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Consensus Network Weekly Cryptocurrency News 12/19/18
Cryptocurrency Market Capitalization: $125 Billion
Bitcoin Price (Coinbase): $3791
Crypto Come Back or Dead Cat Bounce?
Bitcoin was up just under 7 percent this week. According to theblockcrypto.com, senior market analysts believe that this might be the result of traders closing out short positions.
According to Math Greenspan of eToro, “Closing short sell positions creates an upward pressure on prices. Evidence: BCH is up the most.” BCH or Bitcoin Cash has proven itself to be BTrash over the past month.
Frankly, there is NO other reason for this rally right now. In fact, the global markets themselves are shaky. I do not subscribe to the idea that bitcoin is yet an uncorrelated asset.
In times of uncertainty, people sell off speculative assets. Most of the world views bitcoin and especially other cryptocurrencies that way.
My vote: dead cat bounce. There is no reason for a recovery right now.
Is the Bear Market Scaring Off Institutional Money?
According to Bloomberg, JP Morgan analysts believe that the protracted cryptocurrency bear market is driving away institutional interest.
The report sites decreasing interest in the open contracts on bitcoin futures at the Chicago Board of Options Exchange. Last month was apparently the lowest level of interest since the futures trading began in December of 2017.
A similar sentiment was recently reported by Coinshares CSO Meltem Demirors.
In my view, that is what makes this crash “different”. Many crypto enthusiasts boast about seeing these kinds of corrections several times and not being phased by them.
However, we were on the precipice of seeing bitcoin go mainstream. The crash, mainly triggered by a ridiculous battle between bitcoin cash rivals has hurt the ecosystem at large and I suspect will delay an ETF and other advancements of bitcoin within the Wall Street Ecosystem.
Startup to Focus on Accepting Lightening Network Merchant Payments
OpenNode, a startup backed by Tim Draper, raised $1.25 million to help build a new bitcoin payment platform that focuses on ease of use.
The software essentially makes it very easy for merchants to accept bitcoin. What makes it different from Bitpay and Coinbase Commerce is that it allows for merchants to accept bitcoin through the lightning network— a second layer that allows for cheap instantaneous transactions of bitcoin off-chain. You can learn more about lightening network on our recent interview with Samson Mow of Blockstream.
I love the technology and it will be interesting how it plays out. I’m also interested in understanding how bitcoin taxes will be paid if it is actually used for transactions. In other words, when you pay someone with bitcoin that has gone up in value, will that be a taxable event.
If you pay someone in gold, it is a taxable event. This could be a problem for mass adoption of bitcoin as a payment system in the US.