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4 reasons why the top 15 richest Bitcoin wallets still matter in 2021

Bitcoin may have mooned in 2020, but here’s why watching the top 15 richest addresses will matter in 2021.

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4 reasons why the top 15 richest Bitcoin wallets still matter in 2021

Transparency is one of the most intriguing aspects of cryptocurrency and it was this openness that drew many early supporters to Bitcoin (BTC).

Blockchain technology makes all information associated with the network’s operation accessible for anyone interested in taking a look. Every known address, transaction, fee paid and other details relating to multisignature and SegWit usage is out in the open.

The top 15 wealthiest Bitcoin addresses have always been the centerpiece of attention for several reasons. Some crypto researchers habitually sort through the top addresses searching for the footsteps of Bitcoin creator Satoshi Nakamoto. Others study data to track the maneuvers of crypto whales and predict market manipulation that results in volatile price swings in the Bitcoin price.

The top addresses have even caught the eye of government agencies like the United States Internal Revenue Service as well as the Treasury Department.

In fact, entire companies specializing in obtaining additional information on cryptocurrency addresses and their potential associations have been formed. It’s no secret that the U.S. Internal Revenue Service hired Chainalysis and Integra FEC, two crypto analytics firms, to track transactions.

More recently, under Treasury Secretary Steven Mnuchin, the Treasury Department is considering whether or not a rule on self-hosted cryptocurrency wallets is required. If approved, these changes emphasize the importance of privacy for market participants.

Addresses are not the same as entities

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Top-15 Bitcoin addresses. Source: bitinfocharts.com

As shown above, the top 15 addresses hold 1.07 million BTC, or 5.7% of the outstanding Bitcoin supply. At the current $26,500 price level, this equals $28.3 billion. While this is a large amount of Bitcoin, it’s also worth noting that BTC’s aggregated volume on spot exchanges surpasses $5 billion per day.

It’s important to note that an address’s initial deposit date does not mean that the entity owning the address first acquired coins on that day. The coins could have been sent from another address belonging to the same entity. Therefore, the dates showing first funds being sent to 11 addresses since only 2018 do not prove that the address holders are new to the sector.

It is also worth noting that none of the top 15 addresses are rumored to be Satoshi’s holdings. Researcher Sergio Lerner has shown that the blocks Nakamoto mined contain unique patterns known as Patoshi patterns. Although that mined BTC has yet to be moved, it was not allocated to a single address.

The top 100 addresses concentrate 15.7% of the total supply, which is rather impressive compared to the level of distribution seen in traditional markets. For example, the top 20 funds owning PayPal shares hold a combined 19.7% of the total share supply.

Five of the 15 most significant addresses are known addresses from exchanges, indicating that the apparent concentration does not exist in a way that can be attributed to crypto whales.

In addition to exchanges holding large sums of Bitcoin in wallets, some custodians also accumulate BTC for numerous clients in wallets spread over multiple addresses with large sums.

The top addresses are recent holders and non-SegWit-compliant

An impressive eight out of the top 15 addresses have never withdrawn a single satoshi. Excluding the five exchange-related addresses, only 20% have ever moved their coins. This indicates a strong prevalence of hardcore holders.

Moreover, 11 of the 15 addresses were first used less than three years ago. Multiple reasons could be behind this oddity, including improved security measures, a change of custodian, or different ownership structures.

Only two out of the top 15 (and three in the top 200) addresses are Bech32 SegWit-compatible, which can significantly reduce transaction fees. This indicates that users are resistant to change despite the clear benefits of cheaper transactions. Even more interesting is that the Bitfinex cold wallet ranked second on the list is the only one that has ever had an outgoing transaction.

A few mysterious addresses keep stacking

The third wealthiest address is something of a mystery, as it contains an untouched 94,506 BTC. The address made headlines back in September 2019 after Glassnode reported that 73,000 of the BTC in the wallet had originated from Huobi.

Many analysts suggested that these coins were connected to the Plustoken Ponzi scheme, but these rumors were proven wrong after the Chinese police seized 194,775 BTC on Nov. 19 from the fraudulent exchange.

Aside from the fourth-largest wallet containing 79,957 BTC since March 2011, 20 of the top 300 addresses are over nine years old. Although no one can prove that these funds have been lost, most assume so.

Those untouched coins amount to 313,013 BTC, and only one address has ever transacted out since origination. Thus, apart from F2Pool’s 9,000 BTC held at address 1J1F3U7gHrCjsEsRimDJ3oYBiV24wA8FuV, there is a very good chance that the funds from the other addresses are effectively lost.

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1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ balance. Source: bitinfocharts.com

The fifth-ranked address shown above was created in February of 2019 and, at origination, was listed as the 81st-largest address. Since then, it has been accumulating regularly, adding from as low as 1 BTC in December 2019 to 4,100 in a single transaction in June 2019. Despite being a large accumulator, it has made seven transactions out, ranging from 786 BTC to 3,000 BTC. Maybe even whales have bills to be paid.

There are precisely 100 addresses first used between Nov. 30, 2018 and Dec. 18, 2018 containing around either 8,000 BTC or 12,000 BTC each. These addresses are commonly attributed to Coinbase Custody. Amounting to 881,471 BTC, the addresses’ funds equal to 96% of the exchange’s cold wallet, according to chain.info.

The new whale local top theory

Every investor has a gut feeling that the arrival of new Bitcoin whales is crucial for a sustained rally, even though there has never been hard evidence of this effect until now.

There is a constant flow of new addresses entering the top 300. For example, 16 of them received their first-ever deposits within the past 30 days. Once again, this is not necessarily a new entity but an address receiving its first-ever BTC.

Although it is uncommon, sometimes gaps of 50 or more days occur without newcomers joining the top 300. Coincidentally, these periods mark the end of rally periods, and a healthy correction usually follows.

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BTC/USD price on Coinbase, early 2020. Source: TradingView

Precisely zero of the top 300 addresses were initially used between Nov. 28, 2019 and Feb. 09, 2020, when BTC went up by 35%. Oddly enough, the market plunged 52% over the next 32 days.

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BTC/USD price on Coinbase, 2017. Source: TradingView

A similar effect happened between Oct. 18, 2017 and Dec. 11, 2017. During this period BTC rallied 193% while none of the top 300 addresses were newcomers. A 34% price drop occurred over the following 36 days.

Before that, none of the top 300 addresses were initiated between April 20, 2017 and July 07, 2017. Meanwhile, BTC soared 111%, while a 24% crash has also followed this period over the course of nine days.

So far, history has been proving that the new whale theory makes sense: The market rallies during prolonged periods of fewer new addresses making it to the top 300 holders list, as it indicates accumulation by entities that already had position. On the other hand, new whales could be driven by fear of missing out, which usually indicates local tops.

Therefore, it makes sense to monitor the top addresses and on-chain data to gauge potential corrections.

Every time large deposits enter exchanges, this indicates a potential sell order and is deemed bearish by traders. These movements are then compared to BTC price tops and bottoms in an attempt to find some correlation between whale transfers.

Whenever the market is rallying and miners, in turn, reduce selling, analysts expect a price correction once they start moving coins again. To put things in perspective, this is 6,300 Bitcoin per week that needs to be absorbed by the market to avoid price impact.

Now that institutional investors have “arrived,” investors will be itching to see whether their inflow in 2021 will continue to absorb newly minted BTC.

While 2021 is looking pretty bullish for the crypto market, there is always an unexpected price crash that often results from the government threatening regulation.

This means it will still be important for savvy investors to follow the top 15 Bitcoin addresses and the movements of crypto whales in 2021.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Market Wrap: Bitcoin Closes 2020 Near Record Highs

Dec 31, 2020 at 9:09 p.m. UTC

Bitcoin, ether and gold in 2020.

The Takeaway:

Bitcoin nearly triples its price in 2020 and ends the year close to $29,000 but ether gained 450%.

  • Bitcoin (BTC) trading around $28,963 as of 21:00 UTC (4 p.m. ET), gaining 1.5% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $27,916.63 – $29,280.05 (CoinDesk 20)

Bitcoin prices, Dec. 30 – Dec. 31, 2020.

Bitcoin printed a new record high above $29,000 early Thursday before charting a quick pullback to $27,900 during U.S. trading hours, according to data compiled by the CoinDesk 20.

Despite the minor drop, the number one cryptocurrency by market value is eyeing its third consecutive monthly gain, a feat last achieved in the second quarter of 2019. The cryptocurrency has rallied by over 45% this month alone and is on track to end 2020 with at least a 290% gain.

The price rally puts bitcoin far ahead of traditional assets such as gold and stocks. The yellow metal has gained 25% this year, and the S&P 500, Wall Street’s benchmark index, has added 15%.

The year 2020 will go down in history as the period of bitcoin maturing as a macro asset, with prominent publicly-listed companies such as MicroStrategy diversifying their cash reserves into the cryptocurrency.

Most observers expect a continued rally in 2021. “The longer-term economic impacts of COVID are unknown. However, as we’re still in the midst of major economic disruptions and historical volatility, I believe bitcoin/crypto will continue to rise and be at the pinnacle of positive change,” Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, said in a New Year’s message.

Analysts at the investment banking giant JPMorgan foresee bitcoin’s increasing mainstream adoption hurting gold’s price.

However, a correction could be seen in the short run if the spot inflow from institutional investors slows down, according to Ki Young Ju, CEO of cryptocurrency data provider CryptoQuant.

“We haven’t had significant Coinbase outflows since $23,000,” Ju told CoinDesk. “Tokens transferred are decreasing and the fund flow ratio for all exchanges is increasing. Grayscale BTC holdings are 607,000 since Dec. 25,”

From a technical analysis standpoint, $27,300 is key support which, if breached, would open the doors to $25,300, according to crypto exchange EQUOS’ daily bitcoin analysis email.

Ether outperforms bitcoin

  • Ether (ETH) trading around $742.19 as of 21:00 UTC (4 p.m. ET), down 0.8% over the previous 24 hours.
  • Ether’s 24-hour range: $723.18 – $755.56 (CoinDesk 20)

Ether prices, Dec. 30-Dec. 31, 2020.

Ether, the second-largest cryptocurrency by market value, has gained over 450% this year versus bitcoin’s 300% rally. The cryptocurrency rose to a 31-month high of $757 on Wednesday and was last seen trading at $730.

Ether received a boost from the decentralized finance’s explosive growth in 2020, and stronger gains could be in the offing next year.

According to Ryan Watkins, an analyst at crypto data provider Messari, the CME’s recent announcement to launch ether futures in February is a sign of growing institutional interest in the cryptocurrency.

Bitcoin charted a strong rally in the run up to futures listing on CME three years ago. The exchange announced bitcoin futures on Oct. 31, 2017, when the cryptocurrency was trading near $6,300, and traded the first contract on Dec. 27. By then, prices had neared $20,000.

Other markets

Digital assets on the CoinDesk 20 are mostly down Monday.

Notable winners on the day as of 19:00 UTC (2:00 p.m. ET):

  • cosmos (ATOM): +11.5%
  • chainlink (LINK): +1.7%
  • OMG network (OMG): +1.6%

Notable losers:

  • orchid (OXT): -5.0%
  • stellar (XLM): -4.5%
  • bitcoin cash (BCH): -4.0%

Global equity indexes

  • Japan: Nikkei 225: 27,444.17 (-123.98 or -0.45%)
  • UK: FTSE 100: 6,460.52 (-95.30 or -1.45%)
  • U.S.: S&P 500: 3,756.07 (+24.03 or +0.64%)

Commodities

  • Oil was down 0.22%. Price per barrel of West Texas Intermediate crude: $48.18.
  • Gold was in the green 0.3% and at $1,900 as of press time.

Treasurys

  • The 10-year U.S. Treasury bond yield fell Thursday to 0.917%.

Read more about…

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Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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A New Attempt: VanEck Files for a Bitcoin ETF

Following a couple of unsuccessful attempts, the New York City-based giant asset manager VanEck has filed another document with the SEC to launch a Bitcoin ETF. If successful, the VanEck Bitcoin Trust would reflect the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate.

VanEck Tries Again For A BTC ETF

Founded in 1955, VanEck is a giant US investment firm with about $50 billion in assets under management as of 2019. The company has been actively involved with the cryptocurrency field as well, most notably – with attempts to set up a Bitcoin ETF.

So far, though, VanEck has withdrawn both of its applications – the latest one in September 2019. Nevertheless, the firm has shown a commitment to launch such an exchange-traded product.

VanEck has filed a new S-1 form with the US Securities and Exchange Commission to establish a Bitcoin ETF called The VanEck Bitcoin Trust. As with previous applications, this ETF’s shares would be traded on the Cboe BZX Exchange.

“In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its shares daily based on the reported MVIS CryptoCompare Bitcoin Benchmark Rate.” – reads the document. It added that “VanEck Digital Assets LLC is the sponsor of the Trust, and Delaware Trust Company is the trustee of the Trust.”

sec_cover
US Securities And Exchange Commission. Source: CNBC

Challenges And Hopes For A SEC-Approved BTC ETF

Apart from the two unsuccessful applications from VanEck, the SEC has dismissed numerous other similar attempts. Back in 2018, the Commission rejected nine applications in just one day.

This has raised questions within the community if the watchdog will ever approve a Bitcoin ETF. The former SEC Chair, Jay Clayton, said last year that an exchange-traded product tracking the primary cryptocurrency is possible, but “there’s work left to be done.”

Clayton highlighted that organizations need to address crucial issues, including price manipulation and bitcoin custody, before hoping to receive SEC approval.

With that in mind, VanEck’s timing seems rather intriguing. The company’s latest attempt has come shortly after Clayton stepped down.

Nate Geraci, president of the investment advisory firm ETF Store, told Bloomberg that filing for a Bitcoin ETF at this moment suggests that VanEck believes there’re “shifting viewpoints within the SEC.”

Geraci outlined that President Biden’s choice for the next SEC Chair will be the “key” to resolving this drama.

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About The Author

Jordan Lyanchev

Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

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The Most Important Bitcoin Infrastructure Developments of 2020, feat. Alyse Killeen

Dec 31, 2020 at 7:00 p.m. UTC

(Andy/iStock via Getty Images Plus)

A look at privacy and infrastructure advances that will shape the bitcoin ecosystem in the years to come.

For more episodes and free early access before our regular 3 p.m. Eastern time releases, subscribe with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, iHeartRadio or RSS.

This episode is sponsored by Crypto.com and Nexo.io.

Download this episode

Alyse Killeen is the founder and managing partner of StillMark, and has been investing in bitcoin companies since 2013. While much of the conversation this year has been about high level narratives and new institutional investors, Alyse breaks down the technical advances that happened this year.

Find our guest online:
@AlyseKilleen

See also: Writing Bitcoin Smart Contracts Is About to Get Easier With New Coding Language

For more episodes and free early access before our regular 3 p.m. Eastern time releases, subscribe with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica, iHeartRadio or RSS.

Read more about…

InfrastructureBitcoinPodcastsThe Breakdown

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Did Bitcoin prove itself to be a reliable store of value in 2020? Experts answer

Without any doubt, the year 2020 was unlike any other year in the 21st century: The ongoing COVID-19 pandemic, global governments unstoppably printing money, “lockdowns” and “social distancing” becoming the new normal, protests against racial discrimination and police brutality, and so on and so forth. It even made some claim it to be “the worst year ever.” But as they say: In every storm, each cloud has a silver lining. The most important thing is to learn from what we’ve been through and to improve our world and our future, as there are some problems that we have to solve ourselves.

It’s also true that 2020 was a significant, dramatic year not only for people all over the world but for Bitcoin (BTC) as well: the third halving, increased attention from institutional investors and global regulators, its white paper’s 12th anniversary, etc. Some even called it the “New Testament” of finance, and others suggested using it for the utopian idea of universal basic income. Bitcoin received global attention because of the Twitter hack in mid-July, which required the crypto community to defend Bitcoin’s integrity after the event placed the words “Bitcoin” and “scam” within one headline again. In October, PayPal announced it would offer crypto payments, and later in November, Bitcoin was on the homepage of the Wall Street Journal for its 80% price rally.

Related: Will PayPal’s crypto integration bring crypto to the masses? Experts answer

When 2020 started, it was hard to imagine how the world would change and how fast those changes would be. Despite all the negative impacts of the ongoing COVID-19 crisis, there have been some positive developments, at least within the crypto space. For instance, Bitcoin’s volatility has decreased since its peak in mid-March, and the pandemic has highlighted Bitcoin’s most important value: its decentralized nature. Some even argued that the pandemic has underlined the benefits of cryptocurrencies for the world. And while Europe experienced the shift to a cashless world, the United States remained more conservative and didn’t want to give up its paper money.

Related: How has the COVID-19 pandemic affected the crypto space? Experts answer

One thing became certain due to the effects of COVID-19: There are some serious problems with the currently existing financial system that might be solved by Bitcoin and by the technology behind it. And the similarities between the two recent financial crises — the first back in 2008 and now in 2020 due to the pandemic — revealed the systemic problems of centralized financial systems. While the first crisis gave birth to Bitcoin, the current one has made people turn to decentralized tech and Bitcoin on a massive scale amid the global economic recession. Some even argue that during the next decade, Bitcoin will play a crucial role in the global economy’s transformation, called “The Great Reset,” and that crypto mass adoption will be led by the millennial generation.

Central banks printed an estimated $15 trillion in stimulus by May alone as anti-pandemic measures to save global economies, throwing the U.S. dollar under the bus, as some said. And these measures turned people toward alternative financial tools, making Bitcoin a hedge against inflation and even an alternative to traditional finance entirely. Some even suggested governments make a monetary transition to Bitcoin to solve the national debt problems.

Another important 2020 milestone was the rise of institutional investors’ interest in Bitcoin. Although this trend seemed to be “built on nothing more than hope” earlier this year, 2020 surprised everyone here as well. Forced by the possibility of rising inflation, the hedging abilities of Bitcoin couldn’t go unnoticed by high-profile investors who saw crypto as an important part of a diversified corporate treasury holding, becoming major holders of digital assets this year.

Unsurprisingly, the crypto space has started to consider the rise of Bitcoin mining institutions inevitable. Also, China’s dominance over the world’s Bitcoin mining operations seemed to be challenged. And most importantly, the future of crypto mining will become more sustainable.

With the 2020 shift in public discourse around Bitcoin, it’s becoming more and more important to create a regulatory framework for the crypto space, without which it will have no future. The regulation, some argue, has to be evolutionary rather than revolutionary, and most importantly, it requires dialogue and close collaboration between regulators and crypto businesses.

All in all, it is hard to predict the crypto’s future in the post-COVID-19 world, as the pandemic has not yet come to an end. Meanwhile, it is impossible to neglect the impact it has had on the crypto space this year. The new Bitcoin era, after everything that happened this year, is forming the new financial order. And if fiat money might lose up to 90% in 100 years, Bitcoin’s future seems to be much brighter than it is now, considering that Bitcoin just reached $27,000 for the first time in history and is now targeting $100,000 within the next 12 months and $500,000 within the decade. And with 2020 coming to its end, Cointelegraph reached out to experts in the blockchain and crypto space for their opinions on Bitcoin’s path this year.

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Brian Brooks, acting comptroller of the currency of the U.S. Treasury Department’s Office of the Comptroller of the Currency:

“We hope that our July 2020 letter regarding crypto custody will make Bitcoin safer for institutional and retail holders. Bitcoin was the innovation that opened the door to decentralizing financial services, and the growth of it and other tokens in 2020 shows the beginning of a transformation of cryptocurrencies from an exotic concept to a more familiar and comfortable means of engaging in financial services.”

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Da Hongfei, founder of Neo, founder and CEO of Onchain:

“Since its inception, Bitcoin has witnessed and survived various ups and downs, and it now appears that investors, on the whole, are increasingly more confident in its value. More significantly, I believe that this signals how quickly we are moving toward mainstream adoption.

Throughout 2020, the blockchain space experienced an explosion in terms of interest and creativity, and we’re seeing the results now: More and more people are recognizing that blockchain is here, and it is here to say.

Moving forward, I believe we’re on the cusp of mainstream adoption, and I’m very excited for what 2021 will bring.”

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Denelle Dixon, CEO and executive director of the Stellar Development Foundation:

“I think that the institutional focus on Bitcoin has created positive momentum for the entire blockchain space. Personally, I think it is a reliable store of value. As is much debated throughout crypto circles and beyond, engagement with the network in the long term may present challenges and affect Bitcoin’s ability to translate to certain business applications and use cases, but I believe that storing value and holding value are irrefutably its strengths.”

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Emin Gun Sirer, CEO of AvaLabs, professor at Cornell University, co-director of IC3:

“We’ve seen over time how narratives around cryptocurrencies can shift and evolve to fit market demand or a network’s capabilities. The Bitcoin narrative around store of value and hedge against currency inflation has hardened this year, and I believe it’s now the dominant positioning for BTC, as its most vocal supporters and institutional adopters have rallied around it.

That’s a perfectly fine position for Bitcoin to occupy.

Personally, I’m most excited about currencies that have both a scarce, hard-capped supply like Bitcoin but also push for more sophisticated utility with functionalities like smart contracts, DeFi applications and asset issuance.”

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Heath Tarbert, chairman and chief executive of the U.S. Commodity Futures Trading Commission:

“We have definitely seen an increase in digital assets overall. Bitcoin is among that market, but let us not forget about Ether, which I declared a commodity last year. The two of these together represent a large portion of the crypto market. And it has been an interesting year in this market — not just with the halving but also the move to Ethereum 2.0 and both Bitcoin and Ether forking.

Despite this, however, we must still recognize that this market is small compared with other assets we regulate. I think over time, this market will be comparable. Until then, however, there will need to be more regulatory clarity around these digital assets for these markets to grow.”

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James Butterfill, investment strategist at CoinShares:

“Bitcoin remains a volatile asset. Many expect a store of value to have much lower volatility, but as gold was developing into an investment store of value in the 1970s, it too had extremely high volatility. As it has matured as a store of value, so too has its volatility declined. We expect the same to happen to Bitcoin, and early evidence alludes to this.

2020 has been crucial for Bitcoin. We see it as the year of legitimization for the broader public and investors, fortuitously aided/accelerated by the COVID-19 crisis and the consequent rapid escalation of quantitative easing and fall in use of cash. Our conversations with institutional clients have changed considerably over the course of 2020. What was typically a desire to speculatively invest has now become one of being fearful of extreme loose monetary policy and negative interest rates, with clients looking for an anchor for their investments. As their understanding of Bitcoin improves, clients have grasped that Bitcoin has a limited supply and fulfills this role as an anchor for their assets while fiat is being debased.

This year, we have seen cumulative flows (stripping out the price effect) into investment products rise from $1.35 billion at the start of the year to $6.1 billion today, with only 24 days of outflows for a total of 241 trading days this year. Investors are buying and holding — a good indicator that it is slowly developing into a store of value.”

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Jimmy Song, instructor at Programming Blockchain:

“It’s not that Bitcoin has matured, it’s that we have. The mainstream investors are starting to take notice of Bitcoin’s 12-year history and starting to recognize how valuable it really is in a world of near-infinite quantitative easing. Bitcoin gives us true scarcity, and that’s why it’s useful as a store of value. Literally, nothing like this has existed in human history.”

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Joseph Lubin, co-founder of Ethereum, founder of ConsenSys:

“Despite this very difficult year, I think that the broader decentralized protocol ecosystem demonstrated poignantly that we, like our Web 3.0 technology, are anti-fragile and that this technology will prove a worthy evolutionary successor to Web 2.0 systems. We continue to demonstrate that this technology will serve as a new trust foundation for next-generation, increasingly decentralized, financial, economic, social and political systems.”

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Michael Terpin, founder of Transform Group and BitAngels:

“Store of value is an interesting concept. It doesn’t mean nonvolatile; after all, both gold and real estate have had their cycles, booms and busts, but to date, they have returned to a reliable mean so that there are very few instances where a 20-year investment in either did not perform as a reliable way of keeping ahead of inflation with very low risk of losing one’s principal.

To skeptics, Bitcoin was seen as the equivalent of investing in a single high-risk stock that could easily crash to zero — and in its early days, this certainly was possible. But no asset in history has ever gone from under one cent, as it was during the first P2P transactions, to this month’s high-water mark of $28,300. As each year has passed, the fluctuations have gotten more manageable — there will be no more 100-times gains in one year, as happened in 2013. This plus the clear signals from the United States, the European Union, China and Japan that they’re happy to cope with both the ongoing COVID-19 pandemic and economic depression through massive money printing means that these currencies will vastly underperform hard assets in the next two to three years as the money supply in these nations expands at annual rates of above 20% instead of the historic 4% to 5%, which is near the true rate of inflation.

Barry Silbert primed the pump with Grayscale, allowing accredited investors an easy way to invest in Bitcoin that then makes its way into a publicly traded vehicle. Paul Tudor Jones, who made a fortune calling the gold boom in the 1980s, awoke the multitrillion-dollar institutional fund world by having his funds invest in Bitcoin, calling it ‘the fastest horse’ in the race.

Michael Saylor, CEO and founder of multibillion-dollar public firm MicroStrategy, then lit the fuse on corporate fear and greed by using 80% of its $500 million in cash earlier this year to invest in Bitcoin, which has now more than doubled. More recently, he went even further and issued debt to buy even more Bitcoin.

Bitcoin has never been great at microtransactions — dozens of low-fee, faster-settling cryptos are far better at this — but it needed to go through this use case in its infancy. Its true value now is in sending large transactions instantly and safely, and as a store of value for the next century and beyond.”

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Mike Belshe, CEO of BitGo:

“The 2020 bull run of Bitcoin is very different from anything we’ve seen before. Unlike the previous rapid rise of 2017, this year saw the influx of new large institutional players. New entrants like PayPal, Square, JPMorgan and others are bringing a new level of credibility, liquidity and stability to the crypto markets.

Institutions and retail investors are recognizing the importance of the principle of scarcity, which is the basic economic principle of Bitcoin. With governments overprinting money across the globe, Bitcoin is the most reliable store of value at this time and a hedge against inflation. Those who understand this will be in a stronger economic position than those who don’t.

I agree with Paul Tudor Jones’ recommendation that individuals who have investable assets put a small amount, perhaps 2%, into Bitcoin. And I’d go a step further and say that institutions should invest 5% of their corporate treasuries in order to stay competitive. Investing small amounts can produce tremendous upside with minimal downside risk.”

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Paul Brody, principal and global innovation leader of blockchain technology at Ernst & Young:

“Bitcoin has reached that mature, stable store-of-value stage, but I fear it will never be without some controversy. While the Ethereum ecosystem is becoming a vibrant economic entity — with DeFi, smart contracts and infrastructure services being built atop the system — Bitcoin remains very focused on taking a role as a store of value. This will make it hard for some people to grasp, in the same way that many people still don’t quite realize that there is no gold or other asset that backs any other modern currency either. “

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Roger Ver, executive chairman of Bitcoin.com:

“Clearly not. Anything that can fluctuate from $4,000 to $20,000 in a single year is anything but a store of value. It is still just a speculative investment at this point.”

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Samson Mow, chief strategy officer of Blockstream:

“Bitcoin was always a reliable store of value. The only people that say otherwise are the ones looking at it on very short time horizons. As public market companies like MicroStrategy have recently realized, Bitcoin is the only safe haven to store value — cash will just melt away from inflation and quantitative easing, gold is stagnant, and tech stocks are overextended. Now, we’re seeing giants like Guggenheim Partners and Ruffer pile in as they come to that same realization as well. Hyperbitcoinization is inevitable.”

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Serguei Popov, co-founder of the Iota Foundation:

“Bitcoin and other popular cryptocurrencies have been a store of value for many people for quite some time already. The considerable capitalization of the crypto market corroborates this, and it’s likely that quite a few readers of this article are using cryptos in this way already. Whether it is ‘reliable’ or not depends on the definition of reliability. Of course, it is true that Bitcoin’s — let alone other cryptos’ — price is quite volatile and will probably remain so, meaning anyone who uses it for a store of value might experience some strong emotions. On the other hand, it is very reliable in the sense that nobody can take your Bitcoin away, as long as you keep your private keys secret and store them safely. This constitutes a unique advantage of cryptocurrencies in the store-of-value context.”

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Todd Morakis, co-founder and partner of JST Capital:

“The institutions are here. This year, we’ve seen a number of large traditional firms either announce or begin to explore Bitcoin. While custody is still challenging for institutions, the Paul Tudor Jones announcement earlier in the year as well as the improvement of institutional Bitcoin solutions have led to much broader acceptance of Bitcoin within the traditional financial community. Bitcoin is no longer a bad word on the street.”

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Vinny Lingham, CEO of Civic:

“Bitcoin is a speculative investment. Even if we see the price goes up, we have to remember that it’s still speculative. When will it become a reliable store of value? As I’ve been saying for years, Bitcoin may eventually evolve into a reliable store of value, but this growth process will take at least five to 10 years. We’ll know that we’ve reached the goal when Bitcoin becomes far more stable and far less volatile — in a word, boring.”

These quotes have been edited and condensed.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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2020 Year In Review: Bitcoin’s Journey From $3800 To Nearly $30K

2020 has been an interesting year. To say anything else would be an understatement. The global COVID-19 pandemic took the entire world by a storm and changed the lives of millions of people.

This had a direct impact on all industries and markets. Cryptocurrencies were absolutely no exception. 2020 had its lows for the nascent industry, but it’s perhaps safe to say that the highs were much more. The clearest evidence of this is Bitcoin, as well as the massive growth in the total capitalization.

Bitcoin went on a rollercoaster. It started off the year steadily, crashed massively a few months later, and came back stronger than ever to chart highs that we haven’t seen before. The total market cap is almost at the point it was back in 2017’s parabolic run, though this time, things are looking very different.

Without any further ado, let’s have a look at the most important events of 2020 and how we ended up right where we are!

January – March: The World Before COVID and the First Wave

Technically, the novel coronavirus was discovered in China before the beginning of 2020, but it was really in March when most countries took serious measures as the virus went rampant.

However, the first few months before that were relatively calm. Bitcoin was increasing in value in what seemed like a very healthy progression. Towards the beginning of January, the Chicago Mercantile Exchange (CME) launched bitcoin options contacts, providing its institutional investors with more tools to receive exposure to the cryptocurrency.

More positive news came for the entire industry as two of the world’s largest banks, Goldman Sachs and Citigroup, executed an equity swap on a blockchain network similar to Ethereum.

However, the telling signs were there that something bad was brewing, and it’s easy to see them in retrospect. A growing number of banks started to introduce negative interest rates, highlighting some of Bitcoin’s inherent benefits.

In February, China delayed the development of its national cryptocurrency as the epidemic continued, though, at this point, the spread was somewhat limited to the country. And towards the end of the month, things started taking a turn for the worse.

Wall Street marked its fastest 10% correction in history as the coronavirus pandemic started to loom over the entire world. This quickly transitioned to the cryptocurrency market, and in the middle of March, Bitcoin had its worst week since 2013.

RedMarket

The panic was all over the market as many investors rushed to dispose of their holdings, resulting in a drop higher than 40% in a single day. This wasn’t limited to BTC as all cryptocurrencies suffered tremendously.

Once the dust settled, however, many realized that the worst has passed and the best is yet to come. Especially with what major Governments did next.

April – July: A Period of Infinite Money Printing and Growth

The coronavirus-induced crisis hit the markets so hard that governments across the world had to print money and bail out many corporations. The US, to no one’s surprise, was in the lead.

This would later act as a major push for institutions to realize the opportunity that Bitcoin presented. Nevertheless, at this point, proponents started to highlight the fact that unlike the US dollar, bitcoin is a hard currency – money that can’t be inflated infinitely. Money that stores value and grows it, instead of losing it. Many people came to this realization as the FED continued to print money and pump the economy at times where job-loss claims were sky-high.

This is when Bitcoin started to stage its recovery, and by May, the effects were already showing for what happened then is one of the most important events for the cryptocurrency in the past four years.

On May 11th, Bitcoin went through its third-ever halving which reduced the supply of freshly minted bitcoins in half. If this didn’t make BTC scarce, Grayscale surely did. The largest cryptocurrency fund manager started buying more bitcoins than there were minted.

In June, the V-shaped recovery of the legacy market was completed, following numerous monetary injections. NASDAQ reached a new all-time high.

In July, Ethereum had its 5th birthday, at which point the cryptocurrency market surged to a new 5-month high as the total capitalization surpassed $300 billion.

And while it may all sound particularly good to this point, something was lurking in the background.

The United States top regulators were furthering their efforts to scrutinize the industry, which culminated with a deal between the Securities and Exchange Commission and Telegram, resulting in the latter having to pay a fine of $18.5 million. This happened in June, but it foretold how the regulatory landscape would develop in the months to come.

August – October: DeFi, The Boom to Remember in 2020

The field of Decentralized Finance is one that many believe is the future of crypto. 2020 was the year this started to come to fruition as its market grew by more than 2,500%. In August, things started going parabolic.

defi

One of the most landmark projects that highlighted the unprecedented growth for DeFi was YFI or Yearn Finance. Founded by Andre Cronje, the value for YFI went from $0 to $44,000 – something that no one could have expected. Even though the cryptocurrency has halved in price, it’s still technically the second most expensive crypto on the market.

After that, we saw plenty of projects flooding the DeFi space. Uniswap – the world’s leading decentralized exchange protocol, had a massive year as it became the established authority in the field. Many tried to claim its spot, but so far, none has succeeded.

We saw food-based meme tokens growing in value like nothing before. One of the most popular examples was SUSHI – a protocol intended to overtake Uniswap but failing after many issues, including the fact that its developer (anonymous, of course) took off with millions before deciding to return them.

Elsewhere, the world’s largest online payment processor, PayPal, announced its plans to start offering its customers the option to buy, sell, and store cryptocurrencies. This is a massive deal for the entire industry because the huge network of merchants that PayPal serves will also be able to use crypto as a means of payment.

Apart from DeFi, however, this particular period of time should also be remembered with something else – two landmark lawsuits.

In October, the US CFTC slapped the company behind one of the world’s largest derivatives exchanges, BitMEX, and its owners, including Arthur Hayes with a suit. It alleged that it has been running an illegal derivatives exchange, continuing its efforts to scrutinize the industry. Shortly after, another famous name, John McAfee, was also charged with promoting fraudulent initial coin offerings.

November – December: Bitcoin’s Time to Shine

The last two months of this year were nothing short of spectacular for Bitcoin. The most impressive part was that this isn’t a retail-driven hype cycle. Rather, institutional investors fueled the increase.

btc_rocket

It was all prompted by the NASDAQ-listed company MicroStrategy which allocated its reserve treasury in Bitcoin, setting the stage for many others to follow. Jack Dorsey’s square, as well as some of the largest hedge funds, followed with different allocations, building up a rally that will go down in history.

In November, Bitcoin had long recovered from its lows and, even more so, broke its previous ATH set back in December 2017. What followed is even more impressive.

In December, the last month of 2020, BTC broke all expectations and surged past major psychological levels all the way to $29,000 in a few short weeks.

The cryptocurrency seems well on its way to take a shot at $30,000 – the next major target for Bitcoin, the all-time high of which currently rests at about $29,000.

Yet, there was another piece of news that took the cryptocurrency market by a storm, something that perhaps shadowed Bitcoin’s brilliant performance to a certain extent. The United States Securities and Exchanged Commission pressed formal charges against arguably the biggest company in the industry – Ripple. The watchdog alleges that it had conducted an unregistered securities offering worth $1.3 billion, implying that XRP is, indeed, security. Major exchanges delisted the coin as a result, and it plummeted by more than 65% as a result in just a few days.

Closing Words

2020 was perhaps the most interesting year for the entire cryptocurrency industry. The single, most crucial fact that everyone should by now be aware of is that it stood the test of one of the worst challenges that the entire world has had to face in the past decades – the Coronavirus (COVID-19) pandemic.

This is a clear testament that blockchain and cryptocurrencies are here to stay. This should also put a definitive damper on the “it’s a bubble” narrative because its resilience was put to the test like never before.

This concludes our yearly recap.

We at CryptoPotato would like to thank our readers and wish that you and your close ones be blessed with health and happiness. Stay safe!

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About The Author

George Georgiev

Georgi Georgiev is CryptoPotato’s editor-in-chief and a seasoned writer with over two years of experience writing about blockchain and cryptocurrencies. Georgi’s passion for Bitcoin and cryptocurrencies bloomed in late 2016 and he hasn’t looked back since. Crypto’s technological and economic implications are what interest him most, and he has one eye turned to the market whenever he’s not sleeping. Contact George: LinkedIn

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Five Months After Buying Bitcoin MicroStrategy’s Stocks Have Surged By 200%

Michael Saylor’s business intelligence firm MicroStrategy has become one of the largest bitcoin holders after accumulating more than $1 billion worth of BTC in less than six months. Interestingly, the company’s stock price has surged by roughly 200% in the same timeframe.

MicroStrategy’s History With Bitcoin

MicroStrategy is a Nasdaq-listed company providing business intelligence, mobile software, and cloud-based solutions. Founded in 1989 by Michael Saylor, the firm’s internally developed software helps other organizations make “better business decisions” by analyzing internal and external data.

Before mid-2020, the company and its founder weren’t too fond of bitcoin. In one of the few registered public opinions, Michael Saylor said in 2013 that BTC’s days were numbered.

However, the economic events that transpired this year prompted by the COVID-19 pandemic changed Saylor’s opinion on the primary cryptocurrency, as he recently explained.

As a result, MicroStrategy began accumulating BTC. The company announced the purchase of its first massive batch on August 11th, 2020. Less than a month later, the business intelligence giant doubled-down on its bitcoin investment, and Saylor revealed that he owns a sizeable stack as well.

Despite already allocating $425 million in BTC, MicroStrategy didn’t stop there as two more purchases followed. The second one was particularly interesting. The company raised $650 million via senior convertible notes offering and used all funds to buy bitcoin.

Ultimately, MicroStrategy has allocated $1.125 billion in BTC at an average price of $15,964. Consequently, the firm now owns 0.335% of all bitcoins ever to exist.

Company Stocks Soar

On the day MicroStrategy announced the first BTC purchase (August 11th), the company’s stocks (MSTR) traded around $135. Thus, the firm’s shares were down by more than 7% on a yearly basis.

However, it seems that the bitcoin buys have had a massive positive impact. Less than five months later, MSTR has skyrocketed to $390 as of closing price yesterday and up to $403 pre-market today.

This represents an increase of roughly 200% since declaring to the public the initial bitcoin purchase. For comparison, the price of the cryptocurrency has increased by “only” 150% since August 11th.

MicroStrategy Stock Performance. Source: TradingView
MicroStrategy Stock Performance. Source: TradingView
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Jordan Lyanchev

Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

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Ripple Price Analysis: Can XRP Bulls Stage a Comeback Following the Bloodbath?

XRP/USD – Bulls Attempting To Recover Above November 2020 Lows

Key Support Levels: $0.2, $0.171, $0.14.
Key Resistance Levels: $0.254, $0.3, $0.325.

A couple of days ago, XRP spiked beneath $0.2 to hit the July 2020 lows at $0.171. By the end of the day, the buyers regrouped to allow the daily candle to close above the November 2020 lows at $0.219.

Yesterday, XRP penetrated beneath the November 2020 lows. Its daily candle eventually closed at $0.21. Today, after a brief spike back into $0.2, the buyers are attempting to bring XRP back up.

xrpusd-dec31
XRP/USD Daily Chart. Source: TradingView

XRP-USD Short Term Price Prediction

Looking ahead, if the bulls can close above $0.22, the first level of resistance lies at $0.254. This is followed by $0.3, $0.325 (200-days EMA), and $0.35 (Feb 2020 highs).

On the other side, the first level of support lies at $0.2. This is followed by $0.171 (July 2020 lows), $0.15, and $0.129 (March low-day closing price).

The RSI rebounded from extremely oversold conditions, and if it can continue to rise, it will indicate the bearish momentum is finally fading. Additionally, the Stochastic RSI is primed for a bullish crossover.

XRP/BTC – Bulls Rebound Back Above 700 SAT

Key Support Levels: 695 SAT, 591 SAT, 500 SAT.
Key Resistance Levels: 800 SAT, 1000 SAT, 1200 SAT.

Earlier this week, XRP fell beneath the 1000 SAT support against Bitcoin as the capitulation continued. It proceeded to fall beneath 800 SAT yesterday to hit the support at 695 SAT (downside 1.414 Fib Extension).

Today, the bulls are attempting to rebound from 695 SAT as they currently trade at 758 SAT.

xrpbtc-dec31
XRP/BTC Daily Chart. Source: TradingView

XRP-BTC Short Term Price Prediction

Looking ahead, if the buyers can continue with the rebound, the first level of resistance lies at 800 SAT. This is followed by 1000 SAT, 1200 SAT (December 2017 lows), and 1425 SAT.

On the other side, the first level of support lies at 695 SAT. This is followed by 591 SAT, 500 SAT, and 438 SAT.

Likewise, the RSI remains extremely oversold, suggesting that the sellers might be a little overextended.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


About The Author

Yaz Sheikh

Yaz is a cryptocurrency technical analyst with over seven years of technical analysis trading experience. As an Economics graduate, he has taken a keen interest in the future potentials of blockchain in the financial industry. Removing crypto from the equation, Yaz loves to watch his favorite football team and keep up-to-date with the latest fights within the UFC.

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Bitcoin Mining Machine Maker Ebang to Launch Crypto Exchange in 2021; Shares Rise

Dec 31, 2020 at 3:20 p.m. UTCUpdated Dec 31, 2020 at 3:38 p.m. UTC

(Shutterstock)

Bitcoin mining equipment maker Ebang (EBON) announced Thursday it is preparing to officially launch a cryptocurrency exchange in the first quarter of 2021.

  • Shares of the Nasdaq-listed mining equipment manufacturer rose on the news, jumping to as high as $6.18 a share before settling down to $5.71 at the time of this writing, up 16%.
  • Ebang said it has started publicly testing its cryptocurrency exchange and will officially launch in the first quarter of 2021.
  • Very little has been revealed about the proposed exchange, except that Ebang has said it will be a regulatory-compliant cryptocurrency exchange that would strictly operate outside of China, where the government has cracked down on trading platforms.
  • Recently Ebang set up a wholly owned subsidiary in Australia as part of its strategy to create a digital asset trading platform.
  • In a statement, Ebang Chairman and CEO Dong Hu said the completion of the internal testing of the cryptocurrency exchange is a step forward in expanding its blockchain financial services business.
  • “We will also explore other business opportunities in the blockchain and cryptocurrency industry such as establishing mining farms and cryptocurrency mining to optimize the structure of our offerings in the blockchain industry value chain,” said Hu.

Read more: Bitcoin Miner Producer Ebang Blames Coronavirus for 50% Slump in Revenue

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