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Buying Bitcoin (BTC) at $8,500 is Best, Says Analyst

Why Buy Bitcoin at $8,500?

After falling to $9,100, Bitcoin (BTC) has managed to pick itself up from its bootstraps, rallying to $10,800. As of the time of writing this, the rally has paused, with the cryptocurrency falling back to $10,400.

Despite this strong bounce, a Bloomberg guest recently suggested that Bitcoin may have further to fall. In a segment recorded prior to the out-of-left-field resurgence, John Kolovos, Macro Risk Advisors chief technical strategist, gave his reasoning as to why BTC may move lower in the coming days.

Kolovos notes that Bitcoin double topping in the $13,000 to $14,000 region over the past month implies that there should be a stronger pullback, as this is often a technical pattern that could signal weakness in markets if the top is not broken past convincingly.

He adds that if you look to the cryptocurrency’s previous bull cycles, the 14-day Relative Strength Index (RSI) historically read a 40, which could imply that an asset is slightly oversold, preceding moves to the upside. As it stands, this indicator still reads at around 50, which Kolovos claims is a sign that slightly more downside is in Bitcoin’s cards.

Even fundamental analysis suggests that Bitcoin is somewhat overvalued in its current state. Earlier this week, Timothy Peterson, a prominent American crypto fund manager, opined that Bitcoin’s current active account figure suggests that BTC could be somewhat inflated.

According to Peterson’s model, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.

Also, as CryptoKea pointed out in an extensive Twitter thread, history repeating would see Bitcoin fall to $7,148 to $8,700.

What to Look Forward to

While Kolovos and other analysts watching the cryptocurrency space may be bearish in the short term, most of these temporary bears seem to be long-term bulls. The Macro Risk Advisors chartist is a perfect case in point.

After laying out why he believes that Bitcoin is poised to return to at least $8,500, Kolovos remarked that BTC holding strong above its 50-week moving average and breaking out of a descending wedge in April are positive signs. In fact, he claims that through the use of “simple technical analysis”, Bitcoin reaching $20,000 is entirely logical. The Bloomberg guest didn’t divulge deadlines for his targets.

However, there are a number of commentators that have laid out theories that suggest a $20,000 or higher Bitcoin is possible in 2019. For instance, Tom Lee has noted that BTC could rally to $20,000 or even $40,000 in Q4 of this year, drawing attention to Trump’s tweet on cryptocurrency, the buzz being generated by Libra, and potentially pro-Bitcoin fiscal policies enlisted by central banks.

Photo by Aleksi Räisä on Unsplash

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Why is Bitcoin (BTC) Here to Stay? Former Bear Explains

Why Bitcoin is Here to Stay

To most in the Bitcoin (BTC) and crypto community, mainstream media is viewed with intense skepticism. Case in point, the leading cryptocurrency has been declared dead over 360 times according to 99Bitcoins.

Most of these attacks come from mainstream outlets, from CNBC and Forbes to the New York Post and Bloomberg. For instance, one Bloomberg op-ed headline published in January 2018 reads: “Sorry, Bitcoin Fans. Digital Currency Is Still a Dream.”

This recently changed, however. A Bloomberg columnist and prominent economist going by Tyler Cowen recently gave a few nods to Bitcoin, releasing an article titled “Bitcoin is (Probably) Here to Stay”. Here is a quick compilation of his thoughts on why BTC is, after all, a viable asset in today’s ever-changing economic climate.

Geopolitical Tension: US-China Trade War

Firstly, the US-China trade war is likely to drive Bitcoin’s long-term value proposition. This is because it is widely believed that Chinese investors, namely those looking to bypass currency controls, are putting their capital into BTC and other digital assets via backdoor on-ramps, suggested to be Tether (USDT) and over-the-counter trading desks.

As reported by this outlet previously, Blockchain.com’s research division found correlations between periods of Chinese Yuan devaluation and Bitcoin growth, further corroborating this theory.

And more importantly, there has recently been a massive uptick in interest for Bitcoin in China, as made apparent by data from Tencent (WeChat), Baidu (China’s Google), and other outlets that suggest cryptocurrency is, once again, starting to grip the hearts of investors in the nation.

Libra Validates Bitcoin

Secondly, Cowen believes that Libra’s launch validates the idea of cryptocurrency. While he is skeptical of the Facebook-backed project’s ability to “get off the ground”, he noted that Libra is “backed by a pretty striking and radical innovation”, this being the potential for transactions to cost much less than their predecessor. He concludes on this specific matter:

The idea that transaction costs on remittances and other fund transfers can be lowered significantly by defining a new medium of payment, piggybacking on older media of exchange… Crypto still holds this promise.

Left-Leaning U.S. Politics

Thirdly, he remarks that the Democratic Party in the U.S. continues to lean left on many matters, especially in regards to wealth and taxes. Thus, he notes that a need for offshore banking, which can technically be Bitcoin or other decentralized cryptocurrencies, is likely to grow with time. This is because the nation’s sovereign debt continues to grow due to the need for more government services, necessitating the government to take more from taxpayers.

This catalyst is similar to one in Italy. For those who missed the memo, a prominent Italian minister recently proposed a wealth tax of around 15% on citizen’s safety deposit boxes. As some have put it, Italy could be the best thing to ever happen to Bitcoin, as investors would seek to store their money in an asset that the government cannot exactly confiscate.

Need for a Portfolio Hedge

Lastly, Cowen writes that there is a need for a hedge in today’s geopolitical and macroeconomic climate:

One final possible explanation for the resurgence of Bitcoin: Populism is spreading, the Middle East is not calming down, and the world is not solving its geopolitical problems. 

This is obviously in reference to the idea that Bitcoin is a proper replacement for gold.

Photo by Zoe Ra on Unsplash

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Blockchain-Based Alternative Investment Firm to Be Listed on Bloomberg Terminal

Cadence is believed to be the first digital asset to obtain a Financial Instrument Global Identifier, known as FIGI for short.

A blockchain-based alternative investment provider that tokenizes commercial debt is being listed on the Bloomberg Terminal, according to a news release published on June 4.

Cadence is believed to be the first digital asset to obtain a Financial Instrument Global Identifier (FIGI), enabling professionals who use the Bloomberg Terminal to research its offering and execute trades.

The company connects investors with businesses that need to borrow money in order to plug temporary gaps in their cash flow. On its website, Cadence says the minimum investment amount is $500, giving consumers “opportunities traditionally reserved for institutions.”

Currently in private beta, Cadence claims its platform allows investors to generate passive income and hedge against market volatility. Every deal matures within a year, and the company is aiming to deliver annualized returns of more than 10%.

In the news release, Bloomberg Head of Data Standards and Strategy Richard Robinson said:

“The assignment of a FIGI to digital assets is a natural and simple example of the standard’s native utility. It is proof that FIGI can easily extend to new, even esoteric financial instruments.”

Last June, the Bloomberg Terminal started listing Huobi’s Cryptocurrency Index, which tracks the performance of the top 10 traded assets on its exchange.

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Bitcoin Adoption Is Ghost: Hardly Anyone Uses BTC for Payments, Bloomberg Says

An analytical company Chainalysis shows that hardly anyone utilizes Bitcoin as means of payment, preferring to see it as a store of value and ‘hodl’

In spite of the recent massive price surge, Bitcoin seems to have a problem that few are aware of. An analytical firm Chainalysis Inc. from New York has recently shown that merely 1.3% of economic transactions were made by merchants in the first quarter this year. Bloomberg says that this amount has remained the same over the last few years.

The current pace of adoption is too slow

Recently, some big market players, such as AT&T. Inc., have adopted crypto, allowing for customer payments. Still the number of platforms that allow clients to pay them with virtual coins, when Bitcoin rate may go much higher within just a few weeks, is tiny.

This is the major difficulty for cryptocurrencies: Bitcoin was meant and developed to be an alternative to fiat money currently in circulation. However, people prefer to ‘hodl’ BTC, whereas hedge funds are merely using it for financial speculations. Thus, it is currently a hard job to raise hype around Bitcoin to attract mass appeal.

Kim Grauer from Chainalysis has told
Bloomberg:

“Bitcoin economic activity continues to be dominated by exchange trading. This suggests Bitcoin’s top use case remains speculative, and the mainstream use of Bitcoin for everyday purchases is not yet a reality.”

Hardly any merchants actually use Bitcoin

As part of its research, Chainalysis tracks the work of companies, such as BitPay, that process payments for merchants. The aforementioned AT&T telecom giant has recently chosen BitPay to conduct crypto payments through it. In 2017 and 2018, BitPay processed payments of $1 bln, according to Bloomberg.

All crypto payments to AT&T are made through BitPay. Then the service provider chooses whether to take Bitcoin or fiat currency or a mixture of those. BitPay then charges 1 percent off the deal.

Even though, BitPay has processed an impressive amount over the past two years, when it comes to payment service providers dealing with fiat currencies, such as Visa, their volumes are much bigger. In 2018, Visa dealt with payments totalling $11.2 trln.

As said above, the majority of Bitcoin transactions take place in crypto exchanges, says Chainalysis, about 90 percent.

Despite this, attempts to introduce Bitcoin into everyday payments continue. Recently, a Flexa startup announced that Starbucks, Wholefoods and several other major chain stores will be accepting Bitcoin and other crypto through it.

This is still a tiny amount of the market
compared to traditional fiat payments.

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Bank of France is Closely Watching Stablecoin Developments, Says Governor

The Bank of France’s governor Francois Villeroy de Galhau says they are monitoring stablecoins “with great interest.”

The Bank of France has taken an interest in stablecoins, as indicated by the bank’s governor Francois Villeroy de Galhau in a Bloomberg report on May 14 .

Villeroy has said that the bank is “observing with great interest” growing networks that allow members to exchange stablecoins for tokenized securities, goods, and services. He makes a point to distinguish stablecoins from cryptocurrency tokens at large, however, saying that stablecoins “are quite different from speculative assets like bitcoins, and more promising.”

Villeroy has been an outspoken critic of bitcoin in particular, notably making the following statement at a 2017 conference in Beijing, China:

“We need to be clear: Bitcoin is in no way a currency or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Bank of France reminds those investing in bitcoin that they do so entirely at their own risk.”

Mario Draghi, the President of the European Central Bank (ECB) — of which Villeroy is a governing council member — has recently echoed these sentiments, saying that cryptocurrency is not a currency, but rather a risky asset. Draghi points to the lack of backing for tokens such as bitcoin, rhetorically asking, “Who is behind the cryptocurrencies?”

Unlike bitcoin, stablecoins are designed such that their value is always tied directly to some asset, such as gold, or are stabilized by an algorithm. A number of stablecoins have their value pegged to fiat currencies, such as TrustTokens’ line of fiat-backed coins, which include TrueUSD (U.S. dollars), TrueGBP (British pounds), TrueAUD (Australian dollars) and TrueCAD (Canadian dollars).

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South Korean Internet Giant Kakao’s Blockchain Platform to Launch in June

South Korean internet giant Kako has announced the release date of its blockchain platform.

Ground X, the blockchain arm of South Korean internet giant Kakao Corp, has announced the launch date of its own blockchain platform, a Cointelegraph correspondent learned at Consensus 2019 on May 13.

Per the announcement, the Klaytn mainnet will launch on June 27, 2019, and will purportedly be a major driver of blockchain adoption in the country. Kakao has a 96% market share in South Korea, with a presence in messaging, gaming, content services, financial services and mobility services.

Kakao announced its intention of launching a blockchain platform last March, and released a testnet version of Klaytn in October. The platform focuses on decentralized apps (DApps). As of October last year, developers were working with around ten domestic and international partners to test the new ecosystem.

More recently, Kakao has repeated its initial coin offering (ICO) to raise an additional $90 million for Klaytn. In December, the firm announced plans to raise a total of $300 million through Ground X to develop a native token.

Kakao also purportedly has plans to release an integrated crypto wallet in its messaging app, KakaoTalk, following the release of the Klaytn mainnet, according to South Korean outlet Fnnews.

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It’s Time To Buy Bitcoin (BTC), Ongoing Recovery Looks Bullish: Fundstrat Analyst

bitcoin crypto btc bull

Fundstrat Awaits Rally Past $6,000

Over the past 48 hours, Bitcoin (BTC) bulls have begun to return en-masse. As of the time of writing this, BTC is trading at $5,675, finding itself up by around 5% in the past 24 hours. Crypto assets as a whole have yet to post similar gains, leading some to postulate that Bitcoin’s recent rally has much to do with the Tether and Bitfinex news, but some are sure that the asset’s chart remains bullish.

In a recent research note obtained by Bloomberg, Robert Sluymer, Fundstrat Global Advisor’s technical strategist and in-house chartist, explained that BTC is currently in the midst of a longer-term recovery. He explains that it would be wise for investors to “use pending pullbacks,” which may soon arrive as a result of Bitcoin being overbought per some indicators, to “accumulate BTC in the second quarter.” Sluymer adds that there may be a “second-half rally” through the $6,000 resistance level, especially considering the rebound off its 200-week moving average and breakout from its early-2019 trading range.

This purportedly comes after Sluymer was bearish on cryptocurrencies in late-2018, citing November’s move as a catalyst for the creation of “significant technical damage.”

Not The Only Bull

Sluymer isn’t the only analyst currently bullish on Bitcoin and the digital asset market at large. Murad Mahmudov, Adaptive Capital’s chief investment officer that is 75% sure the bottom is in, noted in a recent chart that the liquidity gap between $5,600 and $6,400 could attract BTC rapidly towards that level. He points out that a similar occurrence came to life when BTC rallied past $5,000 on April 2nd, as a lack of liquidity (meaning little short-term resistance) in the mid-$4,000s aided bulls greatly.

For this to move to come to fruition, however, Bitcoin will need to break past the $5,600 resistance and set up shop above that key local level.

Bitcoin Fundamentals Look Strong Too

Even if technical readings don’t prove to be bullish, fundamentals are surely leaning in Bitcoin’s favor. As Tom Lee of Fundstrat recently remarked on a CNBC “Fast Money” segment, the transactional value of on-chain BTC transfers has turned positive on a year-over-year basis, while the average daily transactions processed have almost reached all-time highs. What’s more, big names, both in terms of institutions and corporations, continue to siphon time, capital, and talent into this space without much of a concern. He adds:

We surveyed OTC brokers, who are really important in facilitating institutional investors, and they’ve all talked about a 60% to 70% increase in activity/number of clients and trading volume per client. Fundamentals are improving; technicals are improving, and activity by HODLers too.

And with that, Lee concluded that BTC could start to enter a state of “spring” after a brutal winter, adding that the asset is “likely” to see new all-time highs at last in 2020.

Photo by Noah Silliman on Unsplash

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Brexit and April Fool’s Joke Possible Catalysts for Crypto Rally, Crypto Reporter Says

Hong Kong-based crypto reporter Eric Lam cites Brexit and a Bitcoin ETF joke as possible catalysts for the recent rally in crypto markets.

Hong Kong-based crypto reporter Eric Lam believes nobody in the crypto industry has a good theory to explain the recent recovery of crypto markets. Lam shared his stance with Bloomberg on April 3.

On Tuesday, April 2, shortly after the Asian markets opened, the price Bitcoin (BTC) unexpectedly rallied by 20 percent. Today the world’s top currency hit $5,000 for the first time since November 2018, while major altcoins have seen double-digit gains.

Lam has ironically linked the uprising to a crypto-related April Fool’s Day story, which claimed that the U.S. Securities and Exchange Commission (SEC) finally approved a Bitcoin exchange-traded fund (ETF). CNBC also mentioned this joke as a possible catalyst behind BTC rally.

The reporter also suggested that crypto investors might start buying coins as the market started showing signs of recovery, forcing the prices to grow further.

Moreover, Lam agrees with an earlier theory which claimed that some investors are changing pounds to Bitcoin ahead of Brexit, which is scheduled to happen in mid-April.

Lam also thinks that the surge can be related to algorithmic trading. As Bloomberg explained in another article dedicated to the so-called crypto Renaissance, the computer mechanisms were allegedly triggered by a mysterious 20,000 BTC order (around $100 million at the press time) that was spread around U.S.-based crypto exchanges Coinbase and Kraken and Luxembourg’s Bitstamp.

As of press time, Bitcoin is still making gains, trading at $5,238 according to CoinMarketCap.