Category Archives: Bitcoin

Technically speaking, Bitcoin is a decentralized computer network. But this one has a special twist: Fearing inflation and currency devaluation, the first companies have exchanged parts of their account balances for Bitcoin. In El Salvador, Bitcoin has now become the second official state currency alongside the US dollar.

Bitcoin was launched in 2008 by an inventor who remains anonymous to date. In its early years, Bitcoin was a project for a fairly small group of IT professionals that wanted to improve the global financial system and began using Bitcoin for trades and investment. In 2013, the Bitcoin price briefly jumped above the US$1,000 mark for the first time, followed by a significant price drop and a few years of silence. Then, in 2017, Bitcoin reached the magic mark of 20,000 US dollars per Bitcoin. Again a significant price drop and a few years of silence followed. Then, in the spring of this year, bitcoin reached the $65,000 mark. Again, the price dropped significantly and is now hovering around $35,000 per bitcoin. What has happened over the years? Will Bitcoin come back again and again; only to pause for a few years at a time? As of today, the valuation of all Bitcoins combined is around $700 billion, which is about 6% of the valuation of gold. This means that Bitcoin has already reached a certain size. At least Bitcoin is so big that it deserves serious attention. Besides Bitcoin, there are countless other cryptocurrencies. All cryptocurrencies together have a valuation of $1.6 trillion. However, the biggest chunks of that are Bitcoin and Ethereum. These two technologies have it all. In contrast, many projects are not to be taken seriously, and numerous projects are even fraudulent.

Money and the World

In the case of Bitcoin, it can be noted that it has slowly worked its way onto the world stage. One of the most significant events in the Bitcoin universe last year was when Microstrategy - an IT company from the U.S. - exchanged part of its account balance, normally quoted in U.S. dollars of course, for Bitcoin. The calculus of Michael Saylor, CEO of Microstrategy, was this: Saylor expects the U.S. dollar to weaken, which will be accompanied by a loss of purchasing power. The reason is years of piling up debt, which accelerated during the Corona crisis. This national debt was bought up by the central bank. Thus, one can confidently say that the central bank financed the national budget and ultimately, in effect, printed money. This money is now in circulation and is pushing into the markets. It is well known that the European Central Bank (ECB) has acted in exactly the same way here in Europe.

CEO Michael Saylor felt it was his duty to protect his company's purchasing power and came to Bitcoin this way. Bitcoin is a scarce commodity and there will never be more than 21 million Bitcoins. Thus, it is limited in its supply - as is gold. In addition, Bitcoin spreads quite slowly over the years. Both developments combined have led Michael Saylor to classify Bitcoin as a future store of value.

What was perceived as a daring move by many in 2020 may turn out to be a smart move in the end. Last week, inflation was measured at 5% in the US. It is conceivable that inflation will rise even further. What does this mean? The purchasing power of the dollar is dwindling; fewer goods can be bought for the same amount of U.S. dollars due to rising prices.

At this point, it is important to remember exactly what inflation feels like. Every European is likely to experience this personally in the coming months. Inflation feels like this: "Man, the hairdresser has become expensive. It used to cost 25 EUR, now it's 35 EUR." Or: "Hmm. This sandwich costs 8.50 EUR. It used to be cheaper." Or: "Wow, gasoline hasnt been so expensive for a long time."

Inflation means that prices are rising. And how does this feel? When we feel like everything around us is getting more expensive. And when the shares of DAX companies reach new highs month after month, even though we are just stumbling out of one of the worst crises in decades. Or when you try to buy a property and even the most expensive properties are bought straight away directly after they have been posted on the real estate portal.

In Germany, inflation was recently recorded at over 4%. Anyone who has recently refueled gasoline can understand this. Anyone who is renovating their house will also see that various materials have become more expensive. Of course, there is a story for every commodity: in the case of gasoline, it is the oil-producing countries that have restricted their production quota. For construction, it's a sudden shortage of wood. But the common denominator remains: Across the board, prices are going up; everything is getting more expensive. Time will tell if Microstrategy-CEO Michael Saylor had the appropriate tactics. At present, it seems he is right. The question now is: Will there be other companies that replace traditional currencies in parts with Bitcoin? Yes, Tesla also made this move in 2021. Some other more obscure companies as well.

Some weeks ago, the Bitcoin community could not believe its eyes when Nayib Bukele, the president of El Salvador, a small authoritarian-ruled country in Central America, announced that he would set Bitcoin as the second state currency alongside the US dollar. Just a few days later, this very step was put into action by the parliament in El Salvador.

What may seem bizarre and hard to believe could hardly be more interesting: El Salvador previously had only the US dollar as its official currency. As a result of the expansive monetary policy of the USA, El Salvador is also being affected by the softening of the US dollar: The 5% inflation - i.e. loss of purchasing power - naturally also has an effect in El Salvador. In this respect, it is even understandable if a state tries to become more independent.

Also last week, the first details of how both currencies can coexist became known: Prices can continue to be quoted in U.S. dollars. Citizens can continue to pay with U.S. dollars. But there will be an additional payment app that will allow every citizen in El Salvador to have a digital wallet to hold bitcoin. The president of El Salvador hopes that this will offer financial inclusion to large sections of the population who previously did not have a bank account. It remains to be seen whether this approach will succeed; there are good reasons to be optimistic about it. The bitcoin would then be in the payment app and can also be used for payment purposes. So at the moment of payment, the customer and the merchant would each have to decide which currency to use and which currency to credit to the merchant. For this purpose, El Salvador now wants to build up a Bitcoin currency reserve of 150 million US dollars. An invitation promptly followed from the International Monetary Fund, where an appointment will take place in the coming days. Certainly with awkward questions.

From all these stories, one can see several things: Bitcoin is spreading quite slowly, but the daily and weekly volatility transfigure the view of the essentials. Further, it shows that established institutions will sometimes have some difficulty making friends with Bitcoin. Last but not least, Bitcoin is a network where the activities of numerous players are interwoven internationally.

First of all, Bitcoin is a decentralized network of 10,000 computing nodes, distributed in all countries in the world. This means there is no central authority. So there is no corporate headquarters, no corporate building, no company behind Bitcoin. The character of a decentralized network has it in itself, because only the technology is in the foreground, no operating company. So this decentralized network is beyond the reach of states. Who should the state address as well? Bitcoin has no summonable address, Bitcoin cannot be summoned by authorities. It is pure technology. And it has been running without interruption for over ten years. Nothing discernible should change this. Therefore, its safe to assume that Bitcoin will continue to run without interruption for the next few years. Incidentally, this does not only apply to Bitcoin, but also to the number two - Ethereum - and to numerous other decentralized protocols.

If you want to shut down Bitcoin, you would have to shut down the Internet - an impossible undertaking. Bitcoin could be hostilely taken over, but it can now be claimed that this is no longer factually possible: The Bitcoin network currently calculates 150 million tera hash operations per second. Behind a million tera hash is a number with 18 zeros. Presumably, no state in the world can muster as much computing power combined with the required power consumption. And if it were possible, it could only destabilize the network for a few minutes or even hours. After that, the network would just keep running. Therefore: we will have to get used to Bitcoin and other decentralized protocols. They are not going to go away.

As is well known, this computing power costs a lot of electricity. This can be criticized, but here, too, one has to go one level deeper: electricity consumption must first be evaluated neutrally. Or don't you watch Internet TV in the evening? Do you never play computer games? Don't write emails? All of this also costs electricity. Therefore, it matters much more whether brown electricity from coal and gas or green electricity from hydropower, solar or wind energy is used. The Bitcoin network uses 55% to 65% electricity from green sources, depending on the estimate. That doesn't make electricity consumption any better, but it does put it in a slightly different context. It's worth digging deeper. The problem is that Bitcoin's architecture cannot be adapted in the short term and electricity consumption is more likely to increase.

At this point however, it must be clearly stated that Bitcoin is not unregulated. Individuals and companies that own, buy, and sell Bitcoin are, of course, subject to the legal system in which they reside. Those who interact with the network - owners, buyers and sellers of Bitcoins - must of course abide by the law, even if the network itself is beyond the reach of states. For companies in the financial industry, the state also issued clear rules at the beginning of 2021. For example, the German government already classified Bitcoin for private individuals quite clearly a few years ago. In short: people are allowed to own and trade Bitcoin as long as they do not engage in money laundering, do not commit tax fraud and do not carry out other criminal activities. Bitcoin is therefore not unregulated. This is essentially true for all other European countries and the United States as well. It turns out that these countries let their citizens and companies handle Bitcoin because the legal framework is mostly clear. This freedom therefore requires a functioning and effective state apparatus in order to be able to punish corresponding offenses. "Freedom, but within limits" is how one can summarize the attitude of Europe and America towards Bitcoin & Co. According to estimates, there are 1.5 to 2 million Bitcoin owners in Germany with a clear upward trend.

The situation is different in Turkey, for example. There, the inflation rate has risen to a value beyond 10% and the Turkish lira is increasingly losing value. To prevent young people in particular from using alternative payment methods, the use of cryptocurrencies for payment purposes has been stopped. But by no means are cryptocurrencies banned in Turkey. Investing and owning them are allowed, while usage as a means of payment is prohibited. The Indian government had decided to ban cryptocurrencies completely some time ago. One conceivable reason for this: because of the complex nature of governance in the Indian state, offenses and criminal activities are not punished as stringent as elsewhere. This could have been a major reason for the complete ban - as a possible result of ineffective state structures. Bitcoin is not fundamentally banned in China either, rather there are restrictions for certain services with cryptocurrencies, and recently large-scale industrial Bitcoin mining unless renewable energy is used. There is no sign of a trend towards uniform global regulation, even if Christine Lagarde of the ECB would like to see it. Instead, each state acts differently, but to some extent comprehensible in itself: from Bitcoin as legal tender in El Salvador to a complete ban in India.

In any case, cryptocurrencies are fascinating. A global ecosystem has emerged with, in some cases, completely different perspectives. It's worth taking Bitcoin increasingly seriously. And it's worth learning more about Bitcoin. A good start would be, for example, the Wikipedia page of Bitcoin.

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Bitcoin: Where do We Stand In Summer 2021? - Forbes

Photo by Dan Kitwood/Getty Images

If you know you have an old bitcoin or dogecoin account somewhere but havent gotten around the digging up your login information, you may have a nasty surprise waiting for you.

With the rise of cryptocurrency, nine states have now adopted rules that include it as a form of unclaimed property and several more are requiring or recommending that companies report their unclaimed virtual currency. That means that this fall, when banks, insurers, retailers and state government agencies are required to annually report and remit any unclaimed funds, your old cryptocurrency account could be liquidated and turned in to the states unclaimed property office.

There are a lot of concerns about this possibility, not the least of which is the fact that liquidating a cryptocurrency account prevents the owner from realizing any future gains.

But theres also a larger economic issue, says Kristine Butterbaugh a solution principal,at the tax firm Sovos.

Some of our clients dont want to liquidate these accounts because it could have an impact on the market as a whole, she says. Were talking millions of accounts, potentially, across the country.

Whats muddling things is a lack of clarity on the rules around cryptocurrency. Unclaimed property law is written for traditional property but now its being enforced for non-traditional property.

Heres how unclaimed property law usually works: Every fall, businesses are required to remit any unclaimed property to the state. For accounts and other financial instruments to be considered unclaimed, they have to be dormant for three to five years, depending on the state. That means the account holder hasnt accessed the account or responded to any communications. Once the account is deemed unclaimed, it gets transferred to the states general fund.

Thats all well and good when were talking about a traditional bank account that is sitting around earning minimal if any interest. But states arent equipped to hold cryptocurrency, so theyre telling firms to turn those accounts into cash before handing them over.

Now lets say you watched the meteoric rise of dogecoin this past spring and decided to go hunting for those coins you invested in on a whim a few years ago. And when you finally tracked them down you discovered your account was liquidated back in November, robbing you of thousands of dollars in potential earnings? Youd probably be pretty angry.

Companies are in a really uncomfortable position because theyre unsure whether or not they should be liquidating for fear of owner retribution down the road, says Butterbaugh. And then you have the state saying, You have to, even if its not explicitly in the statute.

States are also motivated to enforce unclaimed property laws because its a revenue gain for them. Although the state keeps track of the amount due and the rightful owner can still eventually claim the moneyat any time, states in the meantime can use the money for their general operations. This may seem like a gamble, but only about 2% of unclaimed property ever gets returned to the true owner, according to Accounting Today.

Delaware home to more than a million companies is one of the most aggressive states when it comes to auditing companies on unclaimed property law compliance and has secured hundreds of millions of dollars over the last decade in unclaimed property and fines.

So, companies are stuck between not wanting to get dinged for noncompliance and being afraid to liquidate a cryptocurrency account. They want more clarity on what to do and Butterbaugh says two places New York and Washington, D.C. are working on a solution.

But in the meantime, she advises companies dealing in cryptocurrency to start addressing their dormant accounts now.

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Havent Checked On That Bitcoin Account In A While? Your State Could Have It Liquidated - Forbes

If you are an investor who dabbles in cryptocurrencies, or even are what we in the industry call crypto-curious, you know ethereum ETHUSD, -1.94% as the No. 2 cryptocurrency behind bitcoin BTCUSD, +2.60% and the blockchain imbued with the ability to write self-executing smart contracts right into the code underlying a transaction between parties.

What you might not know about is some of the complexities of how the ethereum blockchain functions, its challenges in terms of security, scalability and energy consumption. Ethereum has a market capitalization over $250 billion and at least five times greater than its competitors. But high fees and network congestion have degraded performance and priced certain activity out of the market, providing an opportunity for a variety of competitor blockchains to emerge. Conceived and funded in 2017, these blockchains are now jockeying to make inroads in the smart contract market by providing alternative solutions to some of its problems.

These blockchains, with names that certainly would fit into any horse race (such as Cosmos, Solana and Polkadot) each have their own competitive characteristics that have positioned them well against challenges for ethereum. (Bitcoin, as the first and biggest blockchain, is and may always be the No. 1 with its unrivaled status as digital gold.)

A big drawback that ethereum developers are seeking to shore up is that, like with bitcoin, its mining is incredibly energy-intensive. In the proof of work (PoW) consensus algorithm currently used by both bitcoin and ethereum, so much computing power is used to solve ever-more complicated equations that the University of Cambridge estimates the annual electricity usage of ethereum to be on par with the country of Ecuador, a country of 17 million people. Bitcoin would be similar to Argentinas annual energy consumption, according to these calculations.

Other blockchains have addressed this problem by using proof of stake (PoS) models in which cryptocurrency is used as collateral to secure activity instead of relying on computations typically carried out at massive data centers. Ethereum is now also speeding in that direction as well and should get there as early as the last quarter this year.

Another technical aspect that is hurting ethereum is congestion, where intense activity runs up transaction fees, known as gas prices. Here, ethereum is a victim of its own success attracting many more users than other competitor blockchains. In a way, its like a popular restaurant where patrons find it difficult to get a table.

Still, this has provided a window of opportunity for competitors as users look elsewhere for cheaper and faster alternatives. For instance, Solana, which announced last month a $314 million fundraising round, is much faster and cheaper to use due to its ultra-high scalability.

Congestion is also often created by traders bots written to do front-run and back-run ethereum mining transactions in ever-more sophisticated arbitrage activities. But here again, there is evidence that ethereum can stay ahead. There is a newly created research-and-development organization called Flashbots that has been undertaking activities to manage the arbitrage happening on networks, and already gas fees have fallen.

Ethereum has to move carefully to transition from PoW to PoS while its competitors build their proof-of-stake blockchains from scratch. To use another analogy, it is as if ethereum was a plane changing its engines in mid-flight while its competitors took off with the latest model already in place.

Still, ethereum is responding aggressively to keep its smart-contact crown. Ethereums developers and proponents are responding by improving the blockchains scalability. Initiatives have gained traction in recent months to reduce congestion. Known as layer 2 solutions because they manage activity away from the base-layer blockchain, these innovations batch transactions in a way that reduces pressure on ethereum to settle transactions so frequently.

As a result of Flashbots and the rapid adoption of these layer 2 solutions such as Polygon, average gas fees decreased by 80% on the ethereum network in the second quarter.

Other ethereum-boosting activities include enacting an upgrade in the next few weeks. EIP-1559, in crypto-speak, is one of the most highly anticipated updates of the network since its launch six years ago. EIP 1559 will change how ethereum miners are paid, with a base rate plus a tip, to better manage network congestion at times of peak demand. It also includes a fee-burning mechanism that will remove ether from circulation behaving almost like a stock buyback.

If you are just tuning into this as the news begins to hit even mainstream business publications this month, it might all sound very complicated. Just know that this is ethereum moving through some of the fundamental changes to upgrade its system to make it more functional, efficient and secure. Its possible these efforts will allow it to maintain its position against the challengers. But the coming months will tell.

Ethereum has a lot to do to move through its plan, and how this will change the competitive field will be important and exciting to watch. If you are interested to see how this plays out through ethereums efforts this summer, and then as we move into 2022, when ethereum transitions from PoW to PoS, here are a few blockchains to keep an eye on as this horse race plays out:

Ethereum: Its the smart contract blockchain of choice. Its also what is known as the settlement layer. While the blockchain itself is being upgraded, there are a host of other so-called layer 2 solutions, such as Polygon, Arbitrum, Optimism and so-called zero-knowledge based systems that are being released to help with scaling. They manage transactions offline from the ethereum blockchain, roll them up and bring them back to the ethereum blockchain to settle the accounts. This expansion of layer 2s has shown ethereums power, even as these new challenger blockchains also become a force of their own. Watch closely for the continued progress of ethereum, including the EIP-1559 update and toward a PoS model to see if the picture is coming together relatively quickly.

Solana: It offers the highest throughput smart contract platform. Its transaction throughput is orders of magnitude faster than the competition. The competitive advantage of Solana has largely been that it is the cheaper and faster blockchain. This advantage will begin to fade if ethereum manages its updates successfully. Besides, Solanas weakness is often perceived as its lack of decentralization. Blockchain believers prize decentralization as the way to keep networks secure because it reduces exposure to specific points of vulnerability.

Binance smart chain: Its similar to Solana fast and cheap. But more than any other competitor in the race, BSC is criticized for being too centralized because it is controlled by Asias dominant crypto exchange Binance. Decentralization is a fundamental element in making blockchains secure because it avoids single points of vulnerability that can be hacked.

Polkadot: It offers a settlement layer, which allows different blockchains to interact in a shared security model. Designed largely by one of the original architects of ethereum, Polkadot provides among the easiest ways for new projects to get a purpose-built blockchain out the door.

Cosmos: Like Polkadot, Cosmos enables developers to build app-specific blockchains using a standard software development kit (SDK). Cosmos recently released the interblockchain communication protocol, or IBC, which connects all of the different blockchains in the Cosmos ecosystem.

Tim Ogilvie is the co-founder and CEO of Staked, which provides infrastructure services for institutional investors wanting to earn rewards from blockchain staking.

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Ethereum, the No. 2 behind bitcoin, fights off challengers that offer cheaper and faster blockchains - MarketWatch

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Bitcoin (BTC) is trading above its 50-day simple moving average for the first time since May 12. The trading range since May 19 is from a high of 41,323.05 set on June 15 to a low of 28,800.01 on June 22, down 30.3%. The upside from this low reached its semiannual pivot at 35,643.29 on June 29. A secondary low of 30,400.00 was set on July 19. From this low bitcoin is now trading back and forth around its 50-day simple moving average at 34,183.35.

If bitcoin can stay above 34,183.35 the upside is to its semiannual and weekly risky levels at 35,643.29 and 36,863.07. Even with this upside, its weekly chart stays negative given a close on Friday, July 30 below its five-week modified moving average at 36,162.14.

The Daily Chart for Bitcoin

Daily Chart for Bitcoin. Courtesy of Refinitiv Xenith.

Bitcoin has been trading above a golden cross since May 26, 2020, when the 50-day simple moving averagethen at 8,322.00rose above the 200-day simple moving average at 8,052.43. Notice how the 50-day SMA was a buy level at 29,252.24 on January 27. The next time the 50-day SMA was tested it was 50,951.90 on March 25. On April 18, bitcoin closed at 55,550.00, below the 50-day SMA at 56,252.44.

Bitcoin traded below its 200-day SMA at 39,763.27 on May 19. The trading range since then has been down from 41,323.06 on June 15 to 28,800.01 on June 22.

The horizontal line at the top of the graph is this months risky level at 62,927.95. The horizontal line at the bottom of the chart is the annual value level at 18,892.52, which is the overall downside risk.

The three horizonal lines within the trading range are the weekly risky level at 36,863.07, the semiannual risky level at 35,643.29, and the quarterly pivot at 32,802.94.

The Weekly Chart for Bitcoin

Weekly Chart for Bitcoin. Courtesy of Refinitiv Xenith.

The weekly chart for bitcoin is negative but oversold and is below its five-week modified moving average at 36,216.42. Its well above its 200-week simple moving average or reversion to the mean at 13,939.59.

The last two longer-term buying opportunities came during the weeks of March 15, 2020 and the week of August 2. On March 15, bitcoin tested its 200-day SMA then at 5,540.89. On August 2 bitcoin broke above the down trend line at 10,128.28.

Trading Strategy: Buy bitcoin on weakness to its quarterly pivot at 32,802.94 and reduce holdings on strength to its semiannual and weekly pivots at 35,643.29 and 36,863.07.

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Bitcoin Trading Strategy As The Cryptocurrency Moves Above 50-Day Simple Moving Average In Recovery Mode - Forbes

Anne Boden, CEO of Starling Bank, speaking at Web Summit 2019 in Lisbon, Portugal.

Harry Murphy | Sportsfile for Web Summit via Getty Images

LONDON Anne Boden, the CEO of British fintech start-up Starling, is worried about cryptocurrencies.

Some digital currency exchanges are "quite dangerous," Boden said, adding the finance industry should remain vigilant about fraud in the unregulated crypto market.

It comes after Binance, the world's largest crypto exchange, was banned from carrying out regulated activity in the U.K. by the country's financial services watchdog.

"The industry as a whole must really be alert to the dangers of people using bitcoin and cryptocurrencies to process fraudulent payments," Boden told reporters on a call Thursday.

Founded in 2014, Starling is one of Britain's best-known challenger banks, a new breed of lenders aiming to shake up the market with online-only checking accounts. Rivals include Monzo, Revolut and Monese.

On Thursday, Starling reported a 600% jump in revenue in the 16 months ending 2021, helping the bank more than halve its losses.

Starling is now on track to record its first annual profit in 2022, Boden said, adding the company may go public by late next year or early 2023.

Despite her cautious stance on crypto, Boden said she believed there was a future for digital currencies.

"Certain digital currencies are interesting (but) our customers are not asking for that service," Boden said.

"In 2-3 years' time, things will have changed and most banks, including Starling, will be gearing up to do very interesting things in these areas," she added.

Starling is closely following the Bank of England's research exploring whether to issue a digital version of the British pound, Boden said.

The BOE is one of several global central banks exploring their own digital currencies. China is leading the way, trialing its digital yuan with millions of people.

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British fintech boss sounds the alarm about 'dangers' of bitcoin and other cryptocurrencies - CNBC

Bitcoin has slipped below $30,000 as calls grew among regulators in the US, Europe and Asia for tighter checks on cryptocurrencies, and the less volatile digi-currency known as stablecoins.

Bitcoin, the worlds largest cryptocurrency fell as much as 5% to $29,300, its lowest since 22 June, and investors said it was likely to test the $28,600 level touched last month, its lowest since early January, as it faced a variety of regulatory headwinds. Smaller cryptocurrencies such as ether and XRP also lost around 5%.

On Tuesday, European regulators outlined plans to make cryptocurrencies more traceable as part of a wider crackdown on money-laundering in the bloc.

The European Commission said companies handling virtual assets, such as bitcoin, should become subject to anti-money laundering rules, along with transparency requirements for transfers of crypto assets.

For example, a company such as a bank handling cryptocurrencies for a client would be required to include their name, address, date of birth and account number, and the name of the client. Anonymous crypto-asset wallets would also be outlawed. The proposals could take two years to become law.

Part of a wider crackdown on money laundering, the European Commission said: Given that virtual assets transfers are subject to similar money-laundering and terrorist-financing risks as wire funds transfers ... it therefore appears logical to use the same legislative instrument to address these common issues.

On Monday, US Treasury secretary, Janet Yellen, told regulators the US government must move quickly to establish a regulatory framework for stablecoins, a rapidly growing class of digital currencies.

A meeting of the nations top regulators agreed that stablecoins a type of digital currency that is pegged to established currencies such as the US dollar had the potential to be a useful means of payment. However, more regulation would be needed to protect stablecoin users and the wider financial system.

The secretary underscored the need to act quickly to ensure there is an appropriate US regulatory framework in place, the Treasury reported.

Neil Wilson, strategist at CMC Markets in London, said the price signals on bitcoin were horrid and he expected the currency to fall further after taking a beating on Tuesday.

Bitcoin has been locked in a relatively tight trading range in recent weeks, after investors sold heavily in May and June following a crackdown by China on cryptocurrency mining and trading.

But Tuesdays fall took its losses for the month to around 15%. It has fallen by more than half since hitting a peak of almost $65,000 in April.

Bob Seeman, a tech entrepreneur and author of the book Bitcoin: Unlicensed Gambling, said governments would begin to use existing licensing laws to combat what he called the bitcoin Ponzi scheme.

I believe that regulation will eventually overwhelm bitcoin,he said. Some governments may soon realise that they already have gambling license requirements in place to regulate and collect tax as a result of every bitcoin transaction having any connection to the governments jurisdiction.

Link:
Bitcoin price slides amid EU call to make transfers traceable, and rise of stablecoins - The Guardian

Traders tend to focus too much on timing the right entry to a trade, but very few focus on developing a strategy for exiting positions. If one sells too early, sizable gains are left on the table and if the position is held for too long, the markets quickly snatch back the profits. Therefore, it is necessary to identify and close a trade as soon as the trend starts to reverse.

One classical setup that is considered reliable in spotting a trend reversal is the head-and-shoulders (H&S) pattern. On the longer timeframes, the H&S pattern does not form often, but when it does, traders should take note and act accordingly.

Lets look at a few ways to identify the H&S pattern and when to act on it.

The H&S pattern forms after a bull phase and indicates that a reversal may be around the corner. As the name indicates, the formation consists of a head, a left shoulder, a right shoulder, and a distinct neckline. When the pattern completes, the trend usually reverses direction.

The above image shows the structure of an H&S pattern. Before the formation of the setup, the asset is in an uptrend. At the peak where the left shoulder forms, traders book profits and this results in a decline. This forms the first trough but it is not yet a strong enough signal to provoke a trend change.

Lower levels again attract buying because the trend is still bullish and buyers manage to push the price above the left shoulder, but they are not able to sustain the uptrend.

Profit-booking by the bulls and shorting by counter-trend traders pull the price down, which finds support near the previous trough. Joining these two troughs forms the neckline of the setup.

As the price rebounds off the neckline, the bulls make one more attempt to resume the uptrend but as the price reaches the height close to the left shoulder, profit-booking sets in and the rally fizzles out.

This lower peak forms the right shoulder and is usually in line with the left shoulder. The up-move reverses and the selling picks up momentum. Finally, the bears succeed in pulling the price below the neckline. This completes the bearish pattern and the trend reverses from bullish to bearish.

Bitcoin (BTC) started a strong up-move after breaking out at $20,000 in December 2020. The BTC/USDT pair hit a local peak at $61,844 on March 13 and the price corrected, forming a trough on March 25. This local peak was the left shoulder.

The bulls considered the dip as a buying opportunity because the trend was still up. Aggressive buying then pushed the price above $61,844 and the pair hit a new all-time high at $64,854 on April 14. This level attracted selling, which pulled the price down to form the second trough on April 25. The middle peak, higher than the other peaks, formed the head.

Another attempt by the bulls to resume the uptrend failed on May 10. This formed the right shoulder and the ensuing correction broke below the neckline of the pattern. The breakdown and close below the neckline on May 15 completed this bearish setup.

Sometimes, after the breakdown, the price retests the breakdown level from the neckline but when the momentum is strong the retest may not happen, an example which is shown in the chart above.

To calculate the pattern target of this setup, determine the distance from the neckline to the top of the head. In this case, the value is $15,150. This distance is then subtracted from the breakdown point on the neckline to arrive at the minimum target objective.

In the above example, the breakdown happened close to $48,000. This projected a pattern target at $32,850. This figure should be used as a guide because sometimes the decline exceeds the target, and in other scenarios the down move ends without reaching the target objective.

Sometimes traders jump the gun and take counter-trend positions before the price breaks below the neckline of the developing H&S formation. Other times, the break below the neckline does not see follow-up selling and the price climbs back above the neckline. These instances may lead to failed setup, trapping the aggressive bears who are forced to cover their positions and this results in a short squeeze.

Cardano (ADA) started an uptrend from the $0.10 level on Nov. 20, 2020. The uptrend hit resistance in the $0.35 to $0.40 zone in January and a H&S pattern started developing. The price dipped to the neckline on Jan. 27, but the bears could not sink and close the ADA/USDT pair below the support.

When the price rebounded off the neckline on Jan. 28, it was a signal that the sentiment remained bullish. There was a minor hiccup on Jan. 30 and 31 when bears attempted to stall the up-move near the right shoulder but sustained buying from the bulls pushed the price above the head on Feb. 1. This break above the head of the pattern invalidated the setup.

When a bearish setup fails, it catches several aggressive sellers on the wrong foot. This results in a short squeeze and propels the price higher. The same thing happened in the above example and the pair soared in February.

The H&S pattern is considered a reliable reversal pattern but there are some important points to bear in mind.

A downward sloping or flat neckline is considered to be a more reliable pattern compared to an upsloping neckline. Traders should wait for the price to break down and close below the neckline before initiating trades. Pre-empting the setup could result in losses because a failed bearish pattern could result in a strong rally.

The pattern targets should only be used as a guide because sometimes the price may overshoot and continue the down move and at other times it may reverse direction before reaching the target objective.

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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This classic trading pattern signaled that Bitcoin price had hit a top - Cointelegraph

Bitcoin is the virtual currency which is needed to be stored in the bitcoin wallet. But the thing is that there are various bitcoin wallets that you can find on the internet, so it confuses the investors which one they should choose. If you are also starting to invest in bitcoin, then you need a bitcoin wallet for it which secures your bitcoin transactions and the coins as well. The people who want to involve in bitcoin trading on the Official Websiteis also advised to choose a suitable bitcoin wallet. There are a lot of things that you need to take into consideration or making the right choice of the bitcoin wallet.

If you have no idea about these essential things, you should surely go through the mentioned below points.

Security

Every bitcoin wallet claims to be very securely but just saying is not enough. You need to learn about the bitcoin wallet to know which one is offering you higher security. There are so many types of bitcoin wallets available like the paper wallet, web wallet, hardware wallet etc. if you are choosing the web wallet, then you need to check that the site has HTTP or HTTPS.

You need to know that the site which has HTTPS is more secure, and you should always choose HTTPS. The bitcoin investor should indeed check that the bitcoin wallet is strong and offering secure login to its user or not. one more factor that you should look for in a bitcoin wallet is two-factor authentication. Before you make any decision to buy a bitcoin wallet, looking for security features is a must for you.

The anonymity of the users

Another most essential factor which you should consider is that the wallet you are going to choose is maintaining the anonymity of the user or not. You must check that the bitcoin wallet is accepting only emails or require some more information from the user. These are the thing which you should look into a bitcoin wallet because the anonymity of the user is one of the most precious things, and the bitcoin user doesn't want to reveal their identity at any cost.

User interface

A good bitcoin wallet always offers easy-to-use features, and they provide the best experience to beginners also. It means that it doesn't matter you are using the bitcoin wallet for the very first time, but you will not face any of the issues in using it. So, the user interface which the bitcoin wallet is offering needed to be considered. It is also essential for you to check that the bitcoin wallet you are choosing is compatible with the iPhone and Android users or not.

Multi -sig

It is one of the most preferred methods which is included in the security of the bitcoin wallet. It helps in protecting your bitcoin wallet from the hacker and any other attackers. You should make sure that the bitcoin wallet which you are considering buying is offering you the feature of multi-sig. The multi-sign means that it requires multiple keys for permitting the transactions of bitcoins. It is crucial for the user that they should protect their multi-sig, which is used for authenticating the transactions so that they can be processed.

Reputed and reliable bitcoin wallet

It is always best for you to choose a bitcoin wallet that is reputed and reliable. This is important for you to research the bitcoin wallet on google in order to know about the reviews of the customers. You should make sure that you are choosing the reputed bitcoin wallet which has good reviews from the user.

Transparency

The bitcoin wallet should always be transparent so that it can explain its services, functions and security levels to its users. You should be looking for a bitcoin wallet that is completely open-source and is providing your bitcoin enough level of security. When the bitcoin wallet is no open-sourced, then it can be difficult to predict that it is reliable or not. You should not forget to check the security code of your wallet which you are going to select, and make sure that it is up to date.

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Factors To Take Into Consideration For Choosing The Suitable Bitcoin Wallet! - State-Journal.com

Traders are showing a renewed sense of hope after Bitcoins (BTC) price held onto the $32,000 range for what could be the second day in a row.

Data from Cointelegraph Markets Pro and TradingView shows that bulls have managed to regroup at the $32,000level, where Bitcoin has hovered throughout the day, but traders are patiently waiting for further confirmation that Bitcoin may be in the midst of a trend reversal before fully reentering the market.

Heres what analysts and investors expect next from Bitcoins price.

According to a recent report from Delphi Digital, an aggressive reversal was observed in the CME futures basis on Wednesday and that this is a bullish sign for BTC traders who scooped up cheap futures contracts. The resulting contango is interpreted as bullish because the futures price is above the spot price of the asset.

As seen in the chart above, the open interest for CMEs Bitcoin futures doubled from $1.25 billion on Monday to $2.5 billion on Tuesday after institutions positioned themselves slightly net long after an extended period of being short.

While leveraged funds remain net short as they utilize CME futures to hedge their spot exposure, Delphi Digital indicated that they have probably closed out some amount of their positions.

Delphi Digital said:

Bitcoins recovery above $32,000 reignited bullish optimism for many traders, but the road ahead is by no means a walk in the park due to the multiple zones of resistance that lie overhead.

According to pseudonymous crypto Twitter analyst Rekt Capital, many of the previous support levels for Bitcoin, including $35,000 and $37,000, could soon act as resistance.

At the time of writing, Bitcoins price is in the process of attempting a sustained breakout above $32,200 where the price has been stuck for most of the day.

Another sign of bullishness came from pseudonymous Twitter user IzzyEibani, who highlighted the recent spike in exchange inflows as a possible sign that the bottom is in.

A closer look at the chart below shows that there have been three instances in the past on Aug. 1, 2017, Nov. 30, 2018, and March 12, 2020, where inflows to exchanges spiked in a manner similar to what was seen on July 16. Each time, the market bottomed within a short time period following the inflows.

If the market unfolds in a similar fashion to the historical pattern, there is a strong possibility that the recent drop to $29,500 may have been the bottom.

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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3 reasons why traders think Bitcoin price bottomed at $29,500 - Cointelegraph

1. Bitcoin (BTC USD) Cryptocurrency Price Chart May Show $30,000 as Floor  Bloomberg
2. Crypto Price Prediction: Bitcoin 'To Overtake' The Dollar By 2050 And Soar To $66000 By The End Of 2021  Forbes
3. This Week in Crypto: Bitcoin Swings, the Fed Talks U.S. Crypto Regulation, Square Goes In on DeFi, and More  NextAdvisor
4. Bitcoin prediction: Crypto king to 'overtake global finance' by 2050; price to soar up to $470000 by 2030  The Financial Express
5. Bank of America might allow limited Bitcoin futures trading, reports say  Fortune
6. View Full Coverage on Google News

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Bitcoin (BTC USD) Cryptocurrency Price Chart May Show $30,000 as Floor - Bloomberg