CoinShares: ‘Bitcoin Is Like a Risky Tech Stock’’

Bitcoin acts more like a tech startup stock than digital gold — with investors reaping big rewards if it works but potentially losing everything if the crypto asset fails.

That’s the conclusion of an Aug. 10 report from digital asset manager CoinShares titled A Little Bitcoin Goes a Long Way. In it authors James Butterfill and Christopher Bendiksen argue that the fact Bitcoin (BTC) “starting its life at a price of zero” gave it a stellar reputation.

“If it reaches its potential, the value could be immense,” the report stated.

“At the same time, there is a non-zero chance that it fails entirely, leaving the value of Bitcoin close to zero.”

Unlike many experts who suggest setting aside 1% of a portfolio for cryptocurrencies, CoinShares suggested investors allocate “just under 4%” for Bitcoin alone.

The firm tested Bitcoin as a reliable store of value by seeing how the cryptocurrency performed as part of a balanced 60/40 portfolio. It’s analysis indicated that the token enhanced annualized returns by 9.7% starting from 2015, almost double comparable assets.

Beginning to mature into store of value

Behaving like a tech stock is no bad thing. Since the crypto bloodbath in March, tech stocks have gained enormous ground. The price of Amazon rose 70.7% to $3,170, Apple rose 63.3% to $450, Facebook 54.5% to $263, and Google 23.6% to $1,496.

The report comes after a period of volatility with Bitcoin testing the $12,000 threshold for the first time since 2019. 

“Bitcoin is an asset in its infancy,” the Coinshares report states. “As Bitcoin matures, its robustness is further proven, and its risk of failure moves further and further away from zero, we believe investors will start treating it differently, leading its macroeconomic behaviour to follow suit.”

News source CoinTelegraph.com

How Not To Lose Everything During the Bull Run

With sentiment suggesting Bitcoin (BTC) and the crypto markets are about to go on a bull run, seasoned old timers are warning about the lessons learned from previous rallies. 

With Bitcoin correcting 5% in the past day, the Crypto Fear and Greed Index is back to 75. A measure of sentiment that looks at the volatility, market volume and social media activity of digital currencies, a reading of 75 equates to “greed,” down slightly from 84 — or “extreme greed” — that was recorded on Aug. 10. But both readings suggest expectations are sky high of boom times ahead.

In a Twitter thread on Aug. 11, MyCryptoWallet and MyEtherWallet co-founder Taylor Monahan laid out some good old fashioned advice learned during the 2017 bull run. She pointed out the irrational exuberance of bull markets invariably attracts bad actors preying on the vulnerable.

Like moths to a flame

“They will make a lot of money and people will lose because the exuberance and FOMO and greed and hype are the most powerful things on earth,” she wrote. Monahan believes the time for accumulation has now passed, and pushed for users to put 90% to 95% of their crypto assets into cold storage. She suggests that you don’t go chasing shiny new coins: 

“Pick a few long-term legit coins that you like. Be invested in them. Do research. Do not follow the shills […] You will win if you take profits consistently, not if you try to call top.”

Monahan also stressed restraint and pointed out that people who “take on huge debt to get crypto” will not win, but will “lose their house, their kids’ savings. Do not be those losers.”

Like many experts, Monahan believes investors should risk just 5% of their net worth, and once it’s been lost, they shouldn’t try to recoup those losses.

“Have fun with it but once it’s gone, it’s gone. Don’t double down. Don’t take from your savings account or your cold storage.” 

Easy to say, hard to do

Crypto researcher Chris Burniske said in an Aug. 7 tweet it was “hard to be adequately prepared” for a bull run. He expects that enthusiasm from “crypto diehards” will be 10 times what it was in 2017, implying there may be reckless buying and selling of assets in the face of wild predictions.

“Speculation cycles have accompanied promising new technologies for hundreds of years,” said Burniske.

“While no one can quite control them, we can control how we react, present, educate, communicate and steward the space.”

Fans of podcaster Anthony Pompliano will be familiar with his frequently reposted advice for what to do in a bull run. Some users believe the advice is a jinx, as every time he posts it, the market appears to turn bearish.

Gathering information

Market manipulation is harder than it used to be, but certainly still happens in 2020. Cointelegraph reported in June that crypto whales have the ability to alter the price of certain digital assets using a variety of techniques.

And remember, sometimes those whales can be influencers paid with millions of tokens to shill coins. Even those who aren’t paid to promote a project are biased in favour of their own investments. Monahan’s advice: “Trust no one.”

“Even good people are motivated by the coins they hold and the relationships they have. You may eventually see the edge but you will never know fullness. Make decisions based on multiple sources and your knowledge and your gut.”

News source CoinTelegraph.com

Surging Interest in ‘Yam’ Yield Farming — But Is It Too risky?

The latest craze in the DeFi sector is a new yield farming protocol called Yam which promises ‘equal opportunity’ staking with no premine, no founder shares, and a zero value token at launch.

The experimental Yam Protocol is the talk of Crypto Twitter right now — with many excited about the big potential returns, while others worry about the risks. The recently launched project offers an elastic supply token, similar to Ampleforth, that can expand and contract depending on market conditions, with the aim of seeking eventual price stability and a peg to the USD.

Yam will reallocate a ten percent portion of each supply expansion to buy a high-yield dollar denominated stablecoin called yCRV in what it terms a ‘rebase’. The tokens will be added to the treasury which is controlled via Yam community governance.

Similar to Yearn Finance when it launched its native YFI token, the official blog post claims that the tokens will have no value at launch.

“We have built Yam to be a minimally viable monetary experiment, and at launch there will be zero value in the YAM token.”

Reasons to tread carefully

Following the monumental gains made by YFI, which surged thousands of percent into four figure prices, some in the crypto community are skeptical of similar tokens cashing in on the hype. Shapeshift CEO, Erik Voorhees — who admits he doesn’t understand how Yam works — wondered if it was a pump and dump scam. 

Messari researcher, Ryan Watkins, echoed the sentiment. “YAMs = Ponzinomics of AMPL + Chad launch of YFI + Meme math of Tendies,” he wrote.

With no premine and no token sale, YAM tokens are distributed evenly across eight staking pools on the top DeFi protocols including COMP, MKR, LEND, YFI, LINK, ETH/AMPL, SNX, and wBTC. Holders of any of these assets can stake them on Yam’s platform to start earning YAM tokens for the first week.

Distribution

With a total supply of 5 million tokens, the initial launch occurred on August 11 at 19:00 UTC when 2 million tokens were divided equally among the eight staking pools. Following this, a further 3 million tokens enter the YAM/yCRV Uniswap v2 liquidity pool with 1.5 million distributed in the first week, decreasing by 50% each week after, the blog post added.

Staking to earn will only be available for seven days, and following the completion of this distribution users will be able to deposit their YAM tokens into Uniswap as liquidity to participate in the longer term ecosystem.

The next week could be interesting for Yam Finance, if it generates the same frenzy that Yearn Finance did with its YFI token. But history suggests that sooner or later speculators on hyped-up new projects are likely to get burnt, as many did during the ICO bubble of 2017.

News source CoinTelegraph.com

Bitcoin Price Is in ‘Early Main Bull Phase’ Circa Q4 2016 — Willy Woo

Bitcoin (BTC) is copying what it did a year before its $20,000 all-time highs, and the new bull market has been here for over a year already.

That was according to popular statistician Willy Woo, who this week shed further light on Bitcoin’s current price gains.

Woo: Bitcoin “early main bull phase” began recently

In a series of tweets on Aug. 10, Woo continued a debate begun by Bitcoin developer Jimmy Song, who himself debated the topic in the latest issue of his Tech Talk blog post series.

“Yes. The bull market really started April 2019,” Woo responded, continuing:

“What’s started recently is the early main bull phase, it’s Q4 2016 all over again, but different dynamics and themes at play.”

BTC/USD hit $12,000 twice in recent days, managing to hold support at $11,500 in a long-awaited show of strength that has given many analysts cause for long-term optimism. 

Despite failing to flip $12,000 to support, Bitcoin remains firmly bullish, both sentiment and technical fundamentals-based evidence suggests.

For Woo, the composition of the market formed a major difference in maturity between this year and 2016 — maturity which has historically dictated both price trajectory and volatility.

“One of the themes is the legitimisation of BTC for large institutional funds, and also the easy accessibility to buy crypto for the masses with the likes of square cash, paypal, and not to mention the one I’m working on LVL which is real regulated banking integrated with crypto,” he continued.

Woo said that he expected sovereign wealth funds to adopt Bitcoin during the current bull cycle, and continue during the next.

He concluded:

“I think this cycle BTC gets to prove itself as a legit macro asset bucket for traditional investors, while the cycle after this it overtakes gold to be the significant digital SoV for a digital age.”

Bitcoin logarithmic growth curves chart

Bitcoin logarithmic growth curves chart. Source: LookIntoBitcoin

Macro investor eyes 10x returns this cycle

The prognosis chimes with conclusions made by macro investor Dan Tapeiro, who predicted that Bitcoin would seal dramatic gains of five to 10 times its current value during this bull cycle.

“Tremendous long term Log Chart of #Bitcoin projects up 5–10x on this run,” he tweeted, uploading a five-year price performance and adding:

“Just breaking up NOW. Should last a few years as 2.5yr consolidation is fantastic base for catapult up. Break of old highs will have explosive follow through. Time to sit and be patient.”

In May, fellow analyst Positive Crypto argued that Bitcoin had in fact been in an “accumulation” phase for almost 900 days — and that the consolidation would soon be broken, which subsequently happened weeks later.

Meanwhile, a survey by quant analyst PlanB revealed increasing bullish sentiment among investors, with over 50% believing that BTC/USD would trade above $100,000 by December 2021.

Bitcoin’s price action was “perfectly on track” vis-a-vis his stock-to-flow model, he added previously.

News source CoinTelegraph.com

Russia’s New Crypto Analytics System to Track Dash and Monero

A major financial watchdog in Russia is developing a new cryptocurrency analytics tool to trace major cryptos like Bitcoin (BTC) and privacy coins.

Russia’s Federal Financial Monitoring Service, a federal service combating money laundering and terrorist financing, is reportedly planning to build a new analytics platform for tracking cryptocurrency transactions via artificial intelligence.

Dubbed “Transparent Blockchain,” the new system is designed to track the movement of digital financial assets and identify crypto service providers to fight illicit activity related to digital assets, local news agency RBC reported on Aug. 10.

According to the report, the new system is able to “partially reduce anonymity” of transactions involving major coins like Bitcoin, Ether (ETH), Omni (OMNI) as well as privacy-focused cryptocurrencies like Dash (DASH) and Monero (XMR).

As reported, the financial regulator has successfully piloted a prototype system to fight drug trafficking. The system was developed in collaboration with a major Russian research institute, the Lebedev Physical Institute of the Russian Academy of Sciences, the report notes. 

The project has reportedly been funded by extra-budgetary resources so far, but would require additional funding. According to preliminary data, the Russian “Transparent Blockchain” will require about 760 million rubles ($10.3 million) from the federal budget from 2021 until 2023. The targeted customers of the new platform reportedly include major financial institutions like Russia’s central bank.

The news comes shortly after Russia officially passed its major cryptocurrency-related bill “On Digital Financial Assets.” Set to be adopted in January 2021, the new law prohibits the use of cryptocurrencies like Bitcoin as a payment method. Earlier in August, Russia’s lawmakers passed new amendments to the law “On National Payment System,” banning anonymous deposits to major online wallets like Yandex, WebMoney, PayPal and Kiwi.

News source CoinTelegraph.com

Mitsubishi Launches Blockchain Platform for Metal Trading

The metals and minerals resource trading subsidiary of Mitsubishi Corporation, Mitsubishi Corporation RtM Japan Ltd, has launched a blockchain platform named ECO for precious metals trading.

Developed by Mitsubishi in partnership with the American blockchain company Skuchain, the platform is built on top of Skuchain’s EC3 platform for blockchain-based supply chain management and finance.

According to the official announcement, ECO will ease metal trades between counterparties by generating, managing and executing invoices and trade confirmations. 

For the start, Mitsubishi will only bring its “most valued customers” on the platform but it plans to soon expand and implement ECO to cover a wider portion of its supply chain system. 

Using the ECO platform, trading parties will be able to sign trade documents and upload them on the blockchain. They can then share the signed documents with others in real-time and hide any commercially sensitive information that they do not want to reveal.

The company said it will be adding more features to ECO in the future to solve other crucial supply chain challenges in the metal trading industry.

Mitsubishi Group has been proactive in the blockchain space.  Cointelegraph recently reported that Mitsubishi’s financial subsidiary Mitsubishi UFJ Group, or MUFG, was collaborating with LayerX to promote digitization for companies and government agencies. It was also reported last month that the financial giant is planning to launch its own stablecoin.

Earlier this year, the company was included in the Singapore government’s 16-company alliance to drive trade digitization through the use of blockchain technology.

News source CoinTelegraph.com

Australian Hacker Sentenced to 2 Years in Prison for $300K XRP Theft

A judge has sentenced Australian citizen Kathryn Nguyen to a maximum time of 2 years and 3 months in prison for her role in stealing more than 100,000 XRP tokens in January 2018.

According to an Aug. 11 report in Australian publication Information Age, Nguyen was sentenced over the theft of more than $300,000 in XRP two years ago. She was initially charged in Oct. 2018 and pled guilty to fraud charges the following August.

Chris Craigie, the judge presiding over Nguyen’s case, said it was a “difficult and troubling decision” to send her to prison. The Australian national will reportedly be eligible for parole in October 2021.

First Australian crypto fraud case

Nguyen was one of the first people to be charged with the theft of crypto assets in Australia.

In January 2018, she reportedly hacked into the email of a 56-year-old man with the same last name as her and stole all his XRP holdings before releasing control of the account two days later. This was at a time when the crypto asset was near its all-time high of $3.84.

Nguyen reportedly transferred the XRP holdings to a Chinese crypto exchange where she swapped the tokens for Bitcoin (BTC), sending them to multiple wallets in what may have been an attempt to launder the funds. According to local news outlet 7News Sydney, authorities in China were only able to recover roughly $9,000.

XRP falls out of favor

The value of XRP has since dropped to $0.30 as of this writing, making the amount of crypto stolen now worth approximately $30,000.

News source CoinTelegraph.com

What Would the Re-Election of Alexander Lukashenko Mean for Crypto?

Protests have erupted in Belarus following the country’s presidential election on Sunday, but the possible continued presidency of Alexander Lukashenko may be good news for crypto.

Lukashenko reportedly won re-election against opposition candidate Svetlana Tikhanovskaya in a landslide victory with more than 80% of the vote on Aug. 9. However, officials from many nations and within Belarus are condemning the election results as flawed, with reports of falsified ballots. 

‘Europe’s last dictator’

The president of the eastern European nation has served since 1994, during which time he has made a number of statements in favor of blockchain technology since legalizing cryptocurrency and initial coin offerings in Dec. 2017. 

In an April 2019 video of Lukashenko addressing a crowd, the president proposed using excess energy from the country’s first nuclear power plant — scheduled to be completed at the end of 2020 — to mine cryptocurrencies like Bitcoin (BTC) and sell them. 

His words were met with laughter from the audience, but Bitcoin bull Anthony Pompliano responded to them by saying “every country will be mining and every country will be holding Bitcoin.”

Crypto legislation

Belarus has not been at the forefront of cryptocurrency and blockchain discussions around the world, but the nation has implemented a few legislative changes. 

In March, a state authority in Belarus asked lawmakers for the authority to seize cryptocurrency from criminals. The country’s central bank is also reportedly setting up a program to allow commercial and state-owned banks to launch tokens and conduct business as crypto exchanges.

News source CoinTelegraph.com

Bitcoin Price Seals Best Weekly Close in 2.5 Years: 5 Things to Know

Bitcoin (BTC) greets another week with a push to $12,000 and its highest weekly close since after it hit $20,000 — will it return?

Cointelegraph takes a look at five things that stand to impact BTC price performance in the coming five days.

BTC: A two-and-half-year record weekly close

Bitcoin hitting $12,000 again early Monday was more than just a boon for traders — in doing so, BTC/USD sealed its highest close on weekly time frames since January 2018.

This means that no single week of price action ended at such high levels since, including during the height of last year’s bull market.

Having pleased analysts for several months in the short term, Bitcoin thus followed through on longer timeframes — a crucial move to cement the upward trajectory.

Now, investors seeking confirmation that the bull market will continue may well have received it — versus daily and hourly developments, a multi-year high weekly close is significant.

BTC/USD was thus up 2.4% on the day, with weekly gains sitting at 7% and monthly returns at over 30%.

Price-wise, $12,000 represents the highest that Bitcoin has reached since June 2019, three months after a Q2 bull market took the cryptocurrency from $4,000 to $13,800 — a level which this cycle has yet to reach.

BTC/USD 7-day price chart

BTC/USD 7-day price chart. Source: Coin360

Trump pushes fiat instability

Bitcoin’s price surge comes the week after United States president Donald Trump added to existing geopolitical tensions by banning Chinese social media platform TikTok. 

The resulting escalation of ties with Beijing adds to existing weakness in the U.S. dollar and ongoing concerns over Coronavirus — a perfect storm for a flight to safe haven assets.

At the same time, Trump signed a series of executive orders on Coronavirus stimulus, something which now has a curious impact on markets which are already subject to heavy intervention from the Federal Reserve. 

This time around, however, the measures will have a smaller direct effect on the average American. A payroll tax delay, for example, does not go far enough in the eyes of critics.

“This fake tax cut would also be a big shock to workers who thought they were getting a tax cut when it was only a delay,” Bloomberg quoted Democratic Senator Ron Wyden as saying in a statement.

“These workers would be hit with much bigger payments down the road.”

It is this delaying the inevitable financial cost to personal wealth, which lies at the heart of the pro-Bitcoin argument — high-time-preference economic behavior ultimately costs much more in the long term than the immediate benefit to the target audience.

Bitcoin correlation: stocks or gold?

Where Bitcoin might head in the short term is now less clear cut when considering its historical performance versus other macro assets.

The period since March, which saw a cross-asset crash, was marked first by a correlation to stock markets, and then to safe havens and specifically gold.

Gold hit its all-time highs in U.S. dollar terms weeks before Bitcoin began significantly gaining, and its run has continued — until now.

A slight correction took XAU/USD to $2,030 from highs of near $2,075 — should the trend continue, Bitcoin may likewise cool off from its upward momentum.

Nonetheless, as Cointelegraph reported, incoming action from the Fed looks set to buoy the precious metal further in a “wildly bullish” policy shift to expanding inflation way beyond its current rate of 0.6%.

Stocks were likewise looking less stable — analysts were warning over fallout for developing markets thanks to Turkey’s currency crisis, and China sanctioning U.S. officials over Hong Kong added to pressure.

“Bitcoin up as tensions rise in Asia. Capital flight out of Asia taking the Bitcoin express,” RT host Max Keiser summarized, adding: 

“You can’t take it with you, unless it’s Bitcoin – then you can take IT ALL with you (Something near impossible with Gold).”

Futures gaps open below for BTC/USD

Another volatile weekend has opened up a classic feature for short-term Bitcoin price forecasting — a “gap” in CME Bitcoin futures markets.

The weekend’s volatility means that futures finished Friday at $11,680 and began again at $11,750. The resulting void provides a key price target, with Bitcoin historically filling such “gaps” within days or even hours.

Last week saw just such a setup emerge, with volatility aiding the trend after weeks of flat price action removed gaps from the market altogether.

Another gap lower down at $9,700 still remains from July.

CME Bitcoin futures chart showing recent latest gaps

CME Bitcoin futures chart showing recent latest gaps. Source: TradingView

All on schedule

For quant analyst PlanB, creator of Bitcoin’s stock-to-flow price forecasting model, the bullish action of the past weeks is exactly to be expected.

Earlier in August, PlanB noted that BTC/USD was filling out the stock-to-flow chart according to historical precedent — since May’s block subsidy halving, dots have confirmed that current behavior falls within the rules.

Bitcoin stock-to-flow chart as of August 10

Bitcoin stock-to-flow chart as of August 10. Source: Digitalik

On the topic of major players flipping bullish, meanwhile, he added last week that “when bitcoin was $4k in 2019, lot of big accounts were bearish, predicting $1k.” 

Behind the scenes, however, signs were that if $6,000 appeared, the mood would change to favor the bulls.

“That actually happened, we shot through $6k. Now many were bearish at $9k .. $13.5k will be interesting,” PlanB wrote.

News source CoinTelegraph.com

Canadian Weatherman Frankie MacDonald Is Bullish on Bitcoin

Frankie MacDonald, an amateur meteorologist based in Nova Scotia, has recently been using his platform to talk up Bitcoin in his charismatic voice.

In a series of tweets beginning Aug. 8, MacDonald posted videos stating his views on the cryptocurrency to his 118,500 followers. The Canadian weatherman said that Bitcoin (BTC) is “worth more than American dollars,” taking viewers through the numbers if they owned anywhere from 1 BTC — $12,007 as of press time — to 10 million BTC, or over $160 billion at the time.

New Bitcoin meme is born

The 36-year-old YouTuber began making videos on the platform in 2009, which focused on meteorology in Canada and the United States. MacDonald gained momentum online, standing out with his unique style of forecasts. 

After seeing a video of MacDonald shouting “Bitcoin” on Aug. 7, the crypto community has quickly picked up on the Canadian’s charisma and turned him into a new meme as the token surged past $12,000 on Aug. 10.

One of MacDonald’s mantras, featured in the title of his book and one of his songs, is “be prepared.” He has yet to associate the phrase with the volatility of cryptocurrency.

Influencers adopting Bitcoin?

A number of high-profile individuals not normally associated with cryptocurrency have been bullish on Bitcoin lately. 

After speaking with Anthony Pompliano on his July 1 podcast, comedian Bill Burr said he would be investing in Bitcoin for the first time. Podcaster and celebrity Joe Rogan has been using his platform to talk up the cryptocurrency to his more than 200 million listeners as part of his sponsorship with Cash App.

Even online personalities with more of a connection to the financial sector are speaking out. Cointelegraph reported on Aug. 4 that Dave Portnoy enlisted the help of Gemini co-founders Tyler and Cameron Winklevoss regarding Bitcoin. Portnoy told the twins he wanted them to “explain Bitcoin in a way that I would understand.”

News source CoinTelegraph.com