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Why Bitcoin Dropped by Over 10 Percent, Deleting $40 Billion From Crypto Market, Experts Explain

Four experts speak to Cointelegraph about the 13 percent drop of Bitcoin, evaluating market slump.

Over the past two days, the valuation of the cryptocurrency market has plunged to $201 billion as Bitcoin lost 13 percent, moving closer to its yearly low at $192 billion.

Since Sept. 6 when the price of Bitcoin dropped by more than 10 percent within a one-hour period, the cryptocurrency market has been on a continuous decline. Tokens bled out more intensely than they previously did in April and June, losing out 10 to 30 percent against Bitcoin.

Source: coin360.io

Cointelegraph interviewed ThinkMarkets chief market analyst and former Bank of America trader Naeem Aslam, eToro senior market analyst Mati Greenspan, and well recognized cryptocurrency technical analyst Uzi, delving into the recent drop of Bitcoin and the rest of the cryptocurrency market.

$40 billion drop: One of the biggest daily decline in recent years

On Sept. 6, the cryptocurrency market lost nearly $40 billion from its valuation in less than 24 hours, demonstrating one of the steepest declines in the past three years.

Source: CoinMarketCap.com

In mid August, the cryptocurrency market dropped to its yearly low at $192 billion, but it took seven days from Aug. 7 to Aug. 14 to record such a large drop in valuation.

Prior to Wednesday, throughout the month of August, Bitcoin showed its highest level of stability since June of 2017, as researchers at Diar noted. From Aug. 8 to Aug. 26, the price of Bitcoin remained relatively stable in the $6,000 region, before initiating an overdue corrective rally above the $7,000 resistance level.

Source: CoinMarketCap.com

But, a rushed rally from the $7,000 mark to $7,400 within a four day period led sell pressure to build up, allowing bears in the cryptocurrency exchange market to take over, leading Bitcoin to fall by a large margin.

In late August, ShapeShift CEO Erik Voorhees said that the bear market is not over yet, but the low price range of major cryptocurrencies present a viable opportunity for new investors to come into the market.

The daily chart of Bitcoin demonstrates four similar movements since February. In the past six months, Bitcoin has risen to $10,000, fell to $6,000, recovered to $10,000, and tested the $6,000 resistance level on four occasions.

In February, Bitcoin surged to $11,000 but fell back down to $6,000. In April, Bitcoin rose to $10,000 and dropped to $6,000. In July, Bitcoin rallied to $8,500, only to test the $6,000 resistance level a month later. In September, the same pattern occurs, with each peak on the upside eventually declining $6,000.

Caption: One-day Bitcoin price chart from Cryptowat.ch

If Bitcoin recovers from the $6,000 support level, the next short-term rally could send Bitcoin to $7,000, which may fall back to the $6,000 region. But, if the dominant cryptocurrency can successfully bottom out in the $6,000 region, a possibility for a proper mid-term rally with newly found momentum could emerge.

Factors behind the drop

Speaking to Cointelegraph, ThinkMarkets chief market analyst Naeem Aslam said that speculators have unnecessarily intensified the downtrend of Bitcoin by overselling Bitcoin in the global exchange market.

Aslam emphasized that the downward trend of Bitcoin has not changed since December of 2017, when the cryptocurrency market achieved a $900 billion valuation and initiated a rapid decline:

“Speculators have gone crazy and they are trying to squeeze as much blood out of this trade as they can. Bitcoin hasn’t changed what it was since last December, so what is the panic?”

Aslam added that it is difficult to pinpoint specific factors that have led the price of Bitcoin to drop substantially in recent months.

Analysts and investors in the cryptocurrency market and the broader financial market often attempt to find correlation in cryptocurrency price movements to developments in the cryptocurrency and blockchain sector.

However, correlation is not equivalent to causation, and because an event occurs at a certain time in which cryptocurrency prices fall or surge by a large margin, it does not necessarily mean that the event triggered a big movement in the cryptocurrency market.

TABB Group, an international research company, reported in July that the over-the-counter (OTC) Bitcoin is at least two to three times larger than the cryptocurrency exchange market.

Under the assumption that the OTC market is in fact two to three times bigger than the exchange market of crypto, developments in the cryptocurrency sector should have minimal impact on the price movements of cryptocurrencies — at least in the short-term — as the exchange market depends on the larger OTC market.

Reports have suggested that the correction of Bitcoin initiated on Wednesday was mainly caused by the delay in the decision of Goldman Sachs to launch a Bitcoin trading desk.

It is far-fetching to claim that the decision of a major investment bank to pivot from offering Bitcoin trading services — which may not appeal to its consumer base of institutions and large-scale corporations — to cryptocurrency custodian services led the price of Bitcoin to plunge within an hour.

Rather, it is more likely that the continuous build up of sell pressure on Bitcoin and other major cryptocurrencies since December of 2017 created instability and volatility in the market, causing the valuation of the market to drop.

Because the volume of Bitcoin remains relatively low in comparison to traditional assets and stores of value like gold, it is easier to trigger a domino effect across leading cryptocurrency exchanges.

Goldman Sachs delaying Bitcoin trading desk not relevant

On Sept. 6, Cointelegraph reported that Goldman Sachs has delayed the formal launch of its Bitcoin trading desk that is structured to facilitate rising demand from retail traders and individual investors.

Goldman Sachs spokesperson Michael DuVally told Reuters that the bank has not been able to reach consensus on the roadmap of its digital asset venture, citing various regulatory issues that currently exist in United States markets.

Hours after the statement of DuVally was released, Martin Chavez, the chief financial officer at Goldman Sachs, personally refuted reports that the institution is pivoting away from forming a Bitcoin trading desk operation, characterizing reports around it as “fake news.”

Aslam stated that it is premature to attribute the market’s struggle throughout this week to the delay in the launch of the Bitcoin trading desk operation by Goldman Sachs, as the bank has not closed its operation but merely delayed it to focus on a more urgent initiative that is cryptocurrency custodianship:

“Goldman has only delayed the process, they still have invested a lot of money and talent in this area. Investors must know it is very normal for banks to delay the IPO process if the market conditions are not favorable and over here we are talking about starting something completely new. Goldman has its fingers in many of the areas when it comes to Bitcoin, so stop thinking about it and focus on the price.”

Currently, the cryptocurrency market has a wide range of regulated exchanges in the likes of Coinbase, Gemini, and UPbit that can be used by retail traders to invest in the cryptocurrency market. However, it lacks trusted custodianship and solutions that can break the barrier between cryptocurrencies and institutions.

It can be argued that Goldman Sachs is working on a more urgent issue that needs to be addressed in order to convince the broader financial market and governments to acknowledge cryptocurrencies as an emerging asset class.

As such, while the Goldman Sachs announcement contributed to the fall of the market, as cryptocurrency technical analyst Uzi told Cointelegraph, it is difficult to acknowledge Goldman Sachs as the sole cause for the correction. Bitcoin was already facing resistance around $7,400, the peak it achieved last week before sliding downwards:

“I feel the Goldman Sachs news about them rolling back plans on their crypto trading desk definitely helped trigger the Bitcoin drop, we were facing some tough resistance around $7,400 as well, but it’s not the biggest secret in the world that a massive amount of BTC shorts was added on Bitfinex days before this drop. 10K BTC in shorts, I believe — follow the money, as they say.”

Same bear trend since February

Mati Greenspan, a senior analyst at eToro, one of the largest multi-asset trading platforms in the global finance sector, with eight million active users, echoed the sentiment of Aslam by stating that the cryptocurrency market has been in a similar trend over the last few months, unable to break out of the $8,000 resistance level with solid volume and momentum:

“Volatility in the crypto markets has picked up over the last few days but is still pretty normal for this market. As far as Bitcoin’s price is concerned, the price has been in a rather stable range between $5,000 and $8,000 for the last few months and this hasn’t changed.”

Greenspan added that the volatility in the market can be attributed to the lack of demand from traders in the cryptocurrency sector, rather than specific events which analysts have pinpointed as the primary cause of the recent correction.

“Several possible reasons for the drop could be a few bad rumors that are circulating in the press, along with a stronger dollar and weakness in tech stocks. Ultimately though, it’s simply a matter of more supply and less demand in short-term trading.”

Technical analyst says Bitcoin market is illiquid, fake volumes

Bitcoin is not considered a sufficiently liquid market, especially considering the fact that its exchange market is open to any individual investor and retail trader in the global market. While cryptocurrency market data providers estimate the daily volume of Bitcoin to be around $5 billion, studies have shown that most major cryptocurrency exchanges inflate their volumes through wash trading.

Alex Kruger, an economist and a cryptocurrency trader, stated earlier this week that Bithumb, South Korea’s second largest cryptocurrency exchange behind Kakao-run UPbit, said that more than $250 million worth of fake volume was created since Aug. 25.

He explained that one group of traders has been taking advantage of Bithumb’s 120 percent trading fee payback, which can generate about $90,000 in net income, with a $250 million daily trading volume.

“There currently are $250 million [in] fake volume traded at [the] Korean crypto exchange Bithumb, every day at 11 a.m. Korean Time, since Aug. 25. Bithumb offers 120 percent payback of trading fees as an airdrop. Trading fees are 0.15 percent taker. To collect the full KRW 1 billion rebate, a wash trader must thus trade KRW 278 billion. That is $250 million in daily fake volume. Notice how 31K Bitcoin are traded at exactly 11 a.m.”

Directly or indirectly, the method utilized by Bithumb has incentivized wash trading that bumps up the daily trading volume of the cryptocurrency exchange. The end outcome is a daily net income of $90,000 for a group of traders and a significant increase in the daily trading volume of Bithumb.

However, while the method leads to a win-win situation for both parties, it affects the global cryptocurrency exchange market in a negative way — as it reduces the authenticity of the international trading volume of cryptocurrencies.

Uzi stated that liquidity and fake volumes are two problems that cryptocurrency exchanges will have to address urgently, to ensure that investors in the market are protected and governments can recognize the sector as a legitimate industry:

“Solving the liquidity issue is one that needs to be tackled, and the issue of fake volume is something that needs to be addressed on a larger scale, because there are definitely questionable volumes on major exchanges.”

Uzi also noted that the Bitcoin market is still generally illiquid, given the lack of activity from institutions and large-scale hedge funds in the sector. He stated that the market is still not ready to support big demand from institutional investors, and most short or long contracts around Bitcoin filed through the U.S. futures market or cryptocurrency exchanges are done by individual investors.

“I have always felt the market for Bitcoin is still illiquid, and especially if you look at the altcoins market. I don’t feel any professional institution would take up a short position at that time on Bitcoin just out of the sheer volatility and the momentum it had testing a decent resistance, as well as the massive short being opened that was noticeable to most, it would be terrible risk management.”

Where the market goes next with Coinbase ETF variable

As Cointelegraph reported on Sept. 7, the world’s largest asset manager BlackRock, which oversees $6.317 trillion in assets, and Coinbase, the cryptocurrency sector’s biggest exchange and brokerage, are in talks to develop a cryptocurrency-based exchange-traded fund (ETF) to bolster market activity and facilitate growing demand from institutions for cryptocurrencies.

The entrance of VanEck and the Chicago Board Options Exchange (CBOE) has already increased the probability of the approval of the first Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). The involvement of BlackRock will create more competition in the Bitcoin ETF space among U.S.-based regulated financial institutions, which may lead to more contenders filing with the SEC to improve the liquidity of the dominant cryptocurrency.

Variables like Bakkt, the Coinbase-BlackRock ETF and positive regulation-related developments in Japan and South Korea could contribute to the recovery of the cryptocurrency in the short-term, which previous corrections in 2012, 2014, and 2016 did not have.

Experts generally agree that the correction of the cryptocurrency market on Sept. 6 was caused by increasing sell pressure and a culmination of various developments, rather than a single event like the Goldman Sachs Bitcoin trading desk announcement having an immense impact on a global market.

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Coinbase Explores Bitcoin-Backed ETF With Wall Street Giant

Coinbase Hints At Plans For ETF 

Bitcoin-backed ETFs have been the topic of discussion throughout the cryptosphere over the past few months, as investors and traders claimed that a single publicly-traded ETF would revive the otherwise slumping market. And it seems that this discussion may continue, with those familiar with the matter recently revealing that Coinbase has its eyes on establishing a crypto-focused exchange-traded fund (ETF) in a bid to attract retail investors.

It is important to note that the planned ETF will likely track a variety of cryptocurrencies, not just Bitcoin, possibly indicating that the firm is continuing to look at more crypto assets to add to its already expansive ecosystem.

Although this news was somewhat to be expected, as Coinbase has become well-known for being the primary home of innovation in the cryptosphere, insiders revealed that the firm has sought help from Wall Street giant BlackRock to aid in the establishment of this vehicle, reports Business Insider.

For those who are unaware, BlackRock is a New York-based, yet multinational investment management corporation with over $6.3 trillion worth of assets under management. As reported by Ethereum World News previously, BlackRock has hinted at making a meaningful foray into the cryptocurrency & blockchain industry, so it would make sense for Coinbase to team up with such a firm.

Those familiar with the cryptocurrency company went on state that in recent weeks, Coinbase has been incoinbase adds 100k users contact with individuals from BlackRock’s blockchain-focused division to “tap into the firm’s expertise” of launching exchange-traded investment products. According to the aforementioned insiders, representatives from the Wall Street firm’s blockchain branch were unable (or did not want to) give any direct advice to the San Francisco-based crypto startup at this time.

As Business Insider went on to report, it remains to be seen whether Coinbase’s involvement and discussion with BlackRock are ongoing or just a one-off event, but many optimists hope that it is the former, as a long-term relationship between the two may lead to interesting crypto-focused products, services, and investment opportunities.

The current climate around Bitcoin ETFs is rather contested, with the SEC recently making a series of moves to deny and delay a multitude of ETF proposals from an array of firms, whether said firms hail from crypto-focused or legacy market-centric backgrounds.

But as covered by Ethereum World News, the CEO of crypto startup Abra recently stated that the SEC’s denial verdict is somewhat valid, as the firms backing the ETF applications don’t “feel, smell or look” the part of a traditional financial institution. So the fact that Coinbase could be potentially working with BlackRock, an evidently well-established financial institution, may signal that an ETF application spawned from a collaborative effort between the two firms could see regulatory approval in the near future.

Photo by Luca Bravo on Unsplash

The post Coinbase Explores Bitcoin-Backed ETF With Wall Street Giant appeared first on Ethereum World News.

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Can the Price of Bitcoin (BTC) Withstand the Historical Low Weekend Volumes?

Any keen observer of the behavior of the crypto-markets can attest to the fact that weekends are usually the trickiest for crypto-traders. The volumes of Bitcoin (BTC) and the crypto-markets in general, have a high chance of declining by a considerable percentage during the weekends. An exact explanation of this phenomenon has not been put forward in the crypto-verse, but we can assume the day traders are enjoying their profits of the week during the weekends and away from their computer screens and mobile trading apps. The same day traders then make a reentry into the crypto-markets some time on Monday.

Jokes aside, will Bitcoin (BTC) survive the traditionally low trade volumes during the weekend and sustain its current levels above $7,200?

The mood and feel in the crypto-markets, is that $7,200 is the new support level for Bitcoin (BTC) and this price could withstand the weekend. If this value is maintained, the King of Crypto – BTC – might be able to break the current resistance levels of $7,500 to $7,600 and get the the $8,000 level during the coming week.

The other side of the coin, is that BTC fails to hold the $7,200 support levels and eases back to levels around $6,800.

But the most likely scenario is for BTC to keep pushing up towards the $10,000.

Ethereum World News has highlighted the following reasons to be bullish about Bitcoin:

  1. Coinbase Custody service attracting a hedge fund worth $20 Billion
  2. Several market leaders calling for Bitcoin to move higher, including longtime BTC bear at BK Asset Management, Boris Schlossberg
  3. BTC having hit the bottom of the year
  4. Thomas Lee assuring that the time to buy Bitcoin is now
  5. Continual technical analysis
  6. The Bitcoin ETF frenzy
  7. BlackRock investment firm declaring it is exploring blockchain and cryptocurrencies
  8. Other institutional investors
  9. The general mood and feel of crypto enthusiasts who believe the time for a bull run is now

In conclusion, the weekends are historically known for having low trade volumes in the crypto markets. The exact reason for this has not been explained but the maintenance of the current price of BTC hinges on this. All the King of Crypto has to do, is to maintain levels above $7,200 through the weekend and into the new week. If this is achieved, the coming week might be as good as, or better than, the last one we had in the crypto markets.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Is This The Beginning of Another Bitcoin (BTC) Bull Run?

$6,900 per Bitcoin (BTC) is the current magic number when you ask any seasoned Crypto-trader in the crypto-verse. This is because they believe that once this resistance level is broken by the King of Crypto, we could be seeing BTC values get to a new zone of between $7,600 and $8,000. BTC is currently trading at $6,717 and up 3.34% in the last 24 hours. If its current momentum continues, we could be breaking the $6,900 ceiling very soon.

Several technical analysis experts have done a good job of analyzing the general direction of the price of Bitcoin in the coming months. But technical analysis goes hand in hand with current events that affect the crypto-markets.

Bitcoin ETF Factor

The general mood and feel from crypto-enthusiasts, is that the SEC will approve the Bitcoin ETFs filing by the CBOE. This is due to the fact that previous ETFs were filed during a period when the rest of the world had not shown signs of regulating the industry. At the moment we have the following countries that have passed laws and/or expressing their will to do so: Malta, South Korea, Japan, Canada, Germany, Thailand, Philippines, just to name a few.

This means that the SEC has seen the global progress of crypto adoption as an investment option and will approve the Bitcoin ETFs. The exact date of an SEC decision is not known, but many believe it will be in August.

BlackRock effect

Just yesterday, the news of the BlackRock investment firm exploring blockchain and cryptocurrencies, caused a spike in the price of Bitcoin (BTC). The value of BTC rose from the levels of $6,200 to those of $6,600 in less than 24 hours. The momentum is still there for BTC is now valued at $6,717.

Other institutional investors

The institutional investors are slowly trickling in to invest in the crypto markets. Coinbase has even introduced its Custody service to securely store the digital assets of high net individuals and the said institutional investors.

One good example of the entry of institutional investors, is the declaration of the Swiss based stock exchange of SIX that they will be creating a crypto-trading platform.

Coinbase effect

The Coinbase cryptocurrency exchange has just received the go-ahead to become a government-licensed broker-dealer platform in the United States. This means the exchange can now list digital assets that are classified as ICO tokens. More investors in the United States will now be able to invest in the numerous ICO tokens available, further boosting the volume of the entire crypto markets. Perhaps this is a new avenue for XRP to be listed on the exchange?

In conclusion, the technical analysis of Bitcoin (BTC) had indicated the King of Crypto had been over-sold last week and a rise in value was imminent. The additional news of BlackRock, Coinbase and Bitcoin ETFs might be the news needed to confirm a new Bitcoin Bull Run in the second half of 2018.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Bitcoin (BTC) Price Analysis: Ready for a Triangle Break?

Bitcoin has formed higher lows and found resistance at the $6,800 level to create an ascending triangle formation. Price is currently testing the resistance and an upside break could set off a longer-term rally.

The chart pattern spans $5,800 to $6,800 or the same height as the inverse head and shoulders previously highlighted. This means that an upside breakout could lead to a climb of the same height or $1,000.

The 100 SMA has crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, this means that resistance is more likely to break than to hold. The moving averages could hold as dynamic inflection points near the triangle bottom also.

However, RSI has already made its way to the overbought region to signal exhaustion among buyers. Stochastic is also in overbought territory and could be due to turn lower soon. Once that happens, bearish pressure could still return and lead to a dip for bitcoin.

Reports that BlackRock is looking to invest in cryptocurrencies and blockchain lifted bitcoin at the start of this week. This allowed price to recover back to levels prior to when well-known economists like Roubini and Rogoff slammed bitcoin anonymity and volatility.

According to CEO Larry Fink, BlackRock has assembled a working group to look at blockchain technology and cryptocurrencies such as bitcoin. Note that this company is the world’s largest asset manager as it managed $6.3 trillion in assets as of June 30. However, Fink also clarified that he doesn’t see massive investor demand for crypto.

This also follows a report from Fortune that Cohen Private Ventures, hedge fund billionaire Steve Cohen’s venture arm, invested in cryptocurrency-focused investment fund Autonomous Partners. This renews investor confidence in the industry as big financial institutions are shifting to a more friendly stance to bitcoin and its peers, overshadowing earlier security concerns.

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BlackRock CEO Contradicts Report of $6 Trillion Interest in Bitcoin (BTC)

Cryptocurrency–’Confusing’ is the only way to characterize the turn of events out of BlackRock in relation to cryptocurrency this morning. While the original report by Financial News (fnlondon) had it that BlackRock, the world’s largest exchange-traded fund (ETF) provider was setting up shop to assess the potential of offering a Bitcoin-related fund, CEO Larry Fink has appeared on Bloomberg Television this morning with a statement that seems contradictory.

While the report came out of the U.K. in the early hours for U.S. based investor, crypto news and financial websites across the globe quickly carried the story to front-page prominence, leading to a substantial pump in pricing for the market. Bitcoin jumped nearly 4% in an hour, with the industry market capitalization gaining 10 billion USD in that time span.

Several analysts pointed out the head-scratching and surprising news out of BlackRock, given the firm’s relatively ambivalent stance towards cryptocurrency in the past. While the report did not outright state that BlackRock was planning to establish a Bitcoin or other cryptocurrency related fund, it did provide encouragement that the company was preparing to devote resources to assessing the situation. As CoinTelegraph pointed out, the move by BlackRock seems likely a maneuver to stay ahead of or abreast their competition in reaching the cryptospace, as firms like Goldman Sachs soften their stance towards the volatile industry.

Larry Fink, CEO of BlackRock, appeared on Bloomberg Television this morning with a decidedly different narrative towards cryptocurrency than the one painted by earlier reports.

Speaking of his clients’ $6.3 trillion worth of assets, he reported feeling little interest to invest in Bitcoin or cryptocurrencies, going so far as to say not a single client had petitioned him for the option,

“I don’t believe any client has sought out crypto exposure…I’ve not heard from one client who says, ‘I need to be in this.’”

Fortune reports that the world’s largest ETF firm still remains skeptical of Bitcoin and cryptocurrency, and falls into the camp of financial firms uncertain how the future of crypto as an asset class will shake out when faced with greater regulation. However, Fink does contend that his company is reviewing the industry of cryptocurrency, which could be where earlier reports of BlackRock eyeing cryptocurrency surfaced from,

That means not even a fraction of BlackRock’s $6.3 trillion has been invested in Bitcoin, Ether or any of the other so-called coins, and it signals that institutions remain skeptical of cryptocurrencies as an asset class. For now, Fink said, BlackRock is studying coins to see how they perform and to determine whether they become “legitimized” as alternatives to cash.

While Fink’s ‘lack of interest’ statement towards cryptocurrency is a far less invigorating tune than the one drafted by FN early this morning, there still appears to be some overlap in the message being sent. Yes, BlackRock is devoting resources to study the landscape of cryptocurrency and size up the industry as a potential asset for investment and trading. However, Fink’s comments also caution a work-in-progress and denote that while his company remains on the forefront of financial product offering, they are not going to take a gamble in the direction of cryptocurrency at this point in time–at least not to the extent most current investors would like given BlackRock’s trillion-dollar management.

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All Green as Crypto Markets gain $10 Billion and Bitcoin (BTC) Up by 4%

The general mood and feel in the crypto-markets is one of a recovery that is yet to be confirmed at the moment of writing this. Many seasoned crypto-traders had speculated that Bitcoin (BTC) had been oversold beginning Thursday, 12th July. This trend would then continue for a total of four and half days up until today, Monday, 16th July. One had to just visit the numerous crypto chat rooms on Telegram to know that there was a Bitcoin ‘pump’ coming soon. BTC is currently trading at $6,623 and up 4% in the last 24 hours.

BTC market performance since Thursday, 16th of July. Source, coinmarketcap.com

The total crypto market capitalization has also gone up by a cool $10 Billion as part of the unconfirmed market recovery.

Crypto market capitalization from early Monday. Source, coinmarketcap.com

Blackrock factor and other institutional investors

One of the reasons for the sudden surge in the price of Bitcoin, is news that one of the largest asset management firms known as Blackrock, is evaluating the possibilities of blockchain technology and cryptocurrencies at the firm.

Larry Fink, Chief Executive Officer of BlackRock, is quoted as saying the following during an interview with Reuters:

We are a big student of blockchain [but we do not see a] huge demand for cryptocurrencies.

At first glance, his statement can be viewed as ‘sitting on the fence’. But knowing how CEOs of big companies like to be cryptic, this can only mean that Blackrock is in with both feet when it comes to blockchain technology and cryptocurrencies.

This news echoes an earlier article by Ethereum World News that highlighted yet another traditional stock exchange that is crossing over to cryptocurrency investing as well as trading. The Swiss based SIX exchange plans on building a fully integrated trading, settlement and custody infrastructure for digital assets. SIX is regulated as an operator of Financial Market Infrastructure (FMI) by Swiss Authorities, FINMA (The Swiss Financial Market Supervisory Authority) and the Swiss National Bank.

Perhaps it is safe to conclude that the days of a bear market might just be behind us with the declaration of Blackrock evaluating blockchain technology as well as cryptocurrencies and the earlier news of SIX creating a trading platform for digital assets.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Report: World's Biggest Asset Manager BlackRock Exploring Bitcoin

Global investment management company BlackRock is reportedly mulling a move into bitcoin.

According to a Financial News London report on Monday, the New York-based asset manager has now set up a working group to look into ways it can “take advantage” of cryptocurrencies and blockchain technology, as well as to monitor what rivals are doing in the space.

Citing sources close to the matter, the article says that the working group is comprised of different divisions from within BlackRock, and may be looking at the possibility of a bitcoin ETF.

Soon after the news broke, bitcoin’s price rose sharply from $6,360 to $6,646 in just two hours – a gain of over $280.

While BlackRock only acknowledged a general investigation into blockchain when asked by Financial News, the possible move into bitcoin futures would not come entirely as a surprise.

The company’s CEO Larry Fink has made positive comments about cryptocurrency in the past, saying in October 2017 that he was a “big believer” in bitcoin, though he also also cautioned that it is “an index for money laundering.”

Since then, in February, the firm has said it envisions a wider role for cryptocurrencies in the future, and that blockchain has promise despite some obstacles.

As reported by CoinDesk, global chief investment strategist Richard Turnill said at the time in a company report:

“We see cryptocurrencies potentially becoming more widely used in the future as the market matures. Yet for now we believe they should only be considered by those who can stomach potentially complete losses. Similarly, blockchain needs to overcome significant hurdles to reach its promising future.”

According to online sources, BlackRock is the world’s largest asset manager, having $6.3 trillion in assets under management, according to figures from December 2017.

BlackRock building image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Surges Above $6,600 Amidst Influx of Institutional Investments

Bitcoin is back in the green after positive news in the past few days about big-money investors looking to get involved in crypto. The top-ranked virtual currency has gained almost four percent in the last 24 hours. BTC proponents will be hoping this is the start of a sustained price rally.

Bitcoin Back Above $6,600

Starting from 10:00 UTC, the price of BTC has gained more than $200 to move from the $6,300 mark to slightly above the $6,600. At the time of writing this article, there appears to be no slowing down in the uptrend. Thus, the top-ranked crypto could be on the verge of posting positive growth today.

At the current price level, BTC is set to see its most substantial price upswing in two weeks, gaining almost four percent. Bitcoin experienced a difficult June 2018, twice dipping below $6,000 and set a new all-time low for the year. Since the start of July, BTC has been on a bit of a resurgence, peaking at $6,800 on July 8. However, a significant pullback saw it lose much of the gains earned within the first few days of July.

In the aftermath of the second-week pullback, BTC came dangerously close to falling below $6,000 but has rallied in the last few days. Amidst steady growth since July 13, today’s surge may set the tone for a push towards the $6,900 resistance level. TenX founder, Julian Hosp recently said that if BTC achieved $10,000 by August, then it could make a significant push towards his $60,000 BTC price prediction.

Institutional Investors Trouping into the Crypto Space

This latest BTC price surge comes firmly on the heels of two significant positive pieces of good news for crypto investors. First, BlackRock Inc., the world’s largest ETF provider announced that it was interested in blockchain investment. Billionaire, Steven Cohen recently invested in the Ariana Simpson-led Autonomous Partners, a cryptocurrency hedge fund startup.

Since the start of crypto-winter in January 2018, many analysts have declared that the entry of institutional players is the next big step for crypto. Many big-money investors have so far shied away from the market due to regulatory uncertainty. However, regulations seem to be taking some shape as institutions like the SEC have deemed BTC and ETH not to be securities.

In Asia, the market is becoming more structured with nations like Japan, South Korea, and Thailand taking significant steps to regularize the industry. With more clear and straightforward regulations, institutional money is bound to flow into the industry.

Do you think this is the start of a sustained BTC price surge or is there another imminent dip? How high do you think the latest investment influx will catapult the price of BTC? Keep the conversation going in the comment section below.

Image courtesy of Coinmarketcap.

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Market Reacts as $6 Trillion Asset Manager BlackRock Eyes Crypto Space

Asset managers do not come much bigger than BlackRock which is reportedly the world’s largest holding over $6 trillion. News emerged today that this behemoth is now eyeing the crypto space.

According to London’s Financial News BlackRock has setup a working group tasked with investigating ways that the investment firm can enter the industry. The team will consist of different experts from departments within the company, it includes investment strategy guru Tim Simpson according to insiders.

Citing people familiar with the matter the report went on to say that BlackRock will be looking into the competitive landscape with a view to make a decision on whether to invest in Bitcoin futures. Chief Executive, Larry Fink, told Bloomberg last year that be believed in the potential of cryptocurrencies but still considered them a vehicle for speculation and money laundering.

A spokesperson for BlackRock said that the company has been “looking at blockchain technology for several years.” The report was not confirmed however and the firm has yet to announce and official press release.

Markets have reacted this morning and Bitcoin is trading just over 3% higher on the day at $6,535. The pump started about an hour ago when BTC jumped from $6,370 to $6,530, its largest spike this month. Trade volume has climbed from $3 billion this time yesterday to $4.5 billion at the time of writing.

Crypto markets have been long overdue some good news as the bears have relentlessly pushed them lower for the past six months. When large institutional investment giants start taking an interest in the space it goes a long way to legitimizing digital currencies and cementing their position in global financial markets.

The BlackRock news will be welcome as the week commences and some of those losses over the past couple of months may be regained. It is still unclear whether we have reached the bottom and a new bullish rally can take cryptocurrencies back upwards for the second half of the year but today’s news would be a good place to start it.

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