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Bitcoin Blockchain

Bitcoin’s Illiquid Supply Continues to Grow – What This Means

Bitcoin’s uptrend is currently slowing as the leading cryptocurrency has been down by 10.47% in the last 24 hours, trading at $45,213 at the time of writing, according to CoinMarketCap. This outcome is linked to the fact that risk assets are experiencing a global sell-off, and bond yields are surging on the expectation that inflation will continue to rise.

Nevertheless, crypto trader Carl Martin tweeting under the pseudonym The Moon believes that Bitcoin (BTC) may be getting ready for a monumental move because the present price correction may a temporary pullback before the cryptocurrency surges higher.

BTC is not a stranger to numerous steep pullbacks in a bull run, as acknowledged by Bloqport. The crypto data provider explained

“Historically, Bitcoin goes through multiple steep corrections in a bull run. Between 2016 to 2017, we saw at least six. On Nov 13, 2017, BTC hit a low of $5,844 then hit $20,000 34 days later.”

The crypto trader, therefore, believes that the present price consolidation could trigger a monumental move.

Growing illiquid Bitcoin supply – what this means

Martin’s sentiments are echoed by on-chain analyst Rafael Schultze-Kraft who disclosed that Bitcoin’s liquid supply is nosediving. This can be interpreted as a bullish signal. He explained:

“The amount of illiquid Bitcoin supply in the network has grown more than the circulating supply since 2017. Meanwhile, liquid supply continues to see a steep decrease. Pair this with the demand from MSTR, Square, Tesla, Grayscale, et al., and understand how bullish this is.”

Image

Source: Glassnode

Illiquid BTC supply signifies a holding culture as more participants are storing Bitcoin for speculative or future purposes, which is an indication of bullish behaviourr. 

Jan & Yann, the co-founders of on-chain data provider Glassnode, have also delved into the issue of the current pullback being bullish. They said

“Confidence in the continuation of the Bitcoin bull market during this pullback seems to be higher than for the previous dip in Jan. This chart is a great proxy for long-term holders’ sentiment.”

Image

Source: Glassnode

Time will tell how the leading cryptocurrency moves from here. Bitcoin billionaire Tyler Winklevoss has hinted that the current price of $45k “smells of opportunity,” perhaps suggesting that this is the optimal time to buy the dip and purchase BTC at a lower price.

Image source: Shutterstock Source

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Bitcoin Blockchain Coinbase Crypto_Currency Ethereum Investment

Coinbase’s S-1: The Number That May Make the Exchange Nervous

Jeff Roberts, executive editor at Decrypt and author of “King of Crypto: One Startup’s Quest to take Cryptocurrency Out of Silicon Valley and Onto Wall Street” talks about Coinbase going public. In this episode we discuss:

  • Jeff’s biggest takeaways from Coinbase’s S-1 filing (0:56)
  • why institutions are choosing Coinbase (2:42)
  • how Coinbase going public feels like validation for bitcoiners (4:37)
  • issues Coinbase may face as a business that currently generates 96% of revenue through transaction fees (6:25)
  • Why Surojit Chatterjee has so much equity in Coinbase (11:29)
  • why Coinbase has only invested $130 million in crypto through its corporate treasury (12:26)
  • whether or not decentralized exchanges like Uniswap pose a threat to Coinbase, and whether unregulated centralized exchanges might squeeze them from the other end (15:41)
  • challenges Coinbase will face going forward (19:13)
  • how well the stock will do once it’s listed (20:05)
  • Crypto News Recap (20:59)

Thank you to our sponsor!

Crypto.com: https://bit.ly/3jzkTAD 

Download the Crypto.com app here: https://crypto.onelink.me/J9Lg/laurashinpodcasttesla

Episode Links

Jeff Roberts

Twitter: https://twitter.com/jeffjohnroberts

Personal Website: https://jeffjohnroberts.com/ 

Decrypt: https://decrypt.co

Kings of Crypto: https://store.hbr.org/product/kings-of-crypto-one-startup-s-quest-to-take-cryptocurrency-out-of-silicon-valley-and-onto-wall-street/10436

Coinbase S-1 Filing Information

S-1 Form: https://www.sec.gov/Archives/edgar/data/1679788/000162828021003168/coinbaseglobalincs-1.htm

Coinbase Profit: https://decrypt.co/59347/coinbase-big-profit-for-2020-ahead-of-milestone-ipo-direct-listing

S-1 Deep Dive: https://www.theblockcrypto.com/post/95921/coinbases-s-1-public-filing-is-now-public-setting-stage-for-a-direct-listing-on-nasdaq

Sending to Satoshi Nakamoto: https://decrypt.co/59509/coinbase-s-1-filing-bitcoin-satoshi-nakamoto + https://twitter.com/laurashin/status/1364954956571279369 

Share Distribution: https://decrypt.co/59439/coinbase-insiders-very-rich-goes-public

Pre-IPO Shares: https://www.theblockcrypto.com/linked/96057/coinbase-pre-ipo-shares-ftx-s1 

Armstrong Income: https://www.coindesk.com/coinbase-sec-form-s-1 

Balance Sheet: https://www.theblockcrypto.com/post/96021/coinbase-says-holds-bitcoin-btc-on-balance-sheet 

Transaction Revenue: https://twitter.com/lawmaster/status/1364972834167148548

Link to the Crypto News Recap:

https://unchainedpodcast.com/the-one-figure-in-the-coinbase-s-1/

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Categories
Blockchain Ethereum

Inside the blockchain developer’s mind: Koinos approaches testnet

Cointelegraph is following the development of an entirely new blockchain from inception to mainnet and beyond through its series, Inside the Blockchain Developer’s Mind. In Part Four, Andrew Levine of Koinos Group discusses some of the challenges the team has faced since identifying the key issues they intend to solve.

Earlier in this series I outlined three of the “crises” that are holding back blockchain adoption; upgradeability, scalability, and governance.

In this post I will summarize the solutions we’ve developed to these problems, which we will be showcasing in the upcoming Koinos testnet planned for the second quarter of 2021.

Since that series Koinos Group has successfully launched a token, KOIN, as a proof of work mineable token on Ethereum. By using proof of work to distribute the initial token supply we were able make the token accessible to early adopters and forgo an ICO.

Assessing the ICO model

ICOs and similar token sale tools, while not without their use cases, have created their own crisis within the space by misaligning incentives before development even begins. The issue is not with the ICO as a tool, but what happens when a team is financially rewarded before they have even shipped a product.

While so many projects have followed in the footsteps of Bitcoin, it’s surprising how few have replicated arguably the most successful aspect of its launch; a token distribution exclusively through proof of work.

The benefit of this approach is that it ensures with algorithmic certainty that the people behind the blockchain have no advantage in acquiring the token. In short, everyone, no matter who they are, has to make a financial sacrifice in order to acquire that token and the scale of that sacrifice is determined by some neutral third party. In the case of proof of work, that neutral third party is the manufacturer of hardware.

For Koinos Group, that means we had to spend money to acquire our token just like everyone else. In fact, because we have to spend most of our time developing the product, we are even at a disadvantage relative to professional miners. So we have to keep working to add value to the protocol if we’d like to get a return on our investment.

Proof of work algorithms are not without their problems, but we mitigated those in a few ways.

  • First, the mainnet will be governed by a totally different consensus algorithm that won’t be proof of work or proof of stake, so any attempt to develop an ASIC would be a waste of resources.
  • Second, we made the algorithm GPU resistant.
  • Third, we released this token long before releasing our mainnet. In fact, we released the token long before we had even completed development of our framework. Without a functional product, this token becomes a way for people who believe in our team and who share our vision for a fee-less smart contract platform to acquire the token at a reasonable cost.

Rapid rate of improvement

Part of what makes this launch strategy work is the innovative property set of Koinos. We built Koinos totally from scratch, not around any single feature like transactions per second or sharding, but with the goal of creating a blockchain that would improve at a much more rapid rate than any other blockchain out there.

In our experience developing the Steem blockchain, the need to execute hard forks was the single biggest factor holding back progress. If we wanted to eliminate that bottleneck, we reasoned, moving as much of the system code as possible into smart contracts that could be upgraded in-band would do the trick.

That’s why the Koinos blockchain framework contains only the most basic blockchain features (called “thunks”) like contract input/input, getting parameters, and writing to the database. All of the more complex features that people are more familiar with (consensus algorithm, accounts, resource management, governance, etc.) have been moved into modular WASM smart contracts running in the virtual machine that can be upgraded without a hard fork.

Because all behaviors are now coded in distinct “modules” that can be individually “upgraded” we call this feature modular upgradeability.

As a result of modular upgradeability, any behavior can be added to the blockchain without a hard fork because individual upgrades can be distributed in blocks and transactions that are pushed to the network much like an operating system patch, but with the added benefit of an on-chain record of the entire upgrade path.

By moving nearly all of the system code of the blockchain to smart contract modules that can be upgraded without a hard fork we have made Koinos into a blockchain that derives its strength not from the features it is born with, but based on its ability to rapidly acquire new and better features faster than anything else out there.

This is why we call Koinos the first blockchain capable of evolution.

Microservices

Modular upgradeability was just the first major technical innovation that we developed to make Koinos less monolithic and an order of magnitude more upgradeable. Just like there is code that does not need to be implemented natively (in the blockchain itself) but that can be implemented as smart contracts (most of it in fact), there is plenty of code that does not need to be implemented either natively or as smart contracts and can instead be implemented as microservices.

Microservice architectures have many benefits which is why this has become the industry standard for modern software development, but one major benefit is scalability because individual services can be scaled up without having to scale up the entire system. This can dramatically reduce the cost of running a network while improving both the speed and quality of improvements to that network. As a result of historical accidents, blockchain stacks appear to be the last to adopt this new standard as Koinos will be the first blockchain built on a microservice architecture.

This creates amazing new opportunities for developers who will be able to build application specific microservices for Koinos that will help them run their nodes, and their applications, more efficiently; and as a consequence deliver better user experiences. Best of all, this will make Koinos node operation more accessible, thereby improving decentralization, and enabling the network as a whole to run more efficiently so that developers and their end-users can get more out of their decentralized applications.

Multi-language support

Another benefit of a microservice architecture is that individual microservices (basically small programs) can be written in the best (fastest, most secure, best libraries, etc.) programming language for the job, a capability we also wanted to offer for smart contract developers. But in order to take advantage of this trait we needed to develop a way for these small programs written in different languages to “talk” to one another in a way that conformed to the unique needs of a decentralized network. To solve this problem we created a cross-language serialization framework named Koinos Types.

Koinos Types is like the Rosetta Stone for blockchain data structures. It allows programs written in different languages to talk to one another in a simple and unified way by giving them access to the same objects (the “building blocks” of modern programming languages). Koinos Types allows for the interpretation of Koinos (i.e. blockchain) data structures in practically any programming language which will be extremely useful for the development of blockchain-related microservices, clients, and smart contracts.

Koinos Types solves a number of problems. It helps us add multi-language support to Koinos more generally (including for smart contracts), it enables microservices to communicate with one another, and it makes it far easier to develop and update client-libraries. While modular upgradeability and the microservices architecture alone make Koinos far more upgradeable than any other blockchain, Koinos Types takes that upgradeability to another level. That’s why we were so excited to make Koinos Types the first piece of Koinos that we open sourced.

As you can see, ensuring that Koinos can improve at a more rapid rate than any other blockchain isn’t about any one feature.

  • It’s about getting the incentives right from the beginning.
  • It’s about ensuring that the blockchain has modular upgradeability.
  • It’s about modularizing the very architecture itself as microservices.
  • And it’s about making sure that developers operating at every level of the stack (not just smart contracts) are able to use the programming languages they already know and love.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Andrew Levine is the CEO of Koinos Group, where he and the former development team behind the Steem blockchain build blockchain-based solutions that empower people to take ownership and control over their digital selves. Their foundational product is Koinos, a high-performance blockchain built on an entirely new framework architected to give developers the features they need in order to deliver the user experiences necessary to spread blockchain adoption to the masses.

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Bitcoin Blockchain Ethereum

5 Legendary Investors Share Their Predictions About Bitcoin Prices

Undoubtedly, Bitcoin has reshaped the dimensions of the cryptocurrency market with its bull runs.

Bitcoin transactions are confirmed by miners who are rewarded with BTC for each block that is verified and added to the blockchain. Bitcoin block reward is reduced to half every four years. As a result, miners receive less BTC over the course of time.

Today, Bitcoin prices are trading at around $49,000. Different aspects of Bitcoin make it an incredible financial technology with the potential to revolutionize the world. Bitcoin’s projected growth is expected to be significant and reflects its true usefulness as a global currency. 

Are there any boundaries that are set to bitcoin growth? If yes, then where is it? 

There is a wide range of long-term and short-term Bitcoin price predictions. There also exists some predictions that are not bound to any time span. Below are some predictions from Bitcoin’s well-known evangelists.

Prediction #1: Pishevar claimed that Bitcoin will reach $100,000 by 2021

Shervin Pishevar is an angel investor and venture capitalist. He is also the co-founder of Hyperloop One and Sherpa Capital. He has invested in numerous tech giants such as Uber and Airbnb. 

This legendary investor tweeted that Bitcoin will reach $100,000 by 2021 considering its rapid pace of acquisition. This prediction was made after December 2020, when Pishevar met the CEO of MicroStrategy, Michael Saylor because his company invested more than $1 billion in Bitcoin during 2020. It is not a surprise to see how Pishevar is obsessed with Bitcoin considering his meeting with Saylor and his previous predictions about the United States’ economy.

Prediction #2: Casares believes that Bitcoin will hit $1 million by 2027

The founder, as well as CEO of Xapo – a Bitcoin wallet startup – Wences Casares, is also a board member at PayPal among numerous other roles. The reason why Casares became interested in Bitcoin is due to the high financial volatility experienced by Peso, his hometown Argentina’s native currency. The tech giant then went on to buy its first Bitcoin in 2011. 

In New York, Casares claimed in the Consensus 2017 conference that he strongly believes that Bitcoin will hit $1 million before 2027. Even better, on 23 May 2017, he also claimed that Bitcoin will bypass 1 million dollars within the next 5 to 10 years. 

Prediction #3: Winklevoss predicted that Bitcoin will reach $500,000

One of the famous Bitcoin billionaires out there, Tyler Winklevoss, said that the Bitcoin market has the potential to emerge with the speed of light and successfully reach the price of $500,000 by 2030. This evolution will put its market cap on a certain level in comparison to gold. 

Tyler Winklevoss affirmed:

“According to our hypothesis, bitcoin is gold 2.0 and will be a solid reason for the disruption of gold. If this estimation became a fact, bitcoin will have a market cap of 9 trillion. It is predictable that one day, the bitcoin price will be $US 500,000. ”

Prediction #4: Liew said that bitcoin prices can realistically reach $500,000 by 2030

Jeremy Liew is a partner at Lightspeed Venture Partners. The reason why he is famous is because he is the first investor in Snapchat, a very well-known social media application. He has also invested in the listing service VarageSale, the hardware wallet LedgerX, and the multimedia company Beme. The net worth of Jeremy Liew is estimated to be north of $2 billion. 

In May 2017, Liew claimed in an exchange with a business insider that realistically, Bitcoin prices can hit the figure of $500,000 by the year 2030. Peter Smith, who is the CEO and co-founder of the world’s most well-known Bitcoin wallet “Blockchain.com” supported this prediction. 

Prediction #5: Chamath Palihapitiya said bitcoin will bypass $1,000,000 by 2037

The founder of Social Capital and co-owner of Golden State Warrior, Chamath Palihapitiya, started his Bitcoin journey by investing back in 2012. By the year 2013, he added Bitcoins successfully in his general fund, private account, and hedge fund. There was a point in time when he owned 5% of all evolving Bitcoin. 

Palihapitiya predicted that in the next 3 to 4 years, Bitcoin prices will reach $100,000. He added in his prediction that Bitcoin will surely hit $1 million by the year 2037. 

Chamath Palihapitiya claimed: 

“Bitcoin has a potential to be comparable with the value of gold which is a fantastic hedge and stores the value against financial infrastructures and autocratic regimes which is crucial to the proper working of this world.”

Conclusion

Cryptocurrencies are becoming a widespread acquisition by the mainstream public in this modern era of digitization and evolving technologies. Keeping in view these massive price predictions and forecasts from legendary industry experts and investors, there is a high possibility that Bitcoin will replace all other local currencies and cryptocurrencies around the globe in the near future. It is understandable why evangelists are bullish on Bitcoin, with Bitcoin prices hitting such high numbers, ranging from thousands to over $58,000 per BTC. The technological advancements have stimulated an entire industry, projecting an aim to disrupt traditional finance. 

Image source: Shutterstock Source

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Bitcoin Blockchain

Bitcoin Rallies Back to $50,000 on Backing from Ark Investment CEO

Bitcoin (BTC) surged past $50,000 after nosediving to lows of $45,000 as a price correction was imminent after hitting a new all-time high of $58,350. 

Bitcoin Rallies Back to $50,000 on Backing from Ark Investment CEO

Bitcoin’s Tough Week

This price surge of about 7.2% to hit $51,393 in Asian trading was witnessed after Bitcoin’s price plummeted to nearly $45,000 because of significant selling pressure. Cathie Wood, the CEO of Ark Investment Management, trusts that this correction is healthy for the market as she is still very positive on Bitcoin.

The price correction to levels below the $50,000 mark was partly triggered by the liquidation of 474,968 BTC trades worth $4.4 billion on Feb 23.

Furthermore, there was an 11x exchange inflow spike, which signals the urge to transit crypto assets like Bitcoin to cash because they are withdrawn from cold storage intended for future usage or speculation. This trend, therefore, contrasts with the holding culture.

More Stimulus On the Horizon

Bitcoin is expected to continue to benefit from the rollout of more stimulus packages as echoed by the US Federal Reserve Chair Jerome Powell that the central bank is nowhere close to unwinding its easy policy.

Global governments have been adopting financial initiatives like quantitative easing (QE), which involves printing of more money needed to fight the economic impact of the coronavirus (Covid-19) pandemic.

This tide of monetary and fiscal stimulus, together with remarkable institutional investments, has been the engine behind BTC’s present uptrend. One of the corporate giants making notable BTC investments include Square, which has revealed pumping in a further $170 million in Bitcoin.

Square has optimized on the temporary Bitcoin dip and scooped up more of the digital asset, buying approximately 3,318 Bitcoins when the cryptocurrency’s price was trading around $50,000.

Image source: Shutterstock Source

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Bitcoin Blockchain

474,968 Bitcoin Trades Worth $4.4 Billion Were Liquidated In the Last 24 Hours Making Price Plunge Inevitable

Over the weekend, Bitcoin (BTC) soared to a new all-time high of $58K. Nevertheless, the leading cryptocurrency has slumped by 17.95% to trade around $47,830 at the time of writing, according to CoinMarketCap.

New data by Bybt reveals that the liquidation of 474,968 traders in the last 24 hours triggered this significant pullback. The crypto data provider explained:

“In the past 24 hours, 474,968 traders were liquidated. In total, $4.4B was liquidated! This is the craziest day in Bitcoin futures history.”

A spike in crypto exchange Bitcoin inflow

According to on-chain data provider Santiment: 

“There was an 11x exchange inflow spike that initiated Bitcoin’s price correction from its $58.3k ATH. Further data combing revealed that an address was responsible for the 2nd largest BTC transaction of the year, an import of 2,700 tokens to the wallet.”

High exchange inflows signal the urge to transit crypto assets like Bitcoin to cash because they are withdrawn from cold storage intended for future usage or speculation. This trend, therefore, contrasts with the holding culture. CryptoQuant, a market insight firm, has disclosed that the majority of these inflows were experienced in crypto exchange Gemini.

Furthermore, Bitcoin’s steep price correction might be attributed to the comments made by Treasury Secretary, Janet Yellen, who called out the digital currency, saying it is “extremely inefficient,” as a payment method, a position that has been faulted by the cryptocurrency community.

“I don’t think that bitcoin is widely used as a transaction mechanism,” Yellen told the DealBook DC Policy Project. “It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

The present price plunge has washed away the $1 trillion market capitalization Bitcoin achieved after soaring past the $55,000 mark, as the current market cap of Bitcoin stands at $892 billion. Time will tell what’s in store for the top cryptocurrency moving forward. 

Image source: Shutterstock Source

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Bitcoin Blockchain Investment

South Korean Investors Making more than $2,260 from Crypto to be Slapped with a 20% Tax in 2022

The South Korean Ministry of Economy and Finance has announced that investors making at least 2.5 million won, or approximately US$2,260 from crypto trading, will be subjected to a 20% tax starting in 2022. 

The revision of the South Korean tax code

This revelation comes following the nation’s annual tax code revision, which the National Assembly permitted in December. 

According to the announcement:

“The first 2.5 million won is tax-free. For instance, if an investor makes a 10 million won profit from trading Bitcoin, 7.5 million won of that amount will be subject to the 20 percent tax.”

The report further pointed out:

“Inheritances and gifts of cryptocurrency will also be taxed. In such cases, the price of the asset will be calculated on the basis of the daily average price for one month before and one month after the date of the inheritance or gift.”

Cryptocurrency taxation has been a burning issue in South Korea since the crypto taxation bill was brought up in the nation’s parliament last year.

For instance,  an influential representative of South Korea’s Democratic Party, Yang Kyung Sook, proposed an amendment to re-classify digital assets and cryptocurrency as “commodities” instead of “currency.”

Yang asserted that classifying crypto as goods rather than currency is due to investor behaviour, which he believes qualifies digital assets for a capital gains tax.

The delicate balancing act in crypto taxation

Cryptocurrency investors have been finding themselves in a difficult position because of the heavier taxes imposed on their gains, as compared with stock investment. A police officer surnamed Choi noted:

“I think it’s unfair to charge that much (cryptocurrency) tax when compared to taxes on stocks.”

Therefore, the South Korean government has been struggling to figure out how to deal with crypto taxation because the standard it intends to use is for other non-stock assets like real estate.

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Bitcoin Blockchain

Bitcoin’s Parabolic Price Run Pushes the Cryptocurrency’s Market Cap Above $1 Trillion

Bitcoin’s current bull run has served to push the world’s first and biggest cryptocurrency to a market capitalization of $1 trillion.

According to data from CoinMarketCap, the price of the digital currency has surged by over 8.8% in the past 24 hours, crossing a new all-time high (ATH) of $56,000.00 within that time frame.

Currently, the combined market capitalization of the global cryptocurrency market stands at $1.71 trillion. Bitcoin has proven to be a star digital asset in the crypto space, establishing itself as a unicorn responsible for more than 61% of the value of the entire cryptocurrencies. There are over 8,520 in all.

Institutional Buy-Ups Paid Off

The embrace of Bitcoin by institutional investors is paying off with a corresponding increase in price. A Bitcoin adoption cycle was notably kickstarted with a move from Jack Dorsey’s backed payment firm, Square Inc, and Michael Saylor’s business intelligence firm, MicroStrategy Inc. back in the second half of 2020.

Since these publicly-listed firms dabbled into the world of Bitcoin, it has led to other firms promptly following their lead. Today, many Wall Street firms are shoring up their balance sheets with Bitcoin, bemoaning the unattractiveness of the US dollar amid unrelenting money printing used for covid-19 stimulus packages.

Bitcoin, with a $1 trillion market cap milestone attained today, has further strengthened the appeal of the cryptocurrency industry as the inflow of funds may serve to make regulators rethink their position in the industry. Another step to gain more exposure to Bitcoin for corporate investors is through Exchange-Traded Fund products, and while other nations such as Canada have approved their first Bitcoin ETFs, the US has yet to approve any Bitcoin ETF application.

When this hurdle is crossed, Bitcoin is bound to see a wave of money inflow and the cryptocurrency will gain an even bigger market capitalization in the near future.

Image source: Shutterstock Source

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Bitcoin Blockchain

Bitcoin Surges Past $56k as Addresses Holding At Least 0.1 BTC Hit All-Time High

Bitcoin (BTC) has been on a massive bull run ever since it smashed its previous all-time high (ATH) of $20,000 in December 2020, a milestone set more than three years ago.

BTC has reached a new record-high of $56,286 on Coinbase, although it has since pulled back to $55,304 at the time of writing, per data from CoinMarketCap.

New data by Glassnode reveals that the number of Bitcoin addresses with more than 0.1 BTC has also broken a record. The on-chain data provider noted

“Number of Bitcoin addresses holding 0.1+ Coins just reached an ATH of 3,195,200.”

Image

These statistics show that more participants are joining the Bitcoin network. For instance, with a projection of 1 billion people using BTC in the next four years, Dan Tapiero, the co-founder of fintech and digital asset firm 10T Holdings, believes that this trend will push Bitcoin’s price above $500,000, a prediction that has been given by crypto analyst Willy Woo.

Bitcoin’s value goes through the roof

Bitcoin has been edging closer to a market value of $1 trillion, but this target was finally realized after the leading cryptocurrency soared past the $55,000 mark. Its market capitalization currently stands at $1.03 trillion, according to CoinMarketCap. 

With this milestone, Bitcoin is now more valued than leading corporate giants like Tencent and Tesla, with a market capitalization of $927.12 billion and $757.86 billion, respectively. 

Image

Institutional investments have been the engine behind BTC’s current bull run. Corporates have shown their overwhelming appetite for the leading cryptocurrency based on factors like the fear of missing out (FOMO).

For instance, leading business intelligence firm MicroStrategy Inc. has completed its offering of $1.05 billion in convertible senior notes, a raise that would allow the firm to purchase another $1 billion in Bitcoins. Recently, the corporate giant announced the debt sell-off of $600 million worth of convertible senior notes to qualified institutional buyers.

Image source: Shutterstock Source

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Bitcoin Blockchain Crypto_Currency

Bitcoin & DeFi Markets Are Rallying: Is a Pullback On the Way?

Another week in 2021, another few historic moments for Bitcoin. Last week saw a $1.5 billion investment in BTC by Tesla and Mastercard’s announcement that it would be accepting Bitcoin on its network. This week, BTC crossed through the $50,000 mark for the first time, and held levels above $50K for most of the week.

The move past $50K has brought with it much media attention: Bitcoin, which was already riding high in the headlines because of the Tesla announcement, has stayed in the center of attention–although, not all of that attention has been positive.

Bitcoin’s rally continues–and so do its PR problems

For example, Tesla chief executive Elon Musk appeared to put some distance between himself and Bitcoin in a series of Tweets on Thursday night. In response to a Bloomberg interview with Binance chief executive Changpeng Zhao, Musk wrote that “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

“Tesla’s action is not directly reflective of my opinion. Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company,” Musk explained in another tweet. “[…]
However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere.”

Additionally, Treasury Secretary Janet Yellen once again raised her grievances with BTC on Thursday, telling CNBC that it is a “highly speculative asset,” citing BTC’s volatility over the past several years.

Yellen also referenced Bitcoin’s association with illegal activities: “I think it’s important to make sure that it is not used as a vehicle for elicit transactions and that there’s investor protection,” she said.

However, the Treasury Secretary did say that she believes that proper regulation could solve some of Bitcoin’s problems: “regulating institutions that deal in Bitcoin, making sure that they adhere to their regulatory responsibilities, I think is certainly important.”

In addition to the comments by Elon Musk and Janet Yellen, Bitcoin has also had to once again face up to its carbon footprint problem. It seems that every time Bitcoin’s price captures media attention in a big way, its carbon footprint inevitably follows: headlines comparing Bitcoin’s energy consumption to that of New Zealand, Switzerland, and the Netherlands have populated the cryptosphere for several weeks.

In an interview with Finance Magnates earlier this week, Argo chief executive Peter Wall commented that this is a problem that the Bitcoin community needs to solve: “It doesn’t make sense to be burning coal to make Bitcoin. That’s just not cool,” he said. “The planet has enough problems as it is [without] adding carbon to the atmosphere to create Bitcoin.”

Fields of green across the board–for now

Still, it may be for Bitcoin that there’s no such thing as bad publicly: in spite of the pieces of negative commentary that have been raised against Bitcoin this week, Bitcoin was stronger than ever. At press time, BTC was sitting at roughly $52,800, and showed no signs of backing down.

While BTC may have taken up most of the media spotlight over the past several weeks, it hasn’t been the only cryptocurrency that performed well this week. At press time, Ether (ETH) was sitting at $1930, just $20 short of its latest all-time high; Binance Coin (BNB) had shot up over 40 percent over the last 24 hours, bringing its value to $259.39 at press time. Bitcoin and ETH were both up roughly 10% over the course of the week; BNB had risen a whopping 100%.

Additionally, a number of DeFi assets were performing rather well at press time. According to data from Messari, a number of tokens associated with DeFi projects were up in double-digit or triple-digit percentages over the course of the last seven days; at least 30 of 80 DeFi assets showed gains over the last 24-hour period; of those that showed drops, the worst was less than 25 percent.

A number of analysts have pointed out that when Bitcoin is doing well, DeFi tokens and other altcoins tend to follow: that Bitcoin has some sort of a “run-off” effect. Do Kwon, Co-Founder and CEO of Terraform Labs (TFL), explained the phenomenon to Finance Magnates last week in this way: “as the flagship cryptocurrency, Bitcoin tends to lead while the rest of the industry follows.

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2020 Trends and the Future of BitcoinGo to article >>

In other words, crypto markets seem to have entered a sort of halcyon period: Bitcoin is booming, and altcoins–which are already doing quite well–may soon follow.

However, as well as know, nothing gold can stay. How did we get here–and what’s next?

The channels for institutional BTC investment are more accessible than ever before

John Wu, President of Ava Labs, pointed out to Finance Magnates that the influx of cash into Bitcoin seems to be flowing in from institutional investors. After Microstrategy led the charge with a massive investment last August, a number of major institutions have publicly taken holdings in BTC–Square and Stone Ridge, to name just a few.

John Wu, President at AVA Labs.

Additionally, Craig Kirsner, MBA, and President of Stuart Estate Planning Wealth Advisors, pointed out to Finance Magnates that institutions have also recently been very active with other investing channels related to Bitcoin–specifically, Bitcoin futures markets.

Kirsner explained that the Chicago Mercantile Exchange (CME) “has reported volume spikes” in its BTC futures offerings. Additionally, “open interest for large institutional holders in the bitcoin futures contracts [is] at an all-time high. You can also invest in BTC on the publicly traded markets by buying GBTC (the Grayscale Bitcoin Trust.)”

Institutional cash in Bitcoin could eventually roll into altcoin markets

However, Tesla’s public investment in Bitcoin last week may have been something of a turning point for BTC: the first time a major publicly-traded company made a sizeable, public investment in BTC.

Therefore, Wu believes that the Bitcoin world is at some kind of a turning point: “institutions are just now turning the corner on accepting bitcoin as a high-quality, investable asset, and I suspect bitcoin will continue to be the first asset in every institution’s foray into crypto,” he said. “Bitcoin will still be the main gateway for most, fulfilling the ‘digital gold’ and ‘store of value’ role.”

But just as is often the case with retail investors, Bitcoin’s “run-off” effect could also apply to some of the institutional investors that make their way into Bitcoin.

“I hope [Bitcoin] will open their eyes to projects that are just outside the bitcoin frame,” Wu told Finance Magnates.

“There has been massive progress and pockets of true innovation across the ecosystem with networks enabling entirely new use cases like decentralized finance to flourish. It will also separate the winning platforms from the losers as investors looking to find the next BTC or ETH must examine each project individually, rather than assessing them as a collective.”

Craig Kirsner, MBA and President of Stuart Estate Planning Wealth Advisors.

”I think that Bitcoin will hit $55,000 and then pull back sharply.”

However, while altcoins will likely follow BTC as it continues to gain higher levels, they will also likely follow Bitcoin when it begins to lose steam. While it’s not clear when this might happen, analysts seem to agree that it’s an inevitability.

But when could a pullback happen, and how low could it go? “From a technical analysis standpoint, I think that BTC will hit $55,000 then pull back sharply,” Craig Kirsner told Finance Magnates, adding that “this pullback should be a good time to buy if you haven’t bought it before.”

Michael Calce, Advisor for TrustSwap, told Finance Magnates that a pullback in the price of Bitcoin could erase some of the FOMO-induced gains that may have come as a result of the latest media cycle around the Bitcoin-related Tesla and Mastercard announcements. In other words, those who bought into Bitcoin with the expectation that it will continue to appreciate in a linear fashion may exit the market.

“The worst-case scenario for a retrace will make people upset about losses and induce a panic to sell,” Calce said. “However, sometimes retracing is healthy, especially when a coin can rally back to its previous marker or even higher.”

”People are starting to trust Bitcoin more than before.”

However, even if a pullback is in the cards for Bitcoin in the near future, a number of analysts agree that the narrative of Bitcoin as a store-of-value is gaining strength. As such, Bitcoin is developing fundamental value.

“I do think that Bitcoin can be considered a ‘safe-haven’ or ‘store-of-value’ asset,” Craig Kirsner told Finance Magnates. “There is a finite amount of it and it is a true growing technology.” Therefore, “I do believe crypto adoption will increase in 2021 amongst both institutional investors and average investors,” he said.

Therefore, even if there is a pullback at $55K, it may not be long before BTC reaches back to $55,000 and beyond. Michael Calce told Finance Magnates that “as we see more people and companies get involved with Bitcoin, it will organically rise and surpass $55K.”

“[…] Trust is always the main component and people are starting to trust Bitcoin more than before,” Calce explained.

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