Category Archives: Bitcoin

The SEC is expected to act soon to approve or reject bitcoin-based Exchange-Traded Funds (ETFs). Such ETFs would buy and hold bitcoins and provide an opportunity for U.S. investors to speculate in bitcoin.

They are not in the public interest, and the SEC should reject them. Approving bitcoin ETFs would support a payment mechanism that has only one viable application break the law.

In general, I believe issuers should be allowed to issue any type of security as long as they properly communicate the risks to investors. I am not in favor of merit regulation in which regulators only approve investments that the regulators think are good investments.

Informed investors should be allowed to make their own investment decisions without interference from a nanny-state government. Furthermore, I am a big proponent of blockchain, the underlying technological breakthrough behind bitcoin.

Blockchain has many legitimate applications, but Bitcoin 1.0 is not one of them. Further, I see nothing wrong with digital currencies, and have calledupon the Federal Reserve to issue U.S. dollars in blockchain form.

Bitcoin was started in 2008 by someone or some group using the name Satoshi Nakomoto. No one knows for sure who Satoshi Nakomoto is.

There are people who are suspected of being Satoshi Nakomoto who deny it and others who claim to be Satoshi Nakomoto but cannot prove it. This murky background alone should give regulators pause.

Bitcoin is an electronic payment medium that allows anyone to transfer bitcoins securely from one bitcoin address to another. Transactions are verified by a group of so-called miners on the internet who verify each transaction. When the miners verify that a bitcoin associated with one address has not already been spent, they add the new transaction to the public record known as the blockchain.

Miners are paid for their activity through the issuance of newly-minted bitcoins derived from a mathematical formula that purportedly limits the total number of bitcoins that can ever be created. This is all secured through cryptography.

Bitcoin transactions are essentially anonymous. While the bitcoin blockchain records what bitcoins were sent by one address to another, it does not contain any information on the identity of those addresses. Unless someone does something to disclose their address, it is nearly impossible to figure out the identity behind an address.

Most of the trading in bitcoin occurs in China, and most of the mining activity is controlled by Chinese firms. This also raises serious questions about the ability of U.S. regulatory authorities to investigate and prosecute market manipulation of the bitcoin price.

As the proposed ETFs are just plays on the underlying price of bitcoin, this inability to even investigate manipulation of bitcoin prices means that the SEC will lack the fundamental ability to protect U.S. investors from abuses in this market. Approving bitcoin ETFs will lead U.S. investors to slaughter.

Bitcoin is a payment system ideally suited to the black market. The anonymity of bitcoin transactions makes it ideal for drug-running, terrorist funding and human trafficking. Bitcoin is the coin of the realm in the dark web.

Spurred by rumors the SEC will approve a bitcoin ETF, the price of bitcoin finally surpassed an ounce of gold. https://t.co/9gyf0g7vZe pic.twitter.com/KSwxB1Ukx7

When I give a talk about bitcoin, I usually query the audience about who has actually used bitcoin. The last time I did this, exactly one hand went up. A business owner said her business was hacked, and she had to pay the ransomwarein bitcoin.

Alas, the prospect usesfor the bitcoin ETFsdo not clearly communicate that criminal activities are the primary use of Bitcoin 1.0. Indeed, they do not even mention ransomware, narcotics or pornography. For this reason alone the SEC should reject them based on inadequate disclosure.

Yes, bitcoin proponents do claim that there are legitimate applications for bitcoin. However, these proposed applications are mostly theoretical and fall apart upon closer examination. These potential applications include:

Retail sales. The notion that merchants will flock to bitcoin because there are no chargebacks and lower fees has not materialized. While a few merchants now accept bitcoin, this has mostly been a novelty. Consumers have intelligently shied away from Bitcoin 1.0 because of the complete lack of consumer protection built into Bitcoin 1.0.

Bitcoins just like cash feature makes it as dangerous as cash with the added vulnerability of a hacked wallet with no recourse. Furthermore, as it takes around 10 minutes or more to verify a block and about an hour to reach true finality, there is substantial risk to merchants that bitcoins can be double spent by fraudsters acting in concert.

Digital gold. Some hold that Bitcoin 1.0 is a digital gold because there is a theoretical limit to the number that can ever be created. This conveniently ignores the fact that the computer software behind Bitcoin 1.0 is whatever 51 percent of the miners will accept. The bitcoin protocol can and will change, as it already has. Furthermore, gold has many commercial and industrial uses that give it intrinsic value, unlike bitcoins.

Micropayments.The mirage-like no transactions cost nature of bitcoin makes it look like a way to make micropayments work on the internet. Users would be able to efficiently pay a few cents here or there to read an article or listen to a song.

Alas, bitcoin trades are not free, and miners are already expecting transaction fees in order to incorporate transactions in blocks. Consumers arent exactly clamoring for a way to pay for content they now get for free, either.

Cross-border payments. Cross-border remittances are very expensive, and bitcoin-based applications are one of many solutions. While bitcoins, like electrons, can be sent cheaply anywhere in the world, the problem remains with both the first and last mile: getting the remittance from one currency into bitcoin and then from bitcoin into the local currency at the other end.

There are plenty of new entrants into the cross-border remittance space that are bringing the cost down better than bitcoin.The fact remains that the only viable application for Bitcoin 1.0 is to break the law.

It is certainly not in the public interest for the SEC to endorse a product whose only application is criminality. The SEC would not permit a Heroin and Cocaine ETF and it should not permit a Ransomware ETF either.

James J. Angel, Ph.D., CFA is a finance professor at Georgetown Universitys McDonough School of Business. He is not now nor has he ever been Satoshi Nakomoto.

The views expressed by contributors are their own and not the views of The Hill.

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Approving bitcoin ETFs will lead investors to slaughter - The Hill (blog)

By Keith Weiner

Bitcoin Mania

The price of gold has been rising, but perhaps not enough to suit the hot money. Meanwhile, the price of Bitcoin has shot up even faster. From $412 one year ago to $1290 on Friday, it has gained over 200% (and, unlike gold, we can say that Bitcoin went up - it's a speculative asset that goes up and down with no particular limit).

Compared to the price action in Bitcoin, gold seems boring. While this is a virtue for gold to be used as money (and a vice for Bitcoin), it does tend to attract those who just want to get into the hottest casino du jour.

Bitcoin has been on a tear lately - the same cannot be said of gold at the moment [PT].

Perhaps predictably, we saw an ad from a gold bullion dealer. This well-known dealer is comparing gold to Bitcoin and urging customers to stick with gold because of its potential for price appreciation. We would not recommend relying on this argument. Whatever the merits of gold may be, going up faster than Bitcoin is not among them.

We spotted another ad today from a mainstream financial adviser. The ad urged clients not to buy gold. This firm should have little need to worry. Stocks have been in a long, long, endless, forever, never-to-end bull market. Gold is not doing anything exciting now. $1234? "WhatEVAH (roll eyes)!" Stocks, well, the prices just keep on going up. Like we said, nothing whatsoever to worry about. Other than declining dividend yields. There's more than enough irony to go around.

Speaking of dividend yield, that leads us to an idea. Readers know that we like to compare the yield of one investment to another. This is why we quote the basis as an annualized percentage. You can compare basis to LIBOR easily. And also stocks. Or anything else.

For example, the basis for December - a maturity of well under a year - is 1.2%. The dividend yield of the S&P stocks is just 1.9%. For that extra 70 bps, you are taking a number of known risks and some unknown ones too.

It is worth noting that the yield on the 10-year Treasury is up to 2.5%. Yes, that's right, you are paid less for the risk of investing in big corporations than you are for holding the risk-free asset.

Of course, the Treasury bond is not really risk-free. But in any case, if the Treasury defaults, then it's safe to assume most corporations will be destroyed, if not our whole civilization.

The "risk-free" 10 year treasury note yields a lot more than last year, but while 2.5% is not exactly exciting, it is still more than the stocks in the S&P 500 Index are paying out in dividends. It doesn't look like anyone is getting proper compensation for the risks involved [PT].

A Shortlist of Myths

We have heard the mainstream theory so many times, our heads are hurting. Here are the myths: the Chinese are selling, inflation is coming, and the economy is picking up.

China is selling. The Chinese people are selling the yuan to buy dollars - when they can get through the increasingly strict capital controls. The People's Bank of China takes the other side of the trade - selling dollars and buying yuan - to keep the yuan from collapsing.

When a foreign central bank holds dollars, it does not hold paper notes. Nor does it deposit them in a commercial bank. It holds Treasury bonds. Its sales of Treasuries may look scary, but that is just what is seen. The unseen is that the Chinese people are buying dollars. Those dollars come back to the Treasury market one way or the other.

Onshore yuan, weekly. This is the USDCNY notation, which shows how many yuan one has to pay for one US dollar, i.e., a rising trend on the chart denotes a weakening yuan [PT].

Inflation is coming. The Fed is printing, the quantity of money is going up, there will be demand pull, etc. Well, if that were true, then the last place you would want to be is in an asset the price of which is set by the net present value of its future free cash flows. Or at least the price should be. If you think stock prices have to rise in inflationary periods, look at what happened in the 1970s.

The economy is picking up. What can we say? There are two views on this. One has seen (or looked for) green shoots and nascent recoveries since the crisis. The other has seen rising asset prices, and with that, a small wealth effect. We will not opine about Trump and the future of the economy here. We just wish to note that junk bonds have not sold off the way Treasuries have. Junk bonds have hardly sold off at all.

Quite the opposite. They have been massively bid up (i.e., yield has been crushed). We submit for your consideration that if inflation were coming and/or the economy were picking up, you would do even worse in junk bonds than in S&P stocks.

Happy days are here again! Apparently there is currently practically no risk whatsoever in holding junk bonds. Especially the very worst ones are doing exceptionally well. Who are we to argue with "millions of well-informed investors" - they are always right, aren't they? [PT].

The 10-year Treasury hit its low yield (so far) of 1.3% in July. Since then, it has been a wild ride mostly up to 2.6% in December. Since then, it's been choppy but falling (i.e., prices rising a bit).

July also happens to be when the yield on the Swiss 10-year government bond began rising. It made a low of -0.6% (yes, negative). Since then, the yield has gone up (i.e., bond price has gone down) to near zero in December. It is currently at -0.1%.

In Japan, the same occurred. Low yield on the 10-year government bond in July was -0.3%. The high was hit in December. Still elevated now, but off the December high.

It's almost as if government bond yields around the world were moved by the same drivers, or even connected by some kind of arbitrage...

Whatever the cause of this worldwide sell-off of government bonds may be, it is not selling by China. It is not inflation. It is not expectations that the economy will take off under Trump. Maybe it's just traders looking at price charts, buying because stocks are going up?

Precious Metals - Fundamental Developments

This week, the prices of the metals dropped. As always, the question is what happened to the fundamentals?

Below, we will show the only true picture of the gold and silver supply and demand. But first, the price and ratio charts.

Prices of gold and silver.

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved sideways again this week.

Gold-silver ratio.

For each metal, we will look at a graph of the basis and co-basis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and co-basis in red.

Here is the gold graph.

Gold basis and co-basis and the dollar price.

This week, our old friend returned. He is the correlation between the price of the gold (i.e., the inverse of the price of gold in dollar terms) and the co-basis (i.e., our scarcity indicator). They had been moving together.

This week, they met up for old time's sake. The dollar is up from 24.75 mg gold to 25.20 mg. And the co-basis is up from -0.41% to -0.16%. At least in the April contract, which is rapidly approaching First Notice Day, and is already under downward pressure. For farther contracts, the co-basis is up, but not that much.

Our calculated fundamental price dipped twenty bucks. It is still $150 above the market price.

Now let's look at silver.

Silver basis and co-basis and the dollar price.

The co-basis in silver moved up big-time as well. The silver fundamental price also fell about fifteen cents.

Charts by: Cryptowatch, StockCharts, BigCharts, St. Louis Federal Reserve Research, Monetary Metals

Chart and image captions by PT where indicated

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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They're Worried You Might Buy Bitcoin Or Gold - Precious Metals ... - Seeking Alpha

Editors Note: This post originally appeared in slightly different form on The Finanser blog.

As referenced in my recent post about the R3 consortium, there are various camps out there fighting for the cryptocurrency crown. The lead runners are bitcoin and Ethereum, and both have serious backing. However, its still early days. I keep stressing that we need to remember we are experimenting here, and the endgame is still a ways away. The end game is that there will be a digital currency we can all buy into, whether its bitcoin or bityuan or ekrona or ether or monero or any of them, who knows it could be all. Equally, it could be none.

This is not a win-lose equation, however, as there is a potential win-win zero-sum game where several currencies and blockchains survive and thrive, with interoperability for different use cases. After all, corporates might use Ethereum while the general public uses bitcoin. So heres a quick lowdown on how I see it.

Bitcoin

After blogging about bitcoin for six years, Ive closely followed its peaks and troughs, ups and downs.

Right now its peaking with a price of $1,290 per bitcoin. That makes it worth more than gold, and the bitcoinisters are all over the moon. But theres the usual factions moving here, with the hype of the bitcoinisters versus the reality of the markets. For example, Im pleased the price of bitcoin is way up there but (a) its meant to be a currency you spend, not an investment you hoard; and (b) its still tiny (in terms of the size of the market) when compared with other currencies and commodities.

On the former note, Im seeing too many people buying into bitcoin because theyre being suckered by the hype and believe its a good investment. Its a currency, not an investment; or thats what we should be thinking. On the latter, this quote from Fran Strajnar, co-founder and CEO of Brave New Coin, makes sense: The gold supply is 180,000 tonnes of above ground gold, valued at $7 trillion. The bitcoin market value is $20 billion, so gold vs bitcoin is psychological more than anything.

Yep.

Bitcoin has had a lot of people buying into the market, but its still a small $20 billion market. A long way to go before we can believe its mainstream, and there are plenty of competitors out there such as Zcash, which claims to overcome the deficiencies in bitcoin.

It is notable that the gold rush of recent bitcoin activity is caused by a variety of factors, from Japans legitimizing the currency to Chinas outlawing it to the Winklevoss twins' creating a potential SEC-approved ETF to trade in it. All of these factors, along with Brexit and the Trump presidency, are fueling people to invest. This then creates a virtuous circle of the more who invest, the more who invest. This may all come tumbling down quickly, or it may move mainstream. We just dont know. What I do know is that we no longer talk about bitcoin as a Wild West, the dark net currency, ridiculous or stupid. People are taking it seriously now, and thats probably a good thing. Even so, there are many who dont buy into it, with the currency announced as dead 124 times to date. Its still not dead, though.

Ether

Ether is the currency of Ethereum, and this is proving popular with corporates. In fact, its so popular that the Ethereum Enterprise Alliance was announced last week, driven by Microsoft, Intel and JPMorgan. Thats saying something.

So why is Ethereum more popular than bitcoin for corporate users? Because of Microsoft. Microsoft saw the potential of Ethereum for blockchain-as-a-service using their cloud Azure platform early on, and has been driving that project forward ever since to its enterprise account base as the platform of choice. Equally, Ethereum and ether differs from Bitcoin and bitcoins (former is the infrastructure, latter is the currency), because it allows both permissioned and permissionless transactions to take place, whereas bitcoin only works in a permissionless way. For corporates, having transparency of transactions and a completely public ledger just wouldnt work, which is why corporates and banks arent buying into bitcoin.

Ethereum is not proven, however, as demonstrated by the infamous DAO hack and hard fork last year. However, it does show the nature of factions and different views when you google Ethereum fail and the top results include two next to each other: "Why Ethereum Succeeded Where Bitcoin Failed" (Motherboard) and "How Bitcoin Succeeded Where Ethereum Failed" (Coinjournal).

The competition between the various blockchain and distributed ledger models was well summarized recently by Penny Crosman for American Banker in an article focused on Microsoft and IBMs competing projects, respectively, the Enterprise Ethereum Alliance and the Linux Foundation Hyperledger Project.

It just goes to show that there are lots of tribes fighting for survival here, and its not pretty. The two leading tribes are bitcoin and Ethereum, but there are plenty of others, as I outline above. For banks this leads to choices: do we invest in Ethereum and join the Ethereum Enterprise Alliance or do we become part of R3 CEVs consortia? It is not even as simple as that, as there are plenty of other alliances out there.

Chris Skinner is an author, expert and speaker on banking, finance and fintech. He is the author of the The Finanser blog and chairs the Financial Services Club.

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BankThink Bitcoin vs. Ethereum may be a zero-sum game - American Banker (subscription)

The worlds most famous cryptocurrency is trading at record highs, but is it a bubble?

Looking at a chart of bitcoins price as it climbed and eventually overtook its long-held, previous all-time high, set in the final months of 2013, its easy to see why some people think its a bubble in danger of popping.

But Vikram Mansharamani, who wrote a book about identifying bubbles, says the bitcoin market exhibits fewer than two of the five major features of a fully inflated bubble. He lays out his argument in a LinkedIn post, which Ive summarized in the scorecard below.

Another blogger has weighed in with his own interpretation of the market using Mansharamanis framework and concludes that trade in the cryptocurrency is a tad frothier. Whereas Mansharamani gives bitcoin half mark for reflexivitythe idea that an assets rising price increases demand for it, which investors like George Soros subscribe toSG Kinsmanns analysis gives bitcoin a full point for reflexivity. The argument for doing so? Transaction volumes and fees, which indicate demand, have risen along with the price.

Still, that puts bitcoin at just two out of five marks for bubble indicators.

Bubble or not, bitcoin investors are in for some price action this week. The US Securities and Exchange Commission only has five more days before it must issue a decision on a bitcoin exchange-traded fund, which could really open the floodgates of demand for bitcoinor bring the price crashing back down.

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The case against calling it a bitcoin (BTC) bubble Quartz - Quartz

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A single bitcoin is now worth more than an ounce of gold.

The digital currency crossed that threshold for the first time last Thursday, and at one point on Friday it was trading at $1,292.71 compared to gold at $1,226.89.

Of course, as Quartz noted, "the milestone is inherently arbitrary." If gold was measured by a different unit of weight, its value could be higher or lower. But the symbolism is still significant. An ounce of gold holds a special place in our popular imagination.

And it's an impressive mark for bitcoin to surpass. Back in late 2013, the value of a bitcoin came close to $1,200 but then it crashed spectacularly to $600 in almost no time at all. It briefly stabilized at $800, then it went into a slo-mo slide back to $200 over the course of 2014. Lots of observers wrote off the virtual currency as a failed experiment.

Now bitcoin is back, in defiance of the naysayers. To what do we owe its resurrection? To answer that question, let's go back to bitcoin's beginning.

Bitcoin a highly encrypted form of digital currency was founded on a certain renegade libertarian romanticism. It wasn't controlled by a powerful central government, but by a decentralized network of participants. By 2013, 70 percent of all bitcoin trading went through an exchange called Mt. Gox, founded in Tokyo in 2010 as a way for investors to trade bitcoin for real currencies.

Mt. Gox's CEO, Mark Karpeles, was neck deep in the romanticism of bitcoin. And while Karpeles was, by all accounts, a brilliant software entrepreneur, he also didn't understand the basic security features and best practices your standard financial or software firm uses to protect itself. Sure enough, a massive raid by hackers effectively bankrupted the company in late 2013. That was a huge factor in bitcoin's near-demise.

But the other issue was just that bitcoin was young. Even now, while a bitcoin may be more valuable than an ounce of gold, the amount of economic activity in the world that involves gold is still vastly greater. The total global gold supply adds up to $7 trillion. Bitcoin's total market value is just $20 billion. Bitcoin's smaller economic reach means that the downfall of a massive player like Mt. Gox could torpedo the value of the whole currency.

Bitcoin's resurrection has been more gradual than its initial rise. Bitcoin began bouncing back in mid-2015, and didn't cross the $1,200 threshold until just a few days ago. By contrast, its spike in 2013 from $200 to $1,200 only took a month or two. Today's relatively slower rise is likely a sign that the currency is less a hot new flash in the pan, and actually something gaining credibility with more mainstream institutions.

For instance, there are already exchange traded funds (ETFs) for bitcoin on some financial markets. These instruments allow investors to buy bitcoins without going through the tech-savvy rigamarole of maintaining their own bitcoin account. They just invest their money in the ETF, and the fund handles the rest. Later this month, the Securities and Exchange Commission is expected to make a decision whether such on ETF can be sold on the American financial markets.

Another factor in bitcoin's resurrection: the geopolitical turmoil created by Brexit and Donald Trump. Chaos and unrest particularly when it has an anti-elitist, populist bent drives rich people to panic and look for a safe place to stash their money. Gold-standard style investments like bitcoin (or, well, gold) can be pretty attractive to wealthy individuals who worry that currencies backed by governments might become increasingly unreliable when the government is headed by an erratic know-nothing.

But there's yet another factor in bitcoin's resurrection: And it has nothing to do with the virtual currency as a libertarian stateless alternative.

There's also bitcoin the technology, which pioneered the blockchain as a method of digital record-keeping. This is the innovation that allows everyone using bitcoin to agree on how much currency each user has and what transactions they've undertaken all without any centralized financial system keeping track of things.

That innovation has lots of traditional industries and investors pretty excited. Wall Street is an obvious candidate for adopting blockchain technology. But its potential applications are far wider. As the BBC pointed out, you could imagine something as mundane as dentists using blockchain to maintain medical records. A lot of the enthusiasm driving up bitcoin's value is enthusiasm for bitcoin's technology, not its currency.

Under pressure to expand its reach, will bitcoin give up its renegade libertarian ways? Or will mainstream industries and players just copycat the blockchain technology, leaving bitcoin a boutique investment for well-to-do survivalists? Only time will tell.

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The rise and fall and rise of bitcoin - The Week Magazine

Bitcoin (OTCQX:GBTC) is a totally different investment asset type than traditional asset classes. Traditional analysis methods do not applying when forecasting the price of bitcoin. That's why we apply a more fundamental approach in this article in order to come up with a bitcoin price forecast for 2017.

How NOT to forecast a bitcoin price

Most readers would turn to the cryptocurrency blogosphere where they will read ultra-bullish bitcoin price forecasts for 2017 similar to this one from Coindesk. The issue with this approach is that those sites only feature bitcoin enthusiasts and entrepreneurs, so they offer a very biased view.

Traditional financial media, on the other hand, have their classic story telling format. That is not a useful approach either for investors. For instance, CNBC looked at the ongoing stream of articles that compare bitcoin with gold (NYSEARCA:GLD), and concluded that "the comparison is perhaps a positive signal that bitcoin is being commoditized. But bitcoin is not a commodity, while gold has been a commodity for thousands of years." That obviously does not tell anything about the future price of bitcoin.

Fortune.com explained how demand for safe haven assets have fallen since the elections "on a stronger dollar, signs of future interest rate hikes, and potentially business-friendly policies that may arise from the Trump administration. Those potential regulatory changes would raise the chances of higher-yielding stocks." That also is not useful as input for a bitcoin price forecast.

The most interesting headline comes from CNBC: "Bitcoin predicted to rise 165% to $2,000 in 2017 driven by Trump's spending binge and dollar rally."

There is obviously no correlation between the bitcoin price and the dollar or any other regular asset. Large investors simply don't pull money out of currencies, stocks (NYSEARCA:SPY) or gold in order to buy bitcoins.

A legitimate bitcoin forecast for 2017

We believe that a combination of price analysis and fundamental analysis is the most appropriate way to come up with a legitimate bitcoin forecast.

Fundamentally, the bitcoin usage data look great: Usage of bitcoins keeps on increasing, and that is exactly what it fundamentally is all about. Because of the fact that bitcoin is a form of money, the widening acceptance of bitcoin is the most fundamental data point to consider.

According to Statista, bitcoin usage keeps on growing as seen by the number of Bitcoin ATMs, which increased from 538 in January 2016 to 838 by November. Most Bitcoin ATMs, as of July 2016, were located in the United States (345) and Canada (108). The Bitcoin ATMs located in Europe as of June 2016 constituted 24.02 percent of the global ATM market share.

Moreover, several bitcoin charts confirm a growing usage and acceptance:

Last but not least, this research paper on bitcoin's big picture trends identifies 3 marked regimes that have evolved as the bitcoin economy has grown and matured: From an early prototype stage, to a second growth stage populated in large part with "sin" enterprise (i.e., gambling, black markets), to a third stage marked by a sharp progression away from "sin" and toward legitimate enterprises.

In other words, fundamentally, the picture for bitcoin looks very good. This is not only a market for speculators anymore, but one of real users.

We are confident, based on the objective data set outlined above that bitcoin's price rise is not only legitimate, but will continue. That results in a bullish bitcoin price forecast for 2017 and beyond.

From a bitcoin price analysis point of view, the long-term chart (courtesy: Finviz) looks very constructive. Readers should compare the steep rally in 2013 with the steady and solid rise in the last 2 years. As the price of bitcoin took out all-time highs, it suggests it has much more upside potential.

The only 'negative' is that the price rise has accelerated in recent weeks. Investors want to see a steady rise, not a parabolic rise. So we hope there will be a healthy correction sooner rather than later to cool off emotions. Ideally, bitcoin's price corrects to the $1,000 to $1,100 area in the coming weeks.

We could easily see bitcoin's price move to $2,000 in 2017.

This bitcoin price forecast for 2017 originally appeared on InvestingHaven.com

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Bitcoin Price Target For 2017 - Seeking Alpha

By Parke Shall

Those that read us know that we have been Bitcoin bulls for quite some time. With the price of 1BTC now approaching $1300, the question of whether or not we are staying in or cashing out has come up several times.

We wanted to write today to inform readers that not only are we staying long bitcoin, but we will, as we have been saying in the past, continue to add small amounts on any dips. We had a short term bitcoin price target of new all-time highs for this year that we reiterated in a previous article out in December 2016. In December of 2016, with bitcoin at $800, we stated that "Bitcoin Would Soar Through $1200 in 2017".

Now, it is time for us to focus on our multiple year long-term outlook for bitcoin. We don't believe that $5000 or even $10,000 is out of the question eventually, though it may take many years for the digital currency to reach that point. Needless to say, we remain bullish.

We know that bitcoin is becoming more and more of a news item over the last couple of weeks, as its price has run up significantly to now over $1200 per BTC. Anytime there's a price movement in any type of security like this, it makes the news. Many times, when penny stocks or other lesser-known securities rise in value, the media covers them without adequate understanding of what they are and how they work. Bitcoin is no different.

It has been getting more and more media coverage this past week yet the media, for some reason, continues to want to compare the price of one BTC to 1 ounce of gold. Yes, it is true that bitcoin has passed 1 ounce of gold in value. What does this mean? Absolutely nothing.

As bitcoin bulls, we would love to sit here and give you some convoluted meaningless answer as to why the price of one bitcoin passing 1 ounce of gold is meaningful, but there is really no common denominator basis of comparison between the two. You can put gold and silver on a ratio because you can reduce both metals to weight. You can't put bitcoin on a ratio with gold because one is a physical item with weight and a somewhat unknown but relatively finite supply and the other is a digital product that exists only online or in cyberspace.

So if you are a member of the financial media and are reading this, stop comparing the price of gold with the price of bitcoin.

Moving on, we could spend many paragraphs and many pages defending bitcoin as a storer of value. We could also, as generally Austrian thinking economists, make the argument that it has no value because it doesn't really exist. We think the answer for the short term is going to be somewhere in between. It exists because people are buying into it (not unlike Federal Reserve notes). It is a storer of value because it is limited in its supply. We have maintained in many of our articles that the major risk to bitcoin is the fact that it exists on an infrastructure that must be in place in order for it to be transacted. Whereas one person can go and hand gold to another person if the entire infrastructure of the world is brought down, bitcoin doesn't exist without our smartphones, our computers, and the Internet.

With this all said, we have written many articles over the last year talking about why would be buying the dip in bitcoin at various circumstances. After the Bitfinex crash, we came out and said that we would be buyers and after that, we wrote that we thought the digital currency was going to easily eclipse $1000 and then move through new highs. So far we have been right on.

Now let's talk about our outlook for the future. Despite bitcoin being incorrectly compared with gold, it continues to come up as both a hedge and a storer of value. Well you can take dispute with either of these, it is quite obvious that the public believes both of these to be appropriate. We do as well. Like any other financial asset that is in demand, it doesn't really matter what the ultimate product is, it only matters what the demand for said product is.

With the big banks and even the central banks working on different ways to incorporate the Blockchain into their business, it is obvious there has been buy-in on a major scale for a bitcoin. Many have argued that other digital currency's may come and take the place of bit coin and we actually believe just the opposite. We believe that because bitcoin was the original digital currency that it is going to have the most staying power and legacy status for many years to come. Other digital currencies may gain value on the fact that bitcoin has value, but there's only going to be one bitcoin at the end of the day.

In a world that is increasingly switching to digital, it is going to be tougher and tougher to make a case against bitcoin as long as large banks and governments continue to buy into the technology. There is no doubt that the blockchain technology is going to be the next step for a number of corporations and potentially a number of governments.

Investors need to realize that 100% of capital is at risk when they are dealing in such a speculative asset with very little track record behind it. With that said, we believe the bitcoin is going to remain in demand, become further accessible to retail spiking demand, and will have its credibility continue to improve going forward. While there are a varying group of long term estimated price ranges for bitcoin between $0 dollars and $1 million per bitcoin, depending on how seriously it is taken as a hedge against the financial system, we certainly don't think that the digital currency is going to stop growing in value anytime soon.

Over the course of its lifetime, we believe bitcoin is still in its extreme infancy and we would not be surprised to see the price eclipse $2000 by the end of the year this year. Further, our long-term targets for BTC remain between $2000 and $5000 for the next year or two. At this point, we may see corrections and we may see some stagnation but ultimately the most important point is that in the finite amount of supply and growing demand are going to continue to push prices much higher in the future. We remain long bitcoin.

Disclosure: I am/we are long BITCOIN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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We Love Bitcoin, But Stop Comparing It To Gold - Seeking Alpha

The soaring gains made by bitcoin in its latest bullish run in 2017 has seen the cryptocurrencys market capitalization now exceed $20 billion for the first time in its history.

Bitcoins price rally and a few stumbles have already seen a dramatic year for the cryptocurrency, less than 3 months in. At the time of publishing, bitcoin is trading at $1,279, $20 away from its all-time high of $1,298 set on Friday, March 3, 2017.

Accordingly, current figures from CoinMarketCap reveals that a total of 109,320 bitcoins traded in a 24-hour period. With approximately 16.2 million bitcoins currently mined and in circulation, the worlds most prominent and valuable cryptocurrency is now valued at a little over $20.6 billion.

Pitting bitcoin against the worlds M1 (liquid money metric) scale on the CIA global list, the cryptocurrency is up a few places to reside at #66 in the rankings, now ahead of Bulgaria and Cuba and below Lithuania.

Bitcoin has now gained over a third in in market capitalization since the last week of 2016, a year which saw the cryptocurrency double in price over the year. The cryptocurrency crossed the $15 billion mark on December 28 last year as price pushed toward the $1,000 milestone.

Having begun the year above the $1,000 mark, bitcoins market cap hit $17.5 billion, before the bullish run hit a brick wall after intervention by Chinas central bank which began investigating bitcoin exchanges in the country. Bitcoin has since persevered. free from theinfluence of the PBOC as Chinese traders took to alternative platforms.

On March 2nd, bitcoin surpassed parity with gold, a milestone for the cryptocurrency that is quickly being regarded as a store of value for investors around the world. Bitcoins gains have led to a positive trend among other cryptocurrencies. Ethereum, the second largest cryptocurrency after bitcoin, is nearing a market cap of $2 billion. Dash, third in the list after Bitcoin and Ethereum hit an all-time high market cap of $329 million the same day bitcoin announced it was more valuable than gold.

For a live Bitcoin Price chart, clickhere.

Image from Shutterstock. Charts from BitcoinWisdom and CoinMarketCap.

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Bitcoin Exceeds $20 Billion in Market Cap - CryptoCoinsNews

The only way to properly store your bitcoin wealth is by using a safe wallet solution. It is hard to quantify what makes one wallet safer than the next, as users have their individual preferences and needs in this regard. However, there are some wallet solutions out there that take keeping funds safe to a whole new level.

On the software side of things, there are quite a few different bitcoin wallets to choose from. However, one of the primary wallets people use in this regard is Multibit, due to it being lightweight and easy to integrate with hardware solutions. Although Multibits interface looks rather traditional, the wallet receives regular updates to improve security. A convenient and secure software solution to store funds, that much is certain.

Any bitcoin wallet provider providing cold storage and multi-signature support deserves to be on the list of top secure bitcoin wallets. Armory checks the right boxes in this regard, as the software stores private keys in an offline computer. This makes it impossible to steal bitcoins, unless someone has access to the physical location of the computer. No one knows where this location may be, though. Moreover, giving users the chance to set up cold storage solutions themselves is a big bonus.

On the mobile front, there is a lot of competition for the crown of being the most secure wallet solutions available today. Mycelium has gotten a lot of support in this regard, as they are considered to be a must-have secure bitcoin storage application. Their HD wallet support, as well as an option to delete the private key from the device and integrate watch only accounts make Mycelium one of the top secure mobile bitcoin wallets.

Hardware bitcoin wallets have become quite popular over the past few years. That is only normal, as storing bitcoin in a secure manner becomes more important than ever. Hardware wallets are designed to facilitate secure funds storage, with quite a few companies launching their products in recent years. KeepKey is one of the top solutions in this regard, as the device requires users to manually approve every transaction. Moreover the device has PIN protection, adding an extra layer of security.

The Ledger line of hardware bitcoin wallets can not be ignored. The company prides itself on making affordable yet secure bitcoin wallet solutions. There is no reason to pay hundreds of dollars for a device when the same goal can be achieved with a device costing a fraction of the price. Dont let the cheap price fool you, though, as every one of Ledgers devices is more than capable of keeping your wealth safe.

All of Ledgers wallets come in the form of a USB-size, although there are minor differences between each type. The Ledger Nano S is by far the most popular hardware wallet, as it is capable of storing both Bitcoin and Ethereum. Moreover, users can complete wallet actions through the display on the device or by using the browser plugins. An affordable, robust, and secure line of products, that much is certain.

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Top 5 Safe Bitcoin Wallets - The Merkle

The Bitcoin network has been congested for quite some time now, blocks have been full and the debate has been at a stalemate. As Bitcoins adoptions is rising, along with increased coverage in the media about the price breaking all time highs, the amount of transactions has been on the rise. This has contributed to an increase in the average fee paid as users need to pay more and more in order to get their transactions to confirm in a reasonable amount of time.

Developers and users have been long aware of the problem that faced Bitcoin when the amount of transactions exceeded the available space in the blocks. The mining fees will increase because more transactions are competing for the miners hash power.

While this is beneficial to miners, users have to pay higher transactions fees. That fee has been slowly rising until now, it finally has reached the levelof an old school financial institution. Checkout this chart that shows the rise of Bitcoin transaction fees over the past 2 months:

The good news is that SegWit activation is progressing alongas the current amount of nodes signaling it is hovering right around 30%. Furthermore, as the development of the Lightning network and other similar solutions progresses we may be able to fit much more transactions in the same amount of space.

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Average Bitcoin Transaction Fee Has Exceeded $1 The Merkle - The Merkle