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Tag: bitcoin

Bitcoin and cryptocurrency on the rise in South Africa

bitcoin and cryptocurrency on the rise in south africa

 

Bitcoin and cryptocurrency on the rise in South Africa

 

Since the meteoric rise of Bitcoin, cryptocurrency has become increasingly popular across the world.

While Bitcoin is the largest and most widely-used cryptocurrency on the market, there are other currencies experiencing steady growth — such as Ethereum and Dash.

These cryptocurrencies also use a blockchain, or distributed ledger system, but feature different mining techniques and additional features.

Mining is the process of earning cryptocurrency based on the work done to confirm transactions and add them to the blockchain.

The earning efficiency of this process is generally based on hardware processing power, and mining different currencies can require different hardware.

While mining Bitcoin in South Africa generally requires a large investment, mining alternative cryptocurrencies can be a cheaper option for enthusiasts.

Cryptocurrency popularity in South Africa

BitMart CEO Jacques Serfontein told MyBroadband that cryptocurrencies like Bitcoin are becoming increasingly popular in South Africa.

“The popularity of cryptocurrencies has increased tremendously in South Africa, and with the weakening rand it’s a great investment option — giving returns of between 6-15% per month,” said Serfontein.

BitMart is a local online retailer which sells cryptocurrency mining hardware and hosts cloud mining services.

Serfontein said Bitcoin mining rigs remain the most popular choice among South Africans, despite the rise of alternative cryptocurrencies such as Ethereum.

“Ethereum mining hardware is becoming more and more popular as the price gains value, but Bitcoin remains the most popular cryptocurrency among miners,” he said.

“We deliver two Bitcoin miners for every other miner we sell.”

Dash follows closely behind Ethereum in terms of popularity and is gaining rapidly on its competitors.

Mining alternative cryptocurrencies can be more viable than Bitcoin mining for beginners, and Serfontein recommends they purchase a GPU-based mining rig which allows them to mine a number of different coins.

“We recommend the Thorium 2480 rig for beginners, as it is cheap and can mine Zcash, Ethereum, Monero, and various other coins,” said Serfontein.

You can choose to either mine the coin directly and keep it, or have our pre-loaded software convert the coin to Bitcoin.”

David Ogden
Entrepreneur

Alan Zibluk Markethive Founding Member

Bitcoin Price Growth, Global Adoption Depend on Japan’s Confidence in Bitcoin

Bitcoin Price Growth, Global Adoption Depend on Japan’s Confidence in Bitcoin

  

Bitcoin Price Growth, Global Adoption Depend on Japan’s Confidence in Bitcoin

As long as Japan does not fail in what seems to be an effort that is making Bitcoin bigger, the world's top digital currency would always be a success. One latest example is the adoption of the AML/KYC rules for Bitcoin exchanges in the country. Like China, Japan is now impacting meaningfully on the Bitcoin market whenever the third largest economy in the world comes out with a move that causes a change.

Bitcoin price affected

With the recent development in which Japan recognized Bitcoin as a legal method of payment starting Saturday, April 1, the Bitcoin price has seen a steady climb over the $1100 range by the start of Monday. The recovery from the dip where the Bitcoin price had been over a week ago when the deadlock over the scalability issue had heightened has been attributed to a growth in Bitcoin demand from Japanese consumers after the government passed a law which basically says officially that Bitcoin users will not be taxed directly.

Rather, it brings up the issue of AML/KYC which caused a heated debate. Some users are in favor of it preferring exchanges operating legally so that they can be law-abiding, pay taxes on behalf of users and guarantee some form of protection for users’ money.

New law

Japan’s new law has been on debate for months following the collapse of the Mt. Gox Bitcoin exchange. The law’s passing brings Bitcoin exchanges under Anti-Money Laundering/Know Your Customer rules as it is the case in China. The exercise in verification will expectedly increase trust in Bitcoin and probably forestall a recurrence of the Mt. Gox case.

Coincheck's Kagayaki Kawabata told Cointelegraph:

"While market cap and usage of cryptocurrency is scaling significantly in past few years, Bitcoin and cryptocurrencies are something that can't be ignored. The Mt. Gox incident took place in Tokyo. This experience I think has made Japan decided to regulate them in order to protect the customers. I think other countries will follow Japan if this new regulation works out."

Tax issues

The AML/KYC process will also serve as a link between the government and Bitcoin which is what many people believe is still missing for the ecosystem to grow into a regulated market. For Bitsquare's Ken Shishido, the development is a result of years of industry effort in lobbying policy makers and not necessarily the government taking a proactive approach nor wanting to make Bitcoin bigger and better.

Tax implication is not finalized yet but it is a huge deal that consumption tax is now officially exempted, he adds. From China to Japan and other countries, it is now clearer that governments are on the way of recognizing Bitcoin as a financial instrument. But to make the digital currency go mainstream everyday users need to support it as a common practice.

Why Japan Matters

Japan does not seem at all worried by the general attitude of some countries to digital currencies like Bitcoin. The country’s level of confidence in Bitcoin is overwhelming despite the negative history it has had with the digital currency. Based on this level of trust and interest in the currency, the success of the ongoing experimentation will help show how possible legislations can work with Bitcoin.

It will go a very long way to draw other countries that are still skeptical about Bitcoin into the fold as well be a good form of advertisement to the wider global community — especially governments. The legality of the state is always a boost for the justification of Bitcoin. For a big economy like Japan to trust Bitcoin as a payment method speaks volumes. It is a sign that it could be a significant tool that could bring advantages over sentiments that point to negativity.

Shishido says:

“Not sure other developed countries will follow suite anytime soon but maybe countries like Singapore, Hong Kong, Estonia, Switzerland and etc. If some countries do recognize it as a legal tender, it will be a game changer. Japan’s legal status is “currency-like property with consumption tax exemption. If one country recognizes it as a legal tender, all United Nations country will need to acknowledge, too.”

One other factor to note about Japan's impact on the Bitcoin price is that when it happens, the price increase tends to be usually real — it would correct at some point but not to its initial take-off point. Relatedly, one of the countries picking up on a similar move is Mexico which is working on the first draft of a fintech law that will make its central bank define the regulation that will apply to digital assets such as Bitcoin based on two criteria: widespread adoption of the public and the protocols, rules and mechanisms that allow their generation, identification, division and control.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

The Big Three: How China, India, Japan Set Pace For Bitcoin

The Big Three: How China, India, Japan Set Pace For Bitcoin

   The Big Three: How China, India, Japan Set Pace For Bitcoin

The Recent behavior of Bitcoin

reveals that developmental events around certain nations make huge impacts on the cryptocurrency. The most significant among these nations are China, India and most recently, Japan. With the mainstream adoption of Bitcoin in Japan and the subsequent acceptance of the cryptocurrency by several stores across the Asian country, Bitcoin has responded by its most recent surge in price, rising significantly above the $1,200 mark in the process.

Strength in numbers

Whether positive or negative, news and events out of the aforementioned Asian giants are always well respected by Bitcoin as an entity and the community as a whole.

Michael Vogel, CEO of Netcoins, says:

“China and India represent a significant portion of the world's population and each has a rapidly growing middle and wealthy classes. Both of these countries are also experiencing turmoil with government imposed capital controls, so the importance of Bitcoin is much more apparent to its citizens as opposed to North America, for example.”

One of the major issues that have come up repeatedly within these Asian climes is the attempt of the government to regulate Bitcoin. Earlier in 2017, there were a few significant events and pronouncements by both the Chinese and Indian government concerning the use of Bitcoin and other cryptocurrencies.

The majority of Bitcoin users have seen these government interventions as events that could negatively affect the growth and development of Bitcoin. On the contrary, these efforts by governments to control the use of Bitcoin may be having a rather positive effect on the cryptocurrency.

Governments are indirectly working for Bitcoin

Simon Dixon, CEO of BnkToTheFuture.com, believes that governments are driving demand in Bitcoin whether they know it or not. He continues by exemplifying the developments in India, where the government's war on cash was an attempt to force bank adoption in India. Dixon notes that India has less trust for banks than many other nations so some are experimenting with Bitcoin instead.

In addition to this, Japan has chosen to regulate Bitcoin exchanges which mean traditional financial institutions are now able to offer Bitcoin to their clients bringing in more demand. China has decided to implant tougher regulations on Chinese exchanges driving a huge spike in the peer to peer Bitcoin market in China and eventually more trust in the exchanges when they allow withdrawals again.

Dixon says:

“What is clear is that no matter what the government does, it is driving more and more demand for the two Bitcoin markets — regulated Bitcoins through exchanges and unregulated peer to peer Bitcoin. All these approaches show the rest of the world that government action drives Bitcoin demand in many unintended ways.”

Japan is a pacesetter

Another important factor identified by Vogel which may be responsible for the Asian dominance in Bitcoin is the fact that Asian countries, Japan, in particular, have always been ahead of the curve with mainstream adoption of new technology. Cell phones, mobile gaming, and mobile payments all gained popularity in Asia years before Europe and the US. It seems that Bitcoin is following a similar trajectory.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

These Investors Bought the Firm Behind Bitcoin’s Self-Proclaimed Inventor

These Investors Bought the Firm Behind Bitcoin’s Self-Proclaimed Inventor

  

A company built around the research of Craig Wright,

who has claimed to have invented the bitcoin cryptocurrency, has been sold to a private equity firm in a deal the company says is the biggest to date involving bitcoin's underlying blockchain technology. The deal swings the spotlight once again on to Wright, a 46-year-old computer scientist who is the cryptocurrency's most controversial figure. He hopes to remain central to the technology's future, telling Reuters the goal is to build bitcoin into a global "system with no ruler, no king."

"We will scale and grow bitcoin to become what it was envisioned to be," he said. "All I do is to help grow the use of bitcoin, and I want to see it in daily use by at least a billion people on-chain. We have the funds, the people and the technology to do this." According to a news release on Thursday, Malta-based High Tech Private Equity Fund SICAV bought nChain Holdings, "the world leader in blockchain-centric research and development." It put no value on the deal and did not mention Wright. Reuters previously identified nChain, formerly known as EITC Holdings, as Wright's vehicle for filing hundreds of bitcoin and blockchain-related patents.

U.K. records confirm that the target company—under both its EITC and nChain names—already filed more than 80 bitcoin and blockchain-related patents. A person close to the deal said $300 million had been invested in nChain, but it was not clear over what period of time. The Maltese fund did not respond to emails asking for comment.

Reuters reported last year that EITC planned to file hundreds of patents related to the blockchain, the distributed ledger technology that underpins cryptocurrencies like bitcoin. The financial industry and others are exploring its potential. The fund is managed by Liechtenstein-based Accuro Fund Solutions, part of Zurich-based Accuro Group. Accuro did not respond to an emailed request for comment.

DIVISIVE FIGURE

Wright remains a divisive figure in the bitcoin world. After failing to convince many in the bitcoin community that he was Satoshi Nakamoto, the pseudonymous founder of bitcoin, Wright retreated from view last year. Reuters reported last month that Wright was working with Calvin Ayre, a Canadian online gambling tycoon, to build a patent portfolio, though its purpose was not clear. Ayre was not immediately available for comment.

nChain said in an emailed response to questions from Reuters that neither Ayre nor Wright had a stake in it before or after the sale. It said the company previously acquired Wright's assets and intellectual property, and he now held the post of chief scientist. Although it was not possible to confirm Wright's identity as Nakamoto, a Reuters investigation found he was deeply involved in the early development of bitcoin and had told Australian tax officials he possessed more than 1 million bitcoin—worth $1.2 billion at the current exchange rate.

Patent lawyers have noted that open-source technologies like bitcoin are not easy to patent, and even if patents are approved, they are not always easy to defend. Thursday's announcement is the first time nChain has publicly acknowledged it is filing patents. Without confirming how many bitcoins he owns, Wright told Reuters he would never "dump bitcoin." "I will sell when I do this for goods on a daily basis, or I will go down with it. Past the basics of my family's well-being, all I have is dedicated to building the systems and institutions needed to make bitcoin successful globally," he said.

The news release also shed light on what Wright and nChain might do with its patents. nChain this year "intends to make some of its intellectual property assets available to the blockchain community through open-source software and royalty-free licensing." It invited interested parties to register via email. nChain's patent filings, seen by Reuters, range from the storage of medical documents to Wi-Fi security. Investors have spent more than $1.5 billion on blockchain and bitcoin start-ups over the past four years, according to CB Insights, an Internet research company.

The company said it was also working on software tools and applications to support the growth of blockchain. These include a software to develop applications on the bitcoin blockchain, solutions for bitcoin blockchain scalability, inventions to improve security, on-chain scripting for smart contracts, and a decentralized trading platform that uses autonomous agents. The company also called for a neutral standards body to be set up to coordinate bitcoin's development.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Bitcoin bears ramp up bets virtual currency will fall

Bitcoin bears ramp up bets virtual currency will fall

Short interest on Bitfinex has surpassed long interest for the first time since February

  

Bets that the bitcoin price

will fall have surpassed bets that it will rise for the first time since February on one of the world’s largest digital currency exchanges, stoking contrarian speculation that the digital currency could be headed for a new all-time high.

Open short interest on Bitfinex surpassed long interest on Thursday for the first time since February. The last time shorts eclipsed longs, the bitcoin price gained nearly $300 over the following three weeks, rising from $993 on Feb 13 to an all-time high of $1,285. Bitfinex, a top digital currency exchange by trading volume, is also one of only a handful to allow customers to trade on margin.

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In financial markets,

short interest is sometimes viewed as a contrarian indicator because it leaves assets vulnerable to what’s known as a short squeeze. In a short squeeze, investors who bet against the asset are forced to buy it back to close out their positions at a loss, causing the price to move sharply in the other direction.

The buildup in shorts “proves that the bitcoin scaling debate isn’t over yet,” said Chris Dannen, a founding partner at Iterative Instinct, a small New York-based private-equity fund that trades crypto-assets. Dannen was referring to a rift in the bitcoin community over how to upgrade bitcoin’s software to allow the network to process transactions more quickly and efficiently.

That debate has quieted down in recent weeks as bitcoin miners have backed away from a controversial proposal called bitcoin unlimited that would’ve raised the limit on the amount of transaction data can be stored in each block of the bitcoin blockchain. Investors feared that, if support for the proposal passed a certain threshold, but fell short of unanimous adoption, it could split the network into two different coins.

Amith Nirgunarthy, director of marketing and high net-worth partnerships at Bitcoin IRA, was reluctant to read too much into the shift in positioning. “There’s been a lot of good news in the cryptocurrency space as of late,” he said. Earlier this week, Blockchain Capital, a venture fund focused on blockchain initiatives, closed its $10 million initial coin offering—the first of its kind in the U.S.—after just six hours. A blockchain is a decentralized, cryptographically secured ledger that powers digital currencies like bitcoin. The bitcoin BTCUSD, +0.45%  price retreated on Thursday after touching its highest level in three weeks. One coin was recently trading at $1,165.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

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Alan Zibluk Markethive Founding Member

Long Term Bitcoin Analysis

Long Term Bitcoin Analysis

  

Bitcoin (BTC) extended

upside movement against the US Dollar (USD) on Thursday to a weekly high of 1229, rallying the price of BTC/USD to more than 1200, the psychological number, as Japan legalized the cryptocurrency as online payment method while Russia is also mulling over to authorize the cryptocurrency. The technical bias however, remains bearish in near term.

Russia Intercedes into the Crypto World

Russia is mulling over to regulate the digital currency. Russian Deputy Finance Minister Alexey Moiseev told Bloomberg in an interview this week that the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering.

“The state needs to know who at every moment of time stands on both sides of the financial chain,” Moiseev told Bloomberg. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.”

Increasing state regulations around bitcoin could make the cryptocurrency an attractive investment for investors who previously remained cautious due to the high risk and price swings.

Technical Analysis

As of this writing, BTC/USD is being traded around 1170. A 4-Hourly support may be seen around 1135. A major support however still holds around 1060 which is 50% Fibonacci level as demonstrated in the given below 4-hour chart with green color. EMA 200 is pushing upward on a short-term bias after a test at 1135. Trendline in red color is still major and effective as sellers gain momentum. A break and 4-Hourly closing below the 1135 support shall incite renewed selling pressure, validating a move towards 1060, the 50% fibonacci retracement and then a retest of the trend line around 950.

On the upside, bitcoin is expected to face a hurdle near 1230, a key horizontal resistance area ahead of 1300, the psychological number which is also the high of April 2017. The technical bias shall remain bullish as long as the 1135 support area is intact as mentioned before.

What to expect in Long-Term?

In long-term, a pull back will retest the trend line around 950 is very much expected. RSI (25) provides an extra conformation as it is heading lower sharply.

How to Trade BTC/USD in near future?

Selling BTC/USD below the 1135 support level can be a good strategy with stops being placed above 1180. Similarly, buying BTC/USD above 1200 level can be a good idea with stops being placed right below the 1135 support.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Legal Status of Bitcoin in India to Be Addressed at Global Summit by Assocham

Legal Status of Bitcoin in India to Be Addressed at Global Summit by Assocham

  

Legal Status of Bitcoin in India to Be Addressed
at Global Summit by Assocham

 

After the demonetization of 85 percent of the circulating currency in India in November 2016, ASSOCHAM organized the first global summit on Blockchain technology. Now it is all set to hold the second global summit on Blockchain technology with a focus on opportunities and challenges for the Indian economy. ASSOCHAM is a ‘chamber of chambers’ in India having been in existence since 1920 and having in its fold more than 400 industry chambers. The mission of ASSOCHAM is to ‘articulate the genuine, legitimate needs and interests of its members.’ They are also thought of as promoters of new business models.

Going beyond just a nascent technology

While the Blockchain has made a major impact in the world and its potential has been realized and is being released around the globe, in India the situation is still one of considering Blockchain as a nascent technology. The Second Global Summit which will be held in Bangalore on Friday, 21st April 2017 will focus on opportunities and challenges associated with Blockchain technology and explore the future prospects in India. The key discussion areas for the summit are the impact of Blockchain technology on banks, insurance, and financial institutions, legal perspectives and regulation from Bitcoin to Blockchain, applications of Bitcoin and Blockchain and criminal activity, security and data in the Blockchain.

It is expected that a wide variety of people from different backgrounds will attend the summit including company management, telecom and IT sector workers, security and legal heads, Bitcoin exchanges, regulators, bankers, fund managers and etc. Important representatives of the Indian government are expected to be present including Ravi Shankar Prasad, the Minister for Law and Justice and Electronics and IT. PP Chaudhary, the Minister of State Law and Justice and Electronics and IT, Dr. A.S. Ramasastri, Director for Development and Research in Banking Technology and others.

Negative news can be countered by information

In recent days there has been a lot of controversy regarding the status of Bitcoin and other cryptocurrencies in India. This is the result of misconceptions and misunderstanding of what Blockchain and Bitcoin are all about. We talked with Santosh Parashar, joint director and Head-Corporate Affairs and Capital Market Division of ASSOCHAM about the legality of Bitcoin and how this summit could help address these issues.

He says:

“I absolutely agree that in recent days there has been a lot of news about the legality of Bitcoin and other cryptocurrencies in India. Indeed, this is happening due to the lack of related know-how at different levels in the economy. A few illegal transactions that recently came into notice cannot be ignored with reference to Bitcoin and its legality in India. In our first summit organized in March 2017, nearly all such possible negatives related to Bitcoin were addressed. They were not a fairy tale but based on worldwide experiences that may or may not happen in India. Simultaneously, the investments and transactions in Bitcoin are not altogether ceasing to an end due to any such fear of legal status in India.”

Santosh further adds about learning from other countries and the role the summit is supposed to play, “The options available for India to choose from are — learning by practice, learning by mistakes or learning through others. To what extent, the cost of particular learning is affordable should be a subject matter of utmost priority. Certain countries like the US, China, and Japan which had banned Bitcoin earlier and now following the trend of acceptability must have learned through mistakes. This has to be taken care of by the investors as well as the government and regulators in India because it is a matter of economic significance. In the absence of any such legal tender of Bitcoin in India, ultimately opportunity cost is foregone as there is a loss of taxes to the government. Therefore, this summit is expected to address the legal issues, applications, and implication of Blockchain Technology in the light of recent global developments happening.”

India can become a Fintech Hub

India has been known as an IT hub for more than a decade now. The contributions of India’s IT sector can’t be downplayed as the country is the world’s largest sourcing destination for Information technology (IT) industry and accounts for 67 percent of the $124-130 bln market according to ibef. The industry also gives employment to close to 10 mln people. India can capitalize on its IT experience and recreate a similar success story in the Financial Technology (fintech) sector as well. The need though is for a better understanding of the possibilities that reside in this area and for changing perceptions in New Delhi.

The need for a conducive environment

Demonetization was followed by a push for a Cashless India where all the transactions are done digitally. In fact, if India truly does want to go digital, it will have to rely on the emergent fintech sector and try to embrace digital currencies and Blockchain technology.

Santosh points out:

“The traditional technology models used in the financial sector and sub-sectors for operations are becoming inoperative at the same cost. Hence the new cost effective and efficient technology has much scope to become handy. Fintech has gained substantial attention of traditional players in the Indian financial system. However, the participants of the fintech ecosystem require having a conducive environment of collaboration and dynamism. To build a robust fintech ecosystem, the proper mix of innovative and technical skills, CapEx, government policies and regulatory framework could drive fintech as a key enabler.”

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

F2Pool: We Were Never Against SegWit. Wait…

F2Pool: We Were Never Against SegWit. Wait…

  

F2Pool: We Were Never Against SegWit. Wait…

Earlier today, Wang Chun, the owner of F2Pool, the second largest Bitcoin mining pool in the world, clarified that he was never against the activation of Bitcoin Core’s Segregated Witness (SegWit) on Litecoin.

Chun stated:

“Please let me do Charlie Lee a favor and clarify: I was never against SegWit on Litecoin.”

Just a few hours later, Chun offered a completely opposing stance on SegWit to his previous statement. What are Chun’s intent and motive? During an interview in February, Chun reaffirmed that F2Pool is pushing the activation of SegWit on Litecoin to observe its impact on overall scaling, on-chain capacity expansion and providing an infrastructure for two-layer solutions. At the time, Chun planned to support SegWit on Bitcoin upon the activation of SegWit on Litecoin.

Since then, Chun has emphasized his opposition to the Bitcoin Unlimited software and its team, due to multiple bug exploitations and the software’s instability. However, Chun has since expressed his concern over the Bitcoin Core development team as well.

In a rather conflicting statement, Chun wrote to Cointelegraph’s journalist:

“I've tried my best to love Core. But Core doesn't love me. Now I know Charlie Lee has a backup plan and it is called UASF.”

Chun’s criticism of Bitcoin Core came as a surprise to the Bitcoin community as he previously explained that Greg Maxwell, a Bitcoin Core developer, helped make his decision to support SegWit on Litecoin. It is highly likely that Maxwell introduced the benefits and advantages of activating SegWit and Chun agreed to observe the solution’s effect on Litecoin prior to implementing it on the Bitcoin network.

Currently, Chun is not in support of SegWit on Bitcoin, Bitcoin Core and Bitcoin Unlimited. He went as far as to encourage developers to find an alternative solution to SegWit since the majority of miners are not willing to accept SegWit as a scaling solution. “If the majority of the miners say no to SegWit, developers must find an alternative solution,” Chun said. Over the past week, a new solution called Extension Blocks was introduced by Bitcoin startup Purse’s BCoin. However, the community doesn’t seem to be convinced as of yet that Extension Blocks is the answer to Bitcoin scaling.

Based on the current trend, a user activated soft fork (UASF) is likely, considering that some of the largest businesses and companies within the Bitcoin industry already expressed their support toward UASF. Throughout this month, Chun has changed his stance on SegWit and Bitcoin scaling in multiple occasions. On April 6, Chun stated that he decided to reconsider SegWit on Litecoin. While Chun has been offering ambiguous statements to his followers and to the Bitcoin community, it is still likely that Chun will change his stance on SegWit on Bitcoin if the solution is activated properly on Litecoin.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Cryptocurrency Boom Predicted By Bitcoin Market Data CEO Confirmed, Trend ‘Set To Continue’

Cryptocurrency Boom Predicted By Bitcoin Market Data CEO Confirmed, Trend 'Set To Continue'

  

Where’s the cryptocurrency market heading?
A stack of bitcoins 
stand on top of U.S. dollar bills.

Well, a prediction made in January over a boom in market capitalization of cryptocurrencies — and particularly in the altcoin market — by the founder of a crypto-market intelligence start-up that raised over 10,000 Ethereum (ETH) in a pre-sale financing round, has fully come to pass.Maksim Balashevich, the Belarusian CEO and founder of Santiment based in Germany, which collects and sells live markets data feeds to crypto traders, predicted such a boom in altcoin cryptocurrency capitalization last quarter on January 5, 2017.

And, even though bitcoin is the ‘Big Daddy’ of cryptocurrency and accounts for just under 70% of overall market capitalization today, the boom predicted would “outpace bitcoin by a wide margin”, according to the crypto-market platform’s CEO in Frankfurt Am Main. Based on the Elliott Wave theory, his prediction posited that the cryptocurrency altcoin markets would increase to over $6 billion (bn) in market capitalization. This has already come true and gone a fair way beyond. Fast forward and the combined altcoin market cap today stands in excess of $8.4bn. Some going and much aided by the recent strong performance of Ethereum (ETH), ranked the number two crypto currency behind bitcoin.  

The Elliott Wave theory (or principle), which is named after professional accountant Ralph Nelson Elliott who developed the concept in the late 1930s, is a form of technical analysis that traders apply to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology. The theory claims that markets enter periods of mass pessimism (negative/depression) and euphoria (positive/hype) that drive prices.

The driver of this latest growth in the crypto space was cited as the increase in smart contract awareness and anonymous blockchain technologies. Digging a little deeper into the Elliott Wave theory, the move in the direction of the main trend is made of five waves, with corrections always being in three waves, and patterns repeat themselves on any time scale due to the fractal nature of the waves.

Fear & Greed

Balashevich, who has over a decade of experience in financial markets analysis, argued that the crypto markets are driven by fear (i.e. selling in panic almost at the bottom), greed (i.e. Buying close to the top in fear of missing out) and ignorance (i.e. entering an asset/project with weak fundamentals), with altcoins exhibiting particular “sensitivity to collective emotional impact as participants fear potentially missing out on rapid gains and extreme risks.”

And, having good information at your fingers should help to spot the potential danger signs. The Minsk-born CEO who came to Germany in 2000, predicted that market sentiment in the altcoin market, which encompasses all digital coins except bitcoin, remains extremely bullish. He claimed that 2017 would see a “dramatic boom”, and that this boom is just getting started.

‘Third of a Third’ Wave

On his blog from January, Balashevich wrote: “The altcoin market is entering the ‘third of a third’ wave in the Elliott Waves theory." This represents a moment the crowd realizes that the main trend — either up or down — is occurring. “Following the recent rise in bitcoin, we believe the altcoin market is set to experience a similar bull market over the course of the next six to twelve months as cryptocurrency investment enters the mainstream conscious,” he contended at the time.

Applying such wave analysis to the altcoin market since May 2013, Balashevich showed using graphs that the combined altcoin market capitalization (ex-bitcoin) was entering the so-called ‘third of a third’ wave. This point is regarded as something special in the Elliott Waves theory. Also at the time, he stated: “It represents the capitalization of the entire crypto market and we have just had a decisive breakout to new highs. This means we are most likely entering the next wave of crypto acceptance and would not be surprised to see continually rising prices for most or all major crypto assets.”

As an aside, he noted that “it is, by the way, the only time the crowd is right about price direction” and the trend gets accepted by the majority. [Thereafter] the good news keep coming and the price steadily climbs higher. For practitioners of the science of waves patterns, looking at the whole crypto market at the start of this year it was noted that the pattern was slightly different and “close to the middle of wave 3”. It still required “a few sequences of up and down to finish this wave”, the CEO suggested. That said, moves in the latter would not be “as volatile and intense” as those in the alts-only market.

By comparison at the time to the whole crypto market and based on the analysis presented, Balashevich asserted: “We can comfortably expect the alt-crypto market to rise substantially more in percentage terms than the bitcoin market over the next 6-12 months.” He added: “We might see ‘alts’ capitalization reach somewhere around $7bn. This figure is based on a typical Elliott Waves Fibonacci projection, where wave 3 is either 1.61 or 2.61 the size of wave 1. We saw wave 1 rise from $0.5bn to $2.8bn (a move of around +$2.3bn). So based on the next wave pattern, we could see an increase anywhere between $3.5bn and $6bn in the next move.” This has proven to have been exceeded.

Smart Contracts & Anonymity

Santiment, which is aimed at traders and investors that touts a network giving participants an "information edge" over the competitors thanks to machine learning and the wisdom of the crowd, predicts that areas focused on smart contracts and anonymity are set to benefit most from the next wave of investment in the cryptocurrency sector. This is given that these are areas that bitcoin has "failed to innovate on", according to the Belarusian.

“Smart contracts could potentially have the greatest effect on the way we use the internet in the not-so-distant future,” Balashevich elaborated. “One way, which already exists now, is ICOs (Initial Coin Offerings) and tokenized economies. ICOs have had their share of problems already — not all funded projects will deliver what they promise — and we might see an ICO bubble pop at some point." Adding a caveat he stated: “Yet, ICOs are by far the most democratic, transparent, and frictionless ways to fund and run modern digital companies. I have little doubt that strong communities will be able to establish proper open-source environments to get the most out of this trend.”

Noting that the start of 2017 that Ethereum appears to be the “de-facto platform of choice” for developing smart contracts and the rise of the ICO, Balashevich remarked: “Most ICOs are created here and we expect the trend to continue. The openness of Ethereum platform allows many teams to work together on building the many needed components, such as decentralized exchanges, mobile clients, CDNs (content delivery networks), oracles, prediction markets and stable cryptocurrencies…for running the modern digital companies.”

The upshot — as predicted by the German-based Belarusian — was that ETH (the cryptocurrency behind Ethereum) alone, with all incorporated Ethereum blockchain companies, “could bring in a significant portion of this additional valuation.” Ranked number two cryptocurrency behind bitcoin, some have dubbed Ethereum ‘Bitcoin 2.0’. Trading at $46.43 today (April 12), its market cap currently stands at over $4bn. This is significantly up from just over $8 a pop at the start of this year with a then market cap of around $722 million. It rose to the $30 mark by the middle of this March before reaching a peak at the end of last month — touching $53. But even with the recent dip in price, it has still added to the overall altcoin market capitalization.

Still, one has to question if the altcoin market's performance overall is heavily dependent on the contribution of Ethereum for its market cap, what happens if there is a reversal in its price? On that score, only time will tell. But with hundreds of cryptocurrencies on the market one has to figure that there is junk out there amongst the winners. A point in fact, which Jack Tatar, CEO & President of Research at GEM Research in New York and co-author of 'What's The Deal With Bitcoins?', underlined in an engaging presentation ('Blockchain Assets & Investing In The Future') during a Coinsbank-hosted event last October in Turkey. As I recall his precise words at the time were "some real garbage out there." So it pays to pick wisely and do your research.

Crowd Sentiment

Santiment’s crowd sentiment platform claims that it enables users to access “sentiment data that cannot be found anywhere else.” The theory and sales patter says that this should enable faster and more profitable crypto-trading decisions. Furthermore, it can be used to earn tokens — Santiment Network Tokens — in ‘crypto-financial’ games or spend them to access what are described as “exclusive market insights.” By using their platform users are able to receive clear market analyses, chart trading data, visualize and compare sentiment data with friends to "turn weaknesses into strengths", and, benefit from a 'Battle-test' simulator.

Earlier this year on February 13, Santiment raised 12,000 Ethereum (ETH) in an initial crowdfunding campaign in a matter of  2.5 hours, which is the equivalent today to around $525,000. The start-up, which had been a fair while in planning, stated after reaching its pre-sale goal that the venture would go to work on its white paper and MVP (Minimum Viable Product). It has also forged a number of partnerships that includes universities in Germany.

Predicting The Market

One might well ask is it possible at all to predict the market and the crypto market come to that? On that notes and as Balashevich noted in a separate blog at the back end of last year: “The truth is, no one can make predictions with 100% accuracy. It’s just the nature of the beast. I’ve come to accept that if no one can absolutely predict the market, it means we’re all in the same boat, guessing what will happen next.” Phew, so we are not alone on that front. But whatever investors in the crypto space do, it should go without saying don’t forget to store your crypto assets securely. Any gains built up over a sustained period of time in a cryptocurrency could be wiped out if this aspect not addressed properly.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member