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November 2005

Bitcoin Rises 5% Amidst Technical Rebound Signal

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Bitcoin

Bitcoin

Bitcoin (BTC) may have been on a superb run for much of 2019, but in July, the cryptocurrency has run into trouble as a range of factors contributes towards wild price fluctuations. The launch of Facebook’s Libra and the skepticism expressed about it by such powerful figures like the head of the Federal Reserve, Jerome Powell, as well as the United States President Donald Trump, proved to be a huge drag on Bitcoin.

Mixed Sentiments

Trump expressed his misgivings about Bitcoin specifically in his tweets. These developments had a significant effect on dragging the price of Bitcoin to around $10,000. Yesterday, BTC fell below that psychologically important level as well after a regulatory body in Switzerland stated that it had not received a reply from Facebook (NASDAQ:FB) about the concerns expressed regarding users’ privacy.

>> Bitcoin Survey Shows Major Distrust Abounds for Facebook’s Libra

However, it needs to be remembered that many experts had stated that the cryptocurrency still displayed plenty of bullish tendencies and their words came true today, as the token crossed the important $10,000 mark in earlier trading. It rose by as much as 5% to hit $10,163 today at one point. That being said, it is perhaps more important to mention that the cryptocurrency managed to climb despite unflattering comments from the United States Treasury Secretary Steve Mnuchin.

During the course of an interview, Mnuchin implied that Bitcoin might not exist in 10 years. He said, “I won’t be talking about Bitcoin in 10 years, I can assure you that. I would bet even in 5 or 6 years I’m no longer talking about Bitcoin as Treasury Secretary. I’ll have other priorities. I can assure you I will personally not be loaded up on Bitcoin.” Such a development is proof that Bitcoin is perhaps showing much more resilience than it is often given credit for and many buyers piled on to the cryptocurrency today. It is going to be interesting to watch the proceedings over the course of the weekend.

Featured image: DepositPhotos © KostyaKlimenko

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Bakkt’s First Week Trading Volumes Hit Just $5 Million USD

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Bakkt

Bakkt

Bakkt, the highly anticipated Bitcoin futures contract, recorded just $5 million USD in total trading during its first week.

The long-awaited Bitcoin futures platform from The Intercontinental Exchange (ICE) launched last week to considerably underwhelming fanfare given the hype surrounding the project since it was initially announced last year. According to ICE, which is also the parent company of the New York Stock Exchange, just 623 Bitcoin futures contracts were traded during the first week of Bakkt. Each of Bakkt’s futures contracts represents one Bitcoin, so just over $5 million was traded based on Bitcoin’s current value of $8,325 USD.

Compare this with the Chicago-based CME launch in 2017, the biggest rival to Bakkt, which traded over 4,000 Bitcoin futures on September 27 alone. This represents a trading volume of $165 million with CME contracts worth five Bitcoins. Bakkt’s daily futures contracts fared even worse than the monthly one, with fewer than six being traded during the first week.

Bakkt was touted as a gateway for institutional investors to get into Bitcoin, with many analysts believing it would help build trust towards crypto trading among legacy financial institutions. While it is still early days, it hasn’t exactly panned out as analysts expected. Guy Hirsch, managing director of eToro, has urged for patience with Bakkt:

“I see the hesitance as a ‘wait-and-see’ approach more than a reaction to the structure of the offering. Crypto is still a relatively new asset class and institutions are still learning about the benefits that it offers. These sorts of offerings can often take a long time to play out and gain market share. Expect institutions to cautiously watch each other and ensure that the market infrastructure is in place before making any commitments.”

>> Ripple Transfers XRP to New Trading Address: Bad News for Crypto?

Perhaps one reason for the lack of trading volume on Bakkt is Bitcoin’s stuttering price over the last week. Bitcoin’s price tanked more than 20% from $10,026 to below $8,000 in the first seven days of Bakkt’s launch. However, some analysts have argued that the declining price is a direct consequence of Bakkt, with JP Morgan saying, “It may be that the listing of physically settled futures contracts has contributed to recent price declines, rather than the low initial volumes.”

Featured Image: DepositPhotos

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China’s Cryptocurrency | A Response to Facebook’s Libra Coin?

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China cryptocurrency

China cryptocurrency

In response to Facebook’s new cryptocurrency, Libra, China’s central bank is reportedly developing its own cryptocurrency.

According to the South China Morning Post, Libra poses a threat to the country’s financial system, and this has spurred on the development of the bank’s own digital coin.

China’s Cryptocurrency

At an event at Peking University’s Institute of Digital Finance yesterday, the director of the People’s Bank of China (PBoC) research bureau, Wang Xin, argued that if Libra effectively functions like money, then it will likely have a huge influence on “monetary policy, financial stability, and the international monetary system.”

In other words, it could greatly affect the value of China’s fiat currency.

Wang explained the issue further, focusing on the link between the Libra coin and the US dollar:

“If the digital currency is closely associated with the US dollar, it could create a scenario under which sovereign currencies would coexist with US dollar-centric digital currencies. But there would be in essence one boss, that is the US dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”

For this reason, PBoC has received permission from the State Council to develop a central digital currency and will work in tandem with other market institutions to do this.

China’s Cryptocurrency: Years in Development

However, the bank has reportedly been developing a digital currency for years. It seems, though, that Libra has made it look at the situation with “high attention” and, as such, it will ramp up development.

There is still no indication of how close it is to completion.

>> Does Bitcoin Breakout Signal More Rallies to Come Later This Year?

Facebook revealed its Libra project in mid-June after a year of rumors and speculation. The coin is created as a stablecoin and is backed by several fiat currencies and government bonds.

According to Wang, China is now pressing hard to find out exactly what those currencies are and if the US dollar will be strongly linked.

What are your thoughts on China’s cryptocurrency?

Featured Image: DepositPhotos © Alan

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