Good day, our followers! We are here again and ready to share some exciting news. To start with, U.K. Releases Economic Crime Plan That Addresses Crypto Assets and we think it is interesting. The new plan will establish the Financial Conduct Authority (FCA), the U.K.’s financial watchdog, as the supervisor of the regulations. The goal is to create a strict AML/CFT regime that will prevent illicit activities. In our view, this case aims at the legalisation of crypto assets, and it is going to be very helpful for all the crypto projects located in the United Kingdom. Also, we should like to take advantage of this opportunity and express profound gratitude to Richmond Hill municipality. Because in the nearest time Canadian citizens in the city of Richmond Hill will have the chance to pay their municipal taxes in bitcoin. In our thinking, it is another step toward the liberty of using crypto around the world, and we are living for it. Also, we please to keep up to speed on Lightning Network. Bitcoin’s second layer has allowed for some interesting, smart contract functions that have encouraged enthusiasts to work on Lighting applications that disrupt everything from content monetisation to privacy-friendly text messaging. Please note! Satoshi’s Games, the Lightning-friendly equivalent of certain flash game websites, features games with similar mechanics to those of Super Mario World, Minecraft and The Legend of Zelda. It seems like real use-cases are becoming a reality. Moreover, Jack Mallers’s Zap desktop wallet, lightning network implementation, has hit mainnet. As we know, it was available only on TestNet, and we are happy to hear an update on it. In speaking of the ecosystem, there is an accident of ATM usage. To put it briefly, a Spanish effort to prosecute a gang that used Bitcoin automated cash machines suspected of being a front for illegal-drug payments has exposed a hole in European anti-money-laundering controls, law enforcement authorities in the country said. Of course, somebody is interested in some financial, and we are ready to say that BItcoin financial metrics look pretty much. Must admit, only the usage is decreasing. So in our point of view, it can be explained by the healthy correction. Everything is going as we thought. To conclude, there are many updates on Bitcoin, and we are looking forward to it is becoming the main currency in the world.
Disclaimer:
Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This article and information below and above are for informational purposes and should not be considered investment advice. They should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
Development:
GitHub metrics:
Developer activity (from Coinlib.io):
Since the latest Bitcoin Core 0.18.0 which was published on May 02, 2019, there are no updates, according to the Bitcoin Core. However, the commits are published every day and the issues become closed.
Social encounters
The Economic Crime Plan (2019–22) released by the U.K. government and the trade association UK Finance details regulatory action on cryptocurrencies to prevent their use in criminal activities. According to the document, the government is working closely with businesses to bring together private and public sectors in an attempt to tackle fraud, money laundering, bribery and corruption.
“By bringing together leaders from across government, law enforcement and business, we can better tackle the scourge of dirty money, and ensure the U.K. continues to be one of the safest places in the world to invest and do business,” the Chancellor of the Exchequer, Philip Hammond, said in a government announcement about the plan.
Among the new regulations are ones that specifically address crypto assets, including new anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations that will be implemented in January 2020.
The new plan will establish the Financial Conduct Authority (FCA), the U.K.’s financial watchdog, as the supervisor of the regulations. The goal is to create a strict AML/CFT regime that will prevent illicit activities.
According to the plan, “This will aim to not only meet the latest international standards but provide one of the most comprehensive responses globally to the use of cryptoassets for illicit activity.”
Earlier this month, the FCA proposed a ban on retail investors in the U.K. purchasing crypto derivatives, arguing that such products are not suitable for them due to the risks involved. Around the same time, the investment management firm Prime Factor Capital Ltd. became the first crypto-focused hedge fund to be authorized by the FCA.
Finance:
To start analyze Bitcoin’s finance, we should admit that there is a lot of fundamental metrics which can help us make a decision, but metrics are just metrics and there are risks associated with investing in crypto assets. All metrics can only show general market and user sentiment in past and present, not in the future.
We use fundamental analysis as one of several aspects in our approach to investing. For instance, we use the following indicators and ratios.
- Active Addresses (Daily) — indicator
The graph above shows the average number of active addresses used on the Bitcoin blockchain in the last 30 days. It is obvious that the increase in the number of active addresses reflects the growth of the activity of the entire Bitcoin network. Now we are seeing this growth which is accompanied by a trend change to bullish.
- Average Transaction Value (Daily MA30) in USD
This graph reflects the average transaction value in the previous 30 day, and, as previous graph, shows the rise in network activity. There is no one man who can deny the trend change, because even transaction value is rising — more rich people want to buy and hold it waiting for the new high price.
- Mining profitability in USD
No one PoW blockchain can be working without its main power — miners. And the mining profitability can indicate the interest of miners. There is a graph which indicates mining profitability per one day and it can tell us that it can be a nice idea to return to mining business — profitability has doubled in several months.
- Average fee in USD
As we know, every transaction includes fee which is paid to the miners for write this to the ledger, but because of low Bitcoin TPS (Transactions per second), there is a lot of unconfirmed transaction and if any user wants to make his/her transactions confirmed faster he/she is able to pay higher transaction fees. It is obvious that the growth of commission is due to increased activity. And today this fact can be seen on the chart above.
Monetary properties:
- 30-day Volatility — 29%
Volatility is a statistical measure of the dispersion of returns for a given security or market index over a given period of time. Generally, this measure is calculated by determining the average deviation from the average price of a financial instrument in a given time period. We use standard deviation whose using is the most common, but not the only, way to calculate historical volatility. The higher the historical volatility value, the riskier the asset (in our case, Bitcoin). However, that is not necessarily a bad result as risk works both ways — bullish and bearish. But there is an important point for long-term crypto-investors — Bitcoin volatility is decreasing, however S&P 500 volatility is increasing. In our view, one of the reasons is Trade War — investors might prefer to invest in digital assets, not in Equity, which depends on the policy. Nevertheless, everybody, interested in crypto currencies, must remember that investing in digital assets like bitcoin is highly speculative and comes with many risks, but according to Hawley, professor and economist, the higher the risk in business, the greater the potential financial reward is for the business owner.
- Bitcoin Inflation — 4.11%
When we talk about Bitcoin Inflation Rate, we do not mean the purchasing power of money, we mean the average mined bitcoins. There is a fixed amount of 21 million Bitcoin that can be minted, which means that no coins can be minted once this amount is reached. Approximately 80 percent of the total amount of Bitcoin has already been minted. Bitcoin’s algorithmic inflation rate since 2010 is displayed in the figure below and is explained in the original white paper written by Satoshi Nakamoto.
Today, 2nd July, the inflation rate of Bitcoin is 3.96 percent. And it is more than last week. It is obviously, because BTC pumped to $13.5K. The difficulty re-adjustment makes it impossible to simply mine more Bitcoin by allocating more computer resources to the network. As more people try to mine Bitcoin, the software automatically increases the difficulty of successfully mining a Bitcoin and vice-a-versa.
Once the inflation rate reaches zero, miners will no longer be able to earn money from minting newly created bitcoins. Instead, transaction fees will have to increase or the number of transactions will have to increase.
To conclude, we must admit that Bitcoin Block Reward Halving Date approaches — 21 May 2020. According to the history prices and previous halving, we believe that after this date Bitcoin’s price will incredibly rise, because the inflation rate will drop by half.
- Bitcoin Future on the Chicago Mercantile Exchange
The CME was created in 1898 as a commodities exchange for butter and eggs. It is now one of the biggest financial exchanges in the world, specializing in futures and options across industries, from agriculture to metals to real estate.The CME launched Bitcoin futures trading in December 2017, and volume on the exchange has been rising since then.
On May 13, 2019, the Chicago Mercantile Exchange (CME) reported a daily volume of over $1.3 billion in notional value for Bitcoin futures contracts traded. The CME is a regulated exchange based in the United States, but unregulated exchanges outside of the U.S. report even higher volumes for futures trading. On the same day, BitMEX reported $13 billion in notional value traded. However, on May 28,2019, the volume raised 21 thousand futures. Today, 18th June 2019, it is only 8 thousand futures.
A new, Toronto-based crypto exchange will allow users to trade in bitcoin, ether and litecoin (with potential expanded offerings in the near future) for no fees.
The exchange, Newton, is partnered with DV Trading, a regulated proprietary trading firm with over a decade of experience trading stocks, bonds, derivatives and, more recently, cryptocurrency for institutional customers.
Newton CEO Dustin Walper told Bitcoin Magazine what some critics have already been saying, that bitcoin mass adoption will only come when trading is made easier and cheaper.
And Walper thinks it’s time for the adults to step into the Canadian exchange market noting, “Cryptocurrency is growing up as an asset class, and professional management is a must.”
“We felt that Canadians were poorly-served by incumbents, and that there was room for an aggressively low-cost player that doesn’t compromise on UX,” he said. “As a Canadian I also thought it was crucial to increasing adoption and, eventually, lessening the insane grip Canada’s banking oligopoly holds on the payments industry. It’s really, really anti-competitive.”
IS A FEE-FREE CRYPTO EXCHANGE POSSIBLE?
Walper told us Newton can offer no-fees trading because the exchange will be making a small profit from the “bid-ask spread,” the difference between buying and selling prices.
“Lower fees and tighter spreads are better for consumers, and a prerequisite to mainstream adoption of cryptocurrency for payments,” he said. “Moving money between fiat and cryptocurrency needs to be low-cost and painless if it’s ever going to be ubiquitous … Even though our spreads are extremely tight, particularly for Canada, we act as a market-maker … and with a firm like DV Trading backing us, it’s an extremely sophisticated market-making operation that allows us to make money at prices that most other companies can’t.”
Newton will be publishing buy and sell prices on its website.
HOW SECURE IS NEWTON?
After QuadrigaCX, the Canadian crypto community could be forgiven for being skeptical about Newton and its promise of a new feeless, secure, fast and convenient cryptocurrency trading platform.
As such, Walper recognizes the importance of air-tight security in today’s crypto marketplace, calling it “a huge part of our strategy.”
The exchange will keep “the vast majority” of assets in cold storage off-site with no access to the internet. And all keys will be backed up in multiple copies to prevent accidental loss.
Access to clients bank accounts will be facilitated by Plaid, an identity and verification app.
“Transferring funds from your bank account to Newton is as simple as entering an amount into our app and tapping ‘Add funds.’ Plaid makes this sort of experience possible,” said Walper.
GETTING UP TO SPEED WITH GOVERNMENT REGULATIONS
Calling Canada’s new AML regulations “timely” and “necessary,” Newton has taken the first step, registering the company with the Financial Transactions and Reports Analysis Centre of Canada.
“We’ll be making a big announcement soon about how we’re handling custody of our assets — I can’t say much yet, but if you’re thinking ‘third-party,’ ‘audited’ and ‘insured,’ you’d be on the right track,” Walper told Bitcoin Magazine. “Canada is a great place to do business with tons of technical talent on offer. We’re a top 10 economy globally, so it’s not a bad choice for our first market and an ideal base for launching global operations in the near future.”
Fittingly, Walper concluded his expectations for Newton and the needs it will fill with a hockey metaphor. “As Gretzky famously said, skate to where the puck is going,” Walper recalled. “In this case, as with FX or stock brokerages, the puck is going towards lower fees and tighter spreads. We’ve laced up our CCM JetSpeeds and we’re holding on to the Zamboni.”
In partnership with Coinberry exchange, Richmond Hill is the first city and the second Canadian municipality to offer the option. Innisfil, a town of 36,000 just outside of Toronto, announced its own year-long trial in March 2019. Building on the momentum of this successful rollout, Coinberry is now outfitting the Richmond Hill government with the tools to accept bitcoin from its 200,000 constituents.
The Richmond Hill city council gave its stamp of approval for the initiative in a July 10, 2019, vote, and Marina Krtinic, a representative of Coinberry, told Bitcoin Magazine that, while the final deal hasn’t been inked, “Coinberry will be the only partner” for the new feature. Like in Innisfil, the government will use Coinberry Pay, the exchange’s fiat rail, to process the bitcoin tax payments into CAD.
EXPANDING BITCOIN TAX PAYMENTS
This program only applies to the city’s municipal taxes, but a team of city staffers will report back on September 30, 2019, to evaluate whether the option might be effective for other levies, like property taxes or other city fees.
“We believe that the demand for a digital currency payment option is only going to grow in the coming years, especially amongst millennials,” said Richmond Hill Deputy Mayor Joe Di Paola, who introduced the motion. “Our council was aware of Coinberry’s successful implementation of a digital currency payment service with the Town of Innisfil, and since there was no cost and no risk to the City of Richmond Hill to do the same, it made the decision that much easier for us.”
If the pilot goes well, it could set an example for other Canadian precincts, Coinberry believes.
“We are reaching out to other municipalities, mostly centered around Ontario for now,” Krtinic said. “They’re going to be watching Innisfil [and] now Richmond Hill because it is a bigger municipality and they’re very close to Toronto,” where the city council has taken a softer stance on bitcoin and crypto as of late, she said.
Krtinic also mentioned that the service in Innisfil has seen modest interest from taxpayers, and officials have been largely receptive of the initiative. She added that Coinberry continues to work with governments toward solutions like this one, to inject legitimacy and trust into the Canadian government’s sometimes-stressed relationship with crypto companies (QuadrigaCX, for example, comes to mind).
BITCOIN TAX PAYMENTS IN TORONTO?
The end game for Coinberry, she said, is “to start a domino effect of other municipalities accepting crypto tax payments,” hooking as many municipal governments onto the tax option as possible. Toronto, however, would be the trophy catch.
“I don’t know about [it coming] next, but it is the prized tuna,” Krtinic said.
With a population of 2.7 million (swelling to 5.9 million in the greater metropolitan area), integrating bitcoin into the taxation process of Canada’s largest and fastest-growing city would be a boon for bitcoin adoption in the country. But at 200,000, Richmond Hill isn’t any little guppie, and the latest in Coinberry’s bitcoin tax initiative is a win for the industry in its own right.
ShapeShift announced today, July 8, 2019, the launch of its latest platform to provide users with an end-to-end solution for securely controlling all aspects of their digital assets. With the announcement of this new noncustodial platform, the five-year-old digital asset company will allow users to buy, sell and trade cryptocurrencies while maintaining full control of their private keys.
According to ShapeShift Founder and CEO Erik Voorhees, the web-based platform is built entirely without custody and across multiple blockchains. The vision for this new platform will allow users to maintain control of their financial assets while participating in the crypto economy.
“The new ShapeShift is arguably the world’s first non-centralized multi-chain digital asset platform,” Voorhees said, per press material shared with Bitcoin Magazine. “It becomes the basis of self-sovereign finance and we’re immensely proud to bring this to market.”
In a press release, the company says that the platform is mainly aimed at international crypto users who have been searching for an easier interface without counterparty risk, as opposed to targeting institutions with custodial solutions.
Voorhees said that the new platform is a more holistic approach to “hodling, buying, selling, trading, tracking and managing digital assets across multiple blockchains.”
In September 2018, ShapeShift launched a controversial new loyalty program that required users to provide “basic personal details” as a result of stricter regulatory demands to comply with KYC and AML laws. The firm stated that users would still have full control and ownership over their funds and that the company would maintain its “noncustodial model” despite the new membership program.
The new platform will support over 50 digital assets, including bitcoin, ether and litecoin.
New methods for key storage will be provided by the company as the platform develops, but as of right now, users can integrate KeepKey or Trezor hardware wallets that they currently own.
Ecosystem
- Bitcoin ATM Network
First, there is the robust growth in Crypto ATM Installations. Now there are 5 054 installations and it seems went fine.
There is the pie chart above which reflects the distribution by manufacturer. The biggest players are General Bytes and Genesis Coin. Must admit, the average transaction fee continues to be pretty high — about 8%.
Moreover, most of them are located in North America. It means that there remains much to do in order to make Crypto ATM as usual as our ordinary ATMs.
A Spanish effort to prosecute a gang that used Bitcoin automated cash machines suspected of being a front for illegal-drug payments has exposed a hole in European anti-money-laundering controls, law-enforcement authorities in the country said.
Rules designed to force money handlers to vet their clients don’t apply to the cash machines’ owners or to cryptocurrency trading platforms, according to drug-enforcement officials from the Civil Guard, a type of police in Spain.
Bitcoin ATMs are a relatively new phenomenon and are spreading rapidly. There are more than 5,400 machines installed worldwide, a number that has grown by more than half over the past year, according to Coin ATM Radar, a website that tracks the industry. Of those, 89 are in Spain. In the U.S., crypto ATMs have proliferated at corner stores, casinos and smoke shops. Their owners, like those in Spain, don’t have to comply with strict anti-money-laundering regulations.
Spanish police announced in May that they had taken down a laundering operation that used Bitcoin ATMs. They arrested eight Spaniards and Latin Americans who allegedly used nine companies to transfer more than 9 million euros ($10 million) for drug traffickers in Colombia and other countries. The authorities say the cash machines were crucial.
According to the Civil Guard officials, who spoke on condition of anonymity, the group hired two ATMs from unsuspecting trading platforms and installed them in an office in Madrid that masqueraded as a center for sending remittances and trading cryptocurrencies. The gang would then transfer money from bank accounts to the trading platforms in order to top up the machines with Bitcoin or other digital currencies.
People linked to the group, who registered at the platform’s office using false identities, would deposit cash in the machines and receive a QR code or a numerical code with which they could claim their cryptocurrencies from the exchanges. Those Bitcoins could then be sent to the drug traffickers who could cash them in.
Cash Deposits
The scheme provided justification for large amounts of cash to be deposited in bank accounts in Spain and abroad without raising red flags.
Prosecuting the case, however, is taking the Civil Guard into new territory. As part of the bust, the police seized the two Bitcoin ATMs along with four cold wallets (for offline storage for cryptocurrencies) and 20 online wallets. It is now trying to prove the relationship between the machines and the digital cash it confiscated, a task made more difficult by a lack of clarity around Bitcoin’s legal status in Spain.
In a separate case, Spain’s Supreme Court issued its first decision on cryptocurrency-related fraud last week, ruling that Bitcoins are not legal electronic money but are assets and that any repayment of the fraud would need to happen in euros. The Civil Guard officials said the ruling was welcome because it starts to define Bitcoin.
New European Union legislation set to take effect by next year aims to include cryptocurrency exchanges and the custodians of online wallets in anti-money-laundering rules that already require banks, jewelry dealers and certain other firms to report suspicious financial activities. It won’t, however, include independent Bitcoin ATM owners, a breach that increasingly sophisticated money launderers will be sure to try to exploit, the officials said.
Lightning Network:
The Lightning Network is a “Layer 2” payment protocol that operates on top of a blockchain-based cryptocurrency (like Bitcoin). It enables fast transactions between participating nodes and has been touted as a solution to the Bitcoin scalability problem. It features a peer-to-peer system for making micropayments of cryptocurrency through a network of bidirectional payment channels without delegating custody of funds. Lightning Network implementation also simplifies atomic swaps.
Normal use of the Lightning Network consists of opening a payment channel by committing a funding transaction to the relevant base blockchain (Layer 1), followed by making any number of Lightning transactions that update the tentative distribution of the channel’s funds without broadcasting to the blockchain, optionally followed by closing the payment channel by broadcasting the final version of the transaction to distribute the channel’s funds.
- Nodes — Number of nodes with and without channels.
This chart shows the number of nodes with and without channels. Lightning nodes open payment channels with each other that are funded with bitcoin. When transactions are made across those channels, the channel balance is reflected without having to broadcast a transaction on chain. This creates a second layer on top of the bitcoin network that expands it capabilities.
Blue — with channels. Red — without channels.
- Channels
Unique (blue) = channels connecting nodes directly for the first time. Duplicate(red) = channels between nodes that are already connected.
- Network Capacity
This chart shows cumulative bitcoin capacity across all channels. Lightning nodes open payment channels with each other that are funded with bitcoin. When transactions are made across those channels, the channel balance is reflected without having to broadcast a transaction on chain. This creates a second layer on top of the bitcoin network that expands it capabilities.
- Network Capacity per Channel
Daily median capacity per channel statistics. Blue — average, Red — 90th percentile, Green — 50th percentile, Yellow — 10th percentile.
These and other graphs can be found here.
Bitcoin’s second layer has allowed for some interesting smart contract functions that have encouraged enthusiasts to work on Lighting applications that disrupt everything from content monetization to privacy-friendly text messaging. The LApps mostly serve as proof-of-concept prototypes that lack the user friendliness of their centralized fiat-friendly counterparts, but they are helping create new ways to circumvent rules and conventions of the old world.
Satoshi’s Games, the Lightning-friendly equivalent of certain flash game websites, features games with similar mechanics to those of Super Mario World, Minecraft and The Legend of Zelda. Those who pay 1,000 satoshis will have access to premium games that reward players with satoshis.
- ZAP ENTERS MAINNET
Jack Mallers’s Zap desktop wallet has hit mainnet.
Mallers heralded the 0.5.0-beta release at the beginning of the week. The first fully operational version comes on the tailwind of some serious momentum for Zap’s testnet version, which has over a million downloads.
Before this update, users could only interact with Lightning Network’s testnet, unless they connected the wallet to their own nodes. Now, leveraging Lightning Labs’ latest LND implementation (which we’ll get to later) and the Neutrino protocol, those who don’t run their own nodes can launch a noncustodial Lightning wallet within minutes.
And this wallet will come loaded with customization features that users clambered for in feedback after the last release. The preference menu option will now give Zap users the flexibility to set their own fees when transferring funds on-chain, and other features include a feedback option to rate payment channel/hub providers and the ability to customize invoice expiration time, among other things. It also includes a revamped channels submenu. With it, users can manage and create new payment channels and even track the activity of each channel they are connected to — rebalancing and other advanced metrics are coming later.
“Your imagination is your only limitation. Create neutrino powered wallets, connect to your remote node, manage your channels, drive your BTCPay server, and more from one application,” Mallers writes in the post.
- LIGHTNING LABS STRIKES AGAIN WITH LATEST LND RELEASE
2019 has been a productive year for Lightning Labs. Just a year after the Lightning Network’s debut, the development hub has rolled out its mobile and desktop apps, watchtowers and its Lightning Loop features. (Loop Out allows users to send bitcoin from their Lightning wallets on-chain without closing channels, while Loop In allows them to top off their balances without closing channels.)
In its LND v0.7-beta release, Lightning Labs’ Lightning Network software implementation adds on to Lightning Loop and watchtowers, along with beefing up some of its other features.
Notably, the update includes payment tracking and management improvements. A new set of protocols allows for payment tracking, with the expressed aim of better representing the accurate state of channels should a Lightning node go down in the midst of processing a payment.
“This information is particularly useful for services that use lnd’s ‘hodl invoice’ functionality, including Lightning Loop In. With these services, payments can stay in intermediate states for longer periods of time, so proper tracking of payment states in case of shutdown is even more important,” the blog post reads.
The new version comes with LND’s Mission Control payment channel routing system to help users find the most reliable route to peers on the network, as well as a fee management tool for sending bitcoin on-chain and other general UX/UI improvements.
- CASA’S NEW MOBILE APP WANTS YOU TO STACK SATS
This week, Bitcoin hardware and key management company Casa announced that it is rolling a Lightning wallet and a Lolli-like, bitcoin-back reward system into one app.
The Sats App is a Lightning Network wallet that syncs directly with Casa’s plug-and-play Lightning Network and Bitcoin full node. It runs Tor and can be used anywhere to make full use of a Casa node, from the comfort of your own home.
It also comes with ease-of-use features, sticking to Casa’s mission to bring Bitcoin’s bleeding edge tech to its least technical users. Its SatsTag, for instance, lets you customize a pseudonymous handle (think Venmo) to represent your identity on Lightning, instead of your public key and node’s IP/Tor address. This address scheme, Casa believes, will whittle down the awkward string of numbers that denotes a receiving address to something more palatable to the average user. It also enables users to send payments without receiving an invoice first.
“We realize that not everyone will want to link their node with a SatsTag, so we will always fully support invoice- and address-based payments as well. Simplifying experience for new users is important, but only if we can do so while respecting user sovereignty by including full existing Lightning payment methods,” the company post reads.
The application will also come with a SatsBack feature, which will reward its users for executing “simple, everyday actions.” For instance, the first of these entails a 20,000 sat reward for connecting the app to a Casa node, and the company said it will announce more as the application hits the market.
Speaking of which, you can try out the Sats App in testnet right now, but you’ll have to sign up for the private beta to get a feel for the real thing. Casa will begin clearing applicants for its iOS release next week and Android “soon after.”
Rumors
In a new report titled “Hedging Global Liquidity Risk with Bitcoin,” the digital currency asset manager explores how bitcoin can give investors protection in uncertain political and economic situations, arguing that the digital currency “deserves a steady strategic position within many long-term investment portfolios” as it represents “a transparent, immutable, and global form of liquidity that can provide both wealth preservation and growth opportunities.”
In particular, the report notes bitcoin’s store-of-value characteristics that are similar to real assets like gold, as well as hard-money attributes like immutable scarcity. The cryptocurrency can also be used for daily spending, similarly to cash, with more than 100,000 merchants worldwide including Whole Foods, AT&T, Microsoft, Overstock.com and Expedia now accepting bitcoin. Additionally, the industry’s significant growth has created value and stimulated further demand. Real applications for blockchain technology and decentralized digital assets are continuing to emerge, spurring this growth.
Bitcoin’s distinct set of properties makes it unlike any other asset and gives it “the potential to perform well over the course of normal economic cycles as well as liquidity crises, especially those involving currency devaluations,” says the report.
Though evidence suggests that bitcoin might be the best asset to turn to in times of global uncertainties, Sagar Chaudhary, a junior analyst at eToro, a global brokerage company, warns investors to remain wary, stating that the digital currency remains a technology in its very early stage that’s known for being highly volatile.
“The conventional list of safe havens usually features instruments such as gold or the Japanese yen,” Chaudhary told Bitcoin Magazine. “Compared to other instruments in the market, bitcoin is still at a very early stage and too early to say whether it is a good hedge against global liquidity crises or macroeconomic shocks.
“Given the volatile nature, most people do not necessarily categorize Bitcoin as a safe haven but, if we look closely at recent trends, we do see that Bitcoin has become a popular hedge against uncertainty in the traditional markets.”
Indeed, Chaudhary sees a strong correlation between bitcoin’s price movements and global political and economical events, and notes that bitcoin and the broader digital assets market are increasingly becoming part of the mainstream.
“We do see that at times of political unrest or market uncertainty, people do fall back on crypto. Bitcoin is gradually becoming more and more popular among investors looking to diversify their portfolios,” he said.
As trade tensions between the U.S. and China escalate, Chaudhary believes we may soon start to see the familiar pattern emerge.
“Bitcoin soared after Brexit and we did see the price spike in the wake of the U.S.–China trade tensions,” he said. “Bitcoin price is closing in on the $10,000 mark, so we can likely expect FOMO [fear of missing out] entering the space, which would likely push prices up further.”
Social media metrics
Social media activity:
Since this is the first biweekly overview, there is only one period and there are no FaceBook and Reddit dynamics.
- Google Trends
Another one symptom of a bullish trend, in our view, can be an increasing Google Trends Score (0–100). But as we can see, after the pump there is a decrease again. It seems there is a correlation between Google Trends and BTC price.
“Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of 0 means that there was not enough data for this term. “
- Tweets
The graph above reflects number of tweets with hashtag #bitcoin. We consider that this index shows the popularity of Bitcoin and the rise, observed nowadays, could predict the larger demand for Bitcoin and other cryptocurrencies.
The graph above shows the dynamics of changes in the number of BTC Reddit subscribers and Facebook likes. The information is taken from Coingecko.com.
