Historically, Bitcoin Really Hates September; What Should Traders Expect?

Bitcoin has started September on a bad note.

The digital currency failed to keep above $12,000 and went down to almost $10,000 level on Wednesday.

This resulted in the market sentiments getting overturned fast, from “extreme greed” to “fear.”

Up 38% YTD, bitcoin is down about 50% from its all-time high of $20,000.

Yesterday, the market had relief as BTC stepped up to $10,645, which led investors to expect the weekend to bring good news for the market.

But the market is moving back down today.

At the time of writing, BTC/USD has been hovering around the key psychological level $10,000.

For a brief moment, the digital asset dropped under $10k to $9,975 on Bitstamp.

This isn’t a surprise for two reasons, one – dring the last bull market, bitcoin saw several, as much as nine, pullbacks of 30% to 40% on its way to the peak.

Second – this month isn’t good for bitcoin.

After March and January, September is the worst month for the leading cryptocurrency in terms of average log returns. Five out of seven times, this month has been a red one for Bitcoin and the other two times, it was barely in the green.

So, expectations for greens should be low in September while being prepared to grab the buy the dip opportunities.

The quarter fourth could bring the much-needed reprieve, filled with more green than red.

Historically, September isn’t bad just for bitcoin but also for the stock market.

As a matter of fact, the three leading indexes of the stock market have performed the poorest during the month of September, which got it dubbed as the “September Effect.”

It first happened in the late 1800s when the Dow Jones Industrial Average fell an average of 0.8%. And the S&P 500 has been dropping about 1% on average this month since 1950.

There is no plausible theory for this other than that these corrections are caused by tax-loss selling from mutual funds or pent-up suffering from investors who just returned from their summer vacations.

This time, however, lockdown due to coronavirus has people working and vacationing right at their home.

For stock markets, the fear doubles because of the election-related uncertainty. Reportedly, S&P 500 sheds 0.2% on average in the election year.

So, with bitcoin still being a risk-on asset, the stock market expecting more losses, and the month not being bullish for the digital assets either, pains could be ahead for the digital asset.

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Author: AnTy

Swiss Govt. Rejects Crypto Valley’s $103M COVID-19 Relief Loan for Blockchain Startups

Switzerland’s own crypto valley located in the Canton of Zug known for its business-oriented regulations is struggling to keep businesses afloat.

Its request of 100 million francs, which is around $103 million USD, as a COVID-19 relief package has been rejected by the Swiss government. The request for the relief package was initiated back in April by the finance director Heinz Taennle, reported a local daily.

The crypto valley would now have to depend on the 15 million Swiss Francs loan announced by the canton of Zug. The application for 100 million francs relief package was the only one rejected by the federal government among 24 similar COVID-19 related relief packages.

Almost two-thirds of the crypto valley blockchain firms which applied for the Federal loans failed to receive any assistance from the government.

The capital crunch in the crypto valley mainly occurred due to the ongoing coronavirus pandemic. Forcing many private equity investors into offering capital support in the fintech valley.

The New Loan Scheme Would be a Joint Effort by Federal and State Government

The newly announced 15 million swiss francs loan scheme would require fintech firms in the valley to submit their loan application by May 27th, 2020, and the loan can be applied to any bank in Switzerland. The loan amount would be covered by both the Federal government and the canton of Zug, where the federal government would offer 65% of the amount and the Zug would offer 35% of the loaned amount.

The situation in the crypto valley is getting worse with each passing day, as 80% of the operating companies in the valley report that they won’t be able to make it through the end of the year.

The main reason behind such outcry is the reluctance of equity investors to invest their money amid financial uncertainty which has been looming even before the pandemic struck which made the situation even worse. Almost 57% of the firms in the crypto valley have laid off a significant portions of their workforce, turning the crypto valley into death valley.

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Author: James W

Bitcoin Market in Backwardation Supports A ‘Cautious Tone’ for BTC Price Short Term

  • Bitcoin price certainly go down but wouldn’t be “surprising if they keep melting up”
  • June Bitcoin futures contracts on BitMEX trading as low as $6,665 while $6,725 on CME
  • A break below $5,000 zone will be particularly painful

The price of Bitcoin on spot exchanges is currently trading around $6,750 after sliding below $7,000 over the weekend. Some extremely bearish predictions are even calling for fresh lows.

However, the good thing is Bitcoin has found a “higher floor” and given that currently, the cash on exchanges is at all-time highs and sentiments are still near their all-time lows, and leverage at two-year lows, “it is VERY hard to short risk assets into a wall of cash right now, including Bitcoin. Prices can certainly go down, but it would not be surprising if they keep melting up,” said Jeff Dorman of Arca.

The stock market is also recording losses amidst the report of the largest drop of 8.7% on record going as far as 1967 in the US retail sales for March. This has been because of the majority of people staying home to slow the spread of coronavirus amidst the news of companies furloughing employees.

Treasury yield also fell to a 7-year low on the back of this data. The two-year-old hit the lowest level of 0.199% since July 2012.

The relief came in the form of stimulus checks that the government started sending late last week that Americans are largely spending on food and gas.

Lower prices in the future

This week, we started seeing the open interest on Bitcoin futures slowly rebounding.

However, bitcoin futures are in backwardation which means the price of an underlying asset currently is higher than prices trading in the futures market.

On CME, June 2020 contracts are trading at $6,725 while Bakkt’s June contracts are at $6,755.

Bitcoin perpetual swaps meanwhile are at a much lower price.

The June Bitcoin futures contracts on Kraken are trading at $6,721, $6,707 on FTX, $6,690 on Deribit, $6,683 on Huobi, $6,668 on OKEx, and the lowest on BitMEX at $6,665, as per Skew Markets.

Futures data suggests speculators are expecting to see lower prices in the near future.

According to Denis Vinokourov, head of research at Bequant, a crypto investment brokerage, “a break below $6,500 level will likely lead to another round of liquidations and send the price towards the $6,100/ $6,200 area.”

With not much support until the $5,000 zone, “a break below will be particularly painful,” for bulls, as such calling for a cautious tone which is supported by the shift in the futures curve into backwardation.

Over-the-counter (OTC) bitcoin liquidity provider B2C2 also warns of caution with the weekly BTC chart “tapped the trendline and formed a shooting star. Unfortunately no follow-through in a negative funding environment (leveraged shorts outweigh longs).”

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Author: AnTy

Japan ‘Must Be Prepared’ To Launch A CBDC If Public Demand Increases: BoJ Official

According to a Bank of Japan’s (BoJ) deputy governor, the country needs to keep on doing research on what issuing a central bank digital currency (CBDC) would mean, even if a launch is not yet in the cards.

As reported by Reuters on January 30, Masayoshi Amamiya said at a seminar held in Tokyo that if the payments technology continues to advance so fast, the demand for a CBDC may increase, so the bank needs to know everything about the groundwork of owning a digital currency. Here are Amamiya’s exact words:

“The speed of technical innovation is very fast. Depending on how things unfold in the world of settlement systems, public demand for CBDCs could soar in Japan.”

BoJ Is Not Yet Planning to Issue a CBDC

The governor continued his speech by saying BoJ doesn’t have any plans to issue a CBDC just yet, as potential problems still need to be researched, the monetary ramifications and security for the digital yen being mentioned among such problems. Even so, BoJ must be prepared, he added. Amamiya’s comments arrived a few days after members of the ruling Liberal Democratic Party in Japan said they would make the proposition for the BoJ to issue a digital currency.

70 Japanese Lawmakers in Liberal Democratic Party Say the Digital Yen Is a Must

There are about 70 lawmakers in the Liberal Democratic Party who think that issuing a digital yen is a must, especially when it comes to competing with Facebook’s Libra and China’s own CBDC, which are both scheduled to launch this year.

In the past, Amamiya has addressed the idea that central banks, by issuing their own digital currencies, would bring more effectiveness to the negative interest rate policies. He said in July that if the digital yen is issued by BoJ and the interest rate set is to be negative, businesses and individuals would be charged if they’d hold the CBDC, which would lead to them to drop the digital currency and to hold cash instead, moment in which banks would have to make an effort to get rid of cash.

As for the time being, Amamiya thinks that BoJ issuing a CBDC would not influence the bank’s control over asset prices, bank lending, and interest rates, yet the monetary policy may turn out to be very complex as a result of “the transmission mechanism” changing.

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Author: Oana Ularu

Vitalik Buterin Back on Dumping his Ethereum? It Could Crash ETH into Double-Digits

  • Ethereum co-founder Vitalik Buterin keep on dumping his Ethereum
  • Chances of ETH even crashing to double digits
  • Etherem 2.0 puts its under regulators’ scrutiny

A total of 214,953 Ether worth about $26.8 million has been sent to cryptocurrency exchanges on Dec. 25.

ViewBase, blockchain analysis company reported 99,987 of these Ether has been sent to Huobi, 89,058 ETH to Kraken, and 25,908 ETH to Binance.

The 90k of Ether sent to Kraken particular originated from a single whale which received most of its Ether from Ethereum co-founder Vitalik Buterin’s wallet address. This wallet still has a balance of 350,000 Ether left.

The firm deduced that the whale is likely to be an Ethereum developer or Buterin himself.

Is Buterin dumping his Ethereum?

According to the Reddit post, Buterin previously revealed that he received a total of 630,000 ETH, 553,000 out of which has been from the genesis pre-mine and 150,000 from the developer purchase program.

In April 2016, he sold 25% of his ETH position as he divulged, “I’ve sold about a quarter of my ETH. Meh, I am not going to apologize for sound financial planning.” As per this, he sold about $1.1 million’s worth.

Just like other founders, such as Charlie Lee of Litecoin who sold all of his LTC during the last bull run, Buterin than sold another of his 30,000 ETH around the top in December 2017.

As we reported, Buterin also persuaded Ethereum Foundation to sell 70,000 of their ETH at its peak.

Now, 90k ETH has been moved by Buterin again.

Chances of crashing to double digits

Eth currently is trading at $125, down 8% on a year-to-date basis and down 92% from its all-time high of $1,570.

But such a huge amount of ETH, if dumped in the market, would put selling pressure on the second-largest cryptocurrency that could see its price sliding even more.

Currently, analysts and traders aren’t feeling very bullish about it either.

Ethereum price chart, Analyst CryptoDude says, “looks like utter shit.”

“Don’t get your hopes up until it reclaims $365 – if it does so then we can talk about 1k+ targets. Until then this is a short every bounce setup,” explained the analyst.

However, until we move back to $160, there are even chances for crashing to double digits.

However, not everyone is bearish…

Ethereum 2.0 Puts It Under Regulators’ Scrutiny

But Ethereum’s pain isn’t limited to just price. Its much-anticipated 2.0 Proof-of-Stake (PoS) transition will also put it under SEC’s scrutiny.

Last month, US CFTC Chairman Heath Tarbert indicated that the agency and US SEC is undertaking a careful analysis of Ethereum 2.0 that fintech attorney Grant Gulovsen says could have

“significant negative implications for the Ethereum Network’s planned upgrade as well as the wider cryptocurrency market.”

Gulvosen says he isn’t trying to create FUD, but encourage those who develop digital asset-based technology to accept that laws apply to their products and developments and they need to proactively engage with regulators, so as not to “run afoul of applicable legal and regulatory frameworks.”

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Author: AnTy

Here’s Why Big Fund Managers Won’t Be Buying Bitcoin Until it Passes Trillions

Quick Look:

  • Institutions don’t come until it gets big enough
  • Just keep on HODling and you get to rake in huge gains

The best way to weather the crypto market and earn serious gains on Bitcoin is HODLling.

All that an individual Bitcoin investor can do is HODL and they know it well and they do it well. As we reported, 11,580,000 Bitcoin hasn’t been moved in more than a year. This has been despite an 85% increase in BTC price during that time.

As Bitcoin enthusiast Rhythm Trader said, “Hodlers of last resort are insane.”

But this insanity can pay off extremely well because “Professional fund managers literally can’t hodl,” points out analyst Ceteris Paribus.

This deduction was highlighted in the Wall Street article “How You Can Get Big Gains That Wall Street Can’t.”

It reveals the “dirty secret” of the investment business that fund managers just don’t hold stocks and not because they don’t want to but because they simply can’t.

It has been found that small investors actually ave a “big edge” over the giants of Wall Street when it comes to capturing the gains. The reason is,

“to earn such superior long-term results, you have to withstand bone-cracking short-term downdrafts along the way—something most fund managers can’t do.”

It’s all about HODLing

The insight emerged from the analysis between a little known Jack Henry & Associates company and Warren Buffett’s Berkshire Hathaway.

If you’d invested $1,000 in Jack Henry stock at its closing price on Sept. 1989, you would have had a whopping $2,763,000 on Sept. 30, 2019.

Now, the same $1,000 invested in Berkshire Hathaway would have only grown to $36,000 and $16,000 in the S&P 500.

However, this would have only been the result of the determination, in other words, HODLing.

Because HODLing means weathering through the brutal winter of price drops and crashes. In the case of Jack Henry, it was in June 2001 through Oct. 2002 when the company’s shares fell 67% and then the stock underperformed the S&P by 72% points between Oct. 1996 and August 1999.

Also Read: Bank of America Merrill Lynch Calls Bitcoin (BTC) The Best Asset Class In The Last 10 Years

But why can’t professional investors withstand this kind of pain?

David Salem, co-chairman of New Providence Asset Management, who has been behind this analysis says,

“It’s potentially career-ending for a manager to hold such big interim losers.”

As for small managers, they have to sell if the position gets too large and dominate their portfolios.

Small stocks actually earn their highest return when they migrate to large.

Institutions don’t Come Until it gets Big Enough

As we saw in Jack Henry’s case, the company first sold its shares to the public in 1985, 9 years after it was founded. But as of 1996, 41% of the stocks were owned by insiders and it wasn’t until 2006 did about 5% of the shares were owned by institutional investors.

It was in Nov. 2018 that the company grew to a size large enough to join S&P 500, where it currently ranks at 402nd. Now, 94% of its stocks are held by institutions.

This is yet another best-case scenario for buying and HODL.

As such, professional fund managers will “buy Bitcoin once it passes a couple Trillion” says Paribus. This means individual investors are in the best position to rake in gains by just keep on HODLing.

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Author: AnTy

Bitcoin Retracing the 4th Biggest Bull Move Ever, How Low are we Going?

  • Bitcoin could move lower, But those waiting for $6k will keep on waiting
  • Historically, November one of Bitcoin’s “greatest” performing months that dates back to 2012.

On Nov 8, Bitcoin price went below $9,000, going just under $8,700, a level is last seen on Oct. 26. Currently, BTC/USD is trading at $8,830 with 24 hours gains of 0.13%, as per Coincodex.

Trading volume has taken a severe drop as well with only $136 million worth of Bitcoin traded in the past 24 hours.

coin360-11-10

This drop followed Bitcoin’s 4th biggest bull move ever as the price jumped 42%, from $7,200 to $10,500. A move triggered by China’s President Xi Jinping emphasizing on embracing blockchain technology.

However, economist and trader Alex Kruger believe this narrative to be “over-hyped as he says “most bullish narratives” are.

The ongoing drop in BTC price trader Mayne says is retracement after a consolidation that could go lower but those waiting for $6k will keep on doing just that, waiting.

But how low we could go?

According to trader Credible Crypto, there would be one more leg down to $7,400 level. After this final drop, the trader expects the leading cryptocurrency to make a run for the 2019 high at $14,000.

Analyst The Cryptomist is expecting a bigger drop. She sees 4hr CME gap getting filled with BTC at 7,185 as she said,

“So fake out finally confirmed. I expect one more touch to support region of wedge.”

But not everyone is expecting a leg down.

“I wish i was kidding. we’re trending up and there’s nothing ur silli retarded bias can do against it,” wrote popular trader Majin.

Given the fact that this is November, it is further adding to the bullish predictions. Historically, it has been one of Bitcoin’s “greatest” performing months that dates back to 2012.

Just like any other time, the market is divided into bears and bulls. And no matter the direction Bitcoin price takes, it would be good for an investor either way.

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Author: AnTy

Crypto Warning: Imposter Trezor Bitcoin Wallet Website Targets Users By Using URL Typos

While the developers of trezors argue that Trezor wallet is a safe and secure way to keep your cryptocurrencies from cyber attacks and hackers, the question now arises is it still safe?

A Redditor has apparently spotted an imposter website for Bitcoin hardware wallet Trezor. Imposter scams have become quite common and can vary in the forms that they take place in. Scammers pretend to be someone you trust, and by way of an email or call convince you to send them money.

Such is the case, a Reddit user discovered an imposter website which is trying to steal people’s bitcoin through the trezor wallet. Castorfromtheva – Reddit user, on Oct 4th posted concerning issues regarding the website, that they performed a test on the site to confirm its authenticity, turns out that it wasn’t true. He states –

“I just made a little ‘typo’ test and entered ‘tezor[dot]io’ where I obviously left out the ‘r’. I was instantly redirected to a site called https://trezor[dot]run/start/ which is not the original trezor site (the correct size is http://trezor.io respectively https://trezor.io/start/).”

The Reddit user further explains that when you put a typo error in the URL it would so direct the user to the Trezor scam website probably installing a compromised computer code.

Bitcoin engineer and self-proclaimed BTC maximalist Jameson Lopp took to Twitter

James Lopp, a self-proclaimed BTC extremist also a Bitcoin engineer took to his Twitter account and tweeted –

raising an alert regarding this to pretend website online.

On May 23 as reported by Cointelegrah, there was an app who appeared to be the Trezor wallet. Some scammers were noticed for adding fake cryptocurrencies to their Google Play store. While the app had no Trezor branding, it appeared to have a conventional login display asking users for their credentials.

A warning was passed by the company to its users in Nov 2018 of dummy versions being made of its wallet. Company representatives said they witnessed Trezor dummy’s being released over the past years but this fake Trezor software produced by an unknown seller comes as a shock.

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Author: Sritanshu Sinha

Another 100 Million USDT Minted At Tether Treasury as Stablecoin Presence Continues Upward

Another-100-Million-USDT-Minted-At-Tether-Treasury

Bitcoin has been soaring like it is the end of 2017 and now the entire crypto ecosystem wants to keep up. Popular Twitter account Whale Alert that tracks down huge movement in the crypto community noted that 100,000,000 USDT was minted at Tether Treasury.

The cryptocurrency has been sent to Tether’s treasury account and all of the newly printed USDT is based on Ethereum’s blockchain.

Naturally, a move of the kind sparks quite a lot of curiosity amid the cryptocurrency community, with most of the people thinking that there is some sort of a large price move incoming. The crypto community accuses Tether of not having sufficient fiat reserves to back all of the Tether coins that are currently in circulation, posing a threat to the overall market integrity. Fears of Tether being insolvent came to a head in advance of the November 2018 drop to deeper lows.

However, at this point, it’s rather premature to come to any conclusions based on the words of Bitfinex’s CTO. The amount of USDT which has been printed hasn’t hit the market yet and it’s questionable when and if it will do so.

Regarding previously mentioned accusations, Tether had issued a statement saying:

“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.”

In the past, fast issuances of USDT have been linked to a price climb for BTC, a trend still noticeable in 2019. The fact that Tether has issued over $350 million in a couple of months has some analysts looking at the company very closely.

Latest Tether News and USDT Market Updates

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Sritanshu Sinha