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Beyond Bitcoin: Cryptocurrency Will Succeed Regardless of BTC, According to Pantera Hedge Fund

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A crypto hedge fund manager is confident that his firm’s portfolio will succeed regardless of where bitcoin ends up. Dan Morehead, chief executive and co-investment officer of Pantera Capital, made his case by comparing the crypto market to the dot-com bull market.

Pets.com

In a letter to investors obtained by CNBC, Morehead said his struggling hedge fund will still turn a profit even if bitcoin goes the way of Pets.com, the high-flying dot-com startup that ultimately filed for bankruptcy in 2000.

“If you had a portfolio of IPOs — one was Pets.com and one was Amazon.com — it doesn’t matter what the rest were. You made a great return,” he said.

In Morehead’s view, even if bitcoin becomes Pets.com, the cryptocurrency revolution is here to stay. That means there will be other candidates that could become the Amazon of cryptocurrency.

The analogy was presented to investors in a letter that tried to explain Pantera’s disappointing returns as of later.

The Pantera Fund, which is comprised of 25 initial coin offerings (ICOs), fell 25% last year but is still up 200% since inception. Its Long-Term ICO Fund remains in positive territory while its Digital Asset Fund is down double digits. Pantera’s bitcoin fund has plunged 27% this year, but has gained 16,000% since it started.

Morehead Isn’t Saying Bitcoin Will Fail

It’s worth mentioning that Morehead never claimed bitcoin will fail, only that the crypto market is diverse enough to see other champions take the mantle should the original blockchain falter. In his letter he described bitcoin as the “miracle whip of financing,” advising investors to hold up to 2% of their portfolios in blockchain. His reasoning was thus:

“I am not certain that blockchain will return 20,000% again. However, the odds are high enough that when you sum the probabilistic weighted outcomes the expected value is the most asymmetric trade I’ve ever seen.”

His comments echo an article we ran last week where the author asserts that bitcoin ultimately has no bearing on the success of the digital currency market. That’s because cryptocurrency has a philosophical undercurrent that extends far beyond the original blockchain.

That being said, bitcoin enthusiasts will be happy to learn that the original blockchain isn’t going away anytime soon. As a matter of fact, bitcoin’s share of all cryptocurrency holdings has increased substantially since the start of the year when it accounted for a record low percentage of the total market cap.

Bitcoin plunged to six-week lows on Sunday with a price per coin of $7,310. At last check, it was trading at $8,143 for a market cap of $138.3 billion. The cryptorucrrency is down nearly 60% from last December’s highs of around $19,600.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 700 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Minor Bounce Lifts Bitcoin Price Back Above $3,200; Waves Making Big Moves

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Cryptocurrencies levitated off yearly lows Sunday, with Litecoin and bitcoin SV emerging the biggest winners following an early weekend retreat. Another shake-up in the top-20 suggests 2019 will be a pivotal year for altcoins and tokens, which have struggled to remain relevant in the face of increasing bitcoin dominance and declining interest among retail investors.

Bitcoin Recovers

The leading digital currency experienced a modest relief rally on Sunday after setting a new yearly low the previous morning. BTC is currently valued at $3,266, having gained 2% on the day. The price peaked just above $3,305 earlier in the session.

Trading in BTC on virtual currency exchanges has declined sharply over the weekend; on Sunday, total daily turnover reached $3.8 billion, according to CoinMarketCap. Spot trading as a share of overall market activity rose to more than 80% with BTC/USDT, ETH/USD and BTC/KRW the most dominant pairs.

With a market cap of nearly $57 billion, bitcoin exerts a strong gravitational pull on altcoins and tokens. Bitcoin’s share of the overall market cap, now at 55%, has risen steadily during the latest leg of the bear market.

Bitcoin SV Leads Rally

In terms of best individual performers, bitcoin SV launched an 18% gain on Sunday as the protocol’s backers remained committed to achieving market dominance in the long term. Craig Steven Wright, one of SV’s most prominent backers, says he’s in it for the long haul in the wake of last month’s hard fork. This comes despite overwhelming support for bitcoin cash ABC, the primary implementation of the BCH hard fork.

Wright appears no longer keen on attacking the competing protocol but will instead focus on brand and business development to attract new users.

In its short history, SV has demonstrated an ability to move inversely with the broader market. This has allowed it to quickly scale the market cap rankings but also fall just as quickly. On Sunday, the coin was worth $77.50 for a total value of nearly $1.4 billion.

Waves Skyrockets

Waves coin briefly cracked the top-20, adding to a string of gains since the end of November that have set the digital currency apart from its peers. At the time of writing, Waves had slipped back to 22nd place with a value of $2.47 and a market cap of $247.4 million. Astonishingly, the cryptocurrency has gained nearly 160% since Nov. 25. Over the same stretch, the broader cryptocurrency market fell by 13%.

As a token customization platform, Waves operates its own decentralized exchange where new tokens can trade alongside major cryptocurrencies like bitcoin and Litecoin. At last check, the decentralized exchange had 69 crypto listings and over 20,000 custom tokens.

CCN reported a 50% surge in Waves coin last week following a mobile wallet upgrade that allows users to buy cryptocurrency with credit cards. This may have contributed to the rise of trading volume in Waves coin.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 700 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Mainstream Adoption of Bitcoin Will Send Price Soaring

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The pain inflicted by the crypto markets has been extreme this year.  It’s become clear that the market ran way too high, way too fast in 2017.  Many traders knew a severe correction was forthcoming, but I doubt many predicted the correction (now a full-fledged bear market) would be this extreme.  While the markets have been painful, Bitcoin (BTC) serves a bigger purpose than just making money in the markets.  To some, that purpose is a worldwide digital currency that can eventually be used to purchase anything.  To others, the purpose is a store of value to prevent against the inflation that plagues FIAT currencies.  Either way, it’s important to remember that this is just the beginning.

Early Phase of Adoption

Bitcoin is still in the very, very early phase of adoption.  Let’s look at the graph below.

The technology adoption life cycle is a sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups.

Many consumers still have no idea what Bitcoin is.  When people google the term Bitcoin, they are likely to get the following definition:  Bitcoin is a digital currency that is not backed by any country’s central bank or government.  Bitcoins can be traded for goods or services with select vendors.  But the truth is that Bitcoin can’t be used to buy things that would be useful for most people.   Consumers can’t use Bitcoin to buy groceries, pay the cable bill, pay for medical expenses, buy a car, or purchase a home.  For years, Expedia (one of the world’s largest travel booking engines) allowed consumers to use Bitcoin to make hotel reservations.  But even that was taken away in June.

Clearly, Bitcoin has yet to achieve its intended goal.  Based on the graph above, I can confidently claim that Bitcoin is still in the innovators phase.  In fact, one big innovation in the future may help push Bitcoin into the early adoption phase.

Lightning Network

Although Bitcoin took the world by storm in 2017, one big problem has always loomed large; scalability.  The ability to scale to the required size was a concern when Bitcoin was first introduced to the world and it remains a problem that needs to be addressed.  What does scalability entail?  Well, let’s look at the visual below.

At present, Bitcoin is only capable of processing approximately 7 transactions per second.  Compared to PayPal, Ripple, and especially Visa, Bitcoin needs to improve dramatically.  One way that Bitcoin may be able to perform significantly better is through the lightning network.

It’s currently estimated that the lightning network will have the potential to process 1 million transactions per second.  While that sounds great on paper, it’s still just theoretical.  Once the network becomes operational, its true greatness will be determined.

Conclusion

Although Bitcoin has had a rough 2018, it’s important to recognize that the future still burns bright.  Bitcoin is still in the innovators phase of adoption.  And while the lightning network is set to address Bitcoin’s biggest hurdle, better days are ahead.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Bitcoin Price Unable to Break Downward Spiral as Speculation Drives Market

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Bitcoin’s price touched new yearly lows on Saturday, as the broader cryptocurrency market risked further capitulation in the days and weeks ahead. According to the CEO of BitPay, bitcoin’s price is driven predominantly by speculation regarding future adoption and is less concerned with current market forces. If that’s the case, there’s a reasonable case to be made for a strong rally in the new year.

BTC/USD Update

The bitcoin price reached a low of $3,130 on Coinbase in early-morning trade, the lowest since August 2017. The U.S.-based exchange last quoted BTC/USD at $3,147. Exchanges Bitstamp, Bittrex and Gemini show similar levels, while Bitfinex maintained a $100 premium.

Market-wide data provided by CoinMarketCap show an average bitcoin price of $3,207, down 2.7%  over the 24-hour period.

Trading volumes across the virtual exchange market reached $4.1 billion, according to the latest available data. BitMEX saw its share of the total volume rise to 24.4% as derivatives continued to drive the market. BitMEX and other futures markets allow traders to profit from bitcoin’s decline. This avenue has increased in popularity since the selloff began last month.

Bitcoin’s market capitalization has experienced a significant drop over the course of the selloff. Now valued at $55.9 billion, bitcoin’s market cap is down a staggering $56 billion compared to early last month.

Speculation Drives Market

Speculation about bitcoin’s perceived utility in the future continues to influence market behavior far more than its actual use in today’s market, according to Stephen Pair, CEO of BitPay. Although BitPay is focused on supporting the actual market for bitcoin payments, this segment has little impact on how BTC is priced by investors and speculators.

“A very big component of the price is certainly speculation,” Pair said in a recent interview with CNBC’s Squawk Box. “It’s investors speculating on the future usage and adoption of this technology. A small component of the price is actual utility, and that’s what BitPay is focused on — using the platform and delivering products to our customers that they find valuable.”

BitPay is hoping to radically alter how bitcoin is priced in the future – not by manipulating the market, but by expanding adoption of cryptocurrency payments. Currently, BitPay processes roughly $1 billion in transactions per year, a figure Pair believes should grow ten-fold in the coming years.

Although bitcoin is accepted by hundreds of thousands of merchants globally, its primary utility continues to be as a store of value for investors looking to capitalize on the alternative asset class. Now that the initial crypto craze is over, adoption as a payment mechanism is the next great hurdle facing BTC and its peers.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 700 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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