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U.S. Treasury Secretary Mnuchin Is Looking “Very Carefully” at Bitcoin

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Bitcoin’s meteoric rise has captured the attention of the White House, according to Treasury Secretary Steve Mnuchin, who cited growing concern about illicit use.

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“It’s something we are looking at very carefully and will continue to look at,” Mnuchin said, according to Yahoo! Finance. “The first issue and the most important issue is to make sure that people can’t use bitcoin for illicit activities. So we want to make sure that you don’t have the dark web funded in bitcoins. And that’s something that is a concern of ours today.”

Mnuchin went on to say that bitcoin dealers in the United States are bound by customer requirements and Bank Secrecy Act (BSA) requirements.

Although government officials are looking closely into the matter, Mnuchin said the Treasury didn’t have a timeline for issuing an official position on the digital currency.

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Bitcoin’s Price Movement

Bitcoin’s rally over the past 11 months has been nothing short of extraordinary. According to FundStrat co-founder Tom Lee, about 94% of the digital currency’s movement over the past four years can be explained by one equation tied to Metcalfe’s law. This law says that the value of a network is proportional to the square of the number of its users.

According to Lee, bitcoin is trading higher than the model predicts, a sign that a short-term correction could be brewing. However, that shouldn’t stop the long-term appeal of the cryptocurrency, according to Lee.

That technical correction may be partially underway on Friday, as bitcoin prices plunged more than $1,000 in less than two days. Prices were last down 4.3% at $6,805, the lowest in ten days. The decline brought bitcoin’s market cap back down to $113.5 billion, according to CoinMarketCap. The total size of the market swelled to $125 billion amid the latest rally, pushing the total value of all cryptocurrencies above $200 billion.

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Companies are Lining Up to Launch Bitcoin ETF, According to SEC

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Two companies have stepped forward with applications to the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin exchange-traded fund (ETF), according to a recent report from CCN. The renewed push toward ETFs comes as more institutional investors look to enter the burgeoning cryptocurrency market.

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Bitcoin ETF

According to the SEC’s public filing system, regulators received new applications for the REX Bitcoin Strategy ETF and Rex Short Bitcoin Strategy ETF, as well as the VanEck Vectors Bitcoin Strategy ETF.

REX, which is based in Connecticut, filed its application on Dec. 8. The New York-based VanEck filed its application on Dec. 11 in a sign that more market players were looking t9 capitalize on a booming market.

VanEck had previously filed to create a bitcoin ETF before the SEC struck down a similar proposal. That being said, VanEck will reportedly provide the pricing data for an upcoming bitcoin futures contract to be made available via the Nasdaq exchange. Unlike the CBOE and CME futures contract, the Nasdaq version will pull pricing information from 50 sources provided by VanEck.

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A bitcoin ETF would make the digital currency widely available to millions of investors through common retirement accounts, such as IRAs and 401(k)s.

The highly coveted but elusive bitcoin ETF has been tried before by Tyler and Cameron Winklevoss, who failed to earn SEC approval earlier this year. Regulators disapproved the ETF on several grounds, including lack of regulation and a general inability to enter necessary surveillance-sharing agreements.

The SEC’s ruling on the Winklevoss ETF puts considerable doubt over whether the new products will ever get approved. Analysts say that ETFs could spark an even bigger rally for an asset class that has already added hundreds of billions of dollars to its value this year alone.

Bitcoin Trade Volumes

Bitcoin’s market cap surged past $290 billion on Monday as institutional money flowed into the asset class following the launch of the CBOE futures contract. Trade volumes over the past 24 hours reached $12.6 billion, according to CoinMarketCap.

Bitcoin-dollar transactions on Bitfinex accounted for 11.6% of the daily transaction. South Kore’as Bithumb accounted for nearly 11% of the daily turnover. Coinbase’s GDAX also saw 6.5% of the daily turnover, data showed.

At press time, BTC/USD was trading north of $17,100. Prices skyrocketed past $19,000 last 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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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“Buy Bitcoin” Is Lighting Up Google as Cryptocurrency Outshines Gold

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The Google search engine has been turning up a lot of bitcoin as of late, a sign of growing interest in the cryptocurrency. In fact, searches for how to buy bitcoin have far outpaced similar searches about gold, according to a recent report.

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Bitcoin Search Results

According to The Telegraph, the search term “buy bitcoin” first outstripped “buy gold” on Google in May. Its popularity has since grown manifold. In fact, “buy bitcoin” is now three times more popular than the search term “buy gold” during the 2008-09 financial crisis.

The financial crisis triggered the most protracted recession since the 1930s, making gold the rational choice for risk-averse investors. Gold prices would later surge to record highs, eventually maxing out above $1,900 a troy ounce in 2011.

Bitcoin is often referred to as digital gold for its perceived haven-like status. Although many would disagree with that assertion, bitcoin and gold share some important similarities. Both are finite resources and reflect a general distrust in governments and traditional financial institutions. Apparently, bitcoin has also been used to shield against growing economic, financial and geopolitical risks, although we don’t have enough data to draw definitive conclusions about its risk-hedging capability.

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Bitcoin set another milestone on Thursday by smashing through $14,000. The world’s foremost digital currency has added a jaw-dropping 42% over the past five days, which is equivalent to more than $4,000.

Google search trends tell us that interest in the digital currency skyrocketed once more after prices rose above $10,000 for the first time. As bitcoin crossed the five-digit mark, Google search interest for the coin rose from 26 to 100. According to Google, these numbers represent “search interest relative to the highest point on the chart for the given region and time.” As you might expect, 100 is considered peak popularity for a search term.

Demand Rising

Google search results are a proxy for underlying demand in the cryptocurrency market. Higher search density suggest greater buyer interest and trading volumes for bitcoin. A simple look at the latest trade volume data corroborates this point.

Bitcoin’s 24-hour trading volumes surpassed $13.2 billion on Thursday, according to CoinMarketCap. That’s more than double the previous day’s volumes. Considering that BTC/USD has more than doubled since October, it’s reasonable to assume that higher search results have been associated with increased trading activity.

South Korea’s Bithumb is turning over the most bitcoin trades at the moment. The exchange is responsible for 10% of daily transactions, which is equivalent to roughly $1.3 billion. Bitfinex is a close second at around 9.4% of the total market.

With volume like this, it’s little wonder why bitcoin controls nearly 60% of the cryptocurrency market. Its growth has also triggered a buying frenzy in other cryptocurrencies, commonly referred to as altcoins.

Growing demand for cryptocurrency is also reflected in another key metric – the number of account registrations. For that, we look not further than Coinbase, which is America’s largest cryptocurrency exchange. The platform recently reported 13.3 million accounts, including 100,000 new signups over Thanksgiving weekend.

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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Global Cryptocurrency Market Now Worth More Than J.P. Morgan

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Cryptocurrencies

The cryptocurrency market notched new all-time highs Wednesday, overtaking America’s largest bank in the process.

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Cryptos Overtake J.P. Morgan

The total value of all cryptocurrencies in existence surpassed $370 billion in mid-week trade, according to CoinMarketCap. The gains were inspired by another record-setting surge in bitcoin, IOTA and Monero. Combined, the crypto market’s value overtook that of J.P. Morgan Chase & Co, which is worth roughly $367 billion.

J.P. Morgan is the stomping ground of Jamie Dimon, one of bitcoin’s most outspoken critic. Dimon has called the digital asset a “scam” that is destined to “blow up.” Interestingly, his firm has facilitated cryptocurrency transactions, putting Dimon in the crosshairs of some interesting banter.

J.P. Morgan, which is a member of the prestigious Dow 30, saw its share prices decline slightly on Wednesday. The stock has returned 22% this year in a rally that has been largely inspired by Donald Trump’s electoral victory.

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Cryptocurrencies have been on an tear all year long, but a decision by China in September to ban trading triggered a massive correction in the market. It didn’t take long for money to flow back into cryptocurrencies as investors quickly bought the dip.

China remains largely on the outs of the cryptocurrency arena, but other nations have taken the reigns. Japan and South Korea have quickly emerged as hotbeds for all things cryptocurrency. South Korean exchanges have been at the center of large rallies in bitcoin and altcoins in recent months.

Bitcoin Continues Higher

Bitcoin prices broke above $12,000 earlier this week as investors awaited the launch of the first cryptocurrency futures contract on Sunday. CBOE made a surprise announcement earlier this week that it aims to become the first major exchange to initiate bitcoin futures. That honor was expected to go to the rival CME Group, which plans to launch its bitcoin derivatives product Dec. 18.

Nasdaq is also reportedly working toward a bitcoin derivatives product for sometime next year.

At last check, bitcoin was trading north of $13,000. The digital currency system has added a staggering 28% in the last five days. It was responsible for nearly 48% of daily turnover on Wednesday. IOTA was second at nearly 9% and Ethereum third at 8%.

Bitcoin’s relentless surge has rubbed off on other cryptocurrencies. Currently, there are 20 altcoins valued at $900 million or greater.

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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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