Monthly Archives: October 2021

Representations of virtual currency Bitcoin are placed on U.S. Dollar banknotes in this illustration taken May 26, 2020.

Dado Ruvic | Reuters

The chief of a new and rapidly growing platform for crypto offerings sees bitcoin hitting $100,000 by the start of next year.

CoinList CEO Graham Jenkin is bullish on the cryptocurrency, which hit a new record high of $66,000 on Oct. 20 following the launch of a hotly-anticipated U.S. bitcoin futures ETF. The digital currency has since pared some of its gains, trading at $59,052 per coin at 6:45 a.m. in London Thursday.

But Jenkin was optimistic about bitcoin climbing to even greater heights.

"Most of the folks at CoinList will bet that we're at $100,000 by the end of the year. It's getting pretty tight so I'm not sure that we're going to make it there, but that's what we're predicting toward the start of the year."

Illustrating the growing demand for crypto holdings, CoinList just announced $100 million in series A funding, which has given it a valuation of $1.5 billion.

A number of financial experts and companies see the currency reaching and even surpassing that $100,000 mark. They point to inflation and the ETF launch as creating a perfect environment for bitcoin to thrive, describing it as a hedge for inflation.

Billionaire investor Paul Tudor Jones told CNBC earlier this month that he prefers the cryptocurrency as an inflation hedge over gold.

"There's a plan in place for crypto and clearly it's winning the race against gold at the moment ... I would think that would also be a very good inflation hedge," Jones told CNBC's"Squawk Box." "It would be my preferred one over gold at the moment."

Fidelity Investments, meanwhile, sees the currency reaching $100,000 but over a much longer timeline.

Jurrien Timmer, Fidelity's director of global macro, told CNBC this month that the prediction is based on a supply and demand model he studies. "The next and last time those two models intersect is at $100,000 in a couple years,"he said.

Still, there remain plenty of bitcoin naysayers.

JP Morgan Chase CEO Jamie Dimon recently called bitcoin "worthless," following previous statements that he believed the currency had "no intrinsic value."

And whilehe sees bitcoinsticking around for the long term, he told Axios in early October: "I've always believed it'll be made illegal someplace, likeChina made it illegal, so I think it's a little bit of fool's gold."

He added that he believes "regulators are going to regulate the hell out of it."

United Wholesale Mortgage, the second-largest mortgage lender in the U.S., this month ditched its plan to accept payments in bitcoin, citing "the current combination of incremental costs and regulatory uncertainty in the crypto space."

And bitcoin bull Mark Yusko is warning of a pullback and calling it overbought, expecting investors to take profit at bitcoin's current high rate.

"A pause that refreshes given how overbought we are right now wouldn't surprise me," Yusko said. "There is some risk of the buy the rumor, sell the news." Still, Yusko sees any potential profit-taking as temporary and seesbitcoin hitting $250,000 in five years.

Of course, it works very much in CoinList's favor to be bullish on bitcoin. But the often dramatic volatility of the cryptocurrency doesn't necessarily hurt the platform, its CEO said.

"As far as any impact of bitcoin price with respect to our platform, there's definitely some impact, but it really tends to be kind of separated between what's happening with respect to the bitcoin priceand eagerness from our community to get access to early-stage tokens and offerings on the platform, so it impacts us less," Jenkin said.

"Certainly if bitcoin went to zero that would be a major challenge for our platform, but we're not expecting that to happen anytime soon."

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CoinList CEO sees bitcoin hitting $100,000 by the start of next year - CNBC

The worlds second most valuable cryptocurrency, ether, has been touching all-time highs in price ahead of a major upgrade of its underlying platform, ethereum. Ether is currently worth in aggregate just shy of $500 billion. Thats still slightly less than half that of the biggest cryptocurrency, bitcoin.

But could this upgrade, a vital step towards a much greener and faster version of the current system, put ethereum on the path to becoming the dominant platform on the internet and make ether number one?

First of all, its important to understand the difference between bitcoin and ethereum. Bitcoin is a system for allowing people to send value between one another without the need for banks. It is built on a technology known as blockchains, which are online ledgers whose transactions are checked and recorded by a decentralized network of computers known as validators.

Related How Ethereum Works: It Seems Like Were Living in a Futuristic Alternate Universe

ethereum

These validators are incentivised for their work by receiving newly minted bitcoin as rewards, in what is known as mining. To make this more attractive, bitcoin is relatively scarce: Only around 18 million coins are in existence and the protocol is such that there can never be more than 21 million.

Ether works in a similar way to bitcoin, but ethereum is different. It is a worldwide software platform with no host, on which developers are building thousands of blockchain-based applications.

This means these applications can all run without being controlled by a company. Examples include cryptocurrency exchanges, insurance systems and new kinds of gaming.

At the heart of the platform is the idea of smart contracts, which are automated agreements that ensure that money and assets change hands when certain conditions have been fulfilled. All transactions on the platform ultimately use ether, and the success of the platform is why ether has been the second-largest cryptocurrency after bitcoin for the past few years. The fact that ether fuels the platform even being referred to as gas fees gives it a utility and an intrinsic value that bitcoin does not have.

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Ethereum has several major problems, however. The first is that gas fees have become very expensive in the last couple of years because the network has become so popular and is therefore very congested.

Validators prioritise users who are willing to pay the highest fees for their transactions. For example, the average transaction at the time of writing on crypto exchange Uniswap costs around $44 in gas fees.

Bitcoin has comparable issues with congestion, which its developers are trying to solve by building applications like Lightning on top, which boast faster transaction speeds.

The second problem for ethereum is that, as it has become more popular, the amount of computational power used by validators has rocketed. Its the same problem that has brought a lot of negative publicity to bitcoin because it uses a lot of electricity.

Bitcoin is currently using as much power as the whole of the Philippines, although its supporters argue that much of this is power that would otherwise be wasted for example, oil rigs burning off natural gas because its not profitable to sell it. Proponents also point out that the network is shifting towards using much more renewable power over time.

Related Is DeFi Rewriting Wall Street Into a Code?

At any rate, the eventual creation of an ethereum 2.0 will solve these problems by moving the platforms system of validation from proof of work to proof of stake. Without getting into too many details, proof of work is a protocol in which validators all attempt to solve complex equations to prove that each proposed transaction is valid. With proof of stake, theres no need for all validators to do this power-hungry work because the system chooses one at random to confirm each transaction.

Many in the bitcoin community are against proof of stake because it gives the most power to the biggest validators, potentially allowing them to corrupt the system of validation if they can get control of more than half of the network. Ethereum supporters counter that proof of stake has checks and balances built in that would prevent this from happening.

Either way, ethereum 2.0 promises to reduce the platforms power consumption by 99.9 percent, making it far more sustainable. It should also solve the problem with gas fees by raising the platforms processing ability from 30 transactions a second to potentially 100,000, as well as making possible more sophisticated smart contracts than before.

The transition to ethereum 2.0 has been a slow one, riddled with technical issues that have dragged on for over two years. For the past few months, the new proof-of-stake blockchain has been running in a test format in parallel with the existing system, allowing the developers to prepare it for a merger in 2022.

The forthcoming upgrade is essentially a warm-up for this merger. Known as Altair, it introduces numerous technical changes that are designed to keep validators honest and make the system more decentralized. Assuming this goes ahead as planned, all eyes will be on the merger, and then later another change known as sharding, which will greatly increase the systems processing capability.

Certainly the price of ether has been strong ahead of the Altair upgrade. The recent surge in bitcoin to all-time highs has been helping to lift the entire crypto market. But some of the price movement in ether probably reflects people betting that the upgrade will succeed, while the rest is from speculators switching from bitcoin and new money moving into the space.

Related Bitcoin and the Cryptocurrency Debate: One Advisor Weighs in on Why Hes Changing His Tune

In the run-up to the merger of ethereums two blockchains, it will be interesting to see how all this affects ethers price in relation to the so-called eth killers. These are rival platforms like cardano and solana that have been very popular in recent months partly due to ethereums problems with fees.

But ultimately the question is what it will mean for bitcoin. Bitcoiners will continue to argue that their protocol is more decentralized than proof of stake, and they have the advantage of being the crypto brand that investors are most comfortable risking their money with.

The question is whether these advantages are outweighed by ethereum 2.0s greener credentials and the fact that it can handle more transactions. Bitcoin is currently worth about double ether, but talk comes and goes about a flippening where ether overtakes it. Could it happen in 2022? With bitcoins hegemony at stake, it will be fascinating to find out.

The Conversation

Daniel Broby is a director at the Centre for Financial Regulation and Innovation at the University of Strathclyde.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The post Ethereum: The Transformation That Could See It Overtake Bitcoin appeared first on Worth.

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Ethereum: The Transformation That Could See It Overtake Bitcoin - Yahoo Finance

boonchai wedmakawand | Moment | Getty Images

Crypto enthusiasts had reason to cheer last week as digital currencies notched another milestone: the first U.S. bitcoin futures exchange-traded fund.

Investors rushed in. The ProShares Bitcoin Strategy ETF (BITO) had the second-biggest trading debut for any ETF on record when it launched Oct. 19. Its share price jumped 4%. A similar fund, the Valkyrie Bitcoin Strategy ETF (BTF), started Friday.

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However, cost-conscious investors who want exposure to bitcoin and other cryptocurrencies in their portfolios may be better off buying them outright instead of via a futures ETF, according to some financial advisors.

That's primarily the case for buy-and-hold investors, who'd save money over the long term, advisors said.

"They're always better off buying bitcoin directly," said Ivory Johnson, certified financial planner and founder of Delancey Wealth Management, based in Washington, D.C.

The ProShares and Valkyrie ETFs, for example, each have a 0.95% expense ratio. That's the asset manager's fund fee; for every $10,000 someone invests, the managers keep $95 a year.

That might not sound like much, but costs can add up over decades of saving. The investor loses out on the fee, earnings on those fees and compound interest.

Here's an example from the Securities and Exchange Commission: An investor who saves $100,000, earns 4% a year and pays a 0.25% annual fee would have $30,000 more after two decades than the same person who pays a 1% fee (which is about the cost of the bitcoin futures ETFs).

"If it will be part of your portfolio for one, five, 10 years or longer, 1% is a big fee to pay for a mutual fund or an ETF," said Charlie Fitzgerald III, CFP, principal and founding member of Moisand Fitzgerald Tamayo, based in Orlando, Florida.

Of course, buying bitcoin or other cryptocurrencies directly (not via an ETF) often isn't free. Crypto platforms and exchanges like Coinbase typically charge a one-time fee (though not always) that varies by provider. But it'd generally be much less costly for buy-and-hold investors relative to the annual fund fee, Johnson said.

And fees aren't the only consideration. Investors may feel safer getting crypto access through a professionally managed ETF if they're worried about hackers or losing passwords or private keys needed to access the funds.

"We feel this is a small price to pay to hold an easily accessible, secure and regulated product, traded at a stock exchange, tracking a regulated investment vehicle," said a spokesperson for Valkyrie.

Short-term investors might also not mind a 0.95% fee if they plan to sell the ETF within days or weeks. (The fee amounts to 26 cents a day on a $10,000 investment.)

"The fee is inconsequential if you're holding for two weeks then selling it," Fitzgerald said.

In that case, a broker's one-time trading fee is likely more consequential, he said.

Overall, there's been a general trend toward lower investment fees. The average expense ratio of U.S. mutual funds and ETFs was 0.41% in 2020, less than half the 0.93% in 2000, according to Morningstar. (These costs are asset-weighted, meaning they account for relative fund popularity.)

Another important distinction: The bitcoin futures ETFs don't directly own bitcoin; they buy "futures" contracts, which are agreements to buy or sell the asset later for an agreed-upon price. Such funds will generally track bitcoin prices, Fitzgerald said.

(It's a similar concept to oil and gold futures, for example. Such investors don't own the physical gold or barrels of oil.)

However, investors might be remiss paying a 0.95% fee for a fund that may or may not track the price of bitcoin, Johnson said.

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Bitcoin futures ETF may be a costly way to get long-term crypto exposure - CNBC

A plunge may be looming for cryptocurrencies, housing and disruptive technology stocks tied to innovation.

According to Rich Bernstein, an Institutional Investor Hall of Famer, the nation's expiring easy money policies and historic supply chain backlogs are posing serious risks for some of the market's most popular investments.

"There's a whole series of bubbles going on right now," the Richard Bernstein Advisors CEO and CIO told CNBC's "Trading Nation" on Wednesday. "There's a bubble in long-duration assets. That's a common theme."

Bernstein's cryptocurrency warning particularly applies to bitcoin. He said insatiable demand is a classic sign of a bubble.

He speculates a meltdown could resemble the tech bubble. It took 14 years for the Nasdaq 100 to break even if you invested in it on Dec. 31, 1999, he noted.

Housing is topping his watch list, too. In a tweet Tuesday, Bernstein warned rising home prices were starting to make the mid-2000s housing bubble seem rather mild.

"[Home prices are] now accelerating more than what you saw during the housing bubble," the CNBC contributor said. "The rate of change now is higher than anything you saw during the housing bubble in 2005, 6, 7, 8."

His other major risk is tied to chaos at the ports and its bullish effect on inflation. Bernstein sees it as a serious problem, and he warned on "Trading Nation" last April that investors were poorly prepared for it.

While he believes hyperinflation risks are very low, he believes inflation higher than consensus is extremely likely.

"They're not going to stay this high. But where do they settle? Do they settle at the consensus 2 to 2.5% or do they settle at 3% or 3.5% or 4% or 4.5%? I think you treat it as an over/under bet right now," he said.

And, Bernstein contends the supply chain backlogs will likely stick in investors' psyches for years.

"It's important to realize that the supply chain disruptions that we are seeing have lasted longer than the oil embargo in '73-'74," he said. "That was only a four-month supply disruption of oil, and it changed the way people thought about inflation for the next 10 years."

In lieu of long-duration assets, Bernstein recommends owning pro-inflation assets. He finds they're "woefully underinvested" in energy, materials and industrial stocks.

"People have been very, very myopic in terms of looking at disinflationary assets," Bernstein said. "There is a world of opportunity out there right now. There is a world of opportunity out there right now outside of this small little bubble sector of tech innovation disruption, cryptos, that type of thing."

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Bitcoin, housing and parts of tech are in a dangerous bubble, all-star investor Rich Bernstein warns - CNBC

Bitcoin (BTC) preserved $61,000 into the weekend after aggressive buying on Coinbase sparked multi-day highs.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD cooling overnight after briefly challenging $63,000.

Friday saw strong performance after U.S. traditional markets opened, helping lift Bitcoin to near its minimum monthly close target.

As analysts noted, major exchange Coinbase was the venue for heavy accumulation on the day.

Popular trader and analyst Pentoshi meanwhile noted selling elsewhere, specifically from one whale whose BTC divesting has now hit over 1,000 BTC, each sold on the open market in batches of 20-30 BTC.

Just goes to show how liquid this market is now, he summarized.

Both the weekly and monthly close on Sunday will be a source of interest for market participants, with the latter seeing a potential all-time high. BTC/USD may also close its third week in a row above $60,000.

For many, however, it was all about altcoins as the weekend began.

Related:Altcoin Roundup: Dogecoin, Shiba Inu and memes are hauling the dogsled to mass adoption

Ethereum's Ether (ETH) hit new all-time highs on Friday, helping the overall altcoin market cap reach new peaks of its own $1.473 trillion.

Strong performance remained elsewhere, with Shiba Inu (SHIB) steadying after its blistering gains throughout the week.

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Bitcoin eyes third weekly close above $60K as Ethereum fuels new altcoin market cap record - Cointelegraph

A yearlong price rally in the Bitcoin (BTC) market and hopes for more upside moves in the future has prompted traders to hold the token instead of trading it for other assets, Glassnode data shows.

The blockchain data analytics service revealed on Oct. 28that the total amount of "hodled or lost coins" reacheda nine-month high of over 7.21 million BTC. In simple terms, the Bitcoin metric reflected an increase in out-of-circulation tokens those that may have been stored in cold wallets by long-term holders or lost due to human errors, with little chance of recovery.

As a result, the total number of lost/hodled Bitcoin exceeded 34% of its total supply of 21 million tokens, making the cryptocurrency more scarce.

Further data provided by CryptoQuant showed that the amount of Bitcoin reserves held across all the crypto exchanges dropped to its lowest level since August 2018 at 2.337 million BTC on Oct. 28, 2021.

Meanwhile, the Miners Position Index (MPI), which measures the ratio of BTC leaving all miners' wallets to its 1-year moving average, has been trading below zero since March 6, 2021, suggesting strong accumulation among miners.

"The amount of Bitcoins [owned by miners] is on similar levels that ... in May when the price was under $40k," noted a CryptoQuant analyst as BTC attempted to rebound after falling below $60,000 on Oct. 26, adding:

Bitcoin's price correction from around $67,000 to $58,100 appeared after October's 60% rally. However, BTC/USD formed a parallel descending channel range (purple), raising possibilities that the structure is a Bull Flag.

Bulls Flags are bullish continuation patterns that send the price in the direction of their previous trend following a consolidation period to the downside. In doing so, the technical indicator eyes their upside targets at length equal to the size of the previous uptrend, also known as Flagpole, once the price breaks above the Flag's upper trendline with higher volumes.

Related:Is Bitcoin price mimicking the 2017 bull run? Find out on The Market Report with ETF expert Eric Balchunas

The Bitcoin flagpole is approximately $15,000 long. That means the cryptocurrency could technically rise by as much as $15,000 from the point of the breakout. The Fibonacci levels in the chart above may work as floors to support rebound towards or above $70,000.

However, not all traders are convinced the current setup is bullish in the short term.

"Some would say this is a bull flag, and that's possible. But the volume characteristics point to a move lower from here, most likely, IMO," commented pseudonymous crypto trader Alex.

Fellow trader Pentoshi added that a break below the recent lows of $58,000 would be bad news for the bulls. He said:

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin hodling rate reaches 9-month high, boosting hopes of 'bull flag' rally to $70K - Cointelegraph

In recent months, we've seen the launch of a new (and questionable) bitcoin futures exchange-traded fund, a plethora of new cryptocurrencieshit the market, and bitcoin become legal tender in the country of El Salvador. So, what's next for cryptocurrency?

Well, one of the first questions we should ask is: Who is driving the push into cryptocurrency investment in the first place? Then, we can start to answer the question everyone seems to be wondering: Is cryptocurrency going to take over the world?

To answer these questions, we'll turn to research from Morningstar's Stan Treger. His research offers insights into what separates crypto investors from their peers.

The move into cryptocurrency investment is pretty broad and recent.

For instance,our researchfound that 28% of respondents reported owning cryptocurrencies--a tremendously large portion of the public investing in an asset that no one really knew about a decade ago. Indeed, a recent study by the crypto platform Geminifound that 68% of respondents said they had started investing in cryptocurrencies within the past two years.

It's worth noting, however, that the sample of Americans used in our survey is slightly skewed toward those with a lower income. So, the percentage of all U.S. investors owning cryptocurrencies may look a little different.

Second, ownership of crypto is highly uneven. It decreases with age and increases with ownership of other assets. This study was most unique in the way it focused on investor psychology. It found that those who invested in cryptocurrencies tended to have what's known as a focus on promotion--achieving gains or goals instead of preventing bad outcomes.

After controlling for other factors, the study also found that those with a shorter time horizon are more interested in crypto. In other words, the longer people tend to plan ahead, the lessinterested they are in cryptocurrency investment.

Would you care to guess what came out as one of the strongest predictors of interest in future cryptocurrency investment? Already owning it. There's a group of people who clearly have experience and interest in the cryptocurrency space, which leads to further exploration and investment.

This also leads us to our final point: Despite what you may have seen in headlines or on social media, cryptocurrency is not taking over the world.

As noted in Treger's previous research, cryptocurrency investing doesn't rank highly in people's prioritiesfor retirement investing, even among younger, generally pro-crypto audiences. In this research, we found that ownership of crypto is considerably lower than ownership of individual stocks (outside of mutual funds and retirement plans), and far lower than investing via a retirement account.

The role that cryptocurrency investing will play in the future is yet to be seen. But we'll continue to research the role it currently plays in investors' short- and long-term goals to gain a clearer understanding of what that future might look like.

Beyond cryptocurrency, Treger also leveraged a national sample of Americans to examine the psychology of investors to better understand why some people who have the means to become investors do so, while others don't. We examined that question further in a whitepaper.

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Who's Biting on Bitcoin and Why? - Morningstar.com

The realm of innovation and growth is extensive when it comes to how entrepreneurs can integrate cryptocurrency into their business models, said Don Stuart.

Don Stuart, Kansas City Bitcoin Meetup

Specific to Kansas City, weve seen more and more interest here in the past few months with different companies getting set up to accept Bitcoin for payments just because they want to tap into the growing network of young professionals and entrepreneurs who are using Bitcoin more day-to-day now, said Stuart, a Bitcoin consultant, investor and founder of the Kansas City Bitcoin Meetup group.

To connect those interested in cryptocurrency with professionals in the field, the KC Bitcoin Meetup group is hosting the first Bitcoin Day KC an all-day conference with speakers, giveaways and networking opportunities set for Saturday, Nov. 6 at Pinstripes at Prairie Fire in Overland Park.

Theres going to be a lot of different-focused discussions and presentations throughout the day, Stuart said. Well have everything from Bitcoin 101 which is the barebone basics of what it is, how to use it, what a [Bitcoin] wallet is to the more advanced topics like the Lightning Network, which is a payment system on top of Bitcoin. There will be something for every level of interest.

Click here to check out the schedule and speakers for Bitcoin Day KC.

Benjamin Maenner, Alpha Bitcoin, Bitcoin Day Omaha

Bitcoin Day KC is modeled after Bitcoin Day Omaha, which has brought tens of thousands of people to Omaha since 2014, shared Benjamin Maenner, a Bitcoin maximalist at Alpha Bitcoin and the host of Bitcoin Day Omaha.

The goal is that were trying to reach everyone, Maenner said. Weve brought in local, regional and national Bitcoin speakers, and the attendees are actually able to have conversations with these Bitcoiners.

The local event will have a Bitcoin in Kansas City panel session for attendees who want to learn about the history of economics in Kansas City that led up to Bitcoin.

Back in the early 1900s, Kansas City was very supportive of the ideals of libertarianism and Austrian economics which kind of formed the basis for Bitcoins economic policy, Stuart explained. Were going to talk about why Kansas City is primed to adapt to Bitcoin.

Some Kansas City-based businesses have already adopted cryptocurrency into their everyday transactions, Stuart added, noting that the KC Bitcoin Meetup group will go out of its way to support restaurants that accept Bitcoin as payment.

Thats another reason why founders and startups should consider having a Bitcoin strategy, Stuart said. Were currently helping J. Rieger & Co. get up and running on Bitcoin payments here pretty soon.

Click here to read more about the cryptocurrency community in Kansas City.

Through the Lightning Network, Bitcoin can be transferred to any account around the world in a matter of seconds, Stuart said. With credit cards charging business owners fees to accept credit card payments, Bitcoin has no fees, he continued.

This is an automatic way for any company to save 3 percent on their revenue, he noted.

Individuals do not need any background in cryptocurrency to attend Bitcoin Day KC. Even those without a Bitcoin wallet will receive $10 in Bitcoin, the duo said.

We really want to get the audience involved, Stuart shared. Were hoping to have some people there who run a business or are looking to start one; we can discuss with them how they see Bitcoin fitting into that venture and answer any questions they may have.

Bitcoin stuff can get very philosophical like why are we here? What are we doing? And it really comes back to community, Maenner added. Were all building on the same thing and thats what moves us forward. Good things happen when Bitcoiners get together, so thats an important part were continuing to push.

Tickets for Bitcoin Day KC are on sale for $150. Startland News readers can get $50 off with the code Startland. Click here for tickets.

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Bitcoin Day coming to KC: Experts share how startups can benefit from cryptocurrency - Startland News