Over the past two days, there has been a notable uptick in concern within the crypto community regarding the U.S. government’s actions toward non-custodial wallets, which facilitate the sovereign storage of crypto assets. Recent events have fueled a widespread belief that a targeted campaign against non-custodial wallets is now underway. Debate Over Crypto Wallet Regulation […]
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Report: Bankman-Fried Stands by Legal Team Amid Potential Conflict of Interest
Sources report that Sam Bankman-Fried (SBF), the erstwhile crypto magnate and former head of FTX, intends to utilize his newly appointed legal team, despite these attorneys also serving Alex Mashinsky, the former chief of Celsius. On Wednesday, in a courtroom declaration, SBF confirmed his complete understanding that his legal representatives were also advocating for Mashinsky. […]
Bitcoin News
Coinbase Executive Urges Congress to Pass ‘Sensible’ Crypto Legislation Swiftly as Middle East Conflict Escalates
Coinbase’s chief legal officer has called on U.S. Congress to pass sensible crypto legislation following reports that Hamas has amassed millions in cryptocurrency amid the escalating Middle East conflict. “We need this industry flourishing in nations committed to the rule of law, not driven to places where human rights and public safety mean much less,” the executive stressed.
‘We Need Sensible Crypto Legislation Passed’
The chief legal officer of cryptocurrency exchange Coinbase (Nasdaq: COIN), Paul Grewal, has called on U.S. Congress to swiftly pass sensible crypto legislation as the conflict in the Middle East escalates.
In a post on social media platform X on Wednesday, Grewal opined: “What’s happened in and to Israel is evil. No funds should EVER be used to support Hamas or any other organization responsible [for the war] — whether those funds are in the form of fiat currency, gold, crypto, or whatever.” In a follow-up post on X, the Coinbase executive emphasized:
That’s also why we need sensible crypto legislation passed here in the United States without further delay. We need this industry flourishing in nations committed to the rule of law, not driven to places where human rights and public safety mean much less.
Currently, the U.S. Securities and Exchange Commission (SEC) sees all crypto tokens, except bitcoin, as securities, bringing crypto platforms under its regulatory purview. However, many contend that the SEC’s regulations pertaining to cryptocurrencies lack clarity, and SEC Chairman Gary Gensler has adopted a litigation-heavy approach to regulate the industry. Additionally, the SEC has lost several legal battles against crypto firms, including Ripple Labs and Grayscale Investments.
Grewal’s statement on Wednesday followed reports claiming that Hamas had received approximately million in cryptocurrency over a two-year period. As per the Israel Police, the militant organization used crypto exchange Binance for fundraising. The Israel Police announced on Tuesday that they had frozen crypto accounts at Binance allegedly used by Hamas along with a bank account at British bank Barclays.
The Coinbase chief legal officer proceeded to emphasize that his crypto exchange “has been laser-focused on rooting out bad actors seeking to use crypto for illicit purposes.” He added: “We do all we can — KYC checks, sanctions screening, SAR reporting, strong law enforcement partnerships, you name it — so this doesn’t happen on our platform.”
What do you think about the Coinbase executive calling on Congress to pass sensible crypto legislation without delay? Let us know in the comments section below.
Israeli Shekel Hits 7-Year Low Amid Conflict; Central Bank Launches $30B FX Intervention
On Monday, as tensions escalated between Israel and Hamas militants from the recent weekend skirmishes, the Israeli shekel plummeted to its weakest level in seven years. Responding to the declining currency, the Bank of Israel unveiled a strategy to offload up to billion in foreign exchange, alongside an additional billion through swap initiatives.
Bank of Israel Intervenes with B FX Move as Shekel Suffers Amid Militant Skirmishes
Amid the tumultuous events of the past weekend involving Israel and Hamas, the Israeli shekel faced a significant blow. By Monday, the currency had descended to its lowest point in seven years, prompting immediate action from the Bank of Israel. To address this, the central bank rolled out a press release, highlighting its intent to harness foreign exchange (FX) markets to amplify liquidity.
“The Bank of Israel announces a program to sell up to billion in foreign exchange,” the announcement disclosed. “The bank will operate in the market during the coming period in order to moderate volatility in the shekel exchange rate and to provide the necessary liquidity for the continued proper functioning of the markets,” the central bank’s announcement added.
By Tuesday, data spanning five days revealed a 2.8% decline in the shekel (ILS) against the U.S. dollar and a more significant 7.25% dip over the preceding six months. Even though the Bank of Israel has intervened in the FX markets, it remains firm in its stance against hiking the benchmark interest rate. Golan Benita, the chief of the central bank’s market division, commented to the media:
The scheme is too big for speculators to test us.
Recalling the nation’s previous financial downturn in 2008 during the global “Great Recession,” predictions from the ex-deputy governor of the Bank of Israel suggest a looming recession by 2024. Following the recent strife, the price for insuring the country’s debt against potential defaults surged by 25 basis points, marking a peak not witnessed since 2009.
Israel’s GDP growth has seen its highs and lows, typically oscillating between 2% and 5%. It even soared to an impressive 7.5% in 2000 but took a nosedive into negative territory from 2001 until mid-2003. Notably, on Monday, the 10-year shekel bond peaked at 4.5%, a rate that hadn’t been observed since 2012. The Bank of Israel, in its announcement, emphasized its commitment to vigilantly observing market trends and employing necessary measures when warranted. The bank added:
In addition to the billion program, and as necessary, the Bank will provide liquidity to the market through swap mechanisms in the market of up to billion.
Markets on Monday witnessed a tumult in equities and cryptocurrencies due to prevailing pessimism, while oil, the yen, and precious metals seized the opportunity. The four key U.S. indices experienced wild fluctuations on Monday, yet both stocks and digital currencies rose higher by the day’s end. However, as profit-seekers offloaded, gold and silver prices dipped. By Tuesday, an ounce of gold declined by 0.33%, and silver had slipped 0.89%.
What do you think about the conflict in Israel shaking up markets and causing the central bank to intervene in FX markets? Share your thoughts and opinions about this subject in the comments section below.
Tensions in Israel Reverberate Globally — US Equities, Cryptos Falter Amid Mideast Conflict; Oil and Metals Capitalize
Markets faced turbulence on Monday as all four major U.S. indices took a downward turn, influenced by the Israel-Hamas conflict which escalated into an outright war over the weekend. The crypto economy experienced a 1.8% dip against the U.S. dollar on the same day. Meanwhile, the onset of the Middle Eastern conflict spurred a surge in precious metals and crude oil prices.
Mideast Crisis Sends U.S. Stocks, Crypto on Downward Spiral; Oil, Metals Gain Ground
U.S. stocks took a hit on Monday, even as the bond market paused for Columbus Day. The market, already grappling with challenges from the Ukraine-Russia conflict, surging inflation, and climbing interest rates, is facing added pressure. While Friday saw a positive close for all four key indices — S&P 500, Dow Jones, Nasdaq, and Wilshire 5000 — Monday morning painted a different picture with declining figures. The recent dip is largely attributed to the unfolding uncertainties in the Mideast conflict.
The crypto economy mirrored the downturn in equities on Monday, sinking over 1.8% with BTC dwindling by 1.7% and ETH dropping 2.46% against the U.S. dollar during the early trading hours (Eastern Time). In contrast, defense giants like Northrop Grumman and Lockheed Martin saw their shares ascend nearly 5% on the same day. While stocks and cryptocurrencies faltered against the dollar, traditional safe havens like Treasury bonds, gold, silver, and the Japanese yen experienced an uptick on October 9. Gold gleamed with a 0.74% rise in a day, while silver’s value edged up by 0.16% at 10:00 a.m. (ET).
Crude varieties such as WTI and Brent experienced significant surges, with WTI climbing 3.7% and Brent ascending 3.46% over the last 24 hours. Susannah Streeter, Hargreaves Lansdown’s head of money and markets, remarked to Bitcoin.com News that surging oil prices are likely to fan the flames of inflation concerns. She noted, ”The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.”
The market strategist at Hargreaves Lansdown further commented:
This latest jump will fuel inflationary worries, at a time when investors are already jittery about the interest rates potentially staying higher for longer.
This uptick in oil prices aligns with the Organization of the Petroleum Exporting Countries (OPEC) raising its output projections to 116 million barrels per day (bpd) by 2045, a hike of 6 million bpd from last year’s forecast. On Sunday, Saudi Arabia’s energy czar, prince Abdulaziz bin Salman, told CNBC that OPEC is adopting a “precautionary approach.” The consortium, led by Riyadh, has scaled back oil output, and there’s chatter about potential further reductions down the line.
What do you think about the Mideast conflicts that are shaking global markets? Share your thoughts and opinions about this subject in the comments section below.
The Inside Story Of The Roger Ver Vs. CoinFLEX Conflict
The infamous Roger Ver is back in the headlines for all the wrong reasons. Like many players in the industry, the derivatives exchange CoinFLEX recently ran into financial trouble. Surprisingly, they blamed it all on Roger Ver and the circus started. Luckily for us, Chinese journalist Colin Wu covered “the entire insider details through a source close to the situation” in his newsletter. However, as you can see, it’s an anonymous source. So, take the story we’re about to analyze with a grain of salt.
The summary of the situation according to Wu:
“On June 24, 2022, the exchange CoinFLEX announced that it made the decision to halt user withdraws, and the price of the platform Token FLEX subsequently plummeted, from .30 to less than .50 in four hours. At the same time, FlexUSD, the platform’s stablecoin, also began to de-peg, with prices dropping as low as .23.”
The funny thing is that both entities were clearly in business together. On May 14th, Roger Ver tweeted, “Interest paying FlexUSD by CoinFLEX is on its way to being the default stable coin for the whole SmartBCH ecosystem if USDT & USDC don’t move quickly.” How did everything deteriorate so fast? That’s what this article’s about.
Interest paying #FlexUSD by @CoinFLEXdotcom is on its way to being the default stable coin for the whole @SmartBCH ecosystem if #USDT & #USDC don’t move quickly.https://t.co/HG14Ik6U0o
— Roger Ver (@rogerkver) May 14, 2022
Roger Ver Vs. CoinFLEX, The Play By Play
The story starts with CoinFLEX announcing to their partners that they “opened a special account for Roger Ver.” The account’s characteristics guaranteed that Roger Ver “would not be liquidated immediately if it fell below the maintenance margin, but rather that he would be given sufficient time to make a margin call.” Nothing special here, the man is a high-net-worth individual, deals like this are a dime a dozen in high finance.
As a guarantee, Roger Ver offered “a margin of BCH,” valued “at around 0.” Then, the Terra collapse happened and the whole crypto market crashed. By the time CoinFLEX ”faced a liquidity crisis,” Bitcoin Cash was worth around 0. It’s still at that price range at the time of writing. This is where things get insane. The biggest revelation of Wu’s story is at the end of this paragraph.
“If that were all, CoinFLEX would have been able to cover its shortfall. However, prior to this, CoinFLEX had issued its own stablecoin, FlexUSD, like other exchanges. At this point, CoinFLEX used FlexUSD to buy a large amount of FLEX from the secondary market and opened short position to hedge the spot price. However, the counterparty to this short position was also Roger Ver!”
As we’ve seen happen again and again, “when the withdrawal restriction announcement was made, CoinFLEX’s total funds began to fall in a cyclical fashion.” And all hell broke loose.
BCH price chart on Coinbase | Source: BCH/USD on TradingView.com
An All-Out Twitter War
On June 27th, the company’s CEO Mark Lamb tweeted, “CoinFLEX made the decision to halt user withdrawals on June 23, shortly after a long-time customer of CoinFLEX went into negative equity. ” Immediately after, the rumor that Roger Ver was that “long-time customer” began circulating.
Recently some rumors have been
spreading that I have defaulted on a
debt to a counter-party. These rumors
are false. Not only do I not have a debt
to this counter-party, but this counter-
party owes me a substantial sum of
money, and I am currently seeking the
return of my funds.— Roger Ver (@rogerkver) June 28, 2022
The Bitcoin Cash leader went on the offensive and tweeted a statement obviously written by a lawyer. “Recently some rumors have been spreading that I have defaulted on a debt to a counter-party. These rumors are false. Not only do I not have a debt to this counter-party, but this counter-party owes me a substantial sum of money, and I am currently seeking the return of my funds.” How could those two statements be true? Remember that “the counterparty to this short position was also Roger Ver!”
He had a long track record of previously topping up margin and meeting margin requirements in accordance with this agreement. We have been speaking to him on calls frequently about this situation with the aim of resolving it. We still would like to resolve it.
— Mark Lamb
(@MarkDavidLamb) June 28, 2022
However, Mark Lamb was not having it. Even though both parties were negotiating, Lamb took to Twitter and stated, “CoinFLEX also categorically denies that we have any debts owing to him.” Plus, “Roger Ver owes CoinFLEX Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly.”
Even if CoinFLEX is right in this instance, did they have to air their dirty laundry in public?
Roger Ver Vs. CoinFLEX, The Aftermath
Back to Colin Wu’s newsletter:
“In the end, Roger Ver’s position was completely worn out and turned into negative equity, while CoinFLEX was left with a lot of delisting FLEX. It was revealed that CoinFLEX had a real loss of 0 million, including losses from the de-peg of the stablecoin FlexUSD and the loss of withdrawals (less than million) due to the collapse of the SmartBCH cross-chain bridge, which was built by CoinFLEX.”
And the fact of the matter is that, even if Roger Ver’s debt caused this, CoinFLEX’s risk management team has a few questions to answer. “Roger Ver became almost the only counterparty to the exchange, and this only counterparty had the privilege of not replenishing the margin in time,” Wu concludes. It was an unfortunate sequence of events, but both parties signed those deals and both parties took to Twitter to resolve what should’ve been a private matter.
Shame all around.
Featured Image by Gerd Altmann from Pixabay | Charts by TradingView
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Battle Of The Hedges: How Gold And Bitcoin Have Performed With Russia-Ukraine Conflict
Bitcoin and gold have been going head to head in performance in light of the recent crisis between Russia and Ukraine. As the conflict rages on, the financial markets have been hit hard. Russia saw its stock market crash over 45% and other financial markets have equally seen declining prices. Bitcoin was not spared from this onslaught. However, gold thrived in this environment, raising the question of which asset is the better inflation hedge?
Gold Outperforms As Russia Invades Ukraine
On Thursday the 24th of February, the world watched in horror as Russia began the first phases of its invasion of Ukraine. The latter which obviously possesses less military strength saw various parts of its country bombed by the Russian forces. But elsewhere on the charts, bitcoin and gold were having a battle of their own as investors watched with bated breaths.
Related Reading | Russia Can Avoid Sanctions By Using A Wide Range Of Cryptocurrency Tools
Bitcoin has emerged in the last years as the “digital gold”, giving its physical counterpart a run for its money. Year over year, bitcoin had outperformed bitcoin and investors flocked to the digital assets as the new, dominant inflation hedge. However, as news of the Russian invasion spread across the world, the digital asset did not put up much of a fight as it had begun to plunge very fast.
Gold used this time to show that it is very much a strong contender for being a powerful hedge. As its digital competitor had declined on Thursday, gold had risen on the charts, and rapidly too.
Gold outperforms BTC after Russia invades Ukraine | Source: Twitter
The asset which had been trading as low as ,892 per ounce the previous day had risen to as high as ,970 on Thursday, where it peaked before declining. For that day, gold had emerged as the obvious winner between the two but this would prove to be only a temporary win.
Bitcoin Mounts A Takeover
Thursday came and gone and the markets once again began to settle by the end of the day. Bitcoin which had taken a beating on the 24th had bottomed out south of ,000 before beginning another climb upwards.
BTC recovers above gold on Friday | Source: BTCUSD on TradingView.com
As Thursday drew to a close, there was an obvious reversal trend between bitcoin and gold. While the latter had done well with the break of the news, the subsequent wave would see bitcoin once again being the dominant asset.
Related Reading | Bitcoin Monthly Cyclicality Paints Grim Picture For Last Week Of February
Gold had crashed back down towards ,888 per ounce while bitcoin had recovered. The digital asset saw a price surge that saw its value come close to ,000. Although the physicality of gold helps to promote faith in the asset, the ease of moving a digital asset like bitcoin can be a bigger reason to hold it as a hedge. As the week draws to a close, BTC remains on a recovery trend but gold has continued to decline.
Gold continues decline on Friday | Source: Gold Price
Featured image from CoinWeek, chart from TradingView.com
Charlie Lee Sums Up Litecoin’s 10 Years History. Part Five: Conflict Of Interest
It’s great that the founder decided to give us one more chapter of Litecoin‘s story. Let’s tie up loose ends and wrap this whole series with a bow on top. As it turns out, Charlie Lee returned to his job at Coinbase. Was the company more supportive this time around? Plus, as we warned you last time, at one point Lee sold all of his LTC. What were his reasons to do that? Did he have a plan? And, more importantly, did the plan work?
Related Reading | Charlie Lee Sums Up Litecoin’s 10 Years History. Part Two: Exchanges + Betrayal
Learn all of that and more in the concluding chapter of this legendary saga.
Charlie Lee Vs. Coinbase, Round Two
After successfully activating SegWit on Litecoin, Lee returned to his job at Coinbase. Ever the pioneer, this time around he worked from home. The year was 2016. Once again, “given how successful the Ethereum launch was,” Charlie Lee tried to get Litecoin listed on Coinbase. “Brian reluctantly agreed to launch on GDAX only.” The predecessor to Coinbase Pro, GDAX stands for Global Digital Asset Exchange.
The launch didn’t go as Lee hoped. Because there was no launch. “For reasons unknown to me, Brian & Fred refused to do a full launch on GDAX & Coinbase like we did with ETH.” Even though Charlie Lee helped design ETH’s launch, which was a moneymaker for the company. To make things worse, “Fred had refused to let Coinbase hold any LTC and due to conflict of interest.” Which, if you think about it, might be the reason Charlie Lee is looking for. Besides, a conflict of interest serves as a link to today’s main story.
Since the exchange had no Litecoin liquidity, Charlie “had to personally lend Coinbase my own LTC.” As the following chart shows, Litecoin was the #4 coin at the time. It “almost matched Etheruem’s and LTC wasn’t even on Coinbase.” Was this a personal attack or does the conflict of interest narrative rings true to you?
It would have been easy to launch on both GDAX and Coinbase. Actually, it would have been easier since we already have a successful launch plan to follow. Coinbase basically had to go out of the way to cripple the Litecoin launch and not even hold any LTC to pay for miner fees.
— Charlie Lee (@SatoshiLite) October 12, 2021
So, Charlie resigned. The company asked him to stay a while to ease the transition. A few months later, with nothing to lose, Lee shot his last shot to try to get Litecoin listed on Coinbase’s main site. Surprisingly, Brian Armstrong agreed.
This was definitely not a staged tweet and reply. I actually didn't expect Brian to reply at all, but I was extremely glad to see him agree with me.
So right away, I gathered the team together at Coinbase to launch Litecoin. I didn't even talk to Brian after his Twitter reply.
— Charlie Lee (@SatoshiLite) October 12, 2021
Litecoin officially launched on Coinbase in May. On June 9th, Lee left the company for good.
Today's my last day at @coinbase! I will miss working with you all.
I'm going to shift my focus to Litecoin now. To the moon! 😁 pic.twitter.com/Ys9dZwtTFO
— Charlie Lee (@SatoshiLite) June 10, 2017
The move was extremely successful. Lee estimates that Litecoin made Coinbase over 0M through that first year. “Brain even emailed to apologize for what I had to go through. He agreed that adding Litecoin was super lucrative for Coinbase.” Even though that happened, in his Twitter thread Charlie went for the jugular. “I guess you can blame me for turning Coinbase into a sh*tcoin casino that it is today.” Savage!
LTC price chart for 10/15/2021 on Exmo | Source: LTC/USD on TradingView.com
The Founder Sells All Of His Litecoin
The story you were waiting for. At the end of 2017, Charlie Lee sold all of his Litecoin. At the market top. In the thread, he doesn’t mention a conflict of interest, but that was the reason he wielded at the time. Nowadays, Lee says that because of the fair launch, he didn’t have that much LTC. He had to mine and buy his share, like everybody else. He also says that “Pretty much every other altcoin had a huge premine. Even Ethereum had like 70% coins premined.”
According to the founder, these were his objectives:
-
Remove the fear of a Satoshi stash
-
Make Litecoin more decentralized
-
Align my motivation/incentive to Litecoin adoption versus LTC price rise
At the time, the move was controversial, to say the least. People assumed the captain was abandoning the ship. At the market top. However, Charlie Lee has spent four years leading the project, focused on Litecoin adoption and “not on the price of LTC.” Since then, they launched LTCpay, “a self-hosted merchant processing service,” and credit card backed by Litecoin. And they hosted a “Global Litecoin Summit” in September 2018.
Plus, they sponsored a UFC night and became “the Official Cryptocurrency of the Miami Dolphins.” for a while in 2019. By the end of 2020, PayPal announced Litecoin support. “PayPal did not reach out to me beforehand. Actual there’s no reason they needed to! Litecoin is a decentralized cryptocurrency after all. It was honestly very satisfying to see this happen.“
Related Reading | Charlie Lee Sums Up Litecoin ‘s 10 Years History. Part Three: SegWit Intro
Charlie Lee’s new project for Litecoin is fungibility. Read all about it in this thread. This new feature is almost done,”The code is being audited right now, and we are very close to releasing it. After release, it will take some time for it to be activated.” Lee expects this to happen in early 2022.
The author finished his epic thread with these two heartfelt tweets.
The blockchain for all intents and purposes is alive. I cannot shut it down and I know Litecoin will outlive me. These 10 years have been a wild ride. Here's to 10 more. 🥂
It's amazing what Satoshi Nakamoto has created. I am privileged to have played a tiny part in all of this. pic.twitter.com/1Zks4QzZbU
— Charlie Lee (@SatoshiLite) October 12, 2021
Congratulations on your 10th anniversary, Litecoin!
Featured Image: Litecoin 10 years from this tweet | Charts by TradingView
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How Lengthening Bitcoin Cycles Conflict With Halving Driven Supply Theories
Bitcoin is at a critical junction. A breakout into a new bull market here backs up the stock-to-flow theory and other halving and supply-driven expectations. Others believe in lengthening cycles between each major peak as adoption takes place and volatility decreases.
However, the lengthening cycle theory coming true would essentially put an end to just about all halving-based theories instantly. Here’s why.
Cryptocurrency Adoption Curve Could Lead To Longer Market Cycles
The leading cryptocurrency by market cap has been consolidating below resistance for months now. The sideways trading range has left the asset dropping to the lowest levels of volatility it can reach.
When the notoriously volatile asset reached this low of volatility, an enormous over 50 to 80% move follows. The entire crypto market is watching and waiting for whatever comes next. It’s just taking a lot longer than expected and leading to boredom.
Related Reading | Bollinger Band Contraction Could Send Bitcoin Flying 50% Or More
Volatility may even drop further over time, as adoption takes place. As Bitcoin’s market cap grows and so does liquidity, relatively volatility should continue to decline.
This lowering in volatility also comes alongside a lengthening bear and bull cycle, with a longer duration between peaks. Several highly accurate crypto analysts are proponents of this theory, based on the asset’s logarithmic growth curve.
As price action travels along the curve, volatility decreases creating a more stable Bitcoin over time. It will take decades for the asset to fully stabilize, but it has continued to do so as time passes. The only issue with this type of theory advocating lengthening Bitcoin cycles is the fact that it is deeply in conflict with supply and halving-based theories.
Brave New Coin Bitcoin Liquid Index Weekly | Source: TradingView Via: DavetheWave Twitter
How A Longer Bitcoin Cycle Means Expectations Around The Halving Are Dead Wrong
Bitcoin has only been around for just over a decade. Therefore, historical analysis only has a small sample at which to draw from. There has only been one major bear market, and we’re amidst or potentially at the end of the second.
The last bear market ended when Bitcoin’s halving passed. The halving reduces the block reward miners receive for securing the network.
As the already limited supply gets further reduced, the theory is that demand begins to outweigh available supply and the asset’s price rises. The stock-to-flow model measures the asset’s relative scarcity based on its supply, points to a new bull market coming any day now.
Technicals also point to a new uptrend forming, but advocates of the lengthening cycle theory are expecting another year of consolidation at least before the bull market breakout occurs.
Related Reading | Data: Bitcoin Is In Accumulation, and That Means k Could Soon Break
While this would be disappointing for crypto investors, it would likely be healthier for Bitcoin in the long run. However, it certainly would put an end to any theories that each halving fuels each bull market.
This is because the halving arrives every four years, and the BTC supply gets further reduced. A bull market may have started in 2016 following the last halving, and history does often repeat. But a lengthening cycle is also a very real possibility.
Whatever the case and trajectory, crypto investors should soon find out once this current trading range breaks. A breakdown would put an end to theories suggesting the halving is the catalyst and would give more credence to lengthening cycles.
Unpopular Opinion: Bitcoin Could Still Fall Despite US-China Conflict
Bitcoin is reportedly attracting haven demand as an escalating conflict between the US and Iran spooks investors. But that does not mean the cryptocurrency is going to register record gains in the coming days.
The bitcoin-to-dollar exchange rate on Monday was trading above a psychological resistance level of ,500. As of 0300 UTC, the pair established an intraday high of ,580, its best since December 23. The move brought its total gains up by 10.58 percent, as measured from Friday’s lowest level.
Bitcoin surges from ,854 to ,580 in Just 4 Days | Source: TradingView.com, Coinbase
Geopolitical Narrative against Bitcoin
The first of bitcoin’s spikes came after a price rally in haven markets on Friday – the day on which a US-sponsored drone attack killed Qassem Soleimani, a top Iranian military official. Investors moved into Gold, Oil, Palladium, and into any asset seen as havens in times of geopolitical tensions.
The close proximity between the price rise in traditional havens and that of bitcoin led analysts to correlate the cryptocurrency’s gains with the US-Iran conflict. Billionaire investor Michael Novogratz, for instance, noted that the said geopolitical situation is “bullish” for bitcoin.
The more I analyze this Iranian situation, the more bullish gold and $btc I become.
— Michael Novogratz (@novogratz) January 5, 2020
At the same time, others found the entire narrative flawed. Peter Schiff, CEO of Euro Pacific Capital, stated that there is no evidence of large capital flow from risk-on equity to bitcoin markets. He claimed that speculators pumped the cryptocurrency higher in anticipation that institutional investors would treat it as par with Gold.
“Gold is being bought by investors as a safe haven,” explained Mr. Schiff. “Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.”
Similar Events, Different Reactions
Bitcoin was facing a similar, geopolitical situation back in September last year when Iran allegedly bombed two major oil facilities in Saudi Arabia. So it appears, the cryptocurrency was a mute spectator to the huge global event. Its price closed 24.4 percent down in that month owing to insufficient demand.
Meanwhile, bitcoin’s traditional hedging rival Gold climbed by up to 3.13 percent in spot markets.
Gold rose when faced with a potential geopolitical crisis | Source: TradingView.com, ICE
Unlike Gold, bitcoin’s bullish narrative shifted goalposts. Furthermore, the cryptocurrency’s latest price rally merely brought it already-tested resistance levels. Whether by speculation or true demand, bitcoin needs to close above certain price areas before it could confirm a near-term bullish bias. Top analyst Crypto Michaël weighs:
“I’d like to see breaking the zone between ,600-7,800. If that breaks, I’m expecting ,400. But [I] wouldn’t be surprised [by] a test of ,200 first.”
Bitcoin – thus – is completely in the hands of a technical narrative. Overall, the cryptocurrency remains under a strong bearish bias, still down by more than 45 percent from its 2019 high. Rejection of ,600-7,800 zone could very well have it retest the support near ,400. The post appeared first on NewsBTC.
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