Category Archives: Bitcoin

A member of the Brussels Parliament, Christophe De Beukelaer, says he will receive his entire salary in bitcoin this year. He believes that the technology will disrupt all industries and crypto adoption is going to be exponential.

Christophe De Beukelaer, a member of the Brussels Parliament, said in a blog post on his personal website that he will receive his 2022 salary in bitcoin.

The lawmaker explained that with the blockchain, we are at the dawn of a revolution of the same order as what we experienced with the internet 30 years ago. He believes that all sectors will be disrupted, adding that in other countries, large institutions are beginning to invest massively in crypto assets in order not to miss this gigantic opportunity.

Noting that it is the role of politicians to make the population aware of these societal changes that are coming, he stressed:

We can no longer remain ignorant of this new world. Its a bit like clinging to the carriage or the candle as cars and light bulbs appear. Adoption is going to be exponential.

To generate interest around bitcoin and the crypto industry, the lawmaker has decided to convert his entire salary for the whole of 2022 into bitcoin, the post details.

The lawmaker opined:

I am the first in Europe, but not in the world, to want to shine the spotlight on cryptocurrencies with such an approach.

He proceeded to reference the mayor of New York City, Eric Adams, who is receiving his first three paychecks in cryptocurrency. His first paycheck was recently converted into bitcoin (BTC) and ether (ETH) via Coinbase. Mayor Adams said he converted his paycheck into bitcoin to send a message that New York City is open to technology.

I think its not too late for Brussels and Belgium to be at the forefront of the cryptocurrency industry. We already have some great companies in the field but its time to position ourselves clearly and create a real ecosystem, De Beukelaer concluded.

What do you think about the lawmaker planning to receive his entire salary in bitcoin? And, do you agree with him that crypto adoption is going to be exponential? Let us know in the comments section below.

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Belgian MP to Receive Entire Salary in Bitcoin Says Crypto Adoption Will Be 'Exponential' Featured Bitcoin News - Bitcoin News

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HIVE Blockchain Technologies Ltd. (HIVE) is a profitable company to trade when investors understand the simple elements associated with the movement of its share price.

While we'll primarily look at HIVE as a proxy for Bitcoin (BTC-USD), we'll also look at Hut 8 Mining Corp. (HUT) and Marathon Digital Holdings (MARA) in order to contrast companies trading at different price points.

The reason I'm doing that is to confirm and reinforce the fact that they move in unison with the price movement of Bitcoin no matter what the share prices of the companies are.

Another reason is to show readers that no matter how the companies break down their businesses, and no matter how financial writers and analysts point out differences between the companies, the reality is, none of that matters at this stage of Bitcoin's acceptance and growth.

As I'll prove to you, there is only one thing that matters when considering these companies, and that is the price and price movement of the flagship crypto.

It can seem daunting at times to trade HIVE and similar companies because of the noise related to Bitcoin and the companies with exposure to it. A lot of this comes from commentary on social media and other media outlets concerning the why behind Bitcoin price movements, the seemingly endless amount of price ranges offered technical analysis on both sides of the play, and the differences between the companies pointed out in a way that suggests that is what is driving the performance of the companies.

The good news is all of that can safely be brushed aside. There is only one thing any investor in Bitcoin proxy companies need to consider, and that is the price movement of Bitcoin; nothing else is relevant.

Something else to take into account is Ethereum (ETH-USD). Some of these companies have significant exposure to the second-largest cryptocurrency by market cap, yet there is no reason to watch that either; it will only distract from watching Bitcoin.

The reason I mention this is obvious: the price of Bitcoin and Ethereum almost always move in unison with one another. For that reason, watching both of them is pointless. Some time back the effort was made to suggest Ethereum, and Bitcoin were decoupling, but that never played out like suggested. Again, things like that are only distractions.

Some will object to this by asserting the fundamentals of these companies are drivers of their performances as well. That's easy to disprove. Look below at the Bitcoin chart and compare it with the share price movement of HIVE, Hut 8 Mining Corp. and Marathon Digital Holdings. You'll find that the market's bid is always in unison with the price movement of Bitcoin.

I'm going on about this because it's important to understand the simplicity of investing in these types of companies. We need to discipline ourselves to ignore everything else but the price of Bitcoin.

Long into the future when price discovery for Bitcoin is known, these things could change. That time is not now.

Forget about any catalyst for these companies except the price movement of Bitcoin.

Three-month chart Bitcoin

Trading View

Three-month chart HIVE

Trading View

Three-month chart HUT

Trading View

Three-month chart MARA

Trading View

When investors think in terms of Bitcoin, the impression, because of its volatility, is that it's a very unsafe investment. That couldn't be further from the truth.

After all, what other market sector can almost guarantee that its price will regain its upward momentum after big crashes, and do it in a relatively short time? That doesn't mean there isn't any risk. The risk comes from those that take a position after much hype about the soaring price of Bitcoin, buying near the top and having to painfully watch as they're caught holding the bag.

Even those getting in near the highs will, I think, eventually generate a profit if they HODL. What they do lose is access to capital they could have deployed in other profitable companies, along with valuable time as they wait for the price of Bitcoin to jump past their entry point.

For example, if HIVE was bought when it was trading above $5.00 per share, it'll take time for the company to get back to that point and surpass it. While there's no doubt in my mind it'll go far beyond $5.00 per share, the question is how long it'll take to do so. That's the same with MARA and HUT as well.

The general difference is that companies trading at higher prices tend to rise quicker than a company like HIVE which trades at a lower share price.

Interestingly to me, there is never a safer time to trade proxy Bitcoin companies than during a correction. Even if there is a bounce off what is perceived to be a low that doesn't hold, it's only a matter of time before it bounces back.

That's one thing to consider when trading these companies. The volatility of Bitcoin makes it difficult to know if the entry point is coming off a real bottom, or there is more room to fall. That's why being patient is crucial to success under these conditions.

Why I say it's very safe once there is a significant correction is because I think the price of Bitcoin is nowhere close to reaching a top. If traders get in and the price goes against them, they can wait until it continues its upward move. Contrary to holding Bitcoin on its own, I think investors should think differently concerning holding over the long term with proxy companies. The reason why is Bitcoin will continue to go through significant corrections and taking profits off the table and redeploying capital allows for many opportunities to generate profits.

Set-and-forget is good for Bitcoin, but I think taking profits and keeping some dry powder available for the next correction offers better opportunity for larger gains.

The thesis of this article is companies that are proxies of Bitcoin aren't subject to the fundamentals other companies are, as it relates to the impact on their share price.

Even so, there are several things to take into consideration. They include CapEx, cash on hand, and access to capital. Investors need to know these companies can keep the doors open in case of a prolonged period of depressed Bitcoin prices. Most companies aren't in danger because Bitcoin doesn't stay down long. Nonetheless, it's important to beware of a company's balance sheet when considering taking a position in them. With that in mind, we'll look at the strategies that are best to use under the volatile economic conditions we're now under.

The first decision to make is whether or not to take a position in the first place. At times the best action to take is to sit on our cash until we're sure of the direction the market is taking.

As mentioned earlier, that's not as easy with the highly volatile and rapidly moving Bitcoin, when compared with most other asset classes. Bitcoin can drop a couple of thousand dollars, take a temporary breather, and then resume its downward trajectory.

For example, look at a three-month chart of Bitcoin and see how it can move in either direction by many thousands of dollars, even as it continues to slide. The chart may not look much different than other charts, but even some of what appear to be smaller moves can be $3,000 or more.

What that does is make it difficult to identify whether or not Bitcoin has reversed direction or not. For that reason, after a significant downward move, I think it's best to use dollar-cost averaging and position sizing as the tools to mitigate risk as a position is being built.

One thing to bear in mind concerning dollar-cost averaging is it's different than most other asset classes when taking positions in these companies. The major difference is the timeframe usually contracts with HIVE and similar companies. What may take months, a year, or even longer when using dollar-cost averaging for a typical company, can many times be completed in one day, a week. or possibly a little longer.

Looking back on the price movement of Bitcoin over the last several years, it is rare for it to consolidate for longer than three months. One exception was an approximate four-month period from the end of 2018 through March 2019.

Under those circumstances, Bitcoin was close to a bottom, so all an investor could do was to wait for the cryptocurrency to resume its upward trajectory. Because of the volatility of Bitcoin, I prefer not to look for an absolute bottom and wait for an upward price movement to confirm it before taking a position, like most of us would do with regular stocks. Again, the quick and wide movement of Bitcoin's price doesn't lend itself well to this strategy. This is why position sizing is important when dollar-cost averaging.

I've been building a position in HIVE using this technique. What I did was determine the largest amount of capital I'm willing to spend, and based upon the price movement of HIVE, have been adding to my position to lower my cost basis while increasing my share count.

With the negative catalysts and sentiment now part of the psychology of the market, I'm not quite as aggressive as I would have been under more favorable conditions. Consequently, there have been a couple of times I could have gotten a real nice price for HIVE, but I thought it could drop much further, so didn't take the opportunity. That was a mistake of omission on my part.

The reason I kicked myself for it was because I should have known better. After all, if you're dollar-cost averaging and position sizing, the whole point is to jump on the price when it drops below the recent entry points. If it drops further after adding to your position incrementally, it provides another opportunity to lower your cost basis.

While focusing on HIVE here, the same methods can be used for MARA, HUT, and other companies whose share price moves in conjunction with Bitcoin.

The key to success is to wait long enough for the price of Bitcoin to fall far enough to provide a measure of safety. As I mentioned earlier, I don't see much in the way of risk concerning the price of Bitcoin over the long term, but if we get too excited and enter too quickly, it can tie up our capital for a longer period of time than we wish, and it also decreases the amount of potential profits of the holding.

This is why once I see a significant downward move in price, I will wait a bit to see if it holds, and if it does, I take an anchor position I can work from. Under the current correction concerning the price of Bitcoin, I took a smaller initial position in order to give myself room to significantly lower my cost basis if the price of Bitcoin continues to fall in a meaningful manner.

One psychological element to consider is this: If we take a smaller position and the price of Bitcoin starts an upward run, we won't generate near the profits we would if we had taken a larger position. That's a tradeoff I'm willing to make.

HIVE and similar Bitcoin proxy companies offer an extraordinary opportunity in a tough market. Because of that potential, we need to remain disciplined in deploying our capital, being willing to take a smaller gain if it requires in order to maintain a margin of safety.

I see little, if any risk, in regard to the price of Bitcoin going forward. I think it will eventually reverse direction and head toward another record high. While I don't think it's going to be long before that happens, it should be understood that there have been times after a correction when Bitcoin took as much as several months to resume its upward move. We can't allow ourselves to be scared out of our holdings and leave a lot of profits on the table.

We do have to be aware of the risk-off trade we now face, and the fear associated with it. This is why I'm investing a lot more defensively in this sector than I normally do.

The bottom line is there is nothing else to do than watch the price movement of Bitcoin and take our opportunities to build our positions in these companies, remembering to watch the balance sheets in case they're close to becoming insolvent.

I'm not concerned at this time about the three companies mentioned in this article, but there are a lot of companies out there that could struggle immensely if the price of Bitcoin remains down for a prolonged period of time.

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Successfully Trading HIVE Blockchain And Other Bitcoin Proxy Stocks - Seeking Alpha

Young peoplewere already feeling depressed about their future retirement prospects, according to polls.

Still more following the collapse of all their cryptocurrency bets, one suspects.

More than $1 trillion has been wiped off the notional value of cryptocurrencies suchas Bitcoin, Ethereum and the like in just a few months according to a Washington Post report, citing data from industry website CoinMarketCap.com.

Its 10 months since HBO talk show host BillMahercalled the crypto boom a joke and Easter Bunny cartoon cash, and urged his viewers to get out. Prices went up for a while before coming back down. Bottom line: Bitcoin is now a third lower than it was when Maher took the air, and Dogecoin, another cryptocurrency he highlighted, has fallen by more than half.

The losses fall heaviest on millennials, those in their 20s and 30s, because they are the most likely to own cryptocurrencies. According to a recent poll, about 31% of those aged 18 to 29 have used or bought a cryptocurrency, compared to just 8% of those aged 50 to 64.

The losses may also be felt more heavily among people of color, if a University of Chicago poll is to be believed. It found that 44% of cryptocurrency traders were from ethnic groups other than Caucasians, and 41% were women. Cryptocurrencies are opening up investing opportunities for more diverse investors, which is a very good thing, said UCs Angela Fontes in July.

Millennials were already worrying about their retirement prospects even before the crypto rout.

Last July, 72% of them told the National Institute for Retirement Security that they were concerned they wouldnt be able to achieve a financially secure retirement. Two-thirds said they were more anxious about their retirement prospects in the wake of the Covid crisis.

Millennials are supposed to face tougher prospects for retirement due to a confluence of factors, especially high student debt. However they are likely to benefit if the aftermath of the Covid crisis includes higher wages.

The latest slump in cryptocurrencies is nothing new. Their prices have soared and crashed repeatedly since they were first invented over a decade ago.

Fans can accurately say that all these currencies in total still sport a total notional value of $1.7 trillion, meaning that owners of cryptocurrencies have collectively created that amount of money out of nothing. Bitcoins price is still more than 6 times what it was 5 years ago.

But whether that wealth could be converted into genuine or fiat moneycashis another matter.

Incidentally, claims that cryptocurrencies are a havendigital gold, as some saidthat can diversify or stabilize a portfolio have suffered something of a setback since the start of the year. While the S&P 500 SPY, +2.48% stock index has fallen 7% and the U.S. bond index AGG, +0.07% 2%, Bitcoin BTCUSD, -0.99% has, er, fallen 26%.

Meanwhile gold GLD, -0.30% has risen 1%.

The standard argument in financial planning is that those who are young, in their 20s and 30s, can most afford to lose money onspeculationand investments because they have the most time to recover. But the argument is flawed. Money lost on investments in your youth is arguably more costly than money lost later, not less costly.

Thats because when youre young your investment dollars are much scarcer. And because its the money you invest when youre young that really has time to grow into something big.

A single dollar invested at 30 and earning, say, 5% a year will grow to $5.50 by the time youre 65.

Invested at age 50, it will grow to only $2 and change.

(A real investment return of 5% a year, meaning 5% above inflation, has been a long-term average from the stock market.)

What happens if the cryptocurrencies dont recover? Likely answer: Finger-pointing, lawsuits, and largely pointless extra regulations.

As reported in the Washington Post article,

The crypto crash has put pressure on Washington regulators to impose stricter rules on the industry and raised fresh questions about the dangers of cryptocurrency for the average investor.

Youre going to get more people calling their elected representatives, generally unhappy about crypto or feeling they were wronged in some way, said Ian Katz, managing director of Capital Alpha Partners, a Washington policy analysis firm. All regulators and members of Congress want to appear to be alert behind the wheel, and if this turns out to be a continued bloodbath, it increases the impetus for action.

Among the ironies: One of the things crypto fans like about these currencies is their alleged freedom from the political and legal system.

Incidentally, it was much the same after the dot-com crash. Back then Washington ended up passing the Sarbanes-Oxley regulations, to protect ordinary people from financial fraud and the ruthless, rampaging capitalism they loved when they thought they were making money. I notice that these regulations didnt seem to stop Bernie Madoff from continuing his fraud for years, and did nothing to stop the subprime bubble and subsequent financial collapse. On the other hand, from my direct experience I can report that the regulations were really, really good at discouraging analysts, economists and other financial experts from talking to the press.

As for crypto? Any young person whos lost money should look at how much and multiply the figure by about 5. Thats how much the losses have taken out of their future retirement funds.

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'Easter Bunny cartoon cash' how Bill Maher called the Bitcoin crash - MarketWatch

Three months ago the crypto economy was worth more than $3 trillion and since then, digital currency prices have slid a great deal in value, as crypto assets have been sold and distributed across many hands. Over the last decade, fluctuating price cycles have made it so some addresses, typically referred to as crypto whales, have been able to accumulate vast quantities of coins. Moreover, a few crypto projects have also seen whales accumulate a majority of a tokens circulating supply via the initial distribution process.

The subject of whales is a popular one in the world of cryptocurrencies, as the entities have always been a force to be reckoned with. Whales are large crypto asset holders who own more tokens than the average person, and they are called whales because their giant holdings can move markets, much like whales in the ocean that can shake up boats and cause massive waves.

After more than a decade of people launching thousands of alternative crypto assets, years of digital currency trading, and the ever-changing price cycles, whale concentrations have changed over the years. The following is a look at the current concentration of large holders and crypto whales throughout the crypto economys top digital assets by market valuation. The concentration of large holders list and its onchain data derive from coincarp.com and intotheblock.com statistics.

The leading crypto asset bitcoin (BTC) is the oldest digital currency in the world based on blockchain technology, and it is assumed that BTC had a very fair distribution process. It is also assumed that Satoshi Nakamoto may own around 750,000 to 1 million BTC, which sit in addresses holding unspent block rewards. This means Satoshis stash is spread out and the inventors concentration of ownership is not easy to find. Intotheblock.com metrics shows BTCs concentration of large holders today is 10%.

Intotheblock.com leverages the total holdings of whales (addresses that own more than 1% of the circulating supply) and Investors (addresses that own between 0.1% and 1% of the circulating supply). Coincarp.com data on January 28, 2022, indicates that the top ten bitcoin addresses hold 5.30% of the current BTC supply in circulation. The top 20 largest BTC holders own 7.26% of the supply, and the top 50 bitcoin addresses own 10.78%. Onchain metrics further indicate that there are 40,301,661 bitcoin holders today.

Ethereum metrics are different as Intotheblock.com stats show concentration by large holders is 42%, which is much higher than BTCs concentration of whales. Coincarp.com data shows that theres 185,912,265 ethereum holders and ETHs top ten addresses hold 23.39% of the current supply. The top 20 ether holders possess 27.06% of the supply and the top 50 own 33.02%. Regarding the top 100 wallet addresses by ether balance, these hold 39.58% of the current ETH supply.

Binance coins (BNB) concentration of large holders data is not available on Intotheblock.com. Coincarp.com metrics, however, indicate that the top ten BNB addresses possess 88.23% of the supply. Onchain stats further show there are 321,134 BNB holders today. The top three BNB addresses are operated by Binances exchange platform, as the richest BNB holder is an exchange wallet with 52.02% of the BNB supply. The second-richest BNB wallet operated by Binance holds 27.14%, while 3.55% of the supply is also held by the third-largest address owned by the trading platform. BNB metrics indicate that more than 82% of the BNB supply is held by Binance operated wallets.

According to stats, there are 325,604 cardano (ADA) holders on January 28, 2022. Intotheblock.com metrics show that ADAs concentration by large holders data today is 17%. Data shows that the top 10 addresses hold 4.36% of the ADA supply, while the top 20 own 5.86% of the supply. The number one richest ADA wallet currently possesses 1.37% of the ADA supply. 100 ADA holders hold 16.76% of the 34,186,794,009 ADA in circulation today.

While XRPs Intotheblock.com metrics are null, Coincarp.com data shows that the top ten holders own 78.02% of the XRP supply. The top five XRP wallets are operated by exchanges, as the richest wallet operated by Binance holds 26.91% of the XRP supply. The top 20 XRP wallets hold 80.93% of the supply, and the top 100 addresses currently possess 85.99% of the XRP in circulation today, which is currently around 47,736,918,345 tokens.

Statistics show that theres a current supply of 314,967,774 SOL in circulation. The top ten addresses hold 10.11% of the SOL supply today, while the largest holder owns 1.58% of the SOL in circulation. The top 20 SOL wallets possess 15.77%, the top 50 hold 26.82%, and the top 100 solana (SOL) wallets hold 34.64% of all the SOL in existence. The number of wallets that hold a fraction of SOL or more today is 8,383,421 holders.

Data shows that the top eight coins by market valuation today have different concentrations of large holders known as whales. Stablecoins also have a concentration of large holders and the top ten tether (USDT) ERC20 wallets hold 26.79% of the current supply. The top ten usd coin (USDC) wallets currently hold 36.22% of the supply. 10.64% of the USDC supply is held by Maker dao while Binance holds 5.62% of all the ERC20-based tethers.

Digital currency proponents dont like large concentrations of whale holders as they could dump their coins on the market to make people panic sell. It is well known that at times large holders of any financial asset can collude and dump hoards of assets on the open market to make the price drop lower. While initially scaring the market, in the end whales make off after a dump because they simply buy back when the panic selling drops prices lower. Traditionally, because of the concentration of large holder levels and illiquid markets, crypto whales grow much larger after bear market cycles.

What do you think about the top eight coins and the concentration of large holders? Let us know what you think about this subject in the comments section below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Whale Watch: A Deep Dive Into the Concentrations of Large Crypto Holders Featured Bitcoin News - Bitcoin News

A new bill introduced in the U.S. has a provision that would essentially give the Treasury Secretary unchecked and unilateral power to ban cryptocurrency transactions, warned crypto advocacy organization Coin Center. Treasury Secretary Janet Yellen will be able to prohibit any crypto transactions without any process, rulemaking, or limitation on the duration of the prohibition.

Jerry Brito, executive director of Coin Center, a D.C.-based think tank focused on the public policy issues facing cryptocurrencies, warned about the America COMPETES Act of 2022 in a series of tweets Wednesday. The bill was introduced in the House of Representatives on Tuesday.

Noting that the America COMPETES Act of 2022 will very likely pass in some form, Brito explained that it contains the special measures provision proposed by Connecticut Congressman Jim Himes that would be disastrous not just for cryptocurrency but for privacy and due process generally. He continued:

The so-called special measures provision would essentially give the Treasury Secretary unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.

Currently, the law requires that Treasury engage in a public rulemaking before instituting a prohibition, Brito said, adding that the secretary can impose a surveillance special measure through a simple order, but its duration is limited to 120 days and must be accompanied by a public rulemaking.

The Coin Center executive outlined that the new provision would do three things.

Firstly, it would Add certain transmittal of funds to the list of things that can be banned by the Secretary. Secondly, it would Eliminate all public notice and comment requirements. Moreover, it would Eliminate the 120-day limitation for measures imposed without regulation.

He warned that If adopted into law, this provision would be disaster not just for crypto but for privacy and democratic public process related to *all* types of financial transactions, elaborating:

It empowers the Secretary to prohibit any (or indeed all) cryptocurrency transactions (or any other kind of transaction) without any process, rulemaking, or limitation on the duration of the prohibition.

What do you think about the America COMPETES Act of 2022? Let us know in the comments section below.

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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US Unveils Bill Giving Treasury Secretary 'Unchecked and Unilateral Power' to Ban Crypto Transactions, Advocate Warns Regulation Bitcoin News -...

The cryptocurrency market faced another day of weakness on Jan. 18 as the price of Bitcoin (BTC) dropped lower and additional pressure was also put on the altcoin market. Currently, the crypto Fear and Greed Index registered "Extreme Fear" among investors and some traders caution that BTC price could soon fall below its recent $39,000 swing low.

Data from Cointelegraph Markets Pro and TradingView shows that bulls lost control of the $42,000 support level during the early trading hours on Jan. 18 as bears hammered the BTC price to a daily low of $41,250.

Many crypto holders who were disappointed by the lack of a blow-off top to close out 2021 are also expecting fireworks to start 2022, but historically speaking, January has been one of the most disappointing months for BTC, according to a recent report from Delphi Digital.

Delphi Digital pointed to a slowdown in global liquidity growth and tighter policy expectations as the primary source of headwinds for Bitcoin and they highlighted that these factors have also led to weakness in the stock market, which is considered to be strongly correlated with the price movements seen in BTC.

Another source of weakness identified by Delphi Digital was a lack of liquidity in the perpetual and futures markets along with a drop in BTC open interest over the past two months.

Delphi Digital said,

As for what comes next, Delphi Ditial indicated that short-term momentum indicators appear to signal the worst may be behind us and the analyst noted that the Fear & Greed index is at levels not seen since May 2021.

Related: Bitcoin hodlers under siege at $42K as 30% of BTC supply flips from profit to loss

A similar trend of weakness was addressed by crypto market intelligence firm Decentrader, which observed that the number of overly bullish Im buying the dip traders on crypto Twitter was challenged at around $41,000.

The analysts suggested that based on the size and consistency of the BTC drawdown over the past two months, a move out of the range to the upside is the most probable outcome eventually and they expect the price to run towards the 200DMA and the point of breakdown in the summer at around $49,000 $50,000.

Decentrader said,

For traders hard hit by this latest drawdown, Twitter user John Wick issued a positive perspective.

The overall cryptocurrency market cap now stands at $1.976 trillion and Bitcoins dominance rate is 40%.

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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Analysts warn that Bitcoin could dip to $38K 'before an eventual breakout' - Cointelegraph

Jan 17 (Reuters) - As bitcoin heads into 2022, a growing cohort of long-term investors is doubling down on its stashes of the cryptocurrency, hoping a December dip was merely a festive blip.

Some industry watchers point to the underlying stability of such long-term investments as potentially promising indicators for the capricious cryptocurrency.

Since last July, for example, the amount of bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing, according to digital currency brokerage Genesis Trading.

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In addition, the amount of the bitcoin held in "illiquid" wallets - which spend less than quarter of their inflows - is also rising, meaning fewer coin are being actively traded, it added, citing wallet data across several exchanges.

"The number of bitcoins that haven't moved in over a year has been climbing since July," said Noelle Acheson, head of market insights at Genesis Trading. "That's pretty staggering."

Many investors were nonetheless sent diving for cover in December when the world's most popular cryptocurrency sunk almost 20%, roughly the same as the second-biggest coin ether, with risk appetite hit by inflation fears and a quicker pace of interest rate hikes from the U.S. Federal Reserve.

While bitcoin and ether both posted gains last week - up 2.9% to $43,107 and up 6.3% to $3,350, respectively - they are still some way off their 2021 highs of $69,000 and $4,868

'STRONG HANDS'

Many cryptocurrency experts caution that no one has been known to reliably predict bitcoin's characteristically wild price swings. In 2017, for example, it went from about $1,000 to around $20,000. In early 2020, it sunk below $4,000 at one point before beginning a dizzying rise.

Yet advocates of bitcoin and other coins say the increasing acceptance of cryptocurrencies in mainstream finance and investing in recent years has shored up the sector.

Cryptocurrency research firm Delphi Digital said their research showed a similar shift towards bitcoin being held for longer period by investors, which it said "illustrates a transference from shorter-term 'weak hands' to long-term 'strong hands'."

Crypto data platform Coinglass's bitcoin Fear & Greed index, has wavered between 10 and 29 since the start of the year, which could be an indicator of a possible market bottom and buying opportunities, according to Will Hamilton, head of trading & research at Trovio Capital Management.

"Previous market bottoms in July 2021 and March 2020 correlated with Fear and Greed scores of 19 and 10 respectively," he added.

For the uninitiated, 0 indicates "extreme fear" and 100 is "extreme greed"

MUSK AND DOGE

There were, meanwhile, more headlines for cryptocurrencies last week.

Meme-based dogecoin stole the spotlight after Tesla (TSLA.O) CEO Elon Musk tweeted that the company would accept it as payment for select merchandise. read more

The tweet sent dogecoin up nearly 12%.

"If more people are looking to buy Tesla merchandise with dogecoin then there's more demand," Acheson said, adding that this move could improve fundamental factors for dogecoin.

Cryptocurrency Solana was another altcoin in focus, with Bank of America analysts saying the Solana blockchain could pull market share away from ethereum and "could become the Visa of the digital asset ecosystem".

Elsewhere, bitcoin miners bounced back from mining crackdowns in China and the recent unrest in Kazakhstan, one of the world's primary centres for bitcoin mining. read more

Bitcoin's mean "hash rate" a measure of the power of the bitcoin computing network, touched an all time high of over 215 million terahashes per second on Thursday, according to blockchain data provider Glassnode.

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Reporting by Medha Singh and Lisa Mattackal in BengaluruEditing by Vidya Ranganathan and Pravin Char

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Bitcoin investors dig in for long haul in 'staggering' shift - Reuters

Nassim Nicholas Taleb.

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Nassim Nicholas Taleb has posted a bunch of incendiary tweets about bitcoin over the past six months. The author of "The Black Swan" and "Antifragile" has compared the most valuable cryptocurrency to an infectious disease, dismissed it as worthless, and said it doesn't serve as a hedge against anything.

In the summer, Taleb said in an analysis dubbed the "Bitcoin Black Paper" that bitcoin wasn't a currency, a store of value, an inflation hedge, or a haven from government tyranny or catastrophe. He has used Twitter to amplify his view that bitcoin is a fragile bubble built on speculation instead of genuine value.

1. "View BTC is as a contagious disease. It will spread, spread & its price will rally until saturation, that is ~every sucker stupid enough to buy the story is invested. When all suckers are in, the prevailing belief will make it an 'obvious' investment. That's maximal fragility." (January 17)

2. "Almost nothing in financial history has been more fragile than bitcoin." (July 3)

3. "Bitcoin has been a magnet for imbeciles." (He was blasting critics who accused him of being too rigid in his views about bitcoin, even though he shifted from being excited about its potential to deciding it was worthless in 2020.) (July 30)

4. "Bitcoin may interest some for speculative purposes but anyone who claims that #bitcoin is a hedgeagainst anything, financial or otherwise, is a certified fraud." (September 20)

5. "1- Bitcoin is no hedge for adversity 2- Bitcoin is no hedge for inflation 3- Bitcoin is no hedge for deflation 4- Bitcoin is no currency 5- Bitcoin is nothing." (December 4)

6. "It is an awkward, clunky & already obsolete product of low interest rates. It should collapse with inflation." (December 28)

7. "If after this morning you still think that #BTC is a hedge against world events, or represents 'diversification', you must stay out of finance, & take up some other hobby s.a. stamp collecting, bird watching or something less harmful to yourself & others." (November 26)

8. "I am not 'bearish' on #BTC. It is a tulip-bubble (without the aesthetics & disguized as a "currency"), hence it is as irrational to buy it as it is to SHORT it, perhaps even more. Gabish?" (October 21)

Read more: A 30-year market vet shares 5 indicators that show stocks are in dangerous territory as the Fed tightens and economic growth gets set to slow all while valuations sit at historic highs

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'Black Swan' author says bitcoin is a worthless, speculative bubble - Markets Insider

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When I last covered Bitcoin (BTC-USD) I said the top crypto asset by market cap was approaching my buy zone. In the two months since that article was published, weve seen the price plummet through the lower end of that zone. While I can freely admit I got that call wrong, I do want to revisit the current setup for those who view Bitcoin as a multi-year hold rather than as a month-to-month hold.

Like gold, Bitcoin is mined. Albeit through a completely different form of mining. Gold and other metals are mined out of the ground. Bitcoin and other cryptocurrencies are mined out of code. The notion that Bitcoin is created simply out of thin air is not accurate in my view. It takes a tremendous amount of energy to reward miners with freshly created Bitcoin. The Bitcoin is rewarded for securing the network and verifying transactions. When there are more miners securing the network, the hash-rate increases.

Bitinfocharts.com

Last year when China banned Bitcoin, the hash-rate took a dive as China-based mining operations started to come offline. That hash-rate has since recovered and the Bitcoin network is just as secure as ever. With more miners coming online competing for the same Bitcoin supply, the difficulty in the block reward has increased.

bitinfocharts.com

You can see in the chart above that I've added a dotted line that represents the difficulty associated with mining Bitcoin. As the hash-rate increases, difficulty moves just about in lockstep. This means that it requires more energy expense to mine the same Bitcoin.

The problem that miners now find themselves in is one of higher input costs with a lower Bitcoin price. Their margin is taking a beating. And to be clear, this is largely by design. Bitcoin is going to continue to get more difficult to mine as the available mine supply continues to dwindle.

bitinfochart.com

Given the current increase in mining difficulty coupled with the sharp price declines in the asset, miners now find themselves at 6-month profitability lows. While there's certainly no guarantee profitability has to increase from here, I think miners will be able to help push Bitcoin prices back up by controlling the flow of the coins in an attempt to defend their margin.

The stock to flow model has been popularized by people like anonymous Bitcoin analyst Plan B and The Bitcoin Standard author Saifedean Ammous. While the metric certainly shouldnt be taken as an absolute measure of Bitcoins value, we do currently find a fairly large discrepancy between where Bitcoin is and where the model says it should be.

Glassnode

At a little under $109,400 per coin, Bitcoin would have to nearly triple in dollar valuation to re-visit the stock to flow estimate. Bitcoin hasnt really sniffed the stock to flow projection in close to 10 months. This would indicate the model is either broken or Bitcoin is due for a sizable move up in price. Given the increase in hash-rate, I believe miners will push price increases since they control the flow of newly minted coins.

When you look at Bitcoin on a logarithmic scale over the course of several years, you can get a sense of when Bitcoin is nearing long-term trend support and resistance levels.

investing.com

Bitcoin has clearly struggled to break out and could potentially even retest the lower range of the multi-year uptrend. That would theoretically put the price of Bitcoin somewhere between $25-30k between now and April. That said, I don't believe that is the most likely scenario.

Nothing is without risk and the same is true for Bitcoin. Though I have a long-term core position that I regularly add to, the technical indicators that I've generally had my eye on in this secular bull run don't look terrific.

investing.com

I've favored the 8-week and 20-week moving averages when making medium-term decisions. Bitcoin closing above the 8-week moving average would give me a lot more confidence going forward. I do believe that will happen but I see potential resistance at the 20-week moving average. Failure to get above that line would likely confirm a bearish head and shoulders pattern. A close above would set us up for a test of previous highs.

There is also the concern that there could be some sort of regulatory action that has a negative impact on Bitcoin's legality in the United States. As Congress and the market await a crypto/CBDC report from the Federal Reserve, there's always the possibility that lawmakers or the SEC could create problems for the cryptocurrency space without the Fed's help.

Cryptocurrency is not for everyone. Understanding the relationship between mining profitability, hash-rate, and price is critical to understanding the current fundamental setup in Bitcoin. While I believe lower prices in the asset could potentially happen, I think there is a higher likelihood for miners to push for an increase in mining profitability in the short run. Long term, profitability will continue to decline but there will be ebbs and flows.

While the stock to flow model should never be the sole catalyst one looks at when deciding when to enter a Bitcoin position, if you believe the idea that the model is a justification for real value at any given time, going long spot here seems to be a pretty asymmetric bet that would favor bulls. I've increased my spot position in recent days and will continue to do so on any further weakness.

Bitcoin will go up because it must to maintain a secure network. The China precedent has been set and it has arguably strengthened the bull case for Bitcoin network security. It wasn't that long ago that China accounted for over 70% of the Bitcoin hash-rate. The country has since punted on Bitcoin mining entirely yet the network has stabilized and continues to chug along. As mining operations expand, hash-rate figures to continue to rise. Ultimately that means the price of Bitcoin must do the same.

Read more:
Bitcoin: It Will Because It Must - Seeking Alpha

After a rough start to the year, the price of bitcoin is about flat in the last seven days. The largest cryptocurrency by market value is currently trading at $41,671, according to Coin Metrics.

Ether, the second-largest, is up about 2% in the same time frame. It's now priced at $3,113.

Other top coins had a better week. Cardano, Terra and Dogecoin, for example, jumped over the last seven days, Coin Gecko data shows.

Along with price movement, here are six important things that happened in the crypto space last week.

In June, Kim Kardashian posted an Instagram Story promoting a cryptocurrency called EthereumMax.

"Are you guys into crypto???" she wrote. "This is not financial advice but sharing what my friends told me about the Ethereum Max token!" Kardashian included the hashtag "#ad," which indicates that the post was paid for as promotional content.

A class action lawsuit in the U.S.District Courtfor theCentralDistrict ofCalifornia was then filed on January 7, accusing Kardashian and other celebrities, like Floyd Mayweather, of "making false or misleading statements" about EthereumMax to allegedly increase its price.

Ryan Huegerich, a New York resident, filed on behalf of himself and other investors who bought EthereumMax between May 14, 2021 and June 17, 2021. The lawsuit claims Huegerich and others lost money on their investments.

Representatives for Kardashian and Mayweather were not immediately available for comment when contacted by CNBC. A spokesperson for EthereumMax told CNBC that the lawsuit was "riddled with misinformation" and disputed accusations that it was a scam.

On Wednesday, Twitter and Block founder Jack Dorsey announced plans to create a "Bitcoin Legal Defense Fund."

"The Bitcoin Legal Defense Fund is a non-profit entity that aims to minimize legal headaches that discourage software developers from actively developing Bitcoin and related projects," Dorsey wrote in an email.

The fund will defend bitcoin developers from lawsuits, "including finding and retaining defense counsel, developing litigation strategy and paying legal bills," with volunteer and part-time lawyers, he wrote.

On Thursday, Dorsey confirmed that Block, formerly known as Square, will be "officially building an open bitcoin mining system," hetweetedon Thursday. The company first announced that it was considering the project in October.

Bitcoin operates on aproof of work (PoW)model, where miners must compete to solve complex puzzles in order to validate transactions. The process isn't easy: It requires a lot of energy and computer power, which isn't cheap. The computers themselves, along with other equipment, can also be very expensive.

With these types of difficulties in mind, the project's goal is to make mining bitcoin, the largest cryptocurrency by market value, "more distributed and efficient,"tweeted Thomas Templeton, the company's general manager for hardware.

Templeton mentioned that there are a number of "customer pain points" and "technical challenges" in the mining community that Block hopes to address, including mining rig availability, high price, reliability and power consumption.

Dorsey has continued to focus more on bitcoin since his departure from Twitter in November.

On Monday, he announced that Block's Cash App integrated with the Lightning Network, which enables faster, cheaper bitcoin transactions. This now allows Cash App users in the U.S., except those in New York, to send bitcoin for free to anyone globally.

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