Bitcoin price

Crypto Trader and the Bitcoin Prize: Is there a connection?

After weeks of calm around the Bitcoin price, the Bitcoin price reached the 257 US dollar mark again for the first time on 17 June.

Market observers paid particular attention to the pace at which the share price rose on 16 June between 13:00 and 15:00 UTC. Although such price fluctuations are not uncommon in the Bitcoin industry, the recent uptrend has seen speculation of a larger market movement.

One of the best-known theories for the sudden rise in Bitcoin’s price is timing with the possible imminent Grexit should Greece fail to meet its commitments.

This crypto trader behaviour in relation to international crises is not a new phenomenon in the Bitcoin industry:

Already during the Cyprus crisis in early 2013, Bitcoin and other crypto trader currencies were used as protection against price fluctuations of the Fiat currencies and the crypto trader exchange rate recorded an extreme rise.

Joshua Scigala, CEO of Bitcoin/Gold exchange platform Vaultoro, agrees that there may be a connection between the current price development and the possible Grexit, if only psychologically:

“It’s a typical meeting point. During the Cyprus crisis, not all Cypriot citizens exchanged their money directly for Bitcoin. It was more like many said ‘Hey look, Cyprus is in trouble and we are seeing a rise in Bitcoin and other assets’.

Bitcoin price

Nevertheless, the connection between the Bitcoin price rise and the possible Grexit was very quickly picked up by the press and Reuters also published an article on the current discussion.

UK Digital Currency Association Chairman Paul Gordon believes, however, that it was simply a coincidence that the Bitcoin price skyrocketed at a time when speculations about a possible Grexit were growing louder. “There is simply too little evidence. Of course, it’s nice to be able to say that the price per bitcoin has risen due to the Greek crisis, but it could just as well have gone down.”

Nevertheless, the question is whether the months long downward trend since the Bitcoin high in 2013, with the recent price rise has found its turnaround.

It is probably still too early to say whether the recent price movement indicates the awakening of a giant, or whether it was just a loud snoring of the giant in deep sleep.

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Bitcoin ETF

Analyst optimistic about Bitcoin loophole – 50 percent opportunity

Analysts from well-known financial institutions and Bloomberg believe that the probability of success of the Winklevoss Bitcoin ETF COIN is now relatively high. The reason lies in the unpredictability of the US Securities and Exchange Commission (SEC).

There are many more parts of the Bitcoin loophole that are under development

Some of these parts could have a major impact on the Bitcoin loophole welcoming the world’s first Bitcoin loophole. Other parts, on the other hand, could completely eliminate the likelihood of getting through.

Based on the SEC’s previous decisions regarding innovative ETFs, it is difficult to say to what extent confirmation of the Winklevoss ETF can be achieved. But the involvement of a respected 30 billion US dollar financial institution, the participation of independent analysts, and Quant Trader from KCG and Susquehanna give hope.

In recent years, Bitcoin has made a name for itself as digital gold. However, it is still in the process of fulfilling its technical potential to become an efficient and affordable processing network. For this reason, the majority of Bitcoin users use the current Bitcoin network as a means of protecting their wealth or carrying out large transactions that would not have been possible without a middleman.

Why analysts believe in the Bitcoin ETF

As Bloomberg Intelligence senior ETF analyst Eric Balchunas said, the SEC has already introduced ETFs in the past that have not yet opened a new market and at the time did not arouse any interest in the industry. One example is the ETF ASHR, which was approved by the SEC authority before US companies got into action.

Balchunas said:

“The probabilities are so high. You get possible regulatory, financial and security problems, but ETFs have a long history of opening up new markets because of that. A great example of an ETF approved by the SEC is ASHR. It was approved before the US companies really knew about it.”

As Spencer Bogart, Vice President of Equity Research at Needham & Co, already mentioned, the opportunities for the Bitcoin ETF are almost equal. This can be deduced precisely from the fact that the officials at the SEC would not receive any advantage/disadvantage from the ETF. Should the ETF fail and destabilize the market, however, the officials will be called to account.

Until the deadline Bachunas sees the chance for the Bitcoin ETF at about 50 percent. The Bitcoin industry and community are quite optimistic about the Bitcoin ETF. This is mainly due to the work the Winklevoss twins are putting into it, as they have now even commissioned a reputable financial institution on State Street to maintain and audit the ETF.

One advantage Balchunas sees in the ETF is the lower premium you pay over other public Bitcoin instruments. As you can see on the Bitcoin over-the-counter (OTC) market, instruments like the Bitcoin Investment Trust (GBTC) are traded at high premiums on the large regulated markets.

GBTC is currently traded at USD 129 per share, which corresponds to a price of USD 1,290 per Bitcoin. At editorial time, a Bitcoin is traded at 1,250 US dollars.

“If it’s a bit like high-yield bonds, you would have to trade Bitcoin ETFs at a premium of 1 to 2 percent, which would still be better than the OTC market,” Balchunas finally added.

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Bitcoin Core

The Future of Bitcoin Development: BitMEX Saws at the Chair of Bitcoin Core

Bitcoin Core: It is well known that competition stimulates business. This must have been what the employees of the research department of the BitMEX crypto exchange must have thought when they started to set up their own client for the further development of Bitcoin. With the new client, BitMEX wants to demonstrate that the supposed dominance of the Bitcoin core implementation is not carved in stone.

Bitcoin Core is still the most common implementation of Bitcoin. More than 95 percent of nodes on the network use Bitcoin Core, which is based on Satoshi Nakamoto’s original reference code. BitMEX’s research department has now investigated how to increase competition in development without compromising the crypto currency through events such as chain splits.

More than 9 out of 10 nodes run with Bitcoin secret

BitMEX first analyzed which forms of competition exist in the further development of the protocol. According to the analysis of the Crypto Exchange, projects competing with Bitcoin secret can largely be divided into two categories:

Competition between different chains

This category includes software projects that provide new rules for consensus building for existing implementations of the protocol. These can be soft and hard forks. An example of competing chains is the Bitcoin ABC vs. Bitcoin SV debate at BCH. BitMEX describes this approach as “risky”, as it can possibly lead to a chain split. This is also feared by BCH. Other examples of this approach are Bitcoin UASF and BTC Classic.

Competition between independent implementations
Another approach is to implement the Bitcoin Core protocol on a new code basis. This re-implementation must include the same consensus-building rules as Bitcoin Core. Nevertheless, there may be conflicts in the consensus mechanism if the re-implementation behaves differently than the dominant client of the network due to its different code base. In the worst case, a chain split can also occur here. Examples for the re-implementation of the Bitcoin Core protocol include BTCD, Libbitcoin and bcoin.

The third way
BitMEX is looking for a third way to compete with Bitcoin Core. Neither the consensus rules nor the code base of Bitcoin Core should be touched. Instead, a software fork is carried out. This bears the – not exactly original – Bitcoin BitMEX Research. The client should illustrate that a healthy form of competition is possible with Bitcoin Core. It also aims to prove that Bitcoin’s fate is not inextricably linked to the Bitcoin Core client. After all, each node operator has the free choice of which implementation to choose. And this corresponds to the Bitcoin ideal rather than constantly focusing on a supposed Bitcoin core development team.

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FinHub

FinHub: New SEC branch office for Bitcoin regulation

Bitcoin, regulation and the SEC: The US Securities and Exchange Commission announced the launch of the Strategic Hub for Innovation and Financial Technology on 18 October. The so-called FinHub is an outsourcing of some internal departments at the SEC, which is to be relieved.

Bitcoin, crypto currencies, blockchain technology and regulation are a pair that is still struggling. New information about Bitcoin’s regulation is constantly being added to the news columns. However, a final agreement is still not in sight. A new department of the SEC is therefore to take some countermeasures in the future.

The tasks of the new FinHub

In future, the Securities and Exchange Commission will outsource part of its work. The authority, which among other things deals with regulatory issues relating to Bitcoin & Co., will be relieved of its responsibilities by the FinHub. Its tasks are:

Provision of a portal for industry and the public on which it will be possible to discuss innovative ideas and technological developments directly with SEC staff;
Provide information on the SEC’s activities and initiatives with FinTech;
Inform the public through publications and events. (Including a FinTech Forum focusing on distributed ledgers and digital assets).

To act as a platform and clearing house for SEC staff to acquire and disseminate information and FinTech-related knowledge within the Agency.

To serve as a liaison with other national and international regulatory authorities regarding new technologies in financial, regulatory and supervisory systems.
Bitcoin regulation to become more centralised in the future

Rejoicing: SEC chief Clayton

Valerie A. Szczepanik will head the SEC’s FinHub. In addition the chairman of the SEC:

“The SEC is committed to working with investors and market participants on new approaches to capital formation, market structure and financial services to improve investor protection and not reduce it in any way. The FinHub is a key focus for our efforts to monitor and promote innovation in securities markets that are promising, but also require a flexible and rapid response from regulators to fulfill our mission.

SEC Chairman Jay Clayton.

This will make the regulation of Bitcoin and Co. somewhat more centralised in the future. Further information can be found in the official press release and on the FinHub homepage.

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