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Sunday Devotional: Welcome the Chaos, Buy the Dips

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It’s nice to go to Facebook sometimes, especially into the cryptosphere. You find the real meat and potatoes people of the crytpo world, and in general, they’re the kind of people you hope really do benefit from all this madness we’re collectively generating in the blockchain sphere. Then you witness a group of Westerners dupe a group of Nigerians (seriously) into believing (for whatever reason) that HTMLCOIN will hit $1 (or whatever) by December, or that it has ever seen a high of 155 satoshis, and you have to wonder if maybe the whole problem of society was better left alone. (Just kidding: it doesn’t matter.)

 

Elsewhere, in the hallowed halls of Bitcoin Core, Gregory Maxwell takes the mantle of Bitcoin’s most influential, true partisan. Speaking to a Bitcoin meet-up in San Francisco, Kyle Torpey reports that Maxwell made some very interesting statements about the near-future of Bitcoin – in effect, that the SHA256 algorithm might be pulled out from underneath the Bitcoin miners and make their hardware obsolete for mining. The effect of this move would actually be to greatly increase some innocent other chain’s hashrate, like DGB, which allows for SHA256 hashing.

Maxwell took the opportunity to disagree with Satoshi Nakamoto: the chain with the most work is no longer Bitcoin, but only the chain which “follows the rules of Bitcoin.” Here are the exact words quoted by Torpey:

More work is always secondary to following the rules of Bitcoin.

A potentially chaotic future for Bitcoin still lies ahead. We’ve seen it in the comments, in the social media: things might be cooling down. The author has never been a fan of Bitcoin maxims, like “honey badger don’t give a ****.” Honey badgers can go extinct, too. Everything relies on an ecosystem, including Bitcoin.

We may see three versions of Bitcoin. Is the Bitcoin Cash thing still going on ~45 days later? Let’s have a look.

Yep, still going just fine, holding a per-token value leagues ahead of even Ethereum, whose usefulness and network effect are more and wider than Bitcoin Cash.

Winter is probably coming, referencing the long winters felt by the people in HBO’s Game of Thrones. The white walkers are amongst us already, though, they just don’t know it. Short opportunities as well as first-time entries wouldn’t surprise the author at all if they arise before the end of the year. It wouldn’t surprise him, either, at this point, to be fair, if the market does the exact opposite. We know there are buyers in waiting, so the rebounds are reasonable to expect.

The only thing we can do is understand that just like Warren Zevon sang, there is disorder in this house; all bets are off. 

But in this case, we mean off-target.

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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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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Altcoins

IOTA, Vechain Lead Tepid Crypto Market Recovery on Sunday

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Digital currencies IOTA and VeChain were among the biggest gainers on Sunday, though a lack of buying interest kept the broader market at a standstill.

IOTA, Vechain Lead Recovery

In terms of percentage gains, IOTA was among the best-performing cryptocurrencies on Sunday. The value of MIOTA sprung up 12.2% to $0.545 on trade volumes of $44.4 million.

IOTA is rebounding from extreme oversold levels after being losing more than 40% of its value during the latest rout in market prices. MIOTA was disproportionately impacted by the recent downturn because of multiple controversies at the Berlin-based IOTA Foundation. As Hacked reported earlier this month, a failed partnership with Sirin Labs and internal divisions at the Foundation have all contributed to the massive drop.

IOTA, which has since dropped to no. 12 on the crypto market cap rankings, has trimmed its seven-day decline to just 1.7%.

Meanwhile, the highly touted VeChain (VET) rose 12.1% to $0.013, regaining much of Saturday’s sharp reversal. The digital currency is also enjoying some momentum after launching its official mainnet in late June. The accompanying token swap on Binance officially produced VeChain Thor (VET), which is the cryptocurrency now quoted by the market.

Although there was no immediate catalyst for the recent upsurge in IOTA and VeChain, both currencies are part of a much larger initiative aimed at monetizing the Internet of Things. In particular, VeChain is benefiting from China’s latest push to speed up development and commercial implementation of blockchain technology. VeChain has developed national level partnerships with various government entities in the world’s second-largest economy.

Broader Market Trades Laterally

Gains in the broader cryptocurrency market were much slower to materialize on Sunday. At the time of writing, the total cryptocurrency market cap was worth $216.6 billion, up just 1.3% over the previous day.

Tepid moves in the broader market were accompanied by a sharp drop in total trading volumes. Market turnover has plummeted by 24% since Saturday, according to CoinMarketCap.

Bitcoin, the world’s largest digital currency by market cap, continues to trade below a key technical resistance. Bitcoin’s lateral moves come despite multiple signs of a bullish reversal over the past few days. As Hacked reported Thursday, the bitcoin price has returned above the 50-day moving average with key measures of relative strength showing stronger upward momentum.

At the time of writing, bitcoin was trading at $6,404 on Bitfinex. The cryptocurrency’s total trade volumes declined to $3.3 billion after spending the better part of a week above the $4 billion mark. The bitcoin price is up 1.7% compared to last week.

Ethereum rose 2.1% on Sunday to $303, trimming its weekly drop to 5.9%. Meanwhile, XRP rose 3.6% on Sunday to $0.342. Compared with last week, the so-called banker’s cryptocurrency has gained 12.8%. At its lowest point, XRP was down 93% from its record high.

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 552 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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Altcoins

Cryptocurrency Rally Stalls as Bitcoin Price Hits Resistance

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Cryptocurrency prices were down across the board on Saturday, with bitcoin – the market’s biggest bellwether – stalling near a key  resistance.

Market Update

After reaching a high of $225.6 billion on Friday, the total cryptocurrency market capitalization has fallen back to $211.3 billion, according to CoinMarketCap. The broad pullback was accompanied by only a minor dip in trading volumes, a sign that profit-taking was a factor.

Six of the top-ten coins (excluding Tether) had reported declines at the start of the weekend. Bitcoin was down 3.5% to trade at $6,355.00 on Bitfinex. The leading digital currency reached a high of $6,619, which is just shy of the most recent peak. Bitcoin’s market still exhibits strong trading volumes, with 24-hour turnover at $4.3 billion.

Among the major altcoins, Ethereum, Stellar Lumens, Litecoin and Cardano had each declined between 1.2% and 3.5%. On the opposite side of the spectrum, XRP, bitcoin cash and EOS had reported gains of at least 1.6%.

Bitcoin’s dominance rate, or the percentage of the total cryptocurrency market cap held in BTC, was 52%. Bitcoin accounted for as much as 54.5% of the total market capitalization earlier this week.

Dollar Factor?

The recent meltdown in cryptocurrencies originated 11 days ago when the U.S. Securities and Exchange Commission (SEC) announced it would delay a ruling on a highly anticipated bitcoin exchange-traded fund (ETF). However, analysts have struggled to explain the extent of the selloff – namely, the $35 billion plunge between Aug. 10-13.

According to eToro analyst and Hacked contributor Mati Greenspan, a surging U.S. dollar may have contributed to the decline. As CCN reports, the cryptocurrency market’s movements this week have been highly correlated with fluctuations in emerging-market currencies. Emerging-market exchange rates have been rocked by contagion fears emanating from Turkey’s political crisis, which have boosted demand for the U.S. dollar. As Hacked reported Friday, the U.S. dollar index recent hit more than one-year highs.

“As the United States moves to tighten its economy and avoid strong inflation, they’re taking action that is strengthening the Dollar. Because the US Dollar is the global reserve currency, many smaller economies rely heavily on a stable exchange rate with the greenback,” Greenspan wrote. “So too, as the Dollar is being seen as a stable store of value at the moment, there really isn’t much incentive for people to store their money in digital assets.”

Bitcoin is generally viewed as a non-correlated asset, which means it enjoys unique price independence when comparted with traditional markets. Correlation, when it does occur, is often driven by the erroneous belief that bitcoin is associated with the broader market. This was observed earlier this year when bitcoin seemingly fell in lockstep with the U.S. stock market.

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 552 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

‘Bitcoin Is Better than Gold’, Says Venture Capitalist

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The bitcoin price is trading above $6,500 again and technical indicators like RSI appear more stable, all of which bodes well for market sentiment heading into the weekend.  The improving outlook for the BTC price has silenced the naysayers for now and reinvigorated the case for bitcoin and its applications as both a store of value and payment method.

Lou Kerner of CryptoOracle, a crypto advisory and VC fund startup, on CNBC made the case for bitcoin overtaking gold as a store of value, pointing to gold’s “awesome run” as a “global store of value for a couple thousand years.”

“We now have something that we think is functionally much, much better. So we would expect over time — not in a day, not in a week, not in even five years — but we would expect over time for some of the people using gold as a store of value to switch to bitcoin,” Kerner told CNBC.

Precious metals investors have in fact been switching from gold, as evidenced by a decline in the gold price to an 18-month low this week. The price of gold is currently trading below $1,200 an ounce. Take a look at the declining performance in this popular gold ETF. And while billions of dollars have poured into crypto over the past week, bolstering the total value of the market to $214 billion, there hasn’t been much evidence of investors redirecting assets from gold to bitcoin in 2018 until now.

Source: Trading View

Kerner went on to compare the emergence of the new technology that is Bitcoin to the junk bonds of Michael Milken’s era, pointing to when junk bonds were similarly volatile and viewed as a scam decades ago but today are offered alongside the most traditional of investment products.

“We think bitcoin is going in that same trajectory. Any new assets in its early days are extremely volatile. Nobody knows how to price it. And that’s exactly what we’re seeing with bitcoin,” he said.

Kerner cut his teeth on Wall Street as an equity analyst at Goldman Sachs and Merrill Lynch, according to his LinkedIn profile. Now his career as a venture capitalist dedicated to crypto, which he says is the “biggest thing to happen in the history of mankind.”

Coinbase Payments

Meanwhile, leading U.S. cryptocurrency exchange Coinbase wants to bolster the security of bitcoin payments for its customers, as evidenced by a new payment-fueled patent that was published in recent days. The invention is comprised of features like a “key ceremony” involving a custodian, master key, bundle and encryption “during a checkout”.

Source: U.S. Patent and Trademark Office

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 40 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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