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Traditional Finance Wants in on Bitcoin After Meteoric Climb

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After shunning cryptoccurrency for the better part of eight years, traditional financiers have begun to pivot toward the alternative asset class. While the old adage, if you can’t beat ’em, join ’em, aptly applies, something much more profound is at stake. And the banks know it.

Wall Street Heavyweights Can’t Ignore Bitcoin Anymore

Trading bitcoin was anathema to the major banks just a few years ago. After all, the cryptocurrency was a major disintermediation channel that allowed consumers to escape the grips of traditional finance. However, following years of bad press, bitcoin and its altcoin competitors are reshaping the financial industry.

That’s why Goldman Sachs CEO Lloyd Blanfein recently said his firm is strongly considering cryptocurrency. Morgan Stanley chief James Gorman has also indicated that cryptocurrency is “more than just a fad.” And while BlackRock CEO Larry Fink criticized cryptos for facilitating money laundering, he sees “huge opportunities” for the market.

To be fair, Wall Street’s interest in bitcoin goes back further than than the recent soundbites. Major institutions have been experimenting with blockchain for several years (the prospect of public online ledgers is simply too good to pass up).

The $100 Billion (Missed) Opportunity

The size and growth rate of the cryptocurrency market has startled even its most ardent supporter. The crypto asset class peaked at nearly $180 billion in September, a 900% increase since the start of 2017. Bitcoin more than quadrupled during that period as nearly a dozen other tokens joined it in the billion-dollar club. By most metrics, the market still has a long, long way to go before it approaches critical mass.

Although investors may be riled up about the latest regulatory crackdown in China, bitcoin represents a huge opportunity for the banks. How they take the plunge is less clear, although recent commentary from BlackRock’s Mark Wiedman suggests that an ETFs is probably out of the question.

A bitcoin ETF is a strong possibility once the Securities and Exchange Commission (SEC) becomes convinced it can prevent fraud or market manipulation. Section 6(b)(5) of the Exchange Act remains the sticking point until further notice.

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 463 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

CNBC Holds Funeral For Bitcoin

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CNBC show “Fast Money” held a supposed funeral for Bitcoin on their show this evening. The tongue-in-cheek ceremony occurred due to the hosts citing the BitThumb hack and today’s corresponding big drop in crypto asset prices across the board.

This is not the first time CNBC, or “Fast Money” in particular has made controversial statements about the original cryptocurrency Bitcoin.

Brian Kelly, for instance, has previously compared cryptocurrency to the “Internet in the 1980s,” emphasizing that Bitcoin is still in its early stages in an April 13 interview on CNBC’s Trading Block.

Also in April, Kelly mentioned a report by analysts at Barclays which referred to cryptocurrency as a “virus” and an infectious disease that would never hit another high again.

In tonight’s episode of “Fast Money”, Kelly noted that the moment right after negative articles are published is exactly when he “wants to buy any asset, whether it’s Bitcoin or not.” Kelly also stated recently that he supports Tim Draper’s assessment that Bitcoin could hit $250,000 by 2022.

So the “funeral” is really a mockery of Bitcoin critics who have a tendency to proclaim the death of Bitcoin every time a negative story hits the press.

The best example of this was obviously when Jamie Dimon of Chase Bank called Bitcoin, “a fraud.” When prices subsequently dropped, Chase was one of the largest buyers of Bitcoin.

During tonight’s “funeral”, Kelly gave four main reasons for why he’s bullish on Bitcoin.

1. Bitcoin is approaching historic lows in terms of both sentiment and prices for the year 2018.
2. He views a recent Japanese government statement ordering exchanges too, “improve business conditions”, while rough in the short term due to a temporary freezing on the creation of new accounts, will actually contribute to a more vibrant market in the long term.

He further clarified that this action by the Japanese government was tantamount to, “cleaning up the system.”

3. Mt. Gox announced that they are going to distribute the rest of the over 1 million in Bitcoin they still have to victims of the 2014 hack. Notably, however, this would not occur until Q1 of 2019 at the earliest. This in Kelly’s view creates a sleeping bull market event waiting to happen.

4. There are not enough Bitcoin futures trades shorting Bitcoin to affect the price negatively in a significant way.

Kelly concluded the segment by making the argument that Bitcoin is due to have a huge price spike. He elaborated on this by noting the similarity in trading charts to a previous spike a couple years ago.

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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4.7 stars on average, based on 8 rated posts




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Altcoins

Selloff Resumes: Cryptocurrency Market Heads for Weekly Loss After Friday Tumult

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Cryptocurrency prices fell hard on Friday, with EOS hitting its lowest level in 60 days as bear-market pressures re-emerged following days of stable trading ranges.

Coins See Red

Cryptocurrency prices were down across the board, with major altcoins like EOS and Ethereum falling double digits percentage-wise. EOS reached a session low of $9.30, its worst reading in two months, following a botched mainnet launch that has yet to be resolved.

Ethereum prices are down more than 10% at $477. Ether bottomed around $468 earlier.

Bitcoin is currently testing four-month lows after being rejected several times at $6,800, a key inflection point for the digital currency. As Hacked reported Thursday, bitcoin’s rejection at that level was a strong sign that the recovery was losing steam. BTC/USD reached a low of around 6,092.38 on Friday, according to CoinMarketCap.

Bitcoin was last down more than 7% at 6,210.

Nearly every coin ranked in the top-100 by market cap was down compared with 24 hours ago, with the only exception being Game.com, a lesser-known altcoin.

The cryptocurrency market cap plunged by more than $30 billion to $257 billion. It had spent most of the week above $285 billion. Total trade volumes have averaged $14.1 billion over the last 24 hours.

Bearish Cycle Continues

While there was no immediate catalyst for the Friday selloff, the pullback is likely a continuation of the bearish cycle that re-emerged last month. The market has formed a new bottom in the wake of last week’s $60 billion selloff, a sign that bearish pressure is likely to remain.

Contrary to some reports, the recent cyber attack on Bithumb is not the cause of the recent price shakeup. Although the market dipped initially following reports of the breach, it recovered just as quickly and continued higher.

That said, the attack did catch the attention of financial watchdogs across the Asia Pacific region. On Friday, Japan’s financial regulator
ordered several digital currency exchanges to improve their anti-money laundering practices.

The order from Japan’s Financial Services Agency (FSA) led bitFlyer, the country’s largest crypto exchange, to suspend the creation of new accounts as it beefed up its standards.

South Korea’s financial regulators have also stated they will expedite the creation of new cryptocurrency laws following the recent attack. According to various reports, new legislation could be on its way in a matter of months.

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 463 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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Analysis

Crypto Update: Bitcoin Plunges Below $6500 as Heavy Selling Resumes

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The cryptocurrency segment is having another very negative day after a calmer period, as selling pressure intensified yet again. All of the major coins turned sharply lower, with the laggards of the recent period, Litecoin, Monero, and Dash confirming their downtrend and the relatively stronger coins also taking a beating.

The total capitalization of the segment dropped below $270 billion, and from a long-term technical standpoint, several currencies are in precarious positions. With no clear news catalyst behind the move, technicals are playing a very important role, and last week’s lows will likely be in focus in the coming days.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is still relatively weak both on the short- and long-term time-frames, and it dropped back to the $6275-$6500 zone that has been acting as primary support during the recent leg lower. Given the importance of the long-term zone between $5850 and $6000, a break below $6275 could set up a crucial test in the coming days. For now, traders still shouldn’t enter new positions, while investors should hold on to their coins as the bullish secular trend is still intact.

No Hiding From the Selloff as Altcoins Broadly Lower

LTC/USD, 4-Hour Chart Analysis

With the weakest coins leading the way lower again, new swing lows are likely in the majority of the coins, although there is still hope for bulls that a major long-term breakdown can be avoided. Ethereum fell below $500 after touching the declining short-term trendline, and it remains in a bearish trend, even as it’s still in a much better technical position compared to BTC, holding up well above the April lows, and being further away from last week’s swing low as well.

ETH/USD, 4-Hour Chart Analysis

 That said, we remain negative regarding the short-term outlook for the second largest coin, and traders shouldn’t enter new positions here.  Above the $500 level, strong resistance is ahead between $555 and $575, while primary support is found at $450, with further zones near $400 and $480.

BNB/USDT, 4-Hour Chart Analysis

There are no real hiding places for crypto investors from the current selloff even as Binance Coin is still holding up relatively well, within a clear uptrend and above crucial technical support.  That said, as we warned before, given the broad downtrend in the segment, traders should be cautious with new short-term positions.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 280 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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