correlation is not a reliable tool for market analysis. 

 

Possible Implications of Brexit On Bitcoin And The Entire Cryptocurrency Industry

by

After years of planning and plotting, The Great Britain has finally left European Union. This Brexit topic has not only divided Britain and Europe, but also a lot of others worldwide, who are now worried about what effects Brexit will have on Bitcoin and the rest of the cryptocurrency industry.  

This event is expected to bring about a big shift in the global economy on top of several unforeseen reverberations. It also begs the question, will this geopolitical cause have any impacts on bitcoin and crypto?

The obvious prediction is that European, British and the world markets will make a shift; up or down depending on the side, you are on. However, in the background, a discrete and decentralized financial market is beginning to blossom in mutuality to what happens in the traditional financial sector.

The position of Bitcoin during the post-Brexit period is a topic of great significance in Europe. More so, the break-off of the UK; a major Fintech hub; will have a huge effect on the free flow of cash, investing and general transactions. Some good news to the cryptocurrency industry is that; all of a sudden, Bitcoin looks like a great alternative to all those who would be negatively impacted by this move. 

Will Brexit affect Digital Currencies Prices?

Well, over the last few months during times of international uncertainties such as the falling economy of Argentina, US-China trade wars, the recent tension between the U.S. and Iran; the cryptocurrency industry seemed to be doing even better.  In other words, the industry seems to benefit from Chaos. Some analysts believe that Bitcoin may reach a new high during the Brexit period.

During an interview with the Independent back in 2019, Luno Cryptocurrency exchange CEO Marcus Swanepoel noted that crisis contributes to the price of Bitcoin. As per him, the Argentinian crisis and the trade-war during the time contributed to Bitcoin breaking the market trend by breaching the $10,000 resistance level.

“After lacklustre trading over the weekend, bitcoin went against the market trend yesterday, quickly breaking through the $10,000 level and reaching $10,500,” Swanepoel said.

“Today the focus will be on Europe and the Brexit developments in the UK, as well as the deepening crisis in Argentina. After the Labor Day holiday in the US, all markets are open, and we can expect to see volumes rising in what is normally the busiest trading month of the year.”

 

Moreover, with the Brexit being viewed as an impermanent financial hand-brake, British investors could easily start focusing their regard to the virtual currency space instead of European investments. Well, Brexit will make European investments difficult to attain, less attractive and even harder to operate.

On the same token, the price boost may be minimal because British investors only make up an insignificant portion of the global numbers related to Bitcoin investments.  According to William Thomas, CEO of exchange Cryptomate:

“I would expect to see some upward movement on BTC/GBP markets shortly after the deadline, but since the British pound is a small portion of global crypto volume it may not have a large overall effect on price as some have predicted. It will, however, have a positive impact within the British market, but the degree to which this will affect the global cryptocurrency markets is speculative at this time.”

The post-Brexit Regulation of Cryptocurrencies

On the other hand, the effects of regulations and logistics on cryptocurrency companies operating within the UK are practically indisputable. Its effect on the prices of cryptocurrencies is much more debatable than its impact on regulations.

In reality, the regulatory results of Brexit and the distinct regulatory trail that may probably take place in the UK and the European Union; could have significant repercussions for cryptocurrency firms based outside the UK and wish to continue operating there. In other words, Cryptocurrency firms will have to make serious adjustments and many have already completed their post-Brexit preparations.

Particularly, Coinbase will be making alterations to its e-money service due to Brexit. Additionally, the exchange will switch banks to the Central Bank of Ireland. Back in October, Coinbase did receive an e-money license from the Central Bank of Ireland to adjunct its London operations. With Brexit now a reality, Coinbase is trying to move its business to Ireland. However, it will still be inclined to its U.K. users. 

In conclusion, Brexit may not bring the topsy-turvy legal turmoil as expected. However, with the 11-months transition period after January 31st, cryptocurrency firms will have enough time to clear any legal ambiguities.

 

What’s Up with Bitcoin? JPMorgan Estimates Strange about BTC’s Intrinsic Value 

by

As per JPMorgan strategists led by Nikolaos Panigirtzoglou “Despite Bitcoin being the largest cryptocurrency in terms of market capitalization, its intrinsic value appeared to be below market price“

Where is Bitcoin’s Price Moving?

Intrinsic value is an estimate of the actual or inherent value of the assets and according to JPMorgan, Bitcoin’s intrinsic value remains below market price. The latest document shared by MD Nikolaos in a report states that “The gap has not yet fully closed, suggesting some downside risk remains”.

However, at the time of reporting this, Bitcoin is trading at over $8100 with over 0.49 percent positive mark within the past 24Hs. More so, BTC is holding the dominance of 68.1 percent with the market capitalization counts at around $147,870,488,329 as per the data provided by Coinmarketcap.

However, the other side of comparison reveals that the price of Bitcoin is still down with around 40% from its $14000 peak from last year. More so, a trader who last week predicted that the price of Bitcoin will go up over $8000 is predicting bullish sight for Bitcoin. He went on to say that the Lucid Stop and Reversal indicator is signaling a stop and an entry in the opposite direction when it reverses, marking bullish view. He tweeted as follows;

In addition, coming back to the JPM report, it mentioned that the market price of Bitcoin fell by some 40% from its peak whereas the intrinsic value has increased by around 10%. For the matter of the fact, JPMorgan points out the high institutional interest in Bitcoin-related contracts which anticipates the launch of CME Group Inc options on Jan 13, Monday. While it appears that the options contract will go live today, it remains to see how it affects the price of Bitcoin or may not affect at all.

Another exertion came forth by Adaptive Capital’s Willy Woo who stated that the data suggests clear signs of bull market re-accumulation. He asserted that we are in the re-accumulation phase of a bull market.