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Bitcoin Is Only for Tech Nerds and the Paranoid, Says ING

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Bitcoin’s mainstream appeal will probably die off soon, leaving only tech nerds and the paranoid involved in the digital currency, according to a recent report from ING bank.

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Bitcoin to Become a “Niche Asset”

In a Dec. 18 publication, ING chief economist Teunis Brosens argues that bitcoin’s key benefits “may actually be impediments to wider adoption.”

Brosens wrote: One day, beyond the hype, bitcoin will return to being the niche product that it was in its initial years. Users will include tech nerds, people obsessed about their privacy, people afraid of (hyper)inflation in traditional currencies, and people wanting to circumvent central banks for ideological or criminal reasons.”

In making his case, Brosens argued it was nearly impossible to appraise bitcoin’s actual value given that price action has been largely guided by speculation. He says the “true” value of bitcoin will depend largely on its future use case, which means it can be worth anywhere “between zero and several million dollars.”

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The blockchain community aims to create more use cases for bitcoin and other cryptocurrencies. However, of the biggest debates is how to improve bitcoin’s transaction capacity without jeopardizing its other core features. The subject of bitcoin’s scalability has divided the blockchain community along technical and philosophical lines, leading to multiple forks in the underlying protocol.

A sizable minority of developers recently abandoned their mission to double bitcoin’s block size – a protocol called Segwit2x – after the community failed to reach consensus. Many opponents of Segwit2x saw the hard fork as a takeover by some large stakeholders.

Skepticism Grows

With bitcoin’s value virtually doubling in the span of three weeks, market participants are becoming more skeptical about its long-term appeal. Danish central bank chief Lars Rohde is the latest to sound the alarm bells over bitcoin, warning investors to “stay away” from the digital asset. Like others before him, Rohde likened bitcoin to “tulip mania,” a term that describes an out-of-control bubble waiting to burst.

Cryptocurrency investor Oliver Isaacs recently told the Express.co.uk he believes bitcoin to be “the biggest bubble of our lifetime.” Other experts have also warned about the cryptocurrency’s rapid rise, a sign that more people were buying into the hype.

Fifty-one of 53 economists recently polled by The Wall Street Journal said they consider bitcoin’s current value to be unsustainable.

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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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Crypto Expert Maintains $60,000 Price Target for Bitcoin

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Back in January, cryptocurrency expert Phillip Nunn made two bold predictions: bitcoin will reach a low of $6,000 this year before rebounding to a high of $60,000. With his first prediction proving true, Nunn remains steadfast that the latter price point will also come to fruition in spite of recent market turmoil.

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The Bulls Will Prevail

In a recent interview with BusinessCloud U.K., Nunn said market volatility will ultimately work in favor of bitcoin, leading to an historic rally before year’s end.

Referring to his January forecast, Nunn said “the prediction was based on, first of all, market volatility which we’re experiencing at the moment.”

Nunn, who heads The Blackmore Group and Wealth Chain Group, said his $60,000 price forecast is “absolutely” possible given bitcoin’s long-term trajectory and role in disrupting traditional sectors. However, at present, bitcoin and other digital currencies are at the mercy of market sentiment and price manipulation, given the relatively small size of the industry. Case in point: cryptocurrency trade volumes plummeted to around $9.5 billion this weekend, the lowest in over two months. Such low turnover makes crypto assets prone to extremely wild swings not unlike the price forecasts Nunn put forward in January.

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“All the money that exists in crypto at the moment is from the public, so it’s all about market sentiment,” he said. “A flood of bad news can wobble the market, stuff like regulation. The industry is so small that there’s market manipulation.”

Ultimately, Nunn says bitcoin is helping to create an “internet of value” that will disrupt everything from money to record-keeping.

His view differs markedly from an institution like the Bank for International Settlements (BIS), which on Sunday released a report arguing for bitcoin’s ultimate demise. Although BIS didn’t frame the outcome exactly in those terms, the Swiss institution said the digital currency is ultimately too costly and too prone to manipulation to become a mainstay in traditional finance.

Bitcoin Prices

Bitcoin was little changed on Sunday, as prices consolidated around $6,500. With daily turnover of $3 billion, bitcoin’s trade volumes accounted for more than a third of the crypto market total.

The world’s largest cryptocurrency by market cap is down nearly 5% over the past week. That pales in comparison with some of the leading altcoins, which have fallen double digits over the same period.

Bitcoin has experienced multiple selloffs this year, with some analysts attributing the decline to the launch of bitcoin futures in December. Fundstrat Global Advosrs’ Tom Lee recently argued that bitcoin prices tend to fall into the expiration of the monthly futures contracts. This is likely caused by traders longing actual bitcoin and shorting the futures market.

Like Nunn, Lee maintains a strongly bullish outlook on bitcoin and has called for prices to rebound to $25,000 this year despite recent market dynamics.

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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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin Could ‘Bring Internet to a Halt,’ Says Bank for International Settlements

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The Bank for International Settlements (BIS) has delivered its most vocal criticism yet of bitcoin and related cryptocurrencies, arguing that the digital asset class may never be ready for mainstream adoption in the financial world.

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BIS Weighs on Bitcoin, Cryptocurrency

In a 24-page report published Sunday as part of its annual economic review, BIS said bitcoin suffers from “a range of shortcomings” that will ultimately derail its effort to become a widely used method of payment and investment asset.

The arguments put forward by BIS are not unlike previous criticisms lobbed at the digital currency. The report’s authors argue that bitcoin consumes too much electricity and is at the center of too much manipulation to become a key artery in the global economy and financial system.

“At the time of writing, the total electricity use of bitcoin mining equalled that of mid-sized economies such as Switzerland, and other cryptocurrencies also use ample electricity,” the report said. “Put in the simplest terms, the quest for decentralised trust has quickly become an environmental disaster.”

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According to the Bitcoin Energy Consumption Index courtesy of Digiconomist, bitcoin miners consume more electricity than 159 countries. For BIS, the size and growth rate of digital currency ledgers will eventually overwhelm existing technologies and bring the Internet to a halt.

BIS also concluded that, despite claims to the contrary, bitcoin’s decentralization is a fundamental flaw because it is “a poor substitute for the solid institutional backing of money.”

Based in Basel, Switzerland, BIS is an 88-year-old institution that promotes financial stability through central banking. It has been described as ‘the central bank for other central banks’ and has been instrumental in measuring the impact of the global currency markets.

Institutions Embrace Cryptocurrency

Despite BIS’ warning, institutions ranging from Goldman Sachs Group to the New York Stock Exchange are taking important steps to make cryptocurrencies accessible to their clients. Even banks choosing to remain on the sidelines of the crypto revolution are adopting blockchain technology to improve internal processes and boost business opportunity.

According to a recent study by the U.S.-based Greenwich Associates, major banks increased their blockchain budgets last year by 67% to $1.7 billion. Payments and trade finance are the most popular commercialization initiatives. The blockchain is also being exploited for revenue opportunities, settlement times and risk management.

BIS even acknowledged the power of distributed ledger technology in its criticism of cryptocurrency. The report released on Sunday conceded that distributed ledgers can improve functions related to cross-border flows and trade finance.

That said, an institution like BIS is clearly ingrained in the existing financial paradigm that has given more power to central banks. The “solid institutional backing of money” really refers to the fact that central banks can print as much money as they want while fractional banking allows institutions to lend out considerably more money than they hold in reserve. A supranational body like the BIS, which promotes this system, is unlikely to develop a favorable view of bitcoin.

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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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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EOS Mainnet Grinds to a Halt Post-Launch as Transactions “Freeze” Unexpectedly

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EOS’ blockchain has reportedly gone offline after an apparent bug in the mainnet caused the network to freeze unexpectedly.

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EOS Network Bug

According to the EOS Authority, transactions on the EOS blockchain froze at 09:56 UTC. Block producers producers convened shortly thereafter to “identify and fix the issue.” At 10:57 UTC, the block producers turned off their nodes and backed up the network’s data to ensure continuity once operations are up and running again.

EOS’s official Telegram channel confirmed that the “Root cause was due to how deferred transactions were handled.”

As of 11:02 UTC, block producers had formulated a “method to unpause the chain” according to EOS Argentina’s official Steemit page. Normal EOS functions are scheduled to resume within the next three-to-six hours.

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Following weeks of confusion and uncertainty, the EOS mainnet officially launched about two days ago after the blockchain received more than the 150 million votes needed to determine the entities that will maintain the network. At press time, more than 218 million votes have been staked. The current list of the top 21 block producers is as follows:

  • EOS Cannon
  • LiquidEOS
  • EOS Canada
  • EOS Beijing BP
  • EOS Authority
  • EOS DAC
  • EOS.Store
  • EOS Cafe Block
  • EOS New York
  • EOS Gravity
  • Bitfinex
  • EOS.42
  • Cypherglass
  • Argentina EOS
  • EOS Sweden
  • EOS South Korea
  • Huobi Pool
  • EOS Rio Brazil
  • EOS Seoul
  • ZB EOS
  • EOS Asia

Although initial voting for network launch has concluded, the voting for block producers is ongoing. This means block producers can be voted out of the top 21 at any time.

EOS Market

The EOS blockchain is the world’s fifth-largest by market cap after a yearlong crowdsale by parent company Block.One raised more than $4 billion in revenue. As the latest bug demonstrates, the launch of the highly anticipated network has faced several stumbling blocks ranging from technical glitches to user distrust over third-party software. Uncertainty over the voting process has also been a factor.

The value of EOS dipped more than 4% Saturday to reach $10.46 a token, according to CoinMarketCap. Daily trade volumes topped $715 million.

EOS’ total market capitalization is $9.4 billion. The blockchain peaked in April near $18 billion.

Over the past seven days, EOS tokens have shed more than 27% in value. Comparable declines have been reported by IOTA, Tron and Neo. The combined value of all cryptocurrencies is currently $276.4 billion after bottoming near $264 billion earlier in the week.

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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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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