BITCOIN PRICE NEWS
The first quarter of 2017 has been a revelation, if you’re a digital currency investor. Whether you like a particular currency’s fundamentals or not, now is the time people are buying in and making a small fortune on most options on the market. Thursday, however, was a return of the bears to Bitcoin, as BTC dropped nearly 10% before rebounding 3%. Here’s why.
USD and The Fed were major factors
In the Bitcoin community, it has been quite a while, since early-2013, since the U.S. dollar has been the major player in exchange currency for Bitcoin. Chinese Yuan and now the Japanese Yen, have been the major forces investing in Bitcoin, but the USD is back on the scene. As the Coinhills chart below shows, at least for Thursday, this 24-hour currency exchange chart for Bitcoin shows there was major Western money moving on Bitcoin. The USD took up better than a third of the exchange market, apparently mostly out of it, as Bitcoin fell like a rock. Why?
With the announcement by Federal Reserve figurehead Janet Yellen of an interest rate increase on Wednesday, it seems that Americans with money in Bitcoin dumped it for Gold, as Gold took off in lockstep with BTC’s fall from over $1250 early on Thursday, according to GoldPrice.org. Here is Bitcoin’s activity versus the Gold market on Thursday, versus the Bitcoin price drop yesterday on BitcoinAverage.com:
Bitcoin did rebound about three percent in the evening, so Bitcoin is worth more than the $1140 it bottomed out at. One digital currency that is not bottoming out is Ethereum, which is crushing the market, a la Dash, over the last few week. Ethereum started Thursday trading at less than $35 USD and as of this writing, it had passed $45 USD for a better than 30% daily gain.
This can be attributed, at least in part, to the Enterprise Ethereum Alliance deal that we reported on last month. Some of the world’s top corporations will collaborate with Ethereum’s brand of blockchain technology, including Fortune 500 companies like Intel, Microsoft, J.P. Morgan and ING. Ethereum started the year trading at less than $8 USD.
Altcoin Dash has retreated since it’s $101 USD all-time high on Wednesday, stepping back about 10% overall to around $90. It has still had an unprecedented level of gains in Q1, beginning the year at just over $11 USD. As Bitcoin fork fear speculation has swelled over the last month, so has Dash’s market value.
This week may prove to be one of the most pivotal weeks in Bitcoin history. With the Bitcoin price set to climb, or fall, at a pronounced rate within the next few days, some experts are using this time to express their optimism. Two such experts can see Bitcoin price reaching as much as $3000, or £3000, before year’s end.
Bitcoin price is up almost 200% over the last years, and with the SEC’s Winklevoss ETF ruling still days away, it is a great time to swing forthe fences. Adam Davies, a consultant at Altus Consulting, is one of those who is very “bullish” on Bitcoin price speculation, at least before the SEC’s ruling.
Peter Smith, CEO of Blockchain, a bitcoin wallet, told CNBC by email that his company is seeing "unprecedented volume and sign ups", adding that at the current price appreciation, a £3,000 dollar price by the end of the year is "feasible".
Other experts, like Tone Vays, posited the idea last week on his YouTube channel this run up to the ETF ruling by the eleventh was a great time for a “pump-anddump” approach by investors, with prices falling sharply just before the announcement. The almost 10% drop in Bitcoin prices we have seen in the last 24 hours may have supported that prognostication.
In my humble opinion, the ETF will make a significant difference in what Bitcoin is value at the end of 2017. Without any ETF option in 2016, Bitcoin price rose over 125%, so the ETF will not make or break Bitcoin. It is just a multiplier I agree that $3000, or £3000, is a legitimate target, but only if the ETF goes through.
And remember, there are more ETF rulings in the pipeline after March 11th. Until an ETF goes through, it may be best to keep expectation to $2000 or less in 2017. Bitcoin doesn’t need its own version of PED’s to succeed, but it may get an injection anyway.
Bitcoin seems to be doing very well, to the untrained eye. ETFs are popping up like daisies, Bitcoin price is at an all-time high, and mainstream publicity is copious and almost positive. However, there are cracks in the foundation of the world’s premier blockchain network. The fees for processing a Bitcoin transaction are going through the roof, and BitPay’s CEO is sounding the alarm.
Bitcoin, we have a problem
Stephen Pair is Bitpay’s co-founder and CEO, and he wrote about his views on how the functionality of the global payment protocol is going in early 2017. His report was not very good. He ended the post ever-optimistically, but he is disturbed by this growing trend of ever-increasing fees that his business is paying, the cost of doing business, here in Q1 of 2017.
After checking into it on an average cost per transaction basis, you can definitely see prices for Bitcoin transactions have taken off. If you go back to January of 2016, fees were in the $0.15 range, but according to 21.co, the average nondelayed, non-mempool transaction is going through at almost 500 bits. This is equal to about $0.67 right now, or about a 350% increase in just over a year. That’s not a Venezuelan rate of inflation, but it is definitely a red flag.
The chart above clearly shows the more you apy, the more you play. The standard fee transactions at the top, the ones that actually worked fairly well a year ago, is seeing a 5-block, 40-minute delay, on average. I have definitely been seeing that, in the real world, and maybe you have too, unless you can adjust your fee settings skyward.
He also mentioned that more businesses and larger value transactions are coming through their system, which will create a de facto caste system for miners. They’ll want to do the larger transactions, with more bytes and higher fees, which will delay more small transactions into a backlogged mempool. He foresees a future where the larger transactions will happen on-chain, and the smaller one’s off-chain.
Optimistically, he sees the benefit of an off-chain Bitcoin processor, like The Lightning Network, being forced to market due to these growing fee-based issues. Pair is surprised the system is still stuck at 1 MB after all these years. He sees the sides of the issue looking like this:
Pair agrees with Bitcoin experts like Andreas Antonopoulos and others that the future for Bitcoin is very bright and these issues will sort themselves out, without the ecosystem imploding int he process. There are too many people with too much invested to not work this conundrum out. It may take Bitcoin to the brink of global mempool hell before the miners are cornered into action, but something’s gotta give.
Bitcoin has passed a major psychological benchmark, again. Earlier this year, Bitcoin passed $1000 USD in value, then it passed its all-time high of over $1180 USD. Now, Bitcoin has officially, and rather easily, passed the international standard for commodity investment value. Bitcoin, on March 2nd, 2017 (my birthday) passed Gold for value per unit of measure for the first time ever.
Not Bitcoin News That Is Welcomed By All
Bitcoin has been on a tear, since starting the year off stumbling to a value of about $775 USD during the first week of 2017. It has gained over 61% in value in less than sixty days. While many in the Bitcoin community are swelling with pride over this significant bit of mainstream approval, not all are enamored with the prospect that some will say Bitcoin is more valuable than Gold.
Those with a vested interest in precious metals, or who specifically make money on the trade of said commodities, like Peter Schiff, have come out publicly against the market competitor. Earlier this week, Schiff debated CNBC contributor and Bitcoin expert Brian Kelly on CNBC’s investment show ‘Fast Money.’
Some Bitcoin experts are speculating that speculators are pumping Bitcoin value up prior to the Securities Exchange Commission’s decision on March 11th to get the most value out of Bitcoin before selling next week. The market is still small enough that a geat deal of investing is not necessary to move the market in your direction. If the SEC does as expected and declined the Winklevoss ETF, the smart money moves out of Bitcoin just before the 11th, and they make a handsome profit. Those who are Bitcoin lifers are making a profit either way, whether it is next week, or later in 2017.
In closing, what we all should have learned from this socio-economic experiment that is Bitcoin is to be mindful not to listen to The Establishment. Hear what they say, even remember what they ay, just don’t listen too much. The Establishment said Bitcoin was a scam. They said Bitcoin would never work. They said no one would ever use Bitcoin. They said it has no value. They said mainstream will never use it. They said it would never reach the value of silver, much less gold.
Now, it is The Establishment that is looking to use Bitcoin’s technology to improve and evntually replace their outdated, costly, time-consuming and fallible IT systems. Surely, I am not the only one who has noticed this evolution of Bitcoin to true financial providence? This triumph reminds me of a famous quote.
“Fight, they laugh at you. Then, they ignore you. Then, they fight you. Then, you win!” - Mahatma Gandhi
Image provided by ZeroHedge
After another turbulent January that had even the most faithful shaken about Bitcoin’s future, the February rally has rekindled the greater community. A January roller-coaster has become a February value rocket, as the Bitcoin price has set a new high-water mark for 2017, as it closes in on a new all-time record, according to the CoinDesk Bitcoin Price Index (XBP).
As a brief recap, Bitcoin started the year on a high, making a furious run at $1000 in value as 2016 closed. The first week of 2017 remained on this bull-run, peaking at almost $1130 USD, but Chinese regulators began the new year cracking down on exchanges and their no-fee trading practices. The market crashed to as low as $775 USD exactly one week later, and Bitcoin has been on the rebound ever since.
This latest run from just under $1000 USD last week to a new 2017 this week seems rooted in the upcoming speculation on the ETF fielded by The Winklevoss Twins, which is due for a decision on March 11th. According to MarketWatch, even though the odds of an approval are long against the ETF, the fact that there are more than one in the pipeline seems to give investors enough hope of an approval to start buying in.
A few weeks ago, Grayscale, which launched the Bitcoin Investment Trust in 2013, filed for an initial public offering that would allow its trust to trade as an ETF on the New York Stock Exchange. The Grayscale bitcoin trust is presently one of the few registered investment vehicles available to financial institutions. A company known as SolidX has also filed for a bitcoin ETF.
The previous high in early January was the highest the Bitcoin had been since the bubble that was Mt. Gox in early December of 2013, when values reached over $1180 USD, according to BitcoinAverage.com, who has been tracking Bitcoin’s price since 2010. Now that Bitcoin is within shouting distance, the way things are going, it seems assured that the all-time mark will be set before March 11th, as Bitcoin has gained what would be needed, just over $50 USD, in the last 48 hours.
The global Bitcoin market seems to be healthier than ever before, with less centralization in exchange trading. By currency, Japan has taken control of Bitcoin’s market with over 50% of the purchases done in Japanese Yen. This seems related to their advocacy of the no-fee trade policy that gained China control of the market.
This leads to many trades that are less than legitimate and encourages traders to trade against themselves to lower exchange costs. However, the mainstream market in Japan is accepting Bitcoin use more and more. There is also more and more Bitcoin legislation in Japan, but that is also not as positive a development as it may seem.
In my writing career, I have never done a Video Review before, as I have never a Bitcoin-related video worthy of a review, but this video inspired me. Hopefully, this doesn’t come across as promotional, because my goal is to educate, not remunerate. Since this video is not promoting any product, except for the digital asset’s value itself, a worthy ideal, in my opinion, let’s look at a new video called “10 Reasons Bitcoin Price Will Destroy All-Time Highs in 2017.”
I will place the video below this article, for your convenience, but before you scroll down, let me give you an outline. The video is current and up-to-date, as it is only about ten days old, and it seeks to affirm the general optimism that surrounds Bitcoin’s potential price for 2017. It is produced by the “Renegade Investor” YouTube channel and is on the long side, standing at over twenty-six minutes.
What you give up in speed you get back in scope. The most impressed aspect to me about the video is the comprehensive research of each point. Plenty of sources were enlisted in the creation, and the reasoning is all sound logic, in a matter-offact type manner of delivery. I was actually expecting 1-2 of the sections to be dismissable fluff, but this video did not fail to deliver value on each and every point noted. All points are legitimate and worthy of consideration for the new investor, except for one.
The fifth item listed in Bitcoin’s favor is “Scaling Segregated Witness” and it intimates that SegWit should be adopted by the 95% of miners who signal they're ready to employ it by this November. As is shown in a progress chart in the video, SegWit has remained in the 25% range for an extended period of time.
I’m personally worried that SegWit will never gain adoption to allow the scalability features like The Lightning Network to take hold. The Lightning Network could allow Bitcoin to effectively scale from the current limits of seven transactions, or less, per second, to as many as 10,000 per second (Visa will tap out at about 24,000 transcations per second, not the 2000-4000 mentioned in the video.)
The Renegade Investor also mentions a double of the effective block size just through SegWit adoption alone, when the actual increase is around 70% over current limits, but the video is very comprehensive, mentioning the sweeping mainstream adoption of Bitcoin into popular Japanese culture, how the current bond market will influence Bitcoin value, and the effects of Bitcoin eventually passing Gold’s market price. Even clips from The Keiser Report are used effectively.
Finer details aside, this video provides a lot of value. If you know of someone who is on the fence about getting involved in Bitcoin, as an investment, I can safely recommend this video to persuade the masses. It doesn’t shill for any product and just provides solid value for those who want the current state of the Bitcoin. Feel free to share this.
Bitcoin price speculation is a very popular practice and a whole lotta fun for the Bitcoin faithful. Now that the issues in China seem to have settled down, and the market has normalized after a turbulent first few weeks of 2017, it is time to look at the next event on the horizon. That will come next month, as the Winklevoss ETF judgment is due in less than four weeks.
Incredible upside potential for Bitcoin in 2017
Any one of a myriad of things could happen in 2017 to send the digital currency “to the moon.” Anything from a global economic recession to a U.S. Dollar collapse, to a New York Stock Exchange market crash, have been forecast as possibilities. One thing we do know will happen is that on March 11th the SEC will make a determination on the future of the Winklevoss’ Bitcoin ETF (COIN) that has been in limbo for years now.
This has caused Emerita Capital to do an extensive “thesis” on the effect that an approval of the ETF by the Securities Exchange Commission (SEC) would have on the market for Bitcoin thereafter. Taking out a highwater mark target price of $36,78 and a lowball figure of $551, they factored in a less than likely chance of approval and came up with the following figures.
The Winklevoss’ ETF is just the first strike out of many from the Bitcoin niche. Two other funds have filed similar applications that would offer ordinary investors broader access to bitcoin investing. The Bitcoin Investment Trust, run by tech entrepreneur Barry Silbert, and SolidX Bitcoin Trust, run by SolidX Partners, are waiting for the SEC to rule on their applications to be listed on the New York Stock Exchange. These also come up for review on March 30th (XBTC) and in October (GBTC).
Keep in mind ‘Emerita Capital’ isn’t exactly Merrill Lynch. They have a couple of articles up on Seeking Alpha’s blog site, both within the last week, and they do not have their own website, or even a social signal listed anywhere on Google. This could be from credible financial advisors, or this could be from a couple of unemployed guys in a basement, for all we know. You make the call. The article is extensive and well-researched.
However, this is one more analysis on this highly relevant subject than has been done by anyone else. At least someone has tried to put this into perspective for the community. Do you think Las Vegas bookmaker will create a betting line based upon this? Within the Bitcoin community, stranger things have happened.
Maybe China no longer controls 95+% of the global Bitcoin trading market, but it is still a top factor in Bitcoin’s price. If something goes down in China, the rest of the community will get heartburn. Another meeting in China between Bitcoin exchanges and the PBOC caused a major Bitcoin tumble on Wednesday.
According to Bloomberg, China’s central bank, the People’s Bank of China, had its regulators hold a major meeting with several Bitcoin exchanges in the country, which may lead to more controls in the weeks to come. What was discussed included issues of money laundering, according to one source?
This caused quite an effect on the market value of Bitcoin, at leats for a few hours. As of this writing, the Bitcoin price started Wednesday trading at around $1075 USD or 7300 Yuan, and it lost over $40 is less than an hour early on Wednesday, or almost 4%. As of this writing, Bitcoin has regained almost all of that previous value lost.
China’s central bank warned domestic bitcoin exchanges that they risk being shut down if they are found to be in violation of the rules on foreign exchange and money laundering. The exchanges called to meet with central bank officials included nine platfoms, among them were BtcTrade.com, HaoBTC, Yunbi, Yuanbao.com, and BTC100.
Bobby Lee, the founder of China’s BTCC Bitcoin exchange, has recently come out against the perception that Bitcoin is the primary engine of “capital flight” in China, and the main source of recent money laundering efforts. (He has also posted a more extensive rebuttal to these ideas in his Medium post earlier this month.)
And he had this tweet to convey on Wednesday, regarding the issues with the PBOC and their Bitcoin activity taking place:
For the third time in its disruptive, controversial, and innovative history, Bitcoin’s decentralized digital currency has passed the $1000 USD mark in value. The first time was in November of 2013 and the second was one month ago. Will this be the last time it needs to climb that psychological price barrier?
Just one week after its 2017 peak, Bitcoin price slid to $770, losing one-third of its market value. Since that point, three weeks ago, Bitcoin has gained back more than $250 in value or over 35%. Bitcoin price has gained over 9% in value over just the last 48 hours.
Reasons for this sudden shot of Bitcoin power are not immediately clear. One issue that did come to light on Tuesday is Iran says they will dump the U.S. Dollar, and Bitcoin is a common hedge during economic turmoil, so that could be a factor in Tuesday’s movement. Also, the Chinese New Year has come and gone, so the largest overall Bitcoin trading market, China, may be back in play for their favorite digital currency.
In January, the entire Bitcoin trading system was altered by regulatory actions in China against Huobi, BTCC, and OKCoin exchanges. At the start of the year, they handled about 96 out of every 100 Bitcoin trades, worldwide. Today, not only are the not the top three traders anymore, but none of them are even in the Top 5 exchanges!only one of them, OKCoin, resides in the top 5 exchanges for trading volume, worldwide, according to bitcoinity.org
As you can also see from the image above, Bitcoin exchange volume has never been more healthy and diversified, with ten different exchanges having at least 5% of the global market share. BTCC has fallen to 6th place over the last 24 hours, and Houbi is not a factor anymore, potentially indicating that the vast majority of its volume was free traders and not a real customer base.
Bitcoin has a history of starting the year off very slowly, not unlike the automotive industry, struggling to get many customers out of the cold, hard winter to shop. February may signal a return to the currency’s normal appreciation arc, as it has already easily erased any January losses and is up about 4% so far in 2017.
With a potential Wall Street ETF option coming next month, and the U.S. stock market bubble ready to burst at any moment, Bitcoin has the potential to eclipse its 126% gain of last year and pass $2000 in 2017. Stranger things have happened.
China pretty much controls the global Bitcoin market, with about 80% of the world’s Bitcoin trading and about 95% of currency exchanges from fiat. This makes how China regulates, or doesn’t regulate, their domestic Bitcoin industry extremely important in the years to come. To this point, China has taken a laissefaire approach to the Chinese Bitcoin industry, but that may be ready to change in 2017. Slightly
According to the South China Morning Post, the Chinese authorities and People’s Bank of China are mulling whether to introduce third-party custodian services to oversee the world’s largest bitcoin market. This comes after the Bitcoin industry’s rapid national expansion and a recent sharp Bitcoin price fall that has highlighted the potential threat it poses to the stability of financial markets.
In a perfect world, there may be a truly free market system where no one scams anyone in an investment, but China is not that world, and the raw volume of trading over the past twenty days has drawn a lot of attention in many influential circles. The Bitcoin industry in China has not been prone to theft, fraud or other maladies that used to plague the digital currency, but some tech issues may have been key to some investors taking a larger loss than was reasonable.
Maybe individual investors contacted authorities for some level of intervention? Whatever the case may be, the PBOC and others are becoming more involved in the dealing of top Bitcoin exchanges, keeping dialogues open, and looking to make small adjustments into how business gets done.
As the market is not self-regulated at this moment, this may be a good approach. Leaders withing these large trading platforms are discussing making some ‘rules for the road’ when it comes to their trading practices in the near future, maybe to prevent a heavier hand from authorities.