Another week, another round of Crypto Tidbits.
It’s been another volatile week for the Bitcoin market. In the past seven days, the leading cryptocurrency has traded at both $11,100 and $12,000, whipsawing between the levels as the price enters a consolidation. Ethereum, on the other hand, has been surging higher; ETH now trades for $440 as of this article’s writing, around 6% higher than the early August high.
BTC’s drop towards $11,100 this week was triggered by a collapse in the values of precious metals. Gold saw its worst day since 2013 early this week, resulting in a similar correction for Bitcoin. The ongoing BTC rally towards $12,000 has been propelled by Ethereum undergoing a breakout of technical significance, slingshotting the asset higher.
Chart of BTC's price action over the past seven days from TradingView.com
Analysts remain optimistic about Bitcoin due to macroeconomic trends.
Dan Tapiero — the co-founder of DTAP Capital, Gold Bullion International, and a digital asset-focused fund — recently wrote in reference to the chart below:
“Tremendous long term Log Chart of #Bitcoin projects up 5-10x on this run. Just breaking up NOW. Should last a few years as 2.5yr consolidation is fantastic base for catapult up. Break of old highs will have explosive follow through. Time to sit and be patient.”
Chart of BTC's macro price action (Logarithimic chart) by Bitcoin bull and gold investor Dan Tapiero. Chart from Bloomberg
The optimism was echoed by Raoul Pal, the chief executive of Real Vision. The Wall Street veteran said that he thinks almost every other trade is “inferior” to Bitcoin. Pal added in a later tweet that for the next 24 months, there’s a good likelihood Bitcoin will be the best-performing asset in existence.
“These are all INCREDIBLY BULLISH long-term chart patterns. The probabilities in the charts suggest that Bitcoin is likely set to be the best performing major asset in the world over the next 24 months and by a big margin.”
- MicroStrategy Acquires $250m Worth of Bitcoin: This week, it was revealed that MicroStrategy, an American business services company, had formally acquired Bitcoin as an investment. The company purchased 21,454 bitcoin with $250 million USD from its balance sheet, according to a press release. The company sees value in BTC, with its chief executive arguing: “This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.” This news is bigger than meets the eye, though. As I explained in a tweet, the California Public Employees Retirement System, Healthcare of Ontario Pension Plan, Vanguard Total Stock Market Index, and many other prominent funds own MSTR shares. This means that millions now have a stake in Bitcoin.
- Dave Portnoy Buys Bitcoin: At long last, Barstool Sports’ Dave Portnoy bought Bitcoin. This week, the Winklevoss Twins from Gemini visited his place and taught him about Bitcoin and how to use their exchange. Portnoy bought $200,000 worth of BTC and $50,000 worth of LINK and added in a video published to Twitter that he wants to launch his own coin.
- BitMEX Implements KYC: This week, leading crypto derivatives platform BitMEX revealed that it will be implementing mandatory Know Your Customer rules for all customers: “We will be launching our User Verification Programme at 00:00 UTC on 28 August 2020, where all customers will be asked to complete ID checks within the next 6 months. These new controls will enable us to create a more trusted and secure trading environment for all BitMEX users.” Users will have a grace period until Feb. 12, 2021 to verify their identities to use the platform.
- Ethereum DeFi Boom Causes Transaction Fee Boom: Due to a DeFi boom, Ethereum transaction fees have exploded higher. The cost of “gas,” how transaction fees are calculated, reached over 300 Gwei this week. This is 3,000% higher than this metric was at the start of the year:
Photo by 🇨🇭 Claudio Schwarz | @purzlbaum on Unsplash
Price tags: xbtusd, btcusd, btcusdt, ethusd, ethbtc
Charts from TradingView.com
Crypto Tidbits: MicroStrategy's $250m Bitcoin Purchase, Ethereum DeFi Boom, BitMEX KYC
Bitcoin has broken out from downtrend resistance and appears to be poised for a new uptrend. Market conditions change dramatically when a switch from bear to bull occurs, and a “buy the dip” strategy is often the most effective.
For investors and traders unsure of how to do that, history shows that one specific level is the best place to buy BTC.
Bitcoin Bull Run Is Here: Time To Buy The Dip, Or Time To HODL?
During the last major crypto bull run, the term “HODL” was coined to reflect how violent each bull market crash was in Bitcoin. Rather than selling Bitcoin, seeking to rebuy the asset lower, the term’s originator recommended investors simply “hold on for dear life,” instead.
Selloffs are especially violent, but present an unrivaled opportunity to double-dip on ROI. During the 2016 and 2017 bull market, Bitcoin had several, over 35% crashes taking place in a matter of weeks to a month.
Related Reading | Economist: Early Days of Bitcoin Uptrend Are Here, Breakout Has A Long Way To Go
Price action and sentiment during these moments would get exceptionally frightening, making buying the dip more difficult in practice than it seems. But those that did manage to buy the dip were always handsomely rewarded for the risk taken.
Looking back over past price action, there could be one important level that acted as an ideal buy zone whenever Bitcoin retracted to touch it. If the same strategy works just as well during the next uptrend, the level could be the key to unlocking untold wealth.
BTCUSD Weekly Price Chart + 20-Week Moving Average | Source: TradingView
20-Week Moving Average Historically Acts As Ideal Buy Zone For Big BTC Profits
Moving averages are visual-based line indicators that are added to price charts, based on statistical open and close data regarding price action. These moving averages can be used to find potential support or resistance and can act as a buy or sell trigger as price passes through it.
The 20-week moving average, according to historical Bitcoin price charts, may be the ideal level to buy just about every dip during a cryptocurrency bull market.
Related Reading | Crypto Is Up Over 80% in 2020—and Google Users Are Taking Notice
In the chart above, at least five different instances took place in 2016 and 2017 where Bitcoin price collapsed back to the 20MA. There, the cryptocurrency found strong support and rocketed off to toward the next psychological resistance level.
BTCUSD Weekly Price Chart + 20-Week Moving Average | Source: TradingView
On average, each time Bitcoin price fell back to the 20MA, there was an over 100% gain that followed before the next correction. This means that each crash in Bitcoin was an opportunity to double your money.
The fifth and final pump from the 20MA resulted in an over 500% rally from $3,000 to $20,000.
Bitcoin has only just broken out from downtrend resistance. If the same sort of price action repeats, Bitcoin price has at least five major corrections back to the 20MA before the top and peak of the next cycle is in.
Before that happens, it may be wise to watch the 20-week MA as the prime zone to buy the dip in crypto for the most possible financial upside.
Marathon Patent Group, a NASDAQ-listed Bitcoin mining firm, has signed a long term purchase contract with Bitmain to procure 10,500 Antminer S-19 Pro, costing the company $23 million.
Announced on Friday, the bulk deal will make the North American company one of the largest Bitcoin miners in the region, and will contribute around 1.2 percent of the total hash rate in the Bitcoin network.
The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation
“Today’s news comes on the heels of recent incremental business growth through the purchase of what now is expected to total 13,520 next-generation miners generating 1.55 Exahash upon full installation,” Merrick Okamoto, Marathon’s chief executive officer, said.
He also added that the US-based company has received a significant discount on the retail price of the flagship ASIC miners and also reduced the risk of price increase of the mining hardware and is protected against any shortage in the miner’s supply in the future.
Everything You Need to Know to Profit from the DeFi HypeGo to article >>
Making of a mining North American giant
This bulk deal for Antminer procurement came a month after the company agreed to purchase another 660 S-19 Pro miners from Bitmain and 700 ASIC miners from MicroBT, a rival of Bitmain.
The company detailed that it has already received the new 1,360 mining rigs and those will be deployed by this weekend, adding to its currently operational 700 miners.
The company is also awaiting another shipment of another 500 S-19 Pro Miners in September and 500 more in November, that was ordered previously.
“We are pleased to have provided Marathon with Bitmain’s latest generation of Antminer S19 Pro mining hardware,” Irene Gao, Antminer sales director of NCSA region at Bitmain, said. “This collaboration continues to strengthen our cooperation and will extend to future work together as Marathon expands its presence in the mining industry.”
Meanwhile, Bitmain recently delayed the shipment of its Antminers till September and October, citing the ongoing chaos in its management.
Source Newsflash: Bitcoin Price Sinks Below $10,000; What’s Behind the 4-Digit BTC Norm? | Digital Money Times
It was recently revealed that Coinbase would soon introduce collateral-based loans taken out against Bitcoin holdings in exchange for instant cash.
The product is a great move by the crypto exchange, allowing it to compete against BlockFi and others in the lending space. But it also may have a side effect that promotes Bitcoin holders to keep on holding for the long term. Here’s why.
Coinbase To Offer Collateral-Based Loans On Crypto
Cryptocurrencies emerged due to Bitcoin’s creation and the rise of alternative forms of digital finance. And what started out as just one cryptocurrency designed to act as the first all-digital form of peer-to-peer cash, was born into an entirely new industry.
Crypto assets now come in all sorts of different types and forms, and which has brought about a new dawn of decentralized finance. DeFi isn’t just a buzz word. Although it is certainly red hot right now, perhaps overly so, but it is a true, sustainable trend building real-world value.
Related Reading | Ethereum Beats Bitcoin, Gold, and Stocks In Stimulus Check Investment
The recent DeFi craze has put the spotlight on crypto-based lending. Assets like Compound allow crypto token holders to lend out their assets for an APY return.
Some companies also allow users to take loans out against their own crypto assets for quick cash.
Popular San Francisco-base Coinbase, will soon be one of those companies, according to a recent announcement. Coinbase revealed they will be offering their customers the ability to borrow as much as 30% of their BTC holdings, up to $20,000 at a rate of 8%.
Holders are only required to make monthly payments on interest, leaving principle up to them to decide when to tackle. After all, it is your own assets you are borrowing against.
This is an enormous benefit for customers, but it also could ultimately be a major boost for Bitcoin.
BTCUSD New Uptrend On the Way? | Source: TradingView
Why Holders Will Be Less Apt To Cash Out Bitcoin Thanks To Collateral Loans
Everyone has been through tough times and needed some cash faster than a paycheck would provide. Banks offer personal loans, credit cards have cash advances, or you could cash out some assets by pawning your gold or exchanging some Bitcoin for USD.
Moving forward, in those unfortunate events, crypto holders will be less apt to cash out their Bitcoin, and could instead consider taking a loan out on their holdings. This would allow the crypto investor to potentially pay off the loan itself with any price increase in the asset.
Related Reading | Economist: Early Days of Bitcoin Uptrend Are Here, Breakout Has A Long Way To Go
This sort of phenomenon taking place in an incredibly scarce asset supply-wise could have a dramatic impact on prices, helping to remove one reason for selling Bitcoin from the overall equation.
What will remain, are investors who sell the asset simply to take profit, which data suggest is slowing by the day with holders expecting higher valuations in the months ahead.
On the negative side, there will always be a subset of holders that abuse this being at their disposal, and will likely result in loans being taken out against Bitcoin, solely to buy more Bitcoin.
Such a strategy could work out in someone’s favor due to the asset being close to a new uptrend. However, it could ultimately backfire and cause a lot of issues. Like any loan, it will be up to the party involved to stay responsible and pay down their loan. But even this irresponsible and risky strategy would also boost Bitcoin by taking more supply out of the market amidst the growing demand.
Privacy is a basic human right. It’s there in Article 12 of the Universal Declaration of Human Rights: “Freedom from Interference with Privacy, Family, Home and Correspondence.” Attaining that right in an era of dragnet surveillance, mass data breaches, state-sponsored hacks and big tech overreach, however, is a Herculean task. As the digital privacy fight heats up, crypto protocols are emerging as a new battleground where the right to anonymity will be won and lost.
Also read: Chainalysis Whistleblower Shares Company Secrets in Explosive AMA
From Data Drought to Tsunami in 40 Years
In 1973, the internet looked like this:
Yes, all of it. Today, your home router connects more devices than the entirety of Arpanet did in the early 70s. Long gone are the days when the connections that comprise the world wide web could be sketched on the back of a napkin. As the internet has proliferated and the number of connected devices has grown into the millions, and then billions, so has the amount of data produced. 90% of all the world’s data was generated in the last two years, with 33 zettabytes created in 2018 alone (one zettabyte equals one trillion gigabytes). By 2025, we’ll be creating 175 zettabytes annually, and will have another 15 billion devices online, largely thanks to IoT.
Data, we are often told, is like oil, serving as the lubricant that greases the web economy. If that analogy is true, we are a long way from reaching peak data. Peak oil, by comparison, is calculated to have occurred as early as 2006 and broadly agreed to occur no later than 2030. We are running out of oil, but demand and supply of data shows no sign of abating. Its ubiquity may account for why we have become so laissez-faire about protecting it. Should our credit card details be stolen, we simply cancel it and order another one; our password exfiltrated, we shrug and create a stronger one. This casual attitude to the loss of a resource that is, to all intents and purposes, invisible, accounts for why the world has sleepwalked into the data dystopia in which it now finds itself.
But as Edward Snowden memorably put it:
Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say. When you say, ‘I have nothing to hide,’ you’re saying, ‘I don’t care about this right.’
The Tug of War for Control of the World’s Data
Webizens today find themselves embroiled in a mighty tussle for control of their data. On the one hand, there are the politicians, in nations as “enlightened” as America and Australia, pondering a crackdown on encryption, and mandating the inclusion of backdoors to facilitate government access to private communications. And on the other end, there are the Web 3 companies like Tide (slogan: “Privacy is more than a human right, it’s your asset”) seeking to return data control to its rightful owners. In the case of companies like Tide, that typically consists of creating containers that enable individuals and businesses to control their data via private keys, sharing and reselling it only to those they trust.
Somewhere in between these opposing forces, tugging at the rope that constitutes data flow, lies Bitcoin. Satoshi Nakamoto’s creation is a privacy purveyor’s nightmare and wet dream rolled into one. Bitcoin’s pseudonymous design enables anyone to transact with anyone else in the world without disclosing their identity or intentions. And yet, thanks to advances in blockchain surveillance and ever-encroaching scrutiny from the three-letter agencies, cryptocurrency users have never been more exposed. As a string of darknet vendors have discovered to their peril, associating pseudonymous bitcoin addresses with real world identities is relatively trivial, unless you’re an opsec expert.
Draconian tactics deployed by agencies such as the IRS, which proposes subpoenaing tech companies to identify taxpayers who have downloaded cryptocurrency apps, shows the extremes that government will take to track and trace bitcoiners.
Governments Hate This One Weird Currency
Despite the panopticon capabilities that cryptocurrency hands to governments, giving them real-time oversight of every single network transaction, they hate and fear this uncontrollable money. Last week, U.S. Treasury Secretary Steven Mnuchin vowed to “make sure that bitcoin doesn’t become the equivalent of Swiss-numbered bank accounts,” while senators sought to rein in Facebook’s Libra, expressing alarm at the potential for a mainstream crypto payment system that doesn’t enforce end-to-end KYC. Facebook’s dismal record in respect to data protection was also attacked.
For the subset of web users educated and concerned enough to safeguard their online privacy, there’s a lot that can be done to prevent their data from falling into the wrong hands. Cryptocurrency users would do well to learn the capabilities and limitations of blockchain surveillance and strategize accordingly, to buy and sell coins on privacy-oriented P2P platforms and reduce their dependence on data-thirsty social media platforms and web browsers in favor of pro-privacy alternatives. There’s no such thing as anonymity in an age of facial recognition, social credit, and deep packet inspection. Nevertheless, through taking practical precautions, bitcoiners can make themselves a hard target in the escalating war on personal privacy.
Do you think it’s possible to maintain a reasonable degree of privacy on the web today? Let us know in the comments section below.
Images courtesy of Shutterstock.
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