Gold Vs. Bitcoin: Who You Got?

05:16

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gold

Gold Vs. Bitcoin: Who You Got?

Investment Thesis

Over the past few years, an increasingly wide range of cryptocurrencies have come into existence. Bitcoin is a very recent innovation of cryptocurrencies.

In the comparative analysis that will follow, we will unfold each of their respective advantages and disadvantages by comparing and contrasting bitcoins against gold.

Each of these two has unique investment characteristics in consideration of five parameters namely, durability, intrinsic value, price volatility, portability and divisibility.

This article will also let us judge, which of the two is a better investment choice. Bitcoin being a speculative financial asset faces the challenge as a store of value due to vulnerable monetary policy decisions. Gold never fails being a store of value and a rare commodity.

Gold and Bitcoins

1. Durability

Gold seems to win out against bitcoins in durability. Both of them require some level of expertise to keep them for a long time. However, correct long-term storage and security is extremely challenging for several reasons.

Bitcoins are vulnerable to hacking. MyBitcoin.com (an online wallet) had approximately 51% of its bitcoins stolen at an estimated value of $49 million. To date, the biggest bitcoin hack was done in the online currency exchange Mt. Gox. Rampant thefts reported from 2011 until its closure in 2014 which took $500 million worth of bitcoins.

There are significant regulatory risks surrounding bitcoins. Many regulators have expressed concerns over bitcoins and the related field of Initial Coin Offerings (ICO), given the short history of the technology and its inherent abilities to audit "Know Your Customer" (KYC) and Anti Money Laundering (AML) legislation.

Bitcoins are also subject to network or infrastructure risk. Bitcoins work on blockchain technology which is "splitting" the internet into two infrastructure. There is still an inherent risk to bitcoins if the internet were ever to "split". It would be possible for bitcoin holders to "double spend" the same bitcoin.

2. Intrinsic Value

Gold is not subject to competition from alternatives, while bitcoins are. Rarity is electronically built into the codes of cryptocurrencies. This would again appear to make bitcoins the better choice over gold, as limited supply is a mathematical certainty. Gold has a limited supply in the earth's crust. However, a key property of all precious metals is that they are "elements".

Elements are not invented, they are discovered, and we have already discovered all the elements neighboring the precious metals. It is impossible that an "alternative" precious metal will ever emerge in the earth's crust.

Hence, there is no control over the supply of bitcoins at a macroeconomic level. Bitcoins can multiply into "alternatives'', and it has a high potential of substitutability to its original form. It has no intrinsic value due to rarity unlike gold.

The data below were gathered from Google Trends. It shows the number of internet searches for the phrase "buy gold", "buy silver" and "buy bitcoins". Search for "buy bitcoins" seems to be fast catching up lately with the other two.

Source: BullionVault

3. Price Volatility

Gold has a long history of maintaining its purchasing power. Bitcoin fails to maintain price stability historically. The extreme volatile exchange rate of bitcoin necessitates a bigger risk premium in order to hedge forex risk.

Simply put, a seller who accepts bitcoins for transactions, will require him to change it into US dollars the following day. After which, he waits further two days for clearance. Taken all together, a risk premium of approximately 2.3% will be needed to hedge forex risk.

The table below shows that Bitcoin/USD volatility averaged almost 7 times that of gold in 2017:

Source: Thomson Reuters, Goldman Sachs Global Investment Research

4. Portability

Transferring gold can be expensive given its weight, high import taxes (such as in India), the need for a high level of security. In contrast, since there is no need to make a physical transfer with bitcoin - just a transfer of ownership in a distributed database called blockchain (which is already held digitally by computers all over the world). It is much faster and less expensive to move bitcoins.

5. Divisibility

Gold physical transfers usually only occur for larger values, with transactions typically occurring in 400 tonnes per ounce (or 11.3kg) or 1kg bars. The smallest Bitcoin unit is 1 satoshi.

The currency is close to infinite divisibility with 100 million satoshis for each bitcoin. This makes bitcoins seem a much better candidate from the perspective of divisibility. However, much higher transaction fees were being charged for bitcoin users with average transaction fee growing to more than $2 since mid-2017, as compared with less than 1 cent charged in previous years.

The chart below exhibits the trend for average transaction fees paid to cryptocurrency miners:

Source: blockchain.info, Goldman Sachs Global Investment Research

Our Takeaway

We prefer to endorse gold to investors, given a number of factors cited in this comparative analysis.

Gold has pure intrinsic value due to its rarity. There is a long history of unregulated currencies. Gold has been an unregulated currency at various times and in various places.

Investors always get to an unregulated currency. There is a government that regulates but it does not control the money supply very well. In some occasions, a number of investors do not trust the official currency. Bitcoin just seems to be another version of this. It is a lot like gold, in fact. Obviously, the difference is bitcoin is digital rather than a heavy, unwieldy object.

That means that bitcoins could serve the same purposes as gold in terms of a currency. It does not have any mass and can be sent easily from place to place.

In terms of price trends, it is also less volatile than bitcoins. Gold price never dropped 40%, which bitcoin has - on a couple of occasions last year. Unlike gold, bitcoin also has no fundamental value from alternative uses that could anchor its price.

This does not mean that the value of bitcoin might not rise over time. If demand grows against a finite supply, it will happen. But without an issuer who could guide price changes, or an alternative valuable use, the notion that its value will be stable is harder to envisage. The lack of these two foundations may end up to bitcoin's price more susceptible to self-fulfilling price dynamics.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article was written by Hans Centena, our business journalist. Gold News is not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes. Investing involves risk, including the loss of principal. Readers are solely responsible for their own investment decisions.

ALSO READ:  Bitcoin Continues to Beat Gold

Source: seekingalpha.com

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Bitcoin Continues to Beat Gold

04:46

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gold

Bitcoin Continues to Beat Gold

Cryptocurrency has been an extremely fruitful market for many investors in the space. One of the best of those coins continues to be the one with the highest market capitalization known as bitcoin.

Bitcoin has had an incredible rally this year, and when compared to gold, it continues to beat it out.

This year represents the second year in a row that bitcoin has beat out gold on the Wall Street market, and it doesn’t look like it is slowing down anytime soon. Many continue to ask the question of whether or not bitcoin is a solid investment, and that remains quite a tricky question to answer.


Since bitcoin has been around for such a small amount of time relatively, so many investors do not know how to fully read the space, but the coin has proven to be quite similar in terms of chart patterns, to most other assets.

Professor Geoffrey Smith at the Carey School of Business at Arizona State University stated that “bitcoin has many advantages over government currencies, not the least of which is that its supply is fixed. Thus, its purchasing power cannot be diminished by ‘currency printing’ by governments. See Venezuela and their inflation, for example. Anonymity is also an advantage. The blockchain technology also provides perfect record keeping which eliminates mistakes and the opportunity for fraud and theft.”


The professor further stated that “Bitcoin is also an international currency, which can be used to facilitate international trade. It may also be very useful in low-trust countries with high levels of corruption where the banking system and legal system protections are not very strong. It remains to be seen, however, if it is useful as a currency due to the high volatility. Yet the number of Bitcoin transactions seems to be increasing every day.”

ALSO READ:  Gold Vs. Bitcoin: Who You Got?


Source: https://typeboard.com

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What is Bitcoin? Here's everything you need to know Blockchains, bubbles and the future of money.

05:37

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how does bitcoin work

What is Bitcoin? Here's everything you need to know

Blockchains, bubbles and the future of money.

You heard about this Bitcoin thing?

We're guessing: yes, you have. The first and most famous digital cryptocurrency has been racking up headlines this year due to a breathtaking rise in value -- cracking the $1,000 threshold for the first time on January 1 before ascending to nearly $19,000 this month.

 
Bitcoin involves technology, currency, math, economics and social dynamics. It's multifaceted, highly technical and still very much evolving. This explainer is meant to clarify some of the fundamental concepts and provide answers to some basic Bitcoin questions.

But first: A quick backstory

Bitcoin was invented in 2009 by a person (or group) who called himself Satoshi Nakamoto. His stated goal was to create "a new electronic cash system" that was "completely decentralized with no server or central authority." After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the Bitcoin community, and subsequently vanished.

What is Bitcoin?

Simply put, Bitcoin is a digital currency. No bills to print or coins to mint. It's decentralized -- there's no government, institution (like a bank) or other authority that controls it. Owners are anonymous; instead of using names, tax IDs, or social security numbers, Bitcoin connects buyers and sellers through encryption keys. And it isn't issued from the top down like traditional currency; rather, Bitcoin is "mined" by powerful computers connected to the internet.

How does one 'mine' Bitcoin?

A person (or group, or company) mines Bitcoin by doing a combination of advanced math and record-keeping. Here's how it works. When someone sends a Bitcoin to someone else, the network records that transaction, and all of the others made over a certain period of time, in a "block." Computers running special software -- the "miners" -- inscribe these transactions in a gigantic digital ledger. These blocks are known, collectively, as the "blockchain" -- an eternal, openly accessible record of all the transactions that have ever been made.

Using specialized software and increasingly powerful (and energy-intensive) hardware, miners convert these blocks into sequences of code, known as a "hash." This is somewhat more dramatic than it sounds; producing a hash requires serious computational power, and thousands of miners compete simultaneously to do it. It's like thousands of chefs feverishly racing to prepare a new, extremely complicated dish -- and only the first one to serve up a perfect version of it ends up getting paid.

When a new hash is generated, it's placed at the end of the blockchain, which is then publicly updated and propagated. For his or her trouble, the miner currently gets 12.5 Bitcoins -- which, in December 2017, is worth more than $225,000. Note that the amount of awarded Bitcoins decreases over time.

What determines the value of a Bitcoin?

Ultimately, the value of a Bitcoin is determined by what people will pay for it. In this way, there's a similarity to how stocks are priced.

The protocol established by Satoshi Nakamoto dictates that only 21 million bitcoins can ever be mined -- about 12 million have been mined so far -- so there is a limited supply, like with gold and other precious metals, but no real intrinsic value. (There are numerous mathematical and economic theories about why Nakamoto chose the number 21 million.) This makes Bitcoin different from stocks, which usually have some relationship to a company's actual or potential earnings.


Without a government or central authority at the helm, controlling supply, "value" is totally open to interpretation. This process of "price discovery," the primary driver of volatility in Bitcoin's price, also invites speculation (don't mortgage your house to buy Bitcoin) and manipulation (hence the recent talk of tulips and bubbles).

Bitcoin has made Satoshi Nakamoto a billionaire many times over, at least on paper. It's minted plenty of millionaires among the technological pioneers, investors and early Bitcoin miners. The Winklevoss twins, who parlayed a $65 million Facebook payout into a venture capital fund that made early investments in Bitcoin, are now billionaires according to Fortune.

How do I buy Bitcoin?

If you're willing to assume the risk associated with owning Bitcoin, there is an increasing number of digital currency exchanges like Coinmama, CEX, Kraken and Coinbase -- the largest and most established of them -- where you can buy, sell and store Bitcoins.

Getting started is about as complicated as setting up a Paypal account. With Coinbase, for example, you can use your bank (or Paypal account) to make a deposit into a virtual wallet, of which there are many to choose from. Once your account is funded, which usually takes a few days, you can then exchange traditional currency for Bitcoin.

What can I do with Bitcoin?

You can use Bitcoin to buy things from more than 100,000 merchants, though still few major ones. You can sell it. Or you can just hang on to it. Note that there are no inherent transaction fees with Bitcoin, although exchanges like Coinbase typically charge a fee when you buy or sell.

Is all of this legal?

Short, qualified answer: yes, for now, as long as -- like any currency -- you don't do illegal things with it. For instance, Bitcoin was the sole currency accepted on Silk Road, the dark Web marketplace for drugs and other illicit goods and services that was shuttered by the FBI in 2013.

Since then, Bitcoin has largely evaded regulation and law enforcement in the US, although it's under increased scrutiny as it attracts more mainstream attention. Though it's legal to buy and sell Bitcoin, miners and exchanges occupy a gray area that could be vulnerable to future regulation and/or law enforcement action.

What are the risks?

Legal and regulatory hazards aside, as both an investment and currency, Bitcoin is very risky. When you wake up in the morning, you know pretty precisely how much a dollar can buy. The financial value of a Bitcoin, however, is highly volatile and may swing widely from day to day and even hour to hour.

Bitcoin transactions cannot be traced back individuals -- they are secured but also obscured through the use of public and private encryption keys. This anonymity can be appealing, especially with companies and marketers increasingly tracking our every purchase, but it also comes with drawbacks. You can never be certain who is selling you Bitcoin or buying them from you.  Opportunities for money laundering abound; last year, authorities in the Netherlands arrested 10 men for just this.
Theft is also a risk. The Bitcoin subreddit is rife with individuals' stories and even established exchanges are targets. Mt. Gox, based in Japan, "lost" 750,000 of its customers' Bitcoins in 2014 and hackers took $60 million from NiceHash earlier this month. There are few avenues for pursuing refunds, challenging a transaction or recovering such losses. Once a transaction hits the blockchain, it's final.

OK, so what about --- wait, there are more risks?

Because Bitcoin is so new and decentralized, there is plenty of murkiness and many unknowns. Even the technical rules for mining are still evolving and up for debate.
The IRS views Bitcoins as property, not currency. There are tax implications and a federal judge recently ruled that Coinbase must surrender records to the IRS on transactions of $20,000 or more.

Then there's the fundamental question of whether you should trust a particular exchange. Even Coinbase, the most established of them all has struggled to keep up with demand, plagued by site outages, scaling issues and customer service complaints. Even if it's venture-backed, every Bitcoin player today is by definition a startup and comes with all of the associated risks.

Now I sort of understand Bitcoin. WTF is Bitcoin Cash?

In August 2017, different sects within the Bitcoin mining community had a disagreement about the rules governing the mining process -- specifically, what constitutes the appropriate size (in megabytes) of a block. Unable to form a consensus, there was a fork in the blockchain, with the Bitcoin originalists going one way and the group favoring larger blocks going another.

Though they share a common digital ancestry, each now has its own individual blockchain with slightly different protocols. (For what it's worth, Bitcoin miners are sticking with 1MB blocks, Bitcoin Cash uses 8MB blocks.) Forking is almost assured to happen again in the future.

Are there other cryptocurrencies?

Yes. More than a thousand, with more sprouting up every day. Aside from Bitcoin, which is the real progenitor of them all, other well-known alternative currencies include Ethereum, Ripple and Litecoin. We'll take a look at the pros and cons of each, and how they stack up, in a future explainer.


Source: https://www.cnet.com/how-to/what-is-bitcoin/

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Bitcoin Eyes $18,000 as Tide Turns in Bulls' Favor

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bitcoin news

Bitcoin is strongly bid today amid reports of institutional buying.

Prices across global exchanges, as per CoinDesk's Bitcoin Price Index, were last seen trading at $14,951 levels. The cryptocurrency caught a bid wave at $13,687.54 (price at 17:00 UTC yesterday) and jumped to a six-day high of $15,393.97 earlier today.

Notably, the news that Founders Fund (co-founded by high-profile investor Peter Thiel) has poured $15 million–$20 million into bitcoin (BTC) looks to have given a lift to prices of the number one cryptocurrency by market capitalization.

As detailed in our explainer, Founder Fund's entry into the bitcoin space is not surprising. Nevertheless, the news does underscore the rising level of interest among institutional investors and thus could have pushed up bitcoin prices.

As per data source CoinMarketCap, the world's largest cryptocurrency has appreciated by 10 percent in the last 24 hours.

Despite the retreat from the intraday high, the technical charts look constructive.

Bitcoin chart

The above chart (prices as per Coinbase) shows:

• Bitcoin followed the historical pattern: a sell-off from the record high of $19,891 (Dec. 17) ended around the 61.8 percent Fibonacci retracement level on Dec. 22 (marked by a circle).
• Bulls successfully defended the confluence of the upward sloping 50-day moving average and 50 percent Fibonacci retracement level ($12,701.55) over the weekend.
• A high-volume "falling wedge" reversal (bullish breakout).
• The relative strength index (RSI) has breached the descending trendline, favoring a further rise in BTC prices.

A falling wedge is characterized by lower lows and lower highs with a contracting range. An upside break (as witnessed yesterday) indicates a bullish trend reversal – i.e. the sell-off from $19,891.99 (Dec. 17 high) has ended and the bulls have regained control.

The pick up in volume yesterday indicates strong hands are at play.

View

The chart indicates that prices could revisit $18,000 in the short-run. However, the decline of the intraday high of $15,400 to $14,650 neutralizes the immediate outlook.

A move above $15,400 in the next few hours would add credence to the bullish technical factors listed above and shall open doors for $16,490 (Dec. 27 high). A violation there would expose resistance at $18,149.99 (Dec. 12 high).

On the downside, only a close (as per UTC) below $12,701.55 (50 percent Fibonacci retracement) would revive the bear market.

Source: coindesk

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How to buy bitcoin: A beginner's guide to purchasing the cryptocurrency and not being scammed

10:11

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bitcoin news

How to buy bitcoin: A beginner's guide to purchasing the cryptocurrency and not being scammed

The value of bitcoin has hit a new record high of more than $19,850, and mainstream interest in the cryptocurrency continues to climb.

The notoriously volatile currency is expected to carry on fluctuating unpredictably, which is why numerous financial experts are urging people not to et involved with bitcoin, believing that the boom can only end badly.

However, if you’re still curious and want to find out more, here’s how beginners can buy bitcoin.

The easiest way to get involved is by signing up to a bitcoin wallet service. You can also “mine” bitcoin using a supercomputer – an unrealistic option for most people – or set up and control your own wallet, but using a third-party service is far simpler.

Some of the most popular options are Coinbase, Blockchain.info and Xapo, which you can use on both desktop and mobile.

You can sign up to these as you would sign up to any website. Enter your name and email address and set a password to get started.

After that, it’s time to connect your bank account, debit card or credit card.

Use two-factor authentication to secure your account, but don’t use your phone number or SMS for this. According to security researchers, criminals only need to know your name and number in order to steal from your bitcoin wallet.

Instead, use Google Authenticator or a security key, such as the YubiKey.

Once you’ve done this, you can start investing in bitcoin. Whichever service you decide to use, you’ll be able to access a graph showing how bitcoin’s value has changed over time. It’s likely to look extremely jagged.

With the value of bitcoin so high at the time of writing, it may come as a relief to hear that it is perfectly possible – and not at all unusual – to purchase small fractions of bitcoin.

Once you’ve established how much traditional money you’re willing to invest, complete your exchange through the wallet service, following their instructions.

However, we can only reiterate how risky the move could be. Not only is bitcoin extremely volatile, but investors in it and other cryptocurrencies are frequently targeted by criminals.

Earlier this month, for instance, the value of bitcoin dropped by 5.4 per cent after $31m worth of cryptocurrency Tether was stolen. Coinbase users have been targeted successfully too.

The best thing you can do to protect yourself is to always proceed with extreme caution.
Scammers constantly use phishing attacks to try to trick people into visiting malicious websites that look official, but aren’t.

They commonly send out fake but legitimate-looking emails, which you need to be wary of. To stay safe, you simply shouldn’t engage with them.

Don’t follow any links in the messages or enter any private details they ask you for. Instead, you should always make sure you’re on the right website or app.

People are also being duped by malicious websites promising quick profits and trading tips. Again, use common sense to protect yourself, and don’t take any unnecessary risks.

Bitcoin transactions are irreversible, so if any of the currency leaves your account, you won’t be able to get a refund. It’s also easy to lose bitcoin, and once it’s gone it can be tough to get back.
Bookmark your wallet service’s website if necessary.

Some services, such as Coinbase, allow to you set price alerts that tell you when the value of bitcoin has dipped below or climbed above specific figures.

When you decide it’s time to sell up, you can complete the transaction through the wallet service.

ALSO READ: Bitcoin is the 'most crowded' investment in the world, according to widely followed investor survey


Source: independent.co.uk

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Bitcoin is the 'most crowded' investment in the world, according to widely followed investor survey

10:10

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investment

Donat Sorokin | TASS | Getty Images

The Bitcoin cryptocurrency symbol on a stone sphere monument painted black by unidentified persons in Oktyabrskaya Square in Yekaterinberg, Russia.

Bitcoin is the 'most crowded' investment in the world, according to widely followed investor survey

Bitcoin tops the list of "most crowded trades" — a measure of sentiment on which popular investment could quickly reverse its gains— in Bank of America Merrill Lynch's December global fund manager survey.

The survey finds 32 percent of respondents named bitcoin as the most crowded trade, up from 26 percent in September when the digital currency first led the list.

Another crowded trade is betting on the stocks of U.S. and Chinese technology giants, 29 percent of respondents said.

More traditional money managers are worried about bitcoin than ever before.
The soaring digital currency topped the list of "most crowded trades" — a measure of sentiment on which popular investment could quickly reverse its gains— in Bank of America Merrill Lynch's December global fund manager survey released Tuesday.

The survey found that 32 percent of respondents named bitcoin as the most crowded trade in the financial world, up from 26 percent in September when the digital currency first led the list. At the time, bitcoin had surged about 375 percent for the year to $4,600.

But clearly that was not the top, despite a rocky September for bitcoin in which the digital currency briefly plunged more than $2,000 as China cracked down on cryptocurrencies and J.P. Morgan Chase CEO Jamie Dimon called bitcoin a "fraud" that "won't end well."

December's "most crowded trades"

Bitcoin has roughly quadrupled since September to briefly trade above $19,000 in the last week. Fueling part of the rally was the launch of bitcoin futures on the CME, the world's largest futures exchange, and its competitor Cboe's Futures Exchange.

The BofAML survey, conducted from Dec. 8 to 14, covered 172 global fund managers with a total $480 billion in assets under management. It's widely considered one of the best surveys of investors conducted on Wall Street.

Another crowded trade is betting on the stocks of U.S. and Chinese technology giants, 29 percent of respondents said.

"FAANG," or Facebook, Amazon.com, Apple, Netflix and Google's parent Alphabet are each up nearly 37 percent to 60 percent this year, versus the S&P 500's 20 percent gain. Chinese e-commerce conglomerate Alibaba has soared 97 percent, search engine Baidu has climbed nearly 47 percent and Hong Kong-listed tech and gaming giant Tencent has leaped more than 110 percent.

The term "FAANG" came about in reference to a handful of high-flying stocks in which much of the market's gains were concentrated. The surge of the Chinese conglomerates has earned them the nickname "BAT."

Bitcoin performance (July to December)

Technology stocks overall are the best performers in the S&P this year with gains of nearly 40 percent.

However, investors are not overexuberant about the gains. The BofAML survey found that allocation to tech stocks in December fell to the long-term average of 24 percent overweight.

Overall levels of cash holdings among the fund managers rose to 4.7 percent, slightly above the 10-year average of 4.5 percent and back into the territory signaling "buy," BofAML said.

Global money managers also called out short volatility, or betting on calm markets, as a crowded trade. Noted investors such as DoubleLine CEO Jeffery Gundlach have said for months that a "massive amount of money" is short volatility indexes, and the extended period of subdued market performance should soon result in a sharp increase in volatility.

ALSO READ: How to buy bitcoin: A beginner's guide to purchasing the cryptocurrency and not being scammed

Source: cnbc.

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Analyst who predicted bitcoin's rise now sees it hitting $300,000-$400,000

07:11

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bitcoin news

Bitcoin will surge past $20,000 and continue its meteoric march into six figures, according to independent research analyst Ronnie Moas.

"Bitcoin is already up 500 percent since I recommended it in the beginning of July, and I'm looking for another 500 percent move from here," said Moas, the founder of Standpoint Research, a self-described "one-man operation" based in Miami.

"The end-game on bitcoin is that it will hit $300,000 to $400,000 in my opinion, and it will be the most valuable currency in the world," Moas told CNBC's "The Rundown." 

"I don't know how much gold there is in the ground, but I know how much bitcoin there is, and in two years there will be 300 million people in the world trying to get their hands on a few million bitcoin." -Ronnie Moas, founder, Standpoint Research
 

The analyst's comments came as the CME, the world's largest futures exchange, launched its own bitcoin futures contract. The Cboe did the same earlier this month.

His aggressively bullish call — a near-$380,000 dollar appreciation on today's prices — is based on the idea that since only 21 million bitcoin can ever exist. Increasing demand for the digital currency will naturally drive its price up, he said.

"I don't know how much gold there is in the ground, but I know how much bitcoin there is, and in two years there will be 300 million people in the world trying to get their hands on a few million bitcoin.

This mind-boggling supply and demand imbalance is what is going to drive the price higher," Moas said.

Not everyone agrees

Moas said he believes his price target is a conservative call, but others disagree.

"We think that it's risky," Vasu Menon, vice president of Wealth Management at Singapore-based bank OCBC, told CNBC.

"I don't see strong fundamental drivers for this bitcoin rally," he said.
But Moas says the party is just getting started.

"I look at bitcoin the same way I look at Amazon," he said. "The way to play Amazon for the last 15 years was to buy it, hold it, and add on the dips. That's exactly the way I think people should be playing bitcoin."

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Bitcoin news: Bitcoin just started trading on the world’s biggest exchange — here's why that matters

07:11

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bitcoin news

The world’s biggest exchange just joined the bitcoin revolution.

Bitcoin futures started trading Sunday night at CME Group Inc.’s venue, a week after Chicago rival Cboe Global Markets Inc. introduced similar derivatives on the volatile cryptocurrency. CME is a much bigger player in futures, so many traders expected it to make a bigger splash in the nascent space.

CME got off to a faster start with more efficient pricing. Its most-active contract changed hands 221 times in the first hour versus 570 during Cboe’s debut. But that’s a win because CME’s contracts are five times more valuable — they’re tied to five bitcoins compared with only one with Cboe’s futures.
“People were better prepared” for the start of trading at CME, said Bobby Cho, head of trading at Cumberland, the cryptocurrency trading unit of DRW Holdings LLC. “They knew how they were going to hedge their positions.”

CME’s futures traded at about 2 per cent above bitcoin itself as of 11:56 a.m. in London; in the first day, Cboe’s got as much as 13 per cent above, a sign trading was relatively inefficient. Bitcoin today climbed 9 per cent from its Friday New York close to US$19,190, approaching the record US$19,511 reached hours earlier.

The CME and Cboe bitcoin futures have some distinct features. The price of Cboe’s product is derived from the cryptocurrency’s price at a single exchange; CME’s is based off four.

“We were waiting for the launch of the CME futures because the price is more robust and the exchange trades much larger volumes,” Jose Miguel Nascimento, head trader at cryptocurrency fund Solidus Capital, said in a telephone interview from Mexico City. “Futures are a very positive development for the bitcoin market, as it will help everyone from miners to traders hedge risk, and having a price curve will help limit price swings.”

The CME futures are another step into the mainstream financial world for an asset created in the wake of the 2008 financial crisis as an alternative to banks and government-issued currencies. The contracts, which settle in dollars and trade on regulated exchanges, can be bought by institutional investors that are prohibited from buying bitcoin directly on largely unregulated exchanges.

“One of the biggest issues when it comes to investing institutionally in digital assets is banks and larger institutions can’t hold an unregulated instrument in their balance sheet, and a futures contract is something they can hold,” said Gabor Gurbacs, director of digital-asset strategy at VanEck Associates Corp. With futures, “you don’t hold the physical bitcoin, which solves custody issues and counterparty risks with these less-regulated exchanges.”

To protect against wild, mistaken price swings, CME will briefly pause trading if the contracts rise or fall 7 per cent or 13 per cent, and prices won’t be allowed to move more than 20 per cent. That wasn’t necessary in its debut. Cboe also has volatility halts, which were triggered in the initial hours of trading a week ago, and its January contract rose as much as 26 per cent on the first day.
Cboe’s website stalled during its launch. CME’s seemed to weather the traffic.

“It’s only one-lots,” said Garrett See, chief executive officer of crypto trading firm DV Chain of the initial CME trades. “The prices are moving around pretty fast.” The order book was pretty thin and “the orders that are there are very small.”

Futures open up arbitrage opportunities — the chance to bet prices of the derivatives and the underlying cryptocurrency will converge. Last week, Cboe’s product was priced as much as 13 per cent higher than bitcoin, but that quickly narrowed. By Sunday night, it was similar to CME’s.
Some brokerages didn’t immediately give customers access to bitcoin futures. TD Ameritrade Holding Corp. said late Friday that it will offer Cboe’s starting on Monday, though it’ll wait to offer the CME contracts until they demonstrate sufficient liquidity.

 E*Trade Financial Corp. is considering offering bitcoin futures, according to a person familiar with the matter who asked not to be named.
“We look at the volume, the open interest and the spreads, and we want to make sure that all those conditions are maturing properly,” said JB Mackenzie, managing director for futures trading at TD Ameritrade. “We have had a lot of customer interest, and we have spent a lot of time educating them as to the differences between the two products.”

Banks and brokers who are offering access are being cautious. Goldman Sachs Group Inc. demanded some clients set aside collateral equal to 100 per cent of the value of their trades, people familiar with the investments said last week. The guidelines are inclusive of other margin requirements such as Options Clearing Corp.’s 44 per cent, required to clear contracts traded at Cboe, and the 47 per cent CME is demanding.

It’s not uncommon for a brokerage to impose steeper requirements than the exchange.
Interactive Brokers Group Inc., which has said it handled 53 per cent of the first day’s trading in Cboe’s bitcoin futures, will require a margin of 50 per cent for long investments, and about 240 per cent for short selling, based on current rates, according to Interactive Brokers spokeswoman Kalen Holliday.


ALSO READ Analyst who predicted bitcoin's rise now sees it hitting $300,000-$400,000

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Bitcoin has hit $10,000 in value for the first time after a 1,000% increase in its worth this year - and it could 'easily' reach $40,000 by 2018

10:11

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bitcoin news

Bitcoin has hit $10,000 in value for the first time after a 1,000% increase in its worth this year - and it could 'easily' reach $40,000 by 2018

A single Bitcoin has hit $10,000 (£7,500) in value for the first time in the cryptocurrency's history. The digital money was trading at $10,009 per coin on the CEX IO exchange this morning, before dropping back down below this watershed mark. Over this past year, Bitcoin has seen its worth increase by 1,000 per cent and it is continuing to attract investment.

 One former hedge fund manager believes it could 'easily' reach $40,000 (£30,000) by the end of 2018. But the dramatic rise has spared fears of a dangerous bubble which could end in huge losses.

Bitoin has seen a surge of activity in recent weeks, rising in value exponentially. For comparison, in July 2010, one Bitcoin was worth only $0.08 (6p). Yet the number of transactions involving the currency have not grown at a similar pace. This suggests that it is mainly being used as an investment, rather than paying for online shopping or other goods and services.

 Former Fortress hedge fund manager Michael Novogratz believes Bitcoin's value could multiply more than four times over the course of the next year. Speaking to CNBC, he said: 'Bitcoin could be at $40,000 (£30,000) at the end of 2018. It easily could. 'There's a big wave of money coming, not just here but all around the world.' Bitcoin has seen an eye-watering tenfold increase in its value since the start of the year and financial experts have warned over the expanding bubble.

Thousands of amateur traders are now piling in and betting huge amounts, while start-up companies are using bitcoin to raise money and avoid the transparency needed in a stock market float. But experts fear that the currency has become a vast speculative bubble detached from reality.

 Watchdogs across the world have warned there could be a sudden massive crash if the market turns. Economist Nouriel Roubini, who predicted the financial crisis, has described the fad for online currency as a 'giant speculative bubble' which is bound to end in disaster.

He said: 'This is neither a serious method of payment nor a good way to store capital. The bitcoin feeds on itself. 'There are no fundamental reasons for its price to reach such levels.' Roubini said the lack of regulation made the currency popular with crime gangs looking to launder money. These warnings have done nothing to dampen enthusiasm, whipped up by celebrities who have endorsed online currencies.

Boxer Floyd Mayweather, actor Jamie Foxx and reality TV star Paris Hilton have all tweeted their support for bitcoin. Football manager Harry Redknapp – who has previously claimed he doesn't know what an email is or how to send a text message – tweeted support for a lesser-known currency called electroneum.

 Watchdogs around the world are starting to take action on bitcoin trades out of fears that it is being used to fund crime and that vulnerable people are being lured into gambling away their savings.



Source: http://www.dailymail.co.uk

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Bitcoin has surged past the $6,000 mark

04:18

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bitcoin profit

Bitcoin has surged past the $6,000 mark.

A tweet by Swiss blogger @Russian_Market attributed the increase to the fact that China has published no further ban on the cryptocurrency.

Bitcoin is surging after no further ban published in China

— Russian Market (@russian_market) October 20, 2017

The news comes a month after China clamped down on mainline residents trading cryptocurrencies. Chinese authorities ordered cryptocurrency exchanges to stop trading, causing the value of bitcoin to drop to $3,226.41 on 20 September.

Since then, the value rose to $5,699.58 at the open today, spiking from $5659.40 at 1.36pm to another all-time high of more than $6,000 this evening.

Bitcoin is up more than 500 per cent this year.


Source:  cityam

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Bitcoin news: A Victory For Bitcoin

04:19

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bitcoin news

A Victory For Bitcoin

While Bitcoin remains highly speculative – I do not view it as a currency and as per my 3 Rules of Bitcoin I am cautious on it, but from a pure trading standpoint, I think it can rally from here in the near term.

The bullish case is that it survived the recent bearish case so well.

Bloomberg

Bitcoin Intraday Prices Since the China ''Crackdown'

Back on September 15^th it appeared to me as though not only China, but a number of public figures were trying to crack down on Bitcoin (link).  It was successful at first as Bitcoin continued its decent, trading as low as $3,000.  It then rebounded sharply.

The proponents, dare I say, ‘evangelists’ of bitcoin argue that this is exactly why investors should care about bitcoin.  Bitcoin is meant to be ‘separate’ from central banks and governments.  While not its only use, the most diehard cryptocurrency proponents focus on that aspect.

Well, it seemed to pass this latest test with flying colors.  While it looked like it was being pushed down, it emerged.  I think the fact that is passed this recent test will usher in a new wave of bitcoin enthusiasts.  Basically, some of those who doubt it, will take the recent trading as confirmation that Bitcoin does deliver some of what they have been hearing – the ability to avoid being trapped within the confines of existing national borders, etc.

The cynic in me, will point out that many people are incentivized to keep Bitcoin going.  Miners, in particular, come to mind.  Bitcoin Mining remains very profitable at these prices.  In a world where there are no rules (Rule #2 of my 3 Rules of Bitcoin) we have to consider, more so than for standard investments, that there may be attempts being made to force Bitcoin to rebound as it is lucrative for them.

I think the jury is still out on the long term viability of Bitcoin – but from a pure trading standpoint – I’d expect some more demand to develop.  The apparent slowdown in the push to launch Bitcoin ETFs or other products that mainstream investors find easier to use (or are just more comfortable with) will slow the rise.  That ‘mainstream’ capability is a requirement, in my opinion, to an even larger potential surge.

I view Bitcoin as highly volatile and highly speculative, but that doesn’t mean there isn’t a time and place for it to be owned (for disclosure, I don’t own it at the time of writing this, but will likely be adding some back to my portfolio).

Disclaimer: Any opinions expressed are those of Peter Tchir. This info is for educational and/or entertainment purposes only, so use at your own risk. He's not a broker-dealer or advisor of any kind.

Don't forget to share A 'Victory For Bitcoin' with friends.

Source: forbes.

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Ethereum, Bitcoin Prices End the Week on a High Note

11:32

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bitcoin news

Ethereum, Bitcoin Prices End the Week on a High Note

The cryptocurrency markets ended the week on a high note following Korea’s ICO ban, indicating that, at least for now, traders are not worried about the government’s posture toward cryptocurrency. The markets were buttressed by positive news from the Japanese government, enabling the ethereum price to climb to $300 and the bitcoin price to approach $4,300.

Earlier this week, Korean regulators announced a ban on initial coin offerings (ICOs). While some reports indicated the prohibition was a blanket ban — such as the one enacted by China — residents still appear to be able to contribute to foreign ICOs and trade for those tokens on exchanges. Consequently, news of the ban only had a minor effect on the markets, and they quickly recovered from that dip.

Hastening the recovery was an announcement by Japan’s Financial Services Agency (FSA) that 11 Japanese bitcoin exchanges — including bitFlyer, one of the highest-volume bitcoin exchanges — had received licensure to continue to operate within the country. Japan has positioned itself as a central hub within the Asian cryptocurrency ecosystem, and this announcement reaffirms that the country will play a prominent role moving forward.

These developments contributed to the total cryptocurrency market cap’s continued recovery. After beginning the week at $131 billion, the total value of all cryptocurrencies steadily climbed throughout the week. Despite a brief dip immediately following the announcement of the Korea ICO ban, the markets continued to rise leading into the weekend. At present, the total crypto market cap is $146.6 billion, which is a 7-day increase of more than $15 billion.

Bitcoin Price Nears $4,300

The bitcoin price headlined the week-long rally with a 14% climb. On September 23, the bitcoin price was trading below $3,800, but it gradually scaled the charts throughout the week. At present, the bitcoin price is $4,284 — this is its highest mark since September 12. Bitcoin now has a market cap of $71.1 billion.

Ethereum Price Crosses $300

The ethereum price did not quite keep up with the pace of bitcoin’s rally, but it did manage a weekly gain of 8%. This was quite significant, especially considering that Korea’s ICO ban has a much deeper impact on ethereum than bitcoin and most altcoins. Altogether, the ethereum price gained nearly $20 for the week and is now valued at a global average of $300. This translates into a market cap of $28.5 billion.

Altcoins Trend Up

The majority of top-tier altcoins followed the path blazed by bitcoin and ethereum, and several returned gains greater than 10%.

The Ripple price rose 12% over the course of the week, enabling it to maintain the 3rd-place ranking on the market cap charts. Bitcoin cash ended the week with a 3% bump and is now priced at $438.

The litecoin price rose 12% to $54 and has widened the market cap gap between it and 6th-place Dash to $400 million. Dash, meanwhile, had a disappointing week that culminated in a 7% decline. NEM rose 8%, while IOTA increased by 15%.

The NEO price was far and away the top 10’s most impressive performer, surging 57% to $31 and the 9th place on the charts.  Monero returned a moderate gain of 5% to round out the top 10, but it may soon face a challenge from ethereum classic, which, after falling to 11th, soared 24% for the week and is now priced at $13.

Source: cryptocoinsnews

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A Beginner’s Guide to Bitcoin

06:24

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bitcoin news

A Beginner’s Guide to Bitcoin

It’s possible that in the last few years, you’ve stumbled across a person or company that uses bitcoin. But what is it? Bitcoin is an emerging encrypted form of digital money, or cryptocurrency, that’s growing in popularity and value internationally.

Started in 2009, bitcoin is attractive to users and investors because of its immediacy, lack of oversight and anonymity. The only identifier of a bitcoin account is the wallet ID - no names, emails, zip codes or even IP addresses. It can be translated into US dollars either digitally or at bitcoin exchanges around the world.

 Bitcoin doesn’t have a supervising body so transactions have no one to review them, no guidelines. Since it’s encrypted, it opens the possibilities for lots of people to interact on the international market with digital money. The upside to that is immediate transfers, no waiting period, and no fees. This is a large selling point for international businesses but, and this is the down side, that’s also a draw for lesser legitimate operations like narcotics and arms dealers.

 As bitcoin has gained popularity around the world, investors started funding and trading with companies operating in bitcoin and has since created a bitcoin marketplace, much like the stock market. Bitcoin values rise and fall by the minute and participants are trading values constantly in attempts to maximize their profits.

The lack of regulation also includes protection, however, which was exposed when one of the largest bitcoin exchanges in the world in South Korea was hacked and compromised over $1B.

I’m far from a finance expert but history shows us that bubbles burst. Before those bubbles burst, a handful of people can make a lot of money but they all eventually burst. The bitcoin bubble is no different. A lot of the hype around it is people recognizing that the bubble will eventually burst, but trying to capitalize on it before it does. While I’m personally more conservative financially, I see the potential in operating in bitcoin. Regardless of my personal feelings about it, the market cap is $137B today and just passed a significant threshold where 1 bitcoin equals over $4,000 USD.

The future of bit coin remains in question. With so much money changing hands every day it’s only a matter of time before the government gets its hands involved. China has already banned some uses of bitcoin and, as of today according to the BBC, all bitcoin exchanges in Shanghai and Beijing must submit plans by September 20 to begin closing their doors. Government oversight will likely effect many of the features that make bitcoin popular.

The other side of the bitcoin is that it becomes regulated and is so readily available that it becomes a new part of our society. Being that banks currently have transfer periods, fees and personal data on the account holder anyway, for the average person this won’t be any different than their average banking experience. A lot hinges on how much of bitcoin can stay true to its current form with the presence of oversight.

Participation in bitcoin, like most financial decisions, is a matter of your risk tolerance. I don’t recommend you get involved in bitcoin as a way to get rich quick, but if you’re already comfortable in the financial space, for now, it appears bitcoin is definitely worth a thorough look.

Menlo House is the editorial publication of Five Four and its affiliate brands. Here members can go behind the scenes, receive style advice and get easy, quick content about what matters. We have experts and contributors in tech, food, style, cars and more to always keep you in the know.


Source: huffingtonpost

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Banks Are 'Afraid' of Bitcoin, Says Wealth Advisor

16:21

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bitcoin profit

Banks Are 'Afraid' of Bitcoin, Says Wealth Advisor

Banks are likely "afraid" of bitcoin and blockchain, a wealth advisor said today.

 Speaking with CNBC, Rainer Michael Preiss, executive director for Singapore-based Taurus Wealth Advisors, made his argument in the wake of comments from JPMorgan chief Jamie Dimon, who declared bitcoin "a fraud" earlier this month and predicted that it would "blow up".

Preiss, according to the publication, said: "Of course, if you run a very large U.S. bank, most probably you are afraid of blockchain and bitcoin."

As for why investors are interested in the cryptocurrency, Preiss suggested that it had to do with fears around the US Federal Reserve and concerns about the integrity of its balance sheet after years of supporting global markets.

"The concerns are about the fractional reserve banking system, and the balance sheet of the Federal Reserve at $4.5 trillion, where the Fed officially refuses an audit," he told CNBC. "On the other hand, on the bitcoin blockchain, you have an audit everyday because it's open-sourced."

Press' supportive comments stand in sharp contrast with Dimon's, who predicted in 2015 that bitcoin would fail. Others, in recent days, have cast a critical eye on the overall cryptocurrency market, with Ray Dalio, founder of the world's largest hedge fund, remarking earlier this week that "bitcoin is a bubble."


Source:  coindesk

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How To Profit From a Bitcoin Crash

14:41

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bitcoin profit

How To Profit From a Bitcoin Crash

Every time there is a crash in cryptocurrencies, the alarm bells ring out and panic often ensues. People predict the end, see the bubble popping and sell off for a loss.

However, there is another way to look at it, and that is to see a significant drop as a buying opportunity and a chance to profit.

How to profit

There are a few ways to try and cash in on a sharp fall in price of cryptocurrencies. Some are more effective than others, and some more suitable for different types of crashes or currencies. It is up to the investor to decide.

There are five methods described below that can help turn a sickening crash into a chance to make more money than before.

A lot of these methods are well known, and almost cliched, but the real difficulty is not simply knowing them, it is being brave enough to enact them in the face of a collapsing market.

Buy the dip

With Bitcoin’s path on a constant upward trajectory, buying the dip is one of the easiest ways to make compelling gains. However, it is not always easy to pull off as it requires timing the market.

Yazan Barghouti, project lead at Blockchain company Jibrel Networks, emphasized:

“Buying a dip in a crash can be difficult, because when do you know it has bottomed out?"

Petar Zivkovski, COO of leveraged digital currency platform Whaleclub, also spoke to the caveats surrounding this particular strategy:

"Buying the dip only works in a general bull market. If the global trend reverses, buying the dip is useless."

Pinpoint strong opportunities

While the cryptocurrency markets seem to be intrinsically linked, and will broadly be in a bull or bear mode, there are still opportunities to be made on certain strong coins through the market.

Vinny Lingham, CEO of Civic, suggested that investors "find quality coins with teams you can trust to execute and weather the storm" and then hold.

In trying to identify these opportunities, one must identify coins with a solid foundation and a compelling business model.

Hodl

A byword when it comes to cryptocurrencies, holding on through the bad times is the most basic and respected strategy. If you do not sell your coins when they are below what they were bought for, you have not made a loss.

This equates to buying digital coins and simply holding onto them through thick and thin. It is one of the most basic strategy for dealing with a crash - do nothing.

Additional advice offered by Zivkovski is to make sure you are holding the top five cryptocurrencies by market cap as they probably have the best foundation and ability to beat the crash.

 Selling to fiat

A somewhat controversial strategy, and one that flies in the face of holding is exiting to fiat currencies.

Crypto asset managers are notorious for doing this when there is a crash. However, it is difficult as it again requires timing the market both on exit, and then again on reentrance. Marshall Swatt, founder and CTO of Coinsetter, said:

"Exiting to fiat requires that you be able to time the market, both when you exit and again when you return. The smartest strategy is to allocate money you can afford to put at risk, and then stick with your plan regardless of the variations in the market."

Shorting Bitcoin

This is a tool used mostly by traders, and it is one that if executed correctly offers huge returns.

A few popular exchanges do offer this as an option, but it takes a lot of skill and experience to get this right. Shorting an asset involves borrowing it from somebody else, selling it, and then buying it back later to return to the person you borrowed from. If the price drops, you’ll make a fortune. If the price rises, you could lose everything. Know your abilities

The strategy you use should be based on your skill level and your comfort with risk. If you don’t want to take any chance of losing your digital currency, then holding is probably best. If you don’t mind being in fiat for awhile (possibly forever), then you can sell at highs and try to rebuy lower. If you’re a high flying and experienced trading, short selling might work for you. Use whatever strategies you are most comfortable with, and always know your investing goals.


Source:  cointelegraph

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