Cryptocurrency This Week

Bitcoin’s birthday and Bitmain’s power shift

Bitcoins Birthday

11 years ago yesterday, the Bitcoin whitepaper was published by the person or persons under the pseudonym of Satoshi Nakamoto. Nine years later, in 2017, the digital currency would reach an all-time high of around $20,000 and in doing so captured the world’s curiosity. Bitcoin then tumbled to as low as $3,130. Since that drop, Bitcoin has slowly resurrected itself, but its future is still unknown. 

Bitcoin has passed other milestones recently as well. The Bitcoin network has officially hit $1Billion in cumulative fee revenue. Bitcoins transactions per day are also on the rise again following the post-all-time high sell off following 2017. 

From Bitcoins year-to-date high of nearly $14,000, it has dropped nearly 34% to around $9,180. This is a 53% decline from Bitcoin’s all-time high of over $20,000. 

Since it started trading on Bitstamp in August of 2011 at the price of nearly $8 it has increased 116,224%. Happy Birthday, Bitcoin.  

Chinese President Embraces Blockchain

Bitcoin experienced a significant increase of nearly 25% in the last week. This increase came after a sharp drop in the previous week that was largely caused by the troubles that Facebook’s stablecoin, Libra, was facing from U.S. policymakers as it attempts to get approved.

A reason for Bitcoin’s sudden rise can be linked to the endorsement of blockchain technology by Chinese President Xi Jinping. Jinping gave a speech that embraced blockchain technology and called on his country to advance development in the field.

Jinping mentioned that China should “seize the opportunity” offered by blockchain. He added that the technology could benefit a range of industries including finance, education, and health care.

After this endorsement, Bitcoin jumped to around $10,300 on Saturday, which has since eased to around $9,180. An endorsement in blockchain technology by China is a positive sign for many and may indicate that other nations are going to invest in the advancement of blockchain in an effort to not fall behind in the industry. 

Bitmain Drama Pushes Bitcoin Cash Higher

Bitcoin Cash (BCH) rallied this week, passing $290 for an hour, on reports that the well known Bitcoin Cash supporter, Jihan Wu, is back as the CEO of the massive crypto mining company Bitmain. The takeover by Jihan Wu has seemingly given hope to Bitcoin Cash supporters that the largest mining company in the world is pro-Bitcoin Cash.  

Micree Zhan Ketuan, Bitmain’s co-founder, has been ousted from his position. An internal memo that was sent throughout the company instructed employees to avoid interaction with Ketuan. The memo threatened staff with potential dismissal and even criminal charges if they were to convene with him or take his instruction. 

As Bitmain’s drama unfolded a competitor filed for an initial public offering in the U.S. on the 28th. The competitor, Canaan Inc., is the second-largest producer of the ASIC mining units that are needed to mine Bitcoin on a large scale. Canaan listed its offering size as $400 million with the SEC. 

Bitmain’s previously attempted to file a $3 billion IPO on the Hong Kong Stock Exchange in September 2018, which collapsed after a number of controversies this March. However, on Oct. 30, a report from Tencent news revealed that Bitmain had discreetly filed for an IPO of their own. IPOs from these massive mining hardware companies may indicate a level of confidence in the overall cryptocurrency markets and the future of the industry as a whole.

eToro’s New Ad Campaign

eToro has launched a new ad campaign to showcase the platform’s release of copy-trading to the United States featuring movie and television star Alec Baldwin. The copy-trading system allows eToro users to select certain traders and follow them much like how a social media platform works. The difference is that they are following these traders with their real money.

When a trader makes a trade their followers make the same trade automatically. Following a trader mirrors their trades in real-time using your own portfolio. The system allows users to copy a user’s entire existing portfolio or to only copy new positions from that point forward.  

This new ad campaign comes as a surprise in a time where regulatory confusion over Bitcoin and cryptocurrency are at an all-time high, especially with the troubles that Facebook’s stablecoin, Libra, has faced. The new advertisement advocates for the trading of cryptocurrencies like Bitcoin and Ethereum and even compare the viewer to a baby, or a “goojybooboo in this case,” implying that using eToro is so easy that a baby could do it.

While the ad can come off as a bit condescending in some aspects, it does accomplish the goal of using stardom to attract viewers to the idea of cryptocurrency. Advertisements like these could be some of the first steps towards a wider presence and acceptance of cryptocurrency in media today and a company going out on a limb with their wallets for such an ad indicates their full confidence with the future of cryptocurrency. 

Bakkt’s Volume 

Bitcoin futures exchange Bakkt had its trading volume surge to all-time highs over the weekend. Previously, the most monthly Bitcoin contracts traded in a day was just 664 on Bakkt. Last Friday 1183 contracts were traded. This is a 78% rise.

The reason for this increase in volume is likely due to the President of China’s endorsement of blockchain and commitment to further its development. Bakkt’s slow increase in volumes gives hope that institutional players may be slowly becoming attracted to the idea of Bitcoin. 

Buy a Starbucks Coffee with Bitcoin

Intercontinental Exchange Inc., the same group that runs the Bakkt exchange, said Monday that it will start to test its consumer app for digital assets with partner Starbucks Inc. in the first half of 2020. 

Mike Blandina, chief product officer at ICE’s Bakkt unit, said on Monday in a Medium blog post that “We’ve assembled a strong team of payments engineers and are nearing completion of our core payments and compliance platform. We’re now focused on the development of the consumer app and merchant portal, as well as testing with our first launch partner, Starbucks, which we expect in the first half of next year.”

The news that the Intercontinental Exchange, and more specifically Bakkt, want to build systems for institutional investors but also everyday consumers is an interesting development in the crypto world. Giving people access to not only purchase and trade cryptocurrencies but also give the ability to buy real-world products like a cup of coffee from Starbucks suddenly gives more legitimacy to Bitcoin or other cryptocurrencies as a true currency. 

Year-to-Date Returns

• Bitcoin’s YTD return has increased 47% from last week at 95% YTD and is now up 140%.
• Bitcoin Cash now has a YTD return of 71.60%. Last week Bitcoin Cash’s YTD was up 32% showing a pretty serious gain on Bitmain’s change in leadership.
• XRP’s return has risen from -23% to -19% YTD.
• Ethereum has gone from nearly a 15.5% return last week to 29% this week.

All of these gains are likely centered around China’s acceptance and promise to accelerate blockchain advancement in a variety of industries.

Author: Luke Conway

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