Category Archives: Bitcoin

When the Nigerian government suddenly banned access to foreign exchange for textile import companies in March 2019, Moses Awa* felt stuck. His business importing woven shoes from Guangzhou, China, to sell in the northern city of Kano and his home state of Abia, further south had been suffering along with the countrys economy. The ban threatened to tip it over the edge. It was a serious crisis: I had to act fast, Awa says.

He turned to his younger brother, Osy, who had begun trading bitcoins. He was just accumulating, accumulating crypto, saying that at some point years down the line it could be a great investment. When the forex ban happened, he showed me how much I needed it, too. I could pay my suppliers in bitcoins if they accepted and they did.

According to bitcoin trading platform Paxful, Nigeria is now second only to the US for bitcoin trading. The dollar volume of crypto received by users in Nigeria in May was $2.4bn, up from $684m last December, according to blockchain research firm Chainalysis. And the true scale of crypto flows through Africas largest economy is likely to be much larger, with many trades untraceable by analysts.

An array of factors, from political repression to currency controls and rampant inflation, have fuelled the stunning rise of cryptocurrencies in Nigeria. In February, the government took fright and banned cryptocurrency transactions through licensed banks. In late July, it announced a pilot scheme for a new government-controlled digital currency hoping to reduce incentives for those wanting to use unregulated crypto.

But these measures have done little to dampen trading, with exchanges reporting a continued rise in transactions this year.

Nigerias experience holds lessons for governments around the world, many of which are now thinking hard about how to regulate digital currencies. Britains chancellor, Rishi Sunak, is looking at creating a central-bank-controlled version, already being called Britcoin. EU regulators have set out plans to make digital currencies more traceable, in order to combat money laundering. In rural China, rows of computers used to create bitcoin in a computational process known as mining are being switched off after a clampdown by the authorities. The ruling party imposed a ban on transactions in May.

Elsewhere, Egypt, Turkey and Ghana have sought to clamp down on crypto trading, wary of potentially vast movements of digital funds beyond their regulatory controls.

Nigeria has one of the youngest populations in the world and is ripe for digital finance. With many people looking for ways to escape widespread poverty, pyramid schemes are proliferating.

Trading in foreign currencies is an everyday activity for many. Remittances into Nigeria from those working abroad, which were worth more than $17bn in 2020, have played a role, as has the way digital currencies can provide insurance against exchange rate fluctuations. The value of the Nigerian naira has plummeted almost 30% against the dollar in the past five years.

There are political factors too. Some see cryptocurrencies as vital protection from government repression.

Last October, Nigeria was rocked by the largest protests in decades, as many thousands marched against police brutality, and the infamous Sars police unit. The EndSars protests saw abuses by security forces, who beat demonstrators, and used water cannon and teargas on them. More than 50 protesters were killed, at least 12 of them shot dead at the Lekki tollgate in Lagos on 20 October

The clampdown was financial too. Civil society organisations, protest groups and individuals in favour of the demonstrations who were raising funds to free protesters or supply demonstrators with first aid and food had their bank accounts suddenly suspended.

Feminist Coalition, a collective of 13 young women founded during the demonstrations, came to national attention as they raised funds for protest groups and supported demonstration efforts. When the womens accounts were also suspended, the group began taking bitcoin donations, eventually raising $150,000 for its fighting fund through cryptocurrency.

Jack Dorsey, the founder of Twitter and a prominent advocate of cryptocurrencies, reshared the FemCo bitcoin donation page, further drawing the ire of Nigerias government, which last month suspended Twitter in Nigeria.

The sight of young people openly critical of government figures easily manoeuvring around restrictions shocked the countrys political class, according to Adewunmi Emoruwa, founder of Gatefield, a public policy organisation which gave grants to journalists covering the protests.

I think that EndSars is like the key catalyst for some of these decisions the government is making, he said. It caused fear. They saw, for example, that people could decide to bypass government structures and institutions to mobilise. It sent shockwaves and those shockwaves have continued.

During the protests, Gatefields bank accounts were suspended, until a court found the suspension unmerited and ordered that they be reopened earlier this year.

The episode reinforced the need many Nigerians felt to insure themselves against sudden moves by the authorities. Many organisations now keep some of their finances in cryptocurrencies.

Speaking anonymously to avoid reprisals from the authorities, a leading figure in one civil society organisation, whose accounts were also briefly suspended last October, said digital currencies were now a key insurance against hostile interventions.

We keep some securities in crypto not too much but enough, sort of as an insurance policy, they said. When the ban happened we were, thankfully, able to pay salaries. This way, in a situation like that, well have a way to keep paying our staff.

In February, the Central Bank of Nigeria responded by telling banks to close the accounts of all customers using cryptocurrencies. Financial institutions would have to identify persons and/or entities making transactions in crypto or face sanctions.

The ban was at first a blow to an emerging industry of cryptocurrency brokers who relied on commercial banks to facilitate transactions between sellers and buyers. However, many customers found workarounds, said Marius Reitz, Africa general manager at Luno, a cryptocurrency trading platform.

A lot of trading activity has now been pushed underground, which means many Nigerians are now depending on less secure, less transparent over-the-counter channels, as well as Telegram and WhatsApp groups, where people trade directly with each other, Reitz said. The ban has made cryptocurrency trading harder to monitor and less safe. This also means regulators now have a reduced level of visibility and control of the market, and unfortunately this can expose consumers to a higher risk of being defrauded.

Platforms have also adjusted, by continuing to facilitate transactions as long as the currency being traded is not declared as a cryptocurrency.

While some platforms experienced a hit in trades, for others, the clampdown has increased demand for cryptocurrencies, not dampened it. In the first five months of 2021, according to Helsinki-based platform LocalBitcoins, Nigerians traded 50% more than in the same period last year.

The Nigerian governments response to cryptocurrencies has in fact been inconsistent. Announcing the February curbs, the governor of the central bank, Godwin Emefiele, told a senate committee that cryptocurrency was not legitimate money.

At the same time, Vice-President Yemi Osinbajo publicly rebuked the move. Rather than adopt a policy that prohibits cryptocurrency operations in the Nigerian banking sector, we must act with knowledge and not fear, he said, calling for a robust regulatory regime that is thoughtful and knowledge-based.

Another Nigerian government agency, the Securities and Exchange Commission, has been more open to creating a more regulated environment for cryptocurrency transactions.

The reality that cryptocurrencies cannot effectively be stopped had gradually dawned on the government, said the operator of one Nigerian crypto trading platform, speaking anonymously after having been targeted by the authorities. They know they cant really stop it. Its out of their control, and what scares them is they are not used to being in this position.

* Not his real surname

Bitcoin was the first cryptocurrency, created in 2009, and remains the most widely known and valuable. Its a digital or virtual asset, operating outside of the traditional banking system, and its influence has soared, with a growing number of companies now accepting it for payments.

Each bitcoin is essentially a digital token containing a secret key that proves to anyone in the network who it belongs to. Effectively, each bitcoin is a collective agreement of every other computer on the bitcoin network that the token is real, created by a bitcoin miner, and then acquired through a series of legitimate transactions.

Each time bitcoins are spent, it becomes known to the entire network that their ownership has been transferred. Every transaction is stored in a lasting public record called a blockchain, which underpins the entire system, making it possible to trace a coins history and preventing people from spending coins they do not own.

For bitcoins many advocates, there are several advantages to the virtual system from the way the blockchain can be used to track things other than simple money, to support for smart contracts, which execute automatically when certain conditions are met.

But bitcoins biggest advantage is that it is decentralised and so extremely resistant to censorship or regulatory control by a single entity. Its possible to observe a bitcoin payment in process, but no one can stop it. This has made governments wary: in a conventional financial system, banks can freeze accounts, vet payments for money laundering or enforce regulations.

Thanks to the decentralised nature of cryptocurrency networks, people have been able to make international payments from closed or tightly restricted economies, but this has also made them a haven for illegal activities, from cybercrime to money laundering and drug trading.

Another concern about bitcoins is that they damage the environment. Bitcoin mining the process in which a bitcoin is awarded to a computer that solves a complex series of algorithms consumes vast amounts of energy. Miners set up large computer rigs to maximise the chances of being awarded bitcoins. The carbon footprint of this mining is now similar to Chiles, according to the Cambridge Bitcoin Electricity Consumption Index, a tool from Cambridge University that measures the currencys energy usage.

Advocates of bitcoin say the mining is increasingly being done with electricity from renewable sources. And while the amount of energy consumed by bitcoin has dropped significantly this year, concerns remain. Environmentalists argue that miners tend to set up wherever electricity is cheapest, which may be in places with coal-generated power.

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Out of control and rising: why bitcoin has Nigerias government in a panic - The Guardian

A rally by bitcoin on Monday wasnt all about a help-wanted ad from Amazon.com Inc., crypto analysts said.

The ad, seeking a digital currency and blockchain product lead got credit for getting the ball rolling as it stoked expectations the e-commerce and cloud computing giant could soon begin accepting bitcoin for payment. That theme was reinforced after City A.M., a London-based financial news organization, cited an unnamed Amazon AMZN, -7.56% official saying the company was considering doing exactly that by the end of the year.

Amazon denied the report. Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon, a spokesperson said in an emailed statement early Monday afternoon..

See: Bitcoin surges as Amazon hunts for cryptocurrency lead

Bitcoin BTCUSD, -3.72% pushed back above $40,000 in mid-afternoon trade for the first time since mid-June, according to FactSet, trading as high as high as $40,581.30 topping the $40,000 threshold for the first time since mid-June before pulling back.

Short covering in which investors who bet bitcoin prices would continue to fall liquidate positions appeared to be part of the picture, analysts said. Short covering can add to rallies as wrong-footed investors scramble to exit positions by buying bitcoin.

According to data from Skew, nearly $800 million in BTC short positions were liquidated on Sunday evening, wrote analysts at Fundstrat. Data from Bybt.com showed that more than $771 million in bitcoin positions had been liquidated in the 12 hours ending at 12 a.m. Eastern on Monday, with nearly $721 million coming from short covering.

Some analysts saw explanations around positioning as more credible when it comes to the rally than the Amazon developments. The move probably speaks more to the flighty nature of positioning in the crypto space, given that any move by Amazon to adopt cryptos is likely to be some way off, said Michael Hewson, chief market analyst at CMC Markets, in a note.

The rally may also have some technical momentum, which also begets more buying, said Fawad Razaqzada, analyst at ThinkMarkets, in a Monday note.

Prices had been coiling for several weeks and when they finally broke above the bearish trend line a few days ago, we have been seeing a few back-to-back green or in my case white candles, he said, referring to candlestick analysis. In particular, he was noting candles marking out sessions in which the closing price was higher than the opening price (see chart below).

It is clear that some speculators relying on price action must have decided it was the right time to get back on board, Razaqzada wrote.

Key resistance around $40,000 the shaded area on the chart remains intact for now, he noted. It will take a clean break above that zone to tilt the bias completely back to full-on bullish, he said, warning that traders will otherwise need to proceed with a higher degree of caution as this could turn out to be a short-lived spike.

Razaqzada and other analysts noted that cryptos appeared to find their footing last week after Tesla Inc. TSLA, +1.45% Chief Executive Elon Musk appeared on a panel discussion alongside Jack Dorsey, the CEO of Twitter Inc. TWTR, -0.88% and Square Inc. SQ, -3.14%, and Cathie Wood, CEO of ARK Invest.

Read: Bitcoin rises as Elon Musk says, I might pump, but I dont dump

Tesla Inc., which holds a bitcoin stake, was due to report quarterly results after the closing bell on Monday.

Are we also seeing some pre-emptive buying ahead of Teslas earnings today? Razaqzada asked. It could be that some speculators are anticipating pro-crypto remarks from Tesla CEO Elon Musk or his team when the electric car maker produces its quarterly results after the stock markets close tonight. So do watch out for that possibility.

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Bitcoin price surges toward $40,000 --- Here are 4 reasons - MarketWatch

HONG KONG/SINGAPORE, July 26 (Reuters) - Cryptocurrencies popped to the top of recent ranges on Monday as short sellers bailed out in the wake of a strong week and while traders hoped a handful of positive comments from influential investors might signal a turnaround in fragile sentiment.

Bitcoin rose as far as 12.5% to hit $39,850, its highest since mid-June during the Asia session, while ether hit a three-week peak of $2,344. On the heels of bitcoin's best week in almost three months, the move put the squeeze on short sellers.

Last week, cryptocurrency enthusiast and Tesla (TSLA.O) boss Elon Musk said the carmarker would likely resume accepting bitcoin once it conducts due diligence on its energy use. It had suspended such payments in May, contributing to a sharp crypto selloff. read more

Twitter (TWTR.N) boss Jack Dorsey also said last week that the digital currency is a "big part" of the social media firm's future and, on Sunday, London's City A.M. newspaper reported - citing an un-named "insider" - that Amazon is looking to accept bitcoin payments by year's end. read more

Representation of cryptocurrency Bitcoin is placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration/File photo

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Brokers said that taken together the remarks were enough to finally lift the market from the floor of support where it has held steady since a May plunge, while data also pointed to heavy short-seller liquidations - suggesting many might have given up.

"Over the last five trading sessions we've seen general near-term bullishness in the market, driven by key technicals, as well as recent positive comments," said Ryan Rabaglia, global head of trading at digital asset platform OSL.

"With a record $1.2 billion in shorts liquidated over the past 24 hours, the outlook and momentum for the week ahead is positive," he said.

Bitcoin was last up 8% at $38,064, putting it within sight of resistance around June's $41,341.57 peak just a week after it was testing support at $29,500.

Ether was last up 5% at $2,304.

Reporting by Alun John in Hong Kong and Tom Westbrook in Singapore; Editing by Christopher Cushing and Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.

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Bitcoin leaps 12% to test recent peaks, ether hits 3-week high - Reuters

Due to a surge of cryptocurrency-fueled crimes, federal law enforcement is seizing a lot of bitcoin. Now the US government is figuring out what to do with all of it.

This week, a small platform for safekeeping cryptocurrency called Anchorage Digital announced it had won a contract from the Department of Justice to store and liquidate digital assets that federal law enforcement seizes following criminal investigations. The government has essentially hired a bank to store and sell billions of dollars worth of forfeited cryptocurrency, including troves of bitcoin and ethereum. Anchorage Digital, which is based in San Francisco, is an obvious choice for a partner, as its the first federally chartered bank for crypto.

Theres no traditional bank that actually offers these services because this is extremely complex from a technical perspective, Diogo Monica, Anchorages co-founder and president, told Recode. Its very hard to store these safely. In fact, there are many, many stories of people losing access to their bitcoin and other cryptocurrency wallets and just losing access completely to them without the ability to be recovered.

That the US Marshals Service needs to hire a cryptocurrency company for help is a reminder that, as these kinds of digital assets go mainstream, theyre also becoming more popular with criminals. In fact, as law enforcement shut down illegal cryptocurrency operations, from ransomware schemes to illegal online markets, its clear that the US government could hold a very large amount of bitcoin, ethereum, and other cryptocurrency. Accordingly, Uncle Sam might even become a more significant player in the crypto marketplace in the months and years to come.

Since its creation, cryptocurrency has been popular for criminals because the accounts and transactions are difficult to trace back to any one person. Now crypto is at the center of a wide swath of illegal schemes, including blackmail scams, Covid-19 vaccine counterfeits, money laundering operations, and illicit sales on the darknet. In the first half of this year, people sent more than $2 million worth of cryptocurrency to Elon Musk impersonators following a grift on social media, according to the Federal Trade Commission (FTC). And earlier this month, a Swedish man was sentenced to 15 years in prison after he pleaded guilty to orchestrating one of the largest cryptocurrency-based Ponzi schemes the US government has ever prosecuted. The man had tricked people into sending him bitcoin, as well as other digital payments, under the guise of a (fake) gold-backed investment opportunity.

Cryptocurrency is not government currency, so its very international in scope, which is why it has become even more popular with transnational organized crime, as well as terrorism, said Suzanne Lynch, a Utica College professor who focuses on economic crime.

Through investigating these crimes and prosecuting the perpetrators, federal law enforcement has acquired a sizable cache of cryptocurrency. In June, the DOJ seized about $2.3 million worth of bitcoin the FBI had obtained after tracking the movement of a ransom payment associated with the Colonial Pipeline cyberattack earlier this summer. This was after the agency seized about $1 billion in cryptocurrency that once belonged to Ross Ulbricht, creator of the online black market Silk Road, which federal officials shut down in 2013. Ulbricht was arrested that year and convicted in 2015 of distributing narcotics and money laundering.

Theres no differentiation here between crypto and an oil tanker, for lack of a better example, or car or fiat [currency], when it comes to how it will ultimately be used in an asset forfeiture regime, said Ari Redbord, a former prosecutor and the head of government affairs at TRM, a cryptocurrency fraud detection startup.

The US Marshals Service is the agency in charge of holding and auctioning off many seized assets, including art, rare collectibles, and real estate, from disgraced pharmaceuticals CEO Martin Shkrelis Wu-Tang album to Bernie Madoffs apartments. Since at least 2014, the DOJs asset forfeiture program, which is run by the marshals, has taken the same approach with cryptocurrency and opened up the stores of crypto it seizes to bids from the public. But the Marshals Service announced in 2019 that it was looking for more help managing all these digital assets.

Pricing, how to price them, how to evaluate it, how to liquidate it, how to safe keep it people are being forced to deal with the asset class because its so prevalent now, Monica, of Anchorage, told Recode. To do that well can be especially tricky since cryptocurrency markets can be extremely volatile.

As the DOJ moves forward with its plan to manage digital assets, calls for tighter regulations on cryptocurrency are coming from higher and higher up. Sen. Elizabeth Warren (D-MA), for instance, said this month that cryptocurrencies should face tighter rules, while some senators recently proposed taxing cryptocurrency transactions to fund President Joe Bidens infrastructure plan. Earlier this month, Federal Reserve Chair Jerome Powell even suggested that the federal government could launch a digital version of the US dollar as an alternative to cryptocurrencies, though hes still undecided on whether thats a good idea.

Despite lawmakers and regulators growing concern about cryptocurrencies, their popularity is forcing the government to adapt. One recent survey from NORC, a research institute at the University of Chicago, found that 13 percent of people in the US bought or traded crypto in the past year alone, compared to the estimated half of US households that have invested in the stock market, according to Pew.

This all serves as a reminder that cryptocurrencies are only becoming more prevalent, which means that crypto scammers arent going away anytime soon. So beware of demands for cryptocurrency payments from fishy romantic prospects, too-good-to-be-true investment opportunities, supposed blackmailers, and people claiming to be Elon Musk. If youre not careful, your bitcoin might end up in the federal governments new crypto bank.

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Bitcoin-based scams mean the federal government now needs a crypto bank - Vox.com

Digital currency markets have been gathering gains again moving past the lows seen a few weeks ago. This week crypto traders have been discussing over-the-counter (OTC) desks bubbling with demand for bitcoin as the co-founder of 21st Paradigm explained, high net worth individuals [and] institutions want your bitcoin.

Most traders either use decentralized exchange (dex) platforms or centralized exchange (cex) operations to acquire bitcoin (BTC) and a myriad of other digital currencies. However, high-net-worth individuals and institutions usually dont leverage dex or cex applications, as they choose to trade via over-the-counter (OTC) trading desks. OTC trading or off-exchange trading is trading between two parties directly and usually with help from the OTC desks representative. In contrast to trades that take place on cex or dex platforms, these trades are not recorded on order books. Although, transfers from crypto OTC desks can be recorded.

Two days ago, the co-founder of the advisory firm 21st Paradigm, Dylan LeClair, tweeted about some large OTC transfers last week by sharing a chart from Glassnode analytics. Big transfer volumes from OTC Desks over the last week, LeClair said at the time. High net worth individuals [and] institutions want your bitcoin, he added. Another individual agreed with LeClair and said Yessssirr, because the individual, Will Clemente, shared a tweet on July 22 that had shown a similar trend.

OTC Outflow RSI showing the strongest BTC buy signal since July of last year, the analyst Will Clemente said to his 158,000 Twitter followers. This indicates buying from institutions/high-net-worth individuals, he added. A number of other traders discussing the subject on Twitter agreed with the OTC demand assessment and the social media platform is littered with threads discussing the subject. One individual tweeted:

Dont give the smart money your BTC (or ETH)

A number of other whale-like and large purchasing patterns were noticed by bitcoiners observing different metrics. While bitcoin has been rising, traders also suspect that China might be buying bitcoin. There have been a few noticeable market changes during the early morning hours in China, according to Trustnodes research.

Meanwhile, during the last 24 hours bitcoin (BTC) has consolidated just above the $41K handle and has only moved +0.10% on Sunday, August 1. However, BTC is still up 17% against the U.S. dollar during the last week and 30-day stats show BTC has gained over 22%. Bitcoin had managed to jump above the $42K handle at $42,615 per unit, but has not been able to hold above the $42K zone for long periods of time.

What do you think about the bitcoin OTC demand assessment from traders and analysts on social media? Let us know what you think about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Glassnode, Tradingview, Twitter, Will Clemente

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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Analysts Discuss Bitcoin Over-the-Counter Desks Bubbling With BTC Demand Markets and Prices Bitcoin News - Bitcoin News

Fate loves irony. Just one day before the bitcoin bull run of 2017 topped out, one of South Korea's best professional esports players Jeon "ikssu" Ik-soo announced that he was retiring to become a full-time crypto trader.

As bitcoin entered into a multi-year bear market , Ik-soo had to quietly come back to pro-gaming. However, his shocking move put cryptocurrencies on the radar of many esports enthusiasts.

One of them is Joseph Edwards, who was a professional esports coach and analyst for several teams in North America and Brazil at the time. As he fell into the crypto rabbit hole, the Oxford grad decided to make a bold transition into another emerging industry.

Today, Edwards wears a very different hat as the head of research at Enigma Securities, a cryptocurrency firm in London focusing on liquidity and treasury solutions.

He is not the only one who naturally gravitates towards gaming and crypto. The 29-year-old FTX billionaire founder Sam Bankman-Fried has said that he is "(in)famous for playing League of Legends while on phone calls."

Edwards thinks there is a natural overlap between pro gaming and crypto. Whether it's the demand for adaptability, the young demographics, or the competition, hustlers in both industries have to go above and beyond.

"Crypto, just like esports, is an industry where there's no barrier of entry and there are like 100,000 people just behind you who want to do what you're doing better than you," Edwards said in an interview. "Adaptability and competitiveness, you have to be both of those things because if you're not, then somebody else will take it from you."

Having worked in the crypto industry for just about two years, Edwards has already found success forecasting bitcoin's price trajectory.

When bitcoin broke above $20,000 for the first time ever in mid-December last year, he issued a research note mapping out its path to $60,000 a milestone it cleared in mid-March.

"If BTC reaches even 10% of the market cap of gold on a nominal basis, it implies a fully diluted valuation of $60,000 or 3x from current levels, 19x from the cycle nadir in 2019," he wrote in the Dec. 16 note.

Right now, as bitcoin trades just below $40,000 after a massive short squeeze sent it surging 22% in the past seven days, Edwards expects to see another short-term spike followed by more drawdowns in September.

The next leg-up is likely to be another mechanical move caused by a shift in the retail-driven crypto derivatives markets over the past two months, according to Edwards.

He explains that the collateral for crypto derivatives contracts has historically been held in bitcoin, but traders are increasingly using US dollars or stablecoin Tether as collateral, resulting in about 64% of all open interest being held in USD- or stablecoin-denominated derivatives.

"If you are holding bitcoin as collateral, your collateral is worth less over time as the price goes down, so you get liquidated more easily," he said. "Whereas on the upside, collateral price is going up, so it's a lot harder to get liquidated if you're shorting the market."

Edwards believes that the recent break to the upside has been assisted by the fact that all these collaterals are being held in US dollars, which caused the shorts to be liquidated and squeezed.

Another such squeeze could lift bitcoin to the $45,000 to $46,000 range in the next month, but bitcoin will likely grind lower as more regulatory actions are announced in September, he said.

In the long term, he is betting on bitcoin to hit $250,000 by 2025 as it reaches 20% to 25% of gold's market cap and the entire crypto market develops into a $10 trillion market.

Unlike many bullish forecasters, Edwards thinks cryptocurrencies have already plunged into a bear market, but the end of that bear market is probably nearer in sight than people would expect.

"For the most part, what retail investors should probably be doing in crypto bear markets is stepping back for a few months," he said. "You can't really escape a crypto bear market by going into altcoins. If bitcoin does go down further, we will see further drawdowns across the board."

Over the long term, he is "genuinely interested" in the fundamentals of the Solana (SOL) and Algorand (ALGO) protocols.

Solana, which is designed to facilitate the creation of decentralized applications, aims to improve scalability by introducing a hybrid of proof-of-history and proof-of-stake models. In some regards, it is cheaper, faster, and easier to use than ethereum.

"Do I think Solana is going to get to 30% to 40% of ethereum's market cap? It's not certain but there is definitely the potential," Edwards said. "Over the next five years, if it succeeds, Solana can easily go up 15 times to 20 times versus the rest of the ecosystem."

Algorand, which powers decentralized finance activities as ethereum does, similarly claims to enable faster transaction speeds, lower costs, and improved security compared to other blockchains. It is also committed to being environmentally green and efficient, which has become a lightning rod for the high-energy-consumingbitcoin.

The MIT computer science professor-founded protocol, which has a current market cap of $2.6 million, could go up at least 10 times over the next three to five years, according to Edwards.

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Price Forecast for Bitcoin and 2 Altcoins, From Crypto Research Head - Business Insider - Business Insider

Miami Mayor Francis Suarez on using cryptocurrency to expand the city's economy and its potential impact on residents.

Bitcoin crossed the $40,000 plateu late Tuesday night, before a slight pullback.

Early Wednesday morning Bitcoin was up more than 6%.

The price was around $39,7500 per coin, while rivals Ethereum and Dogecoin were trading around $2,300 and 20 cents per coin, respectively, according to Coindesk.

Bitcoins mining difficulty may be set to increase for the first time since Chinas crackdown on crypto mining in May, according to Coindesk.

MAYOR SUAREZ ON MIAMICOIN LAUNCH, SAYS CITY IS FOCUSED ON DIFFERENTIATING OUR ECONOMY

Being blamed are the rapid expansion of mining facilities in North America and the return of Chinese miners through overseas hosting sites.

Mining difficulty is a metric to describe how hard it is to mine a block and get rewards in bitcoin.

An increase in mining difficulty requires a miner to use more computing power to earn bitcoin, which reduces the miners profit margin.

Miami Mayor Francis Suarez discussed MiamiCoin, the citys newest cryptocurrency initiative, during an appearance on "Varney & Co." on Tuesday. The mayor says the city is focused on differentiating its economy by creating the new wave of technological products.

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Suarez calls Miami the bitcoin capital of the world.

"The City of Miami could end up earning millions of dollars as a result of the popularity of MiamiCoin," Suarez said. "We're focusing on differentiating our economy by creating the new wave of technological products that will incentivize people to move to Miami and be part of our tech ecosystem".

Whenever a MiamiCoin is mined, a percentage of the coin by virtue of the programing goes to the City of Miami.

Miami hosted the 2021 Bitcoin conference last month.

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Bitcoin price touches $40,000 - Fox Business

When a valuation of a company is made, it is done by modelling future cash flows and discounting them to the present-day value in a discounted cash flow model. Fundamentally, this relies on the estimates of future cash flows to accurately determine what the current valuation for a company should be. All sorts of assumptions need to be made to accurately determine this competition in the marketplace future demand for the product or service, and technological innovations all among them.

Another factor that has to be accounted for is monetary policy, which is something weve seen largely increase the value of equities as a result of looser monetary policy, cheap debt and pulling back future cash flows. So even though a discounted cash flow model is severely flawed, it can give us a starting point through which to value a company because there are fiat cash flows associated with it.

Looking at this through the lens of bitcoin, it has no fiat cash flows, so trying to determine a fiat valuation the same way we do for a company is entirely flawed. A better way to understand it is looking at it through the lens of What problem does this solve? Not only does this eliminate the issues presented earlier in the discounted cash flow model, but it also gives a relative framework through which to evaluate it relative to other assets.

One of the questions you should ask when evaluating any product is functionally, What problem does it solve? Thats the first question you should ask when evaluating a product; but functionally this is more important when evaluating an asset. Since bitcoin is both a product and an asset, understanding the product/market fit is a fundamental pillar in beginning to determine a dollar valuation for it.

That moves us to answering the question. When you begin to go down the line and look at the various asset classes, the answer becomes clear. It solves the store of value problem. But, not necessarily in the way that is commonly thought of as solving that problem. The way we can see this in the real world is to look at other asset classes and ask Does this solve the store of value problem? What we see is that no other asset or asset class does, leaving a gap in the market (people that want a sound place to store their monetary energy) and the products that solve that (more on that below).

Gold is technically a store of value thats broadly kept up with the money supply in recent decades, however, it is a failed store of value. The reason its a failed store of value, is that while gold has kept up with the M1 supply, it has failed to keep up with real estate and the bonds that back that real estate. This is largely due to physical properties of gold that make it a poor store of value. Lack of easily verifiable supply, not being salable, and largely centralized in practice make it fully unfit to store value. And the market has determined that to be the case. Real estate has eclipsed gold many times over as it functionally along with bonds became the de facto store of value of the late 20th and early 21st century.

The bond market serving as a store of value worked, at least to some degree, until the 2008 financial crisis when nominal yields went close to zero and real yields went negative. Since bonds (Treasury and agency and lately even corporate and junk bonds) cannot even keep up with the pace of inflation, bonds have now also become a completely failed store of value.

Real estate then would be the next place one would look for a store of value and for the last decade plus, it has served that purpose. However, real estate (especially residential) was never intended to serve as a store of value. Among the issues that prevent real estate from being a long-term store of value are its reliance on monetary policy (without the credit expansion and fiscal policy it cannot sustain), demographic shifts in populations (baby boomers in the United States hold the vast majority of the real estate value, and younger generations do not have the wealth to buy these homes at record values), and salability across time and space (real estate is time consuming to transfer and takes multiple third-party intermediaries).

That leaves us with equities, and why nominally, weve seen record high valuations for equities over the last decade plus. Not because equities provide a true stable store of value (again we are discounting unknown future cash flows to come up with the valuations here), but because everything else has failed. The problem with equities is that functionally rates cannot go much lower, so they are close to being tapped out as a store of value (they can continue to go higher nominally, if the government implements Universal Basic Income payments).

Circling back to bitcoin and trying to come up with a dollar valuation around it, it solves the problems that gold faces (its more salable, censorship resistant, and less centralized), while also being less likely to be subject to manipulation (through the ease of storing your own keys). That gives us a really low-ball end on which we can say we could value bitcoin at and thats above gold's market cap $10 trillion.

Again though, gold is functionally a failed store of value so this is just a starting framework for which we would set a lower-bound estimate. I think the broader valuation that we can use is the bond market. The global bond market is between $130-300 trillion depending on different sources/estimates. Conservatively, if we assume bitcoin solves the store of value problem better than bonds and real estate and this is definitely true on a long enough time scale, as bonds have lost real value for over a decade then we can safely assume it solves the store of value problem better than the bond market. Therefore, a $130 trillion valuation is a safe, conservative estimate for bitcoins valuation framework. This would put the price per coin at approximately $6.5 million per coin, based on todays U.S. dollar value. Thats arguably extremely conservative, as it does not account for the derivatives market which is estimated to be over a quadrillion U.S. dollars.

This is a guest post by Mind/Matter. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

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How Bitcoin Solves The Store Of Value Problem - Bitcoin Magazine

Cryptocurrency, a form of digital asset that is based on the idea of distributed ownership, is the newest craze in town. Investors see in it the possibility of a good return and consider it a store of value. There have been several digital coins in circulation for almost a decade but a rapid rise in their value earlier this year made them a popular investment destination now. The market crashed soon after, giving those on the fence an opportunity to buy the dip and get involved with what some have called the world's future currency.

Can cryptocurrencies become the future currency of the world? There's some uncertainty. Firstly, they are highly volatile. Secondly, they still lack regulation and government backing in most countries. Despite these issues, the crypto market is thriving, and more coins are being added to the vault. According to market research firm CoinMarketCap, there are more than 1,000 types of crypto coins in circulation today.

What are the most popular cryptocurrencies?

Bitcoin is the world's oldest and the most popular digital coin. It was launched in 2009 by an anonymous person (or group of persons) under the pseudonym Satoshi Nakamoto. On June 1, Bitcoin was trading at Rs. 26,40,420; on July 30, the price closed at Rs. 29,13,645. Bitcoin's current market capitalisation is Rs. 58.3 trillion.

Ethereum is currently ranked second. Ether is the main token of the Ethereum blockchain. It was first described in 2013 by Russian-Canadian programmer Vitalik Buterin in a white paper. Later, Buterin, along with other co-founders, crowdfunded the project via an online sale next year. They officially launched the blockchain in July 2015. On June 1, Ethereum closed at a price of Rs. 1,87,286; on July 30, it was trading at Rs. 1,74,817. The current market cap is Rs. 21.3 trillion.

The largest digital coin by market value, Tether is what's known as a stablecoin. Unlike most cryptocurrencies, these coins are tied to real-world assets to maintain a stable value. Tether was designed to be pegged to the US dollar for stability, but the firm has revealed it does not have enough dollar reserves to maintain stability. In the last 15 days, Tether's price has dipped from Rs. 74.61 to Rs. 74.41. Its market cap is Rs. 4.6 trillion.

Founded in 2017 by Ethereum co-founder Charles Hoskinson, Cardano is a proof-of-stake (PoS) blockchain platform. Under the PoS model, owners put up their tokens as collateral to get authority over the token in proportion to the amount they stake. Cardano traded at Rs. 90.24 on July 16. And by July 30, it had reached a value of Rs. 94.62. The current market cap is Rs. 3.1 trillion.

Ripple, a US-based technology company, created the XRP digital coin in 2012 to be a quick, cost-efficient, and more scalable alternative to digital assets and existing monetary payment platforms like SWIFT. You can buy XRP on any digital currency exchange and store them in a hot or cold wallet. Its price has jumped from Rs. 44.81 on July 16 to Rs. 54.61 on July 30. Its market cap is Rs. 2.6 trillion.

Launched as a meme-based currency to poke fun at Bitcoin, Dogecoin became so popular with people recently that it has taken on a life of its own. Based on the popular doge meme, it features the Shiba Inu face on its logo. Software engineers Billy Markus and Jackson Palmer launched the digital coin in 2013. After remaining in oblivion for almost seven years, billionaire entrepreneur Elon Musk endorsed it and began pushing it on his social media handle. On July 16, it traded for Rs. 13.35 but had gained some value to reach Rs. 15.71 by July 30. Its price has seen ups and downs throughout it journey. The market cap is Rs. 2 trillion.

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Bitcoin, Ethereum, Tether: A Look at Top Cryptocurrencies and Their Worth - Gadgets 360

1. Bitcoin Hits Key Level Not Seen Since May Amid Wood, Musk Boost  Bloomberg
2. Jack Dorsey says bitcoin will be a big part of Twitters future  TechCrunch
3. 'I might pump but I dont dump': Elon Musk says he plans to hold bitcoin long-termhere's why that could be a good strategy  CNBC
4. Elon Musk Still A Bitcoin 'Supporter': 'I Own Bitcoin, Tesla Owns Bitcoin, SpaceX Owns Bitcoin'  Forbes
5. Bitcoin climbs as Elon Musk says Tesla 'likely' to accept it again  BBC News
6. View Full Coverage on Google News

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Bitcoin Hits Key Level Not Seen Since May Amid Wood, Musk Boost - Bloomberg