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Research Firm Says Nasty Things About Bitcoin

Like any other financial asset, bitcoin has a price. That price is currently just over $6,700. However, price and value can mean two different things in financial markets and there is considerable debate surrounding bitcoin’s value or worth.

Investment research firm Capital Economics is chiming in on the bitcoin value with a clear likely controversial view. The London-based research provider believes bitcoin is worthless. Capital Economics also believes bitcoin’s recently intimate correlations to the S&P 500, the benchmark gauge of U.S. stocks, is set to expire.

“For bitcoin, the recent fall in value has been due to a plethora of factors including rising concern over regulation, a ban on cryptocurrency advertising from major internet platforms and some banks banning customers from buying it via credit cards,” according to CNBC.

Price is what investors and traders are willing to pay on the open market, but value is determined by other factors, including supply and demand.

“But the main factor driving down the price of bitcoin is likely to be a realization that it is simply not a credible long-run alternative to conventional currencies,” said Capital Economics.

Difficulty In Assigning Value

There are some difficulties associated with assigning value to cryptocurrencies. Prior to bitcoin being introduced in 2009, market participants were accustomed to two forms of currency: hard currency such as gold and fiat currencies, including dollars, euros and yen. Digital currencies do not fit into those traditional currency boxes, making the asset class harder to assign value to.

On the supply side, cryptocurrencies have finite supply whereas central banks can create as much or as little of fiat currencies as they deem fit. However, the size of the digital currency market is scant relative to the global foreign exchange market. Size aside, Capital Economics is highly pessimistic on bitcoin’s future.

“Bitcoin’s correlation with equity prices has strengthened recently, but we think that this will be just temporary,” said Capital Economics. “We still think that bitcoin is essentially worthless, meaning that it is likely to fare much worse than other assets in the coming months.”

Gloomy forecasts for bitcoin are not new, but there are ways the king of cryptocurrencies can avert the worthless designation. Increased adoption and penetration among investors are the ways bitcoin and its rivals can be further legitimized and avoid falling by the wayside. On the investment side, the runway for growth is substantial as data suggest just 8% of Americans are invested in digital currencies, a mere fraction of the ownership levels of stocks in the U.S.

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Bitcoin

Bitcoin Price Rallies 13% to Break Through $11,000

Within the last hour Bitcoin (BTC) price pushed through the $11,000 level in a high volume surge which saw the price reach a new 2020 high at $11,394.

At the time of publishing the price has pulled back slightly to the $11,150 range but purchasing volume continues to rise on the 1-hour timeframe. This suggests that the top-ranked digital asset on CoinMarketCap may have another go at the daily high.

Crypto market weekly price chart

Crypto market weekly price chart. Source: Coin360

As reported earlier by Cointelegraph, on-chain activity registered a significant spike in exchange inflow as Bitcoin price rallied above $10,000 and Bloomberg analysts now estimate that Bitcoin price will rise above $12,000 this year.

Ether price (ETH) also surged above its previous high by rallying to $333.52 but at the time of writing the top altcoin has pulled back below $330.

Bitcoin daily price chart

Bitcoin daily price chart. Source: Coin360

According to CoinMarketCap, the overall cryptocurrency market cap now stands at $326.7 billion. Bitcoin’s dominance index currently at 63.1%.

Also, don’t miss our upcoming conference Cointelegraph Crypto Traders Live.

More than 30 star speakers including Raoul Pal, John Bollinger, Mike Novogratz, DataDash and Jon Najarian will gather on July 30th to discuss the challenges of crypto trading. Join the show for over 9 hours of crypto trading content!

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Bitcoin

Did Satoshi Nakamoto Just Move 50 Bitcoin?

Key Takeaways

  • 50 Bitcoin that haven’t moved since 2009 were transacted today.
  • Some Bitcoin watchers speculate that these coins belong to Satoshi Nakamoto.
  • The coins were from Bitcoin mining around a month after the network was created.

BTC from the earliest days of the network moved today. Could Bitcoin creator Satoshi Nakamoto be behind the transaction?

Was Satoshi Behind a Recent Bitcoin Transaction?

A 50 BTC transaction representing a block reward from a month after the Bitcoin network launched moved today.

The coins were awarded for mining block 3,654. Several pundits have naturally associated that early mining activity with pseudonymous Bitcoin inventor Satoshi Nakamoto.

Others Are Unconvinced

The Block’s head of research, Larry Cermak, believes the transaction is unrelated to Satoshi Nakamoto, identifying that there were several early miners on the Bitcoin network.

Blocks believed to have been mined by Satoshi have a particular pattern in their nonces, a cryptographic number that can help identify blocks. According to that pattern, these Bitcoin do not appear to have originated from Satoshi.

Patoshi blocks
Courtesy satoshiblocks.info, Patoshi blocks

Another analyst noted that the transaction marks the first time that early 2009-origin Bitcoin has moved since August of 2017.

It’s the first time since August 2017 than someone spent coins from early 2009.

View image on Twitter

Nevertheless, on-chain sleuths will closely watch the path of the coins as the transaction was undoubtedly from an early Bitcoin miner and large holder. If these 50 BTC continue to move, then a lot more about this story will be revealed.

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Bitcoin

Bitcoin price rockets 23% as investors look for a new safe haven. ‘The crypto king is on fire.’

Cryptocurrencies have seen a remarkable resurgence as investors flock to relative safe havens amid a flurry of quantitative easing measures by global central banks.

Central banks including the European Central Bank, Federal Reserve, and the Bank of England have announced asset-purchase schemes in recent days. Bitcoin, a finite cryptocurrency with only 21 million units in existence, has seen a 23% one-day surge. Bitcoin is currently up 21% as of 10.10 a.m. in London (6.10 a.m. ET), per Coindesk.

The cryptocurrency had been down 30% year-to-date amid a sell-off fueled by market uncertainty about the outbreak of coronavirus. However, investors may be looking to digital currencies in the wake of easing measures elsewhere. Other cryptocurrencies like ethereum, XRP, and bitcoin cash all saw major reversals by more than 15% over the same period.

“When it comes to bitcoin, the crypto king is on fire, and we have seen a decent rally,” said Naeem Aslam, chief market analyst at AvaTrade, in a morning note.

“Given the fact that the price has crossed the $6,000 mark — an important level of resistance — the upward momentum is likely to pick up the pace, and if the price crosses the 200-day moving average on a daily time frame, it would be a huge buy signal.”

Volumes at cryptocurrency exchanges have jumped, with Coinbase, Bitstamp, and Bitfinex combined seeing a 19% bump in 24-hour exchange volume, according to data aggregator CryptoCompare.

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