Key Bitcoin price indicators signal bulls bought the $43K restest

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Bitcoin Could Become the Currency of International Trade, Says Citi Report

Bitcoin Could Become the Currency of International Trade, Says Citi Report

Bitcoin (BTC) is at a turning point in its history, according to analysts from US investment bank Citi. The bank estimates that the leading cryptocurrency could become the currency of choice for international trade within 7 years. 

Bitcoin a Potential Currency for International Trade

Citi bank made this observation in a 105-page report titled “Bitcoin: At the Tipping point.”

The report traces the evolution of Bitcoin as a reserve of value and currency. Citi analysts opined that Bitcoin is likely to become the currency of choice for international trade from the introduction of the document. 

The reports highlighted the significant benefits of Bitcoin for global payments, including its decentralized design, fast (and potentially less expensive) money movements, secure payment channels, and traceability. 

The researchers believe that Bitcoin features combined with its global reach and neutrality could achieve international currency status within seven years.

“Bitcoin is also emerging as the ‘pole star’ in the digital goods space and is a compass for the evolution of the cryptocurrency ecosystem,” Citi analysts note.

A Path Strewed With Pitfalls 

Despite the growing optimism in the report, Citi analysts are still non-committal and revealed potential issues that could hinder adoption. “The arrival of institutional investors has created confidence in the cryptocurrency, but there are lingering issues that could limit widespread adoption,” the report said.

Regulatory difficulties were highlighted as a significant problem that could hinder the adoption of bitcoin globally. There are already several governments in the world that have taken significant steps towards setting strict regulations for bitcoins. This could cause fear among the local populace and hinder localized adoption of cryptocurrency. 

Citi analysts also pointed out that the bitcoin network lacks scalability and is often prone to congestion. However, the report considers the development of solutions like Lightning Network that is capable of increasing the capabilities of the bitcoin network. Although other risks remain, these can be quickly swept aside as bitcoin adoption progresses with time. The report concludes by stating that bitcoin is at the tipping point of its existence. 

Citi notes that the development of the leading currency will have far-reaching implications for the global economy and the future of finance. This document by Citi echoes the bullish sentiment held by many traders and institutions about bitcoin.

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BTC Balance Sheets: 42 Companies Hold 1.3 Million Bitcoin Worth More Than $65 Billion

BTC Balance Sheets: 42 Companies Hold 1.3 Million Bitcoin Worth More Than $65 Billion

Since the company Microstrategy shifted a lot of its treasury reserves into bitcoin, a great number of companies have followed the firm’s lead. According to the web portal, bitcointreasuries.org, data shows that 42 companies are now represented on the list and the businesses hold more than $65 billion worth of bitcoin.

The Corporate Bitcoin Stash- 6.43% out of the 21 Million Capped Supply

It has become a trend to add bitcoin (BTC) to a company’s balance sheet and the company Microstrategy invoked the trend when the business purchased $250 million worth of BTC. Since then, a great number of companies have followed suit and BTC’s value has skyrocketed as well.

For instance, at the end of 2020, 29 firms held around 1.1 million bitcoin worth more than $30 Billion using exchange rates on December 28. Moreover, at the time, the 29 companies owned 5.48% of the entire 21 million BTC supply.

Today, according to bitcointreasuries.org statistics the numbers have changed a great deal. There’s now 42 companies listed on the web portal showcasing firms from all around the world that hold BTC treasuries.

BTC Balance Sheets: 42 Companies Hold 1.3 Million Bitcoin Worth More Than $65 Billion

According to the data on March 1, 2021, the companies own $65 billion in aggregated value using BTC/USD exchange values on Monday afternoon (EST). The companies hold a massive 1,350,073 BTC or 6.43% out of the 21 million maximum supply. Since adding 13 more businesses to bitcointreasuries.org’s list, there are a number of new entrants.

Companies, trusts, and hedge funds like Tesla, Inc., MOGO Financing, Osprey Bitcoin Trust, Evolve Bitcoin ETF, Ninepoint Bitcoin Trust, and more have been added to the list. Of course, the biggest holder on the list is Grayscale with 649,130 BTC or 3.09% of the 21 million supply cap. In fact, Grayscale’s massive BTC hoard is close to half of the entire bitcointreasuries.org’s aggregate count of bitcoin balance sheets.

The private entity called “MTGOX K.K.,” holds the second-largest amount of BTC with 141,686 BTC. Behind the Mt Gox stash is Block.one’s treasury, which holds 140,000 BTC worth $6.7 billion today.

Microstrategy is the fourth-largest holder listed and steadily working toward the six-digit bitcoin holdings with 90,859 BTC under management today. The intelligence firm recently announced buying up $15 million in BTC this past week.

Unmentioned Crypto Businesses With Bitcoin Balance Sheets

Other firms close to Microstrategy include businesses like Tesla, Coinshares, Ruffer Investments, Galaxy Digital, Tezos Foundation, and 3iQ The Bitcoin Fund.

Furthermore, there are numerous companies that are not included on the bitcointreasuries.org website including the Mediterranean restaurant chain Tahini’s, the Canadian graphics software company Snappa, the cannabis firm Synbiotic SE, and even Coinbase.

On February 24, the San Francisco exchange Coinbase explained how it can help corporate strategies obtain bitcoin for their treasury positions. The blog post also mentioned that Coinbase has held BTC on its balance sheets since 2012.

It is likely that many cryptocurrency-centric businesses have adopted this model long ago, and have held BTC and other digital assets in their treasuries for quite some time.

What do you think about the 42 companies holding 1.3 million BTC worth over $65 billion today? Let us know what you think about this subject in the comments section below.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Crypto myth busted: Users haven’t mined Ether using a PlayStation 5 yet

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Centralized Exchanges Processed Over $1 Trillion in February 2021, Binance Dominates

Centralized Exchanges Processed Over $1 Trillion in February 2021, Binance Dominates

The cumulative monthly trading volumes in all centralized cryptocurrency exchanges breached $1 trillion for the first time in February 2021, the Block Research on Feb 27 reveals.

Binance, Coinbase, and Kraken are Dominant, Contribute over 80% of Trading Volumes

At over $1.05 trillion, February’s monthly volumes were higher than January’s by roughly 16 percent.

The majority of trading was from Binance—the largest exchange by user base, accounting for around 66 percent. Other slots were taken by Coinbase and Kraken, contributing 10.6 percent and 5.3 percent, respectively.

Centralized cryptocurrency exchanges are custodial in nature, with most supporting fiat-to-crypto trading.

The most popular, including Binance and Coinbase, are highly liquid, attracting billions in average daily trading volumes.

At the same time, because of their fiat support, they have been attractive to new users seeking crypto exposure in a means of diversification or immersing themselves, experimenting with crypto.

Binance Processed over $667 Billion in February 2021

From the list, it is clear that Binance’s efforts are paying off.

With branches across the world, the platform has evolved to be the largest offering spot and derivatives trading platform with tools suitable for both new and professional traders.

Besides, their headquarters outside of the United States gives it an advantage. For instance, it can list various digital assets, some of which won’t find support from Coinbase, Kraken, or Japanese CoinCheck due to stringent local laws.

However, they are circumventing this legal challenge by launching compliant, country-specific exchanges to cater to their users while supporting fiat.

Outside of trading, Binance has the lion’s share of trading volumes due to its ecosystem.

For instance, the launchpad aids companies to raise funds and subsequently list either at Binance or Binance DEX. They also have centralized finance (CeFi) services, aggressively trying to inter-link with Binance smart Chain (BSC)-based DeFi dApps.

Coinbase Plans to go Public

On the other hand, Coinbase and Kraken are compliant with regulators, supporting fiat.

Coinbase—the largest exchange in the United States, plans to go public via a direct listing at NASDAQ. Since its launch, it has transacted over $456 billion to-date.

As BTCManager reported, it submitted its S-1 form with the United States Securities and Exchange Commission (SEC) in late 2021.

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Price analysis 1/3: BTC, ETH, ADA, BNB, DOT, XRP, LTC, LINK, XLM, BCH

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Report: Goldman Sachs Has ‘Restarted Its Cryptocurrency Trading Desk’

According to a report published by Reuters on Monday (March 1), Goldman Sachs Group, Inc. has “restarted its cryptocurrency trading desk and will begin dealing bitcoin futures and non-deliverable forwards for clients from next week.”

The report by Reuters Chief Correspondent Anna Irrera says that, according to “a person familiar with the matter”, this team “will sit within the U.S. bank’s Global Markets division.”

Furthermore, Reuters was told that Goldman is “also exploring the potential for a bitcoin exchange traded fund and has issued a request for information to explore digital asset custody.”

At this time, we can’t verify the veracity of this story, but it is interesting that it comes at a time that major Wall Street firms seem to be falling over themselves to acknowledge the legitimacy of Bitcoin as an alternative to gold with an asymmetric return.

Earlier today, gold bug Peter Schiff, who is one of Bitcoin’s harshest critics, had to admit that Wall Street seems to have changed its stance on Bitcoin:

Jurrien Timmer, Director of Global Macro at Fidelity Investments, today published a 12-page research paper on Bitcoin (title: “Understanding Bitcoin: Does bitcoin belong in asset allocation considerations?”).

Timmer concluded his report as follows:

He finished by saying:

If bitcoin is a legitimate store of value, is scarcer than gold, and comes complete with a potentially exponential demand dynamic, then is it now worth considering for inclusion in a portfolio (at some prudent level and at least alongside other alternatives, such as real estate, commodities, and certain index-linked securities)?

Despite the many risks discussed—including such factors as volatility, competitors, and policy intervention for some the answer may well be ‘yes,’ at least insofar as that ‘yes’ applies only to components on the 40 side of 60/40. For those investors, the question of bitcoin may no longer be ‘whether’ but ‘how much?’.

Featured Image by “petre_barlea” via Pixabay

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Bitcoin Whales Bought the Dip, On-Chain Data Shows

Bitcoin Whales Bought the Dip, On-Chain Data Shows

Whales took advantage of falling Bitcoin prices to accumulate, on-chain data from GlassNode reveals.

HODLers Bought the Dip When BTC/USD Fell Below $44k

On Feb 28, the Bitcoin price cratered below $44k, forcing some traders to liquidate their positions and book profits.

Amid the panic, whales were buoyant and confident, scooping BTC at a discount.

According to GlassNode, there was a sharp spike in the illiquid supply of Bitcoin, indicating the shift of ownership from hot traders to more conservative HODLers.

Interestingly, although the number of whales—or illiquid supply of Bitcoin, is lower than January’s, the expansion of the number of addresses traditionally holding–especially at the recent contraction– suggests general market confidence.

In return, this could see the Bitcoin price recover from February lows towards $58k.

The Institutional Push

At the tail-end of February, MicroStrategy, and Square, as BTCManager reported, cumulatively bought over $1.17 billion of BTC.

Their involvement and support from CEOs, especially Michael Saylor, is a net positive not only for the ecosystem but as a means of outreach. They both have a considerable following.

Coinciding with their accumulation is the Federal Reserve (FED) re-affirmation that the economy is weak and needs fiscal support.

Accordingly, despite inflation fears and more administration of the Coronavirus vaccine, the United States government will release an additional $1.9 trillion over several years to prime the economy.

In return, this will most likely force inflation higher towards the two percent target—or higher in the coming months.

Citi: Bitcoin May Become an International Trade Currency

The minting of money out of thin air cements Bitcoin’s true value proposition. In a recent report, Citi Bank—a global bank, said Bitcoin might evolve to dominate international trade.

An extract from the report reads:

“A focus on global reach and neutrality could see bitcoin become an international trade currency. This would take advantage of Bitcoin’s decentralized and borderless design, its lack of foreign exchange exposure, its speed and cost advantage in moving money, the security of its payments, and its traceability.”

As per a BTCManager report, Google Finance now tracks select cryptocurrencies, including Bitcoin.

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Hyperbitcoinization’s Small Minority: Economist Says Bitcoin’s Growing Success Will Lead to Perverse Consequences

Hyperbitcoinization’s Small Minority: Economist Says Bitcoin’s Growing Success Will Lead to Perverse Consequences

Last Sunday, the price of bitcoin touched an all-time price high at $58,354 per unit and surpassed a $1 trillion market capitalization. Bitcoin’s value has dipped since then, but the decentralized crypto asset’s market still captures a large $900 billion valuation. On February 26, the director of the Economic and Social Research Council (ESRC) warned that bitcoin’s growing value and success may lead to a technocratic dystopian society that rivals “the kings and emperors that ruled over empires in centuries past.”

Hyperbitcoinization: ‘A Voluntary Transition From an Inferior Currency to a Superior One’

Almost seven years ago back in 2014, Daniel Krawisz wrote about and created the term “hyperbitcoinization,” in order to describe how fiat currencies will rapidly lose value and Bitcoin supplants them. Krawisz explained what demonetization is and one specific type that is often talked about these days called hyperinflation.

Essentially, in economics, the term hyperinflation stands for the inflation rate of a currency accelerating at an extremely rapid rate. The value of the currency quickly erodes and the price of goods and services rise significantly, lowering an individual’s purchasing power.

Krawisz explained at the time that there are essential differences between hyperinflation and hyperbitcoinization, as his editorial states:

Hyperbitcoinization is a voluntary transition from an inferior currency to a superior one, and its adoption is a series of individual acts of entrepreneurship rather than a single monopolist that games the system.

Hyperbitcoinization theories have also led a number of people to believe that fiat currencies will erode to nothingness, and crypto assets like BTC will forge ahead. Some have even taken the dream to extreme levels, whereas they divide people into classes and call people who don’t own crypto “nocoiners,” the exact opposite of a “bitcoiner.”

Others believe bitcoiners have jokingly said, they will be so rich that they will be able to construct massive citadels and become the “upper echelons of society.” Meanwhile, there’s definitely a large number of bitcoiners who think the ‘citadel’ and ‘nocoiner’ visions are ultra cringe-worthy, as many individuals remain humble while BTC’s value increases their economic freedom.

The Self-Fulfilling Prophecy and Perverse Consequence

One individual, the director of the Economic and Social Research Council (ESRC), Jon Danielsson, seems to think hyperbitcoinization could be bad news and even reveal an “Emperor has no clothes” situation.

Danielsson’s recent opinion piece says as “bitcoin continues its ascendance, the less fiat will be worth,” which in his opinion will be a “perverse consequence.” He thinks that the coexistence between BTC and fiat currencies creates an “unstable equilibrium.”

“If bitcoin becomes successful, then we will want to use it more and more,” Danielsson writes. “That makes it even more successful so that we disregard fiat even more. In the end, fiat will be fully displaced, as the success of bitcoin becomes a self-fulfilling prophecy.”

Interestingly, on January 17, 2009, Bitcoin’s inventor Satoshi Nakamoto spoke about the crypto asset’s ability to become a self-fulfilling prophecy.

“It might make sense just to get some in case it catches on,” Nakamoto wrote more than a decade ago. “If enough people think the same way, that becomes a self-fulfilling prophecy. Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine,” Bitcoin’s inventor said.

But Danielsson’s report criticizes that only a “small minority” will see their wealth grow, while “those whose material well-being depends on fiat will suffer the worst.”

“The current owners of bitcoin will become the wealthiest people in the world, rivalling the kings and emperors that ruled over empires in centuries past,” Danielsson explains. “They literally will own all the money. They can buy anything they want. There aren’t that many of them. Compared to the multitudes that own assets today via all the pension funds and mutual funds and the rest, it is a tiny group of people.”

No Need to Worry, Bitcoin Will Be Discarded Long Before We Get to That Point

Danielsson’s report also notes that if bitcoin were to be the currency of choice in our daily lives, it “must also become a unit of account,” the economist stressed. Bitcoin’s current volatility stops this from happening in Danielsson’s opinion, and he further asks “who wants high volatility in the purchasing power of their salary or savings?”

Moreover, this contradiction might be the reasoning as to why the crypto asset cannot become successful, the economist highlights. Concluding, Danielsson attempts to close the casket on bitcoin, like so many economists before him, with one last nail by saying:

Fortunately, the more successful bitcoin becomes, the more visible the perverse consequences and the internal contradictions become, so that bitcoin and other cryptocurrencies will be discarded long before we get to that point. At which time, the price of bitcoin will head to zero.

The ESRC director also ends by saying that “Bitcoin is a bubble” and it makes sense to him that individuals and groups may “ride the bubble as long as possible.” Danielsson warns, however, “just get out in time” and that people should watch out for a “little boy yelling ‘the Emperor has no clothes.’”

Unfortunately for Danielsson, bitcoin’s popularity and value grow relentlessly, despite all the unfavorable opinions of a few economists over the last decade. Danielsson is merely a statistic on the long list of economists who have written BTC obituaries over the years. Moreover, BTC’s growth and velocity continue to displace fiat and the monetary supply, whether Danielsson likes it or not.

“Bitcoin’s monetary velocity is now higher than USD M1,” explained the onchain analyst and BTC researcher Willy Woo on March 1. “M1 is the USD held in short-term accounts for buying stuff; none of it is moving. BTC’s making a joke out of it. BTC is moving more than the money we have for spending. Nevermind BTC is for long-term investment,” Woo added on Monday.

What do you think about the ESRC director Jon Danielsson’s opinion about the shift of global wealth flowing into bitcoin? Let us know what you think about this subject in the comments section below.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.