Bitcoin is back on the move today. Volatility has been expected as options for 67,700 Bitcoin worth $745 million are expiring today.
Currently, the largest cryptocurrency is trading just under $11,400, up more than 3%, with over $2 billion in trading volume. In the past ten days, BTC has surged 24.5% that has resulted in the number of bitcoin addresses holding 1 million USD spiking by 38% to about 18,000.
Also, a whopping 93% of bitcoin’s supply is at a profit with the price at $11k.
Interestingly, BTC deposits at major exchanges continue to drop, which has been falling since March after the digital asset crashed along with the other asset classes. The deposits have currently reached the low-levels, last seen in May 2019, which suggests users prefer to store their BTC in private wallets. Moreover, it “may lead to a lower selling pressure the upcoming months.”
“Despite BTC’s recent surge to $11k, there are currently no signs of weak hands from long-term investors,” noted Glassnode. “Hodler Net Position Change remains positive since the end of March, with hodlers currently accumulating more than 50k BTC each month.”
However, Ki Young-ju, the CEO of on-chain analysis firm CryptoQuant, said whales have started to send Bitcoin and stablecoins to exchanges. He said,
“BTC whales are sending Bitcoins to exchanges. Stablecoin whales are sending stablecoins to exchanges as well. This week will be a battle between Stablecoin and Bitcoin exchange inflows. These inflows indicate potential buy/sell pressures.”
So Much HODling & Accumulation
Bitcoin gains are recorded amidst the amount of USDT flowing into exchanges spiking to yearly high. All the while, Tether continues to mint millions more USDT that “hints at increasing market demand and could potentially support further Bitcoin price appreciation,” states OKEx.
The exchange’s one-month futures annualized basis has also surged to as high as 27.67%, its highest level since late February. “Values above 20% indicate that traders are paying a very high premium on spots and using high leverage,” OKEx said.
Just this week, Bakkt recorded peak volume twice in a row while CME saw its open interest making new highs. Regarding the slow adoption of its bitcoin options product, CME Group continues to “work with both brokers and platforms to get them connected and up and running to facilitate trades with customers.”
Over 20 companies are expected to tokenize securities that represent about $200 million in deals on the Tezos blockchain, after a new partnership between DealBox, the fintech merchant, and Vertalo, the software provider, has been closed.
The announcement was made on Monday and says Vertalo is going to tokenize 22 securities that are issued by clients of DealBox. Dave Hendricks, the co-founder and CEO of Vertalo, said that this will provide liquidity and data management services. It should be noted Vertalo has registered with the Securities and Exchange Commission (SEC) as a transfer agent.
DealBox is an Intermediary and Vertalo the Tech Provider
Hendricks mentioned that Vertalo is the tech provider in this partnership, whereas DealBox acts as an intermediary between the tech company and clients. He also said this is the preferable situation because Vertalo prefers to collaborate with channel partners, even if it can work with issuers directly. The Vertalo customers number is going to double as far as digital security issuance goes. As of January this year, the company had 18 clients. Here is what Henricks said regarding how tokenizing may be able to increase liquidity:
“The private assets are a bigger market than public securities. Because of the antiquated methods for asset management, and for ownership of private assets, owners of private assets cannot obtain liquidity.”
Vertalo Decided on the Tezos Network 6 Weeks Ago
Vertalo formally decided on the Tezos network to be its security issuing default blockchain a month and a half ago. It supports Tezos and Ethereum (ETH) issued securities but made the announcement in January this year that it encourages its customers to go with Tezos if possible. The chief investment officer and president at DealBox, John Nance, said the partnership with Vertalo will help the digital investments market infrastructure to develop. Here are his exact words:
“This idea of crowdfunding and using online investment platforms is pretty new.”
He added some companies that are well established may not have what it takes to support the issuing of such securities.
DealBox Hopes for Migration to Tezos
While DealBox has had Stellar blockchain issued securities in the past, it’s hoping for a migration to Tezos. Here are Nance’s exact words on the matter:
“We’re going to be bringing a significant amount of capital to the Tezos platform.”
As Hendricks said, the integration already started and should continue for the entire second quarter.
APAC digital transfer and remittance market expected to grow by 24.2% from 2018 until 2025
But what’s astounding is the expensive services charging as high as 10.34%
In its latest insight report, Ripple shares the growing demand the Asia-Pacific (APAC) region is seeing.
“More remitters than ever are sending money home to their loved ones,” the San Francisco-based company points out adding APAC saw a growth of 12% in remittance flows in 2018, as per World Bank. About 2bln in remittance transactions flow in the area every year.
APAC region to see a growth of over 24%
Remittance flows in the Philippines, makes them the 3rd largest remittance-receiving nation worldwide, and another staggering number that is reaching record highs of $529 billion last year is Thailand, and is also anticipated to see exponential growth as the Philippines greatest help for external financing.
On the opposite side, Australia and Thailand entice a remarkable amount of migrant workers. Australia’s payment outflows are $7.2 billion to China, India, Vietnam, the UK, and the Philippines. Also becoming a major destination for foreign workers is Thailand, with $7.5 billion set against ejaculations of $4.9 billion estimated payment inflows.
From 2018 until 2025, APAC digital transfer and remittance market is actually expected to experience a Compound Annual Growth Rate (CAGR) of 24.2%.
But traditional payment channels charging fees as high as 10%
The rise of worldwide remittances is “significant” but even more astounding are the expensive services. Ripple notes,
“The Asia-Pacific (APAC) region is seeing significant growth in remittances, yet the high cost of cross border payments leaves remitters with few options.”
Here blockchain technologies have a huge part to play as they can offer a fast, smooth encounter for global payments with reliability, and transparency, that people are accustomed to and require from services like email.
The global median cost of transferring $200 was 6.84% in 3Q19, with banks charging an average fee as high as 10.34%.
There is also a high price variance by corridors, from Thailand to Vietnam, Lo PDR, and China has remittance fees exceeding 10% in 2018.
Blockchain provides a solution
Financial businesses desire a cheaper, simpler, and more effective way of processing cross-border transactions and blockchain has created a resolution.
With APAC market “ripe for digitization,” Ripple is already working and seeing much activity in the Philippines and Thai market.
Recently, the company along with Thailand’s oldest bank Siam Commercial Bank announced that they were working on enabling cross-border payments via QR codes.
Through its partner FlashFX, Ripple has opened payment channels in Mexico, the US, and the Philippines with Australia next on the list. Apart from SendFriend, MoneyGram is also using XRP to conduct transactions in Europe, Australia, and the Philippines as well to tap this growing demand in APAC region.
2019 did not turn out to be the year of bulls as many had expected, but despite that cryptocurrencies and blockchain dominated the world news for their growing influence in various sectors around the globe. Interestingly, it’s not just world power which is seeing a gradual shift from West to East the Eastern world is also dominating the west in terms of crypto and blockchain acceptance and regulation.
Asia is currently leading the blockchain and cryptocurrency race with several countries in the continent looking to either implement friendly regulations or have already made strides. China towards the last quarter of 2019 called for accelerated crypto adoption, while Singapore has become one of the leading choices for fintech firms, as the country provides access to south Asian Markets of over 600 million people.
Singapore’s Payment Services Act which is slated to come into action by January 28th is already being seen as one of the most progressive and comprehensive regulatory frameworks covering blockchain and cryptocurrencies. The act is set to cement Singapore’s position as the hub for the fintech industry.
Central Governments Will Also Venture Into The Decentralized Space
Many central governments who were strictly against regulating crypto use in any form have come around to realize the potential of these digital assets. These governments have also realized that it is next to impossible to put a blanket ban on these cryptocurrencies and thus they are looking to regulate crypto trading.
Many central banks from Asia have also shown a great interest in launching a Central Bank Issued Digital Currency (CBDC) to offer faster cross-border remittance services while still maintaining their financial sovereignty. China is slated to become the first country of the world to launch its national digital currency whose research they started back in 2014 itself.
Many crypto analysts believe that governments around the globe understand the shortcomings in the fiat monetary system and know that it would lead to financial instability. This is the reason not just China but many other nations have started their research and development wing to study digital currencies and also develop a stablecoin pegged by the national fiat system.
While Asian countries are actively working to be at the top of the blockchain game Western nations especially the US and many developed nations of Europe are still not clear about the scope of use of cryptocurrencies in their nation.
London based crypto exchange Luno is expected to list XRP token onto its platform. The exchange aims to make the XRP tokens available to Malaysians either in December 2019 or early 2020. Luno was recently relaunched in Malaysia at the end of October this year.
Ripple (XRP), which is a real-time gross settlement system and currency exchange network known for its use in cross-border payments, has been looking to build a larger scheme around the coin and over the last few years the idea has seemed to crystallize. Luno has since noticed XRP’s potential and wants to bring the token to Malaysia. The firm’s head of Asia Vijay Ayyar cited,
“What we can say at this time is that we are planning to increase our cryptocurrency offerings as we grow, while keeping customer’s safety and compliance with regulations as our highest priority.”
He continued to say that while Luno would be widely expanding its crypto offerings, it would also be sure to maintain all ethical standards to customers. The ethical standards include ensuring customer’s data safety and complying with rules and regulations. Luno’s South-East General Manager, David Low believes that the ever-growing demand for Ripple’s XRP would be partially met by the Luno listing. Mr. Low explained,
“Ripple also has a remittance use case which we are excited about. That’s why we want to introduce it to Malaysians, as it allows people on the platform to access and learn about it, and figure out new ways to use this technology for their benefits.”
An exclusive interview with the Malaysian Reserve (TMR) revealed that the Securities Commission has already approved Ripple and that Luno will be bringing the cryptocurrency onboard the exchange sometime this December or early next year. This has allowed the company to once again step on the country’s turf. Due to forward looking regulations and high banking rates, Luno is expected to be one of the largest markets in Malaysia.
XRP was created by Ripple Labs Inc., a U.S based currency exchange founded back in 2012. After Ethereum (ETH) and Bitcoin (BTC), XRP has the third largest market capitalization of US$9.2billion.
The halving of the Bitcoin mining reward is expected to take place in May 2020.
The profitability of the mining process directly correlates to the cost of profitability.
Miners are a critical and essential component of the cryptocurrency industry, especially Bitcoin. The validation of each block on the blockchain relies on these individuals performing their work to solve equations, and they’ve been rewarded from the start of the industry. However, Bitcoin has an algorithm in the network that reduces the reward of miners every four years or so, as the supply of Bitcoin is limited and unchanging.
The first time that the value of Bitcoin’s mining efforts was cut in half – a process that has simply come to be known as the halving or the halvening – was on November 28th, 2012, and the price of Bitcoin was just $12.50. The next event was on July 9, 2016, when the price was $650. The next halving of the reward is expected to happen in May 2020, and there’s already been a lot of discussion over the upcoming value.
Since the last halving, there have been many institutional investors who have entered the market, which makes the halving quite interesting. This will be the third time that the halving has taken place, which will hopefully provide consumers with a confirmation of the correlation between this reward event and the price increases of Bitcoin. However, it may simply show that the halving and the price increases are just a coincidence for each other.
Miners, with this upcoming halving, will see their reward dropped from 12.5 BTC to 6.25 BTC for every block that they mine. As the halving happens, there will be 50% less Bitcoins generated every 10 minutes, which will impact how the new Bitcoins are brought into circulation. The new profitability of these miners will be a topic of discussion at the upcoming World Digital Mining Summit, which is to be held in Frankfurt.
According to data from CoinDesk, there will be over 1,000 attendees at the event, made up of miners, mining farm owners, OTC traders, institutional investors, and blockchain organizations, among others. All of these different parties will have a chance to debate over the reward cut and the impact on mining profitability. Co-founder and former CEO of Bitmain, Jihan Wu, has expressed a pessimistic view about the possibility of a price surge at the halving.
Wu stated, “Maybe people speculate too much before the halving, and then you can’t sell the good news anymore. Maybe, this time a bullish cycle is not coming yet. During the first and second halving, people didn’t know what to expect, and during the second halving, the scaling debate complicated the situation. Now people are expecting it.”
At Ethereum Express, a crypto-community platform, there are analysts that believe that crypto mining will end up becoming profitable again next year. Overall, the global crypto mining market has grown 29.9%, according to researchers who evaluated the compound annual growth rate. In 2016, the market was worth $611 million, followed by a value of $8.9 billion this year. Next year, researchers believe that the market will reach $11.56 billion. By 2025, they are predicting a value of $42.76 billion.
Vlad Miller, the founder of Ethereum Express, was asked about the challenges that are facing the current miners and this profitability concern. He remarked, “Even though the mining industry is investment-attractive and plays an important role in maintaining the health of blockchains, there are still several barriers in this area that cause inconveniences for most ordinary users.” Still, he added that the main motivation for mining is the way it eliminates the possibility of a monopoly by companies that happen to own “massive data processing facilities,” which is why he thinks that profitability is coming back.
The computing power of hash rates have seemingly been left unaffected negatively by the sudden drop that Bitcoin recently faced on the 21st of November. Based on the analysis of hashrate data, allocation of this power actually reached an all-time high for the second time ever.
The halving of block rewards, as a whole, has been one of the important and planned events for miners, and it is likely to come with scrutiny over the profitability of this process. Researchers believe that it won’t be profitable for ASIC owners to mine anymore, especially considering that the CEO of Genesis Mining – Marco Streng – states that the company’s most popular ASIC model has reached its productivity limit. The Antminer S9 model, which is the design that Streng is referring to, is limited now, and he added that “a lot of miners are running on a margin of profit.”
Of all of the equipment presently on the market for mining, the S9 from Genesis Mining and the Avalon A851 series from Canaan Creative have been the most widely used. However, their profit margin is just 50% with the current price of Bitcoin, according to the F2Pool index. The lack of profit generation by the old equipment could push the industry to consolidate even more, if there’s any hope of maintaining profitability. The mining pools that lack the support will likely fade away, especially since these smaller miners only account for about 20% of the mining market for Bitcoin.
The chart below shows the infrastructures that aren’t bringing a profit, which could lead them to shut down their operations, unless their electricity costs are lower.
Still, there’s a chance that new mining equipment on the market – found in the chart below – could increase the profit margins, even with the BTC market unchanged. A more in-depth review of the security, insurance, maintenance costs, and other expenses for individual and small-scale miners will need to be performed to see if this equipment will allow them to be profitable as well.
While there are mining opportunities for tokens of many market capitalization amounts, the most popular mining currencies right now include:
Bitcoin Satoshi Vision
In a recent initial public offering (IPO), Canaan Creative managed to bring in $90 million. By all accounts, this would be a success, but it was actually 75% less than what the Bitcoin mining giant expected. Reports on November 20th by Bloomberg indicated that the firm sold off 10 million shares in their company at just $9 each with this IPO. Canaan Creative is actually the second-larges mining equipment manufacturer for Bitcoin in the whole world, even with negative cash flow since last year. In the first half of 2019 alone, the company recorded a $48.2 million net loss.
The speculation over the reduction in the IPO’s size appears to correlate with their loss of Credit Suisse’s support, which happened last week. The company was unable to get an IPO in Hong Kong in 2018, leading them to focus their fundraising on US investors. However, this sale took place just after the lost support.
Even with the failure of the IPO to meet Canaan’s predictions, the company still stands as the first crypto mining firm to host their own IPO. The results could be a sign that interest in cryptocurrency mining is starting to wind down in general, since Bitmain and Coinshares have also struggled to work with regulators and have had to postpone their own IPOs. Both Bitmain and Coinshares are direct competitors of Canaan.
Bitmain filed an application with the U.S. Securities and Exchange Commission for an IPO recently, though they were met with certain requirements that they must meet. While the projection over what Bitmain hopes to bring in through the US-based IPO has not been disclosed, the SEC has required three rounds of inquiries to take place, and the final of these three rounds will last for about two months. Bitmain had also tried to file an IPO in Hong Kong, like Canaan, for $3 billion.
CoinShares, based in the UK, has been considering the launch of an IPO with London’s stock exchange, but there’s been issues with the financial watchdog in the region. CryptoBriefing reports that the company is worried that a denial may be issued for the application, since retail investors could indirectly be exposed to digital assets with the CoinShares stocks.
The cost of profitability directly correlates with the answer to whether crypto mining is still profitable overall. The massive consolidation on the market appears to be the biggest threat to small and individual mining operations, but crowdsourced mining pools could ultimately start controlling more of the network, putting them in direct competition with bigger mining corporations.
The “Contract for the Web” includes nine principles, surrounding what is expected of governments, citizens, and companies.
Some of the organizations included are French and German governments and Google.
Sir Tim Berners-Lee is known for his work as founder of the web. Recently, Decrypt published an article about his release of a new document that Berners-Lee wrote, titled “Contract for the Web.” The document describes, across 32 pages, the commitments that governments and companies around the world should take to “guide digital policy agendas.” There are nine principles included in these materials.
This is hardly the first time that Berners-Lee has voiced his disdain for the current state of the Web, stating that the free access to it has ultimately led to substantial cybersecurity issues and the monetization of personal data. He is presently working with MIT to develop a project called Solid, which he hopes will help with the rebuilding of the Web. He is also hoping that others will join up with his efforts on these concerns.
Speaking with The Guardian, Berners-Lee stated,
“If we leave the web as it is, there’s a very large number of things that will go wrong. We could end up with a digital dystopia if we don’t turn things around. It’s not that we need a 10-year plan for the web, we need to turn the web around now.”
The contract took a year of working groups, which involved ten organizations, and was deliberated amongst 80 signatories. Some of the organizations included the French and German governments, Wikimedia, and Google. Other supporters of the project include Facebook, Reddit, and Twitter, but cryptocurrency companies are notably absent from the endorsers of the project.
At the government level, the document advises that every citizen should be able to connect with the internet, which should be made available all of the time. Governments are also called to both protect and respect the right that individuals have to maintain the privacy of their online activity and data.
Companies involved are urged to make affordable options to make it easy for consumers to access the Web. They also are urged to respect and protect data, just like the governments are encouraged to while developing technology that can “support the best in humanity and challenge the worst,” as described in the Decrypt article.
Citizens are encouraged to create and collaborate online while developing strong communities. These communities should be respectful and should fight for the Web to be a dignified place.
Loukas is expecting the next Bitcoin move to take us to $9k. But it isn’t the time to start celebrating yet because it won’t be a sustainable move.
Though the next jump after $9,000 would be above $10,000, Loukas projects the leading cryptocurrency to drop back under $8,400 in mid-December.
And then would be the time for BTC to go on a tear. Once the flagship cryptocurrency hits below $8,400, it would be the time to shoot up. But even then, Bitcoin won’t be able to make a new 2019 high before 2020.
On June 26, Bitcoin made its 2019 high at $13,900 after recording a surge of 160% in Q2 2019.
Day 23 and at the midpoint of the Cycle for #bitcoin.
As we recently reported, a sell signal could be triggered if the BTC price drop below the 200-day moving average. Bloomberg Analyst, Mike McGlone also pointed out that the market is “in no hurry to take out the old highs.”
While trader Josh Rager sees more downside in future if Bitcoin makes a close below $8,235 with every time frame under monthly looking “ugly,” analyst Galaxy sees a drop below $8,200 soon but only after a few fakeouts. Don Alt also sees Bitcoin turning bearish if we close below $8.2-$8.3k.
The on-chain metrics aren’t any good either. As Bitcoin Exchange Guide reported, investors’ sentiments are mixed and retail investor interest has “plateaued.” As such it is “deciding moment” for BTC.
Long Term: Bitcoin Ranges above $100k
In the short term, Bitcoin is struggling to make it way back above $10,000. But what about the long term?
Changpeng Zhao, the co-founder, and CEO of the leading exchange Binance sees the price going higher as the industry gets bigger.
As for what the CT thinks, economist and trader Alex Kruger conducted a poll on Twitter trying to find Bitcoin’s most likely long-term scenario.
#3 After a few more epic runs $BTC eventually matures and settles into a wide range, like most commodities do (in real-terms). Bitcoin maxis turn into goldbugs 2.0.
#4 Bitcoin dumps into oblivion. People keep on buying the dip. Bitcoiners get REKT.
The majority of the CT, 46% of 4,105 voters, believes after a few more epic runs, BTC will eventually mature and settles into a wide range. 44% of 3,273 voters see it ranging above $100k and 24% between $30k to $100k.
A higher percentage (20%) of people think Bitcoin will dump into oblivion and Bitcoiners will get REKT than those who see Bitcoin becoming a global reserve currency (17%) with hodlers getting “immensely rich” and for the leading cryptocurrency to continue to outperform as scarcity keeps prices going up “forever” (16%).
Stablecoins are digital assets that are pegged directly to a currency or commodity.
The EU is expected to approve the new declaration on stablecoins by December 5th.
Stablecoins are one of the most consistent assets of the cryptocurrency industry, and there have already been many countries and companies to come out with their own versions. While the idea of having an asset pegged to an asset is appealing to some, the European Union is notably setting themselves apart. While the EU isn’t launching their own stablecoin, they have decided to look at how to regulate these assets.
A group of individuals within the EU presidency is working to develop their own guidance on regulating stablecoins, according to someone familiar with the matter who spoke with CoinDesk. The story was originally reported by Reuters, and the declaration will specifically state that the EU should regulate stablecoins.
The source told CoinDesk, “This is a rather short declaration that is about the EU position on how to handle those new types of cryptocurrencies,” the source told CoinDesk. “The focus is on how those cryptocurrencies should be regulated.”
This declaration is meant to come in response to the launch of Libra by Facebook. Even with many regulatory concerns, Libra hasn’t slowed or stopped the progress on their goal of launching next year. The governing council for the asset formally signing onto the project in October. While the declaration expresses the need to regulate stablecoins, it doesn’t state that the EU should create its own cryptocurrency in response. Instead, according to the source, the idea of launching a stablecoin is more of an idea that “should be explored,” though there’s no indication right now that the EU is going to explore it.
The source added, “The statement is to highlight the need for a proper regulatory framework for those stablecoins and as a consequence, different ideas should be explored. One of them is the possibility of having something that is managed by the ECB [European Central Bank] and other central banks.”
At this point, a summary on what the final declaration will say isn’t something that the source feels confident in speaking to. However, on November 8th, the statement will be officially finalized before being presented to the finance ministers of the EU. However, the EU is expected to adopt the declaration on December 5th, which is the next meeting of the finance ministers, says the source.
According to analyst The Cryptomist, Bitcoin has broken down a rising wedge and now we are testing sym triangle resistance.
“If we break below, (approx 10.1k) then bulls are in big trouble,” she said.
The Cryptomist has previously emphasized on the gap left by CME Group’s Bitcoin futures being the force behind Bitcoin’s drop to $8,500.
However, a drop to this level means 50% retracement of 2019 high move.
As for the gaps, they are not meant to be filled, said economist and trader Alex Kruger.
“Even though gaps often fill, gaps are not meant to be filled. Gap filling is a combination of random variations (price moves), self-fulfilled prophecy (traders assign value to gaps), and lack of support/resistance within gaps (i.e. no trades inside),” explained Kruger.
Large re-accumulation Happening
Despite it being a weekend, Bitcoin is doing nothing new.
We are still waiting for a close below $10,025 that would lean to bearish while a close above $10,800 is bullish for the leading cryptocurrency, said crypto investor and trader Josh Rager.
And if Bitcoin breaks above $12,000, bulls will be back into the beast mode.
“Above 12K price enters hot air territory i.e. little resistance. Price will eventually break out and go vertical before starting to fill in,” said Kruger.
In a separate analysis, Rager shared how the current Bitcoin price movement looks like “one large re-accumulation” happening after big players took profits at $13,900, the 2019 high in late June.
According to him, the price could drop down again but “highly unlikely” that it falls below 20 MA, at high $8ks currently.
In the short term, a drop is expected but the bigger picture is much larger.
“$BTC will eventually break through $20K, in 2020 or 2021, and once it does, it should trade $30K, $40K and $50K fast,” Kruger said.