3 reasons why Ethereum price might not hit $5,000 anytime soon

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

Big Investors Are Pushing up Valuations of Crypto Firms

Big Investors Are Pushing up Valuations of Crypto Firms

Venture capital firms and large investors are driving up the prices of crypto startups. Boutique investment firms and family offices are being elbowed out by big venture capital firms, private equity funds, and even some pension funds.

VC Firms Driving Up Prices of Crypto Startups

Cryptocurrency firms are seeing high valuations due to large investors entering the space, according to Henri Arslanian, Crypto Leader at professional accounting and financial services firm PWC, also known as Pricewaterhousecooper.

In an interview with Bloomberg Thursday, the executive explained that boutique investment firms and family offices are being elbowed out by big venture capitalists, private equity funds, and even some pension funds. He noted that smaller venture capital firms are unhappy about this trend. Arslanian described:

Let’s say they’re looking at a deal and they believe it’s worth $10 million, and you’re seeing large VCs come in and put a bid in for a higher valuation. This is happening a lot with very early-stage companies, say, $5 million to $20 million — the prices are being inflated.

According to the State of Crypto M&A 2021 report, even though deal activity in 2020 increased only 10% from the previous year, total deal value doubled to $1.7 billion. This was primarily due to a handful of large acquisitions in the crypto exchange space, including the $400 million acquisition of Coinmarketcap by Binance and FTX-Blockfolio transaction for $125 million. This trend has continued this year, with Galaxy Digital acquiring Bitgo for $1.2 billion.

In July, derivatives exchange FTX’s valuation rose to $18 billion after the company raised $900 million from investors. In addition, the Digital asset platform Fireblocks raised $310 million to achieve a value of $2 billion.

Arslanian explained that there are some challenges in pricing cryptocurrency startups. They include how to discount for regulatory risk in such a nascent industry and how to assess the valuation of businesses. There is also an issue of the lack of companies to invest in since most firms in the crypto space are still small and not well developed yet.

He further opined:

If your minimum ticket size is around $50 million, there aren’t that many companies that have that status yet. If you’re a large pension fund and you decided to make a crypto allocation, there are no more than two dozen companies around the world that are investable, looking for capital and could absorb $100 million.

What do you think about the comments by Arslanian? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Bear Market Over? Why Bitcoin Could Soar To $45K As Strong Holders Grow

Bitcoin has retaken the highs of its current range. The first cryptocurrency by market cap trades at $41,300, at the time of writing, with a 6% and 23.8% profit in the daily chart.

Bitcoin BTC BTCUSD
BTC moving sideways after retaking $40,000 in the daily chart. Source: BTCUSD Tradingview

The general sentiment in the market has flipped bullish, the fear and greed index signals greed for the first time in months. Other indicators, as many experts have pointed out, suggest a definite shift in the market. The bulls could see more green days in the coming weeks.

Data from Glassnode, provided by the CIO of Moskovski Capital Lex Moskovski, recorded an increase in the amount of Bitcoin held by “strongest holders”. According to the Illiquid Supply metric, these holders have risen to an all-time high and suggest “bullish” price action.

Bitcoin BTC BTCUSD
Source: Glassnode via Lex Moskovski

Charles Edwards, a founder at Capriole Investments, revealed an increase in long-term Bitcoin holders. According to the HOLD Waves metric, these types of investors have been growing their supply since the May 2021 crash. Edwards added:

This type of sharp rise never occurred in the early stages of prior bear markets, suggesting that there is a chance the Bitcoin bull-cycle is still intact.

BTC BTCUSD
Source: Glassnode via Charles Edwards

Additional data provided by Edwards indicates that exchanges platforms had their “first positive outflows” since last week when Bitcoin made a run from its yearly open at around $29,000 to its current levels. This metric suggests that the demand in the crypto market could be returning and could support further appreciation.

Days prior to the current price action, Bitcoin dropped from about $35,000 to its yearly open, as mentioned. Edwards called this price action a “failed breakout”, as sellers were exhausted at those lows and were unable to push the price further down. He added:

The ensuing squeeze to the upside was supported by a heavily short market, with over-exposure to stable-coin contracts. This resulted in a short squeeze over the last week which culminated on the candle highlighted (…)

Bitcoin BTC BTCUSD
Source: Charles Edwards – Capriole Investments

Bitcoin Fundamentals Turn Positive, Bulls Back In Control?

Edwards reviewed other indicators, such as the Hash Ribbons metric and believes it looks “promising”. The metric saw an important decline after China banned Bitcoin mining from the country. Miners had to migrate to friendlier destinations.

The Bitcoin hash rate and its Energy Value has been rising. Edwards found that both of this metric grew around 8%, indicating that the miners’ migration has ended. Another bullish factor, since these entities can stop selling BTC; the market could see selling pressure diminish. However, investors must remain cautious:

Hash rate is showing a positive and strong trend, not dissimilar to December 2018, suggesting the bottom could be in. However, Hash Rate can give various false positives during capitulation. This is why we remain cautious until the Hash Ribbon buy signal is confirmed.

In the coming days, Bitcoin could see more accumulation around its current levels with a “higher chance” of another leg up to the mid-range, $45,000. If BTC’s price retraces, the invalidation zone stands at $39,000.

The macro-economic outlook presents a potential tailwind and risk for Bitcoin. Edwards claims that the U.S. Federal Reserve and its inflationary monetary policy could continue to boost BTC if the financial institution keeps printing money.

There is a potential risk in the traditional market. If the stock market crashes, Bitcoin could follow. The cryptocurrency has displayed a high level of correlation with the S&P 500. In consequence, it could hurt its chances to reclaim previous highs in case of a dropped. Edwards concluded:

For now, fundamentals and technicals are skewed towards the upside, and our base case is we will move towards the mid- to high-$40Ks over the coming weeks. In the near-term this thesis would be validated if we breakdown below $39K. Finally, Bitcoin cycle history tells us to be wary of significant volatility and downside risk until conditions are further improved.

Swiss Private Bank Says Its Wealthy Clients Are Interested in Crypto

In a recent interview, Zeno Staub, the CEO of Swiss private banking and investment management group Vontobel Holding AG, talked about their clients’ interest in crypto.

The Vontobel CEO’s comments were made on July 27 during an interview with Bloomberg TV anchor Anna Edwards.

When Edwards Staub what Vontobel’s clients are asking for with regard to crypto, he replied:

Clients have an interest in digital assets. Clients have an interest in cryptocurrencies. We believe that the underlying technology is actually more important than a certain types of application.

We believe down the line blockchain technology is the logic consequence of the general trend of securitisation because it’s the only available technology that can create a trust without the central counterparty.

We will see major changes coming out of that going forward. What we offer to our clients is that we’ve wrapped some cryptocurrencies in a secure, convenient, easy to handle way, and clients appreciate that and allocate part of their wealth to that.

On 27 October 2017, Vontobel announced that it was expanding its Bitcoin product range by making available on the stock exchange (from 30 October 2017) “the first open-end exchange-traded bitcoin tracker certificate” and that this would provide “an interesting option for all those who believe in the cryptocurrency but don’t want to have to deal with IT administration.”

On January 4, during an interview with CNBC, Alli McCartneya Private Wealth Advisor at UBS, explained why there is “a lot of interest” in Bitcoin among her wealthy clients.

She said:

There’s a lot of interest, and there has been a lot of interest for a significant amount of time… A lot of very wealthy individuals, even those who have made their money in very traditional finance sources, take risk. And they understand the concept of taking risk…

I think the thing is that individuals that act like institutions — I mean not retail individuals — are getting in now as an asset-allocation play, and that I think is why you see such a run-up, is that you’re having some really big buys…

The story of the first couple of years was that here was a store of value that was apolitical and could be a diversifier. And then you fast-forward and, to my colleague’s point, you see the numbers going up, which always gets people interested. You see the adoption in the form of Bloomberg Galaxy Index. Then you go to Fidelity being a custodian and now you are at PayPal letting you buy and sell with it.

So adoption is going up, price is going up, and the lack of available alternatives in the market, in terms of being diversifiers, like bonds, have largely gone out the window in terms of their relative risk-return…

And by the way, unlike a retail investor, the assumption there is that these aren’t speculators. These are long-term buy-and-holds that can create some sort of substantive floor for the currency.

Goldman Sachs provided some interesting insights about family offices’ interest in investing in crypto in a recently-released report.

family office is “a privately held company that handles investment management and wealth management for a wealthy family, generally one with over $100 million in investable assets, with the goal being to effectively grow and transfer wealth across generations.”

The insights in this report come from Goldman’s first global survey of “family office stakeholders” and the financial services firm’s experience of working with such clients. The 150 survey respondents were based in the Americas (54%), Europe (23%) & the Middle East and Africa (23%), and Asia (23%).

According to the report, while most respondents have not yet invested in crypto, nearly half are thinking about getting into crypto in the future As for those respondents with no current crypto exposure, their main concern is suitability of cryptoassets as stores of value. There were also some who had reservations about “the underlying infrastructure (e.g., custody options and exchanges)” or their lack of understanding of the crypto space. Another issue that concerned some investors was the high energy consumption of Bitcoin mining.

Goldman went on to say that “some family offices are considering cryptocurrencies as a way to position for higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Image by “Jonny_Joka” via Pixabay

ETH Compatible BCH Sidechain Smartbch Successfully Launches Three Nodes

ETH Compatible BCH Sidechain Smartbch Successfully Launches Three Nodes

The day before the fourth Bitcoin Cash anniversary, the Smart Bitcoin Cash team (Smartbch), announced the project has launched three nodes as genesis validators. Smartbch disclosed that Btc.com, Viabtc, and Matrixport are participating and the project has officially started its voting period.

Smartbch Fires up Smart Chain’s Genesis Validators

For quite some time now, the Bitcoin Cash (BCH) community has been patiently waiting on the development of the Smartbch project. The reason for this is because Smartbch could unlock massive potential between Ethereum (ETH) and Bitcoin Cash.

The protocol could bolster decentralized finance (defi) on Bitcoin Cash and be compatible with the second largest crypto asset in terms of market capitalization. Bitcoin.com News first reported on Smartbch during the first week of April and interviewed the project’s lead developer 15 days later.

By the end of the month, Smartbch launched the testnet publicly and which gives developers and decentralized app makers the ability to experiment and develop with the high-performance, EVM-compatible Bitcoin Cash sidechain. Now Smartbch has now fired up its engines with three nodes acting as the genesis validators.

The three Smartbch nodes are operated by Viabtc, Matrixport, and Btc.com. “Smartbch is now in its first voting period,” the project’s announcement explains. “More validators will be elected by SHA256 miners and will take on the duty in the future.”

“We have spent two more months in development than the original estimation to finalize the data structure of MoeingADS and to implement SEP101, SEP206, and Transaction Reorder onto Smartbch,” the Smartbch development team adds.

“MoeingADS is the underlying storage engine for the world state, which is very hard to change in hard forks,” the Smartbch devs say. “Ethereum’s underlying storage engine MPT has never modified its data structure since the beginning. MoeingADS is now strong enough to support 51K TPS and can support Smartbch’s growth for many years without changing its primary data structure.”

Focusing on a Secure Cross-Chain Bridge

The Smartbch team says the project will take a lot of time to make the protocol robust. During the last few weeks, the developers noticed a number of defi projects that suffered from exploits and it was due to cross-chain bridge vulnerabilities.

The Smartbch team aims to strengthen the Bitcoin Cash sidechain’s cross-chain gateway so it is very secure and powerful. “It will take security as the priority and be audited by the community,” the Smartbch team says.

“The launch is a solid step in Smartbch’s long journey,” the project’s creators conclude. “We invite everybody from the BCH community to use it and help its growth. We’ll soon provide some guides for BCH holders to try it and transfer a limited amount of coins cross-chain through the current simple gateway.”

What do you think about Smartbch launching three nodes for genesis validators and the focus on the cross-chain bridge? Let us know what you think about this subject in the comments section below.

Tags in this story
BCH

,

BCH Community

,

BCH Compatibility

,

bitcoin cash

,

bitcoin cash BCH

,

Bitcoin Cash Sidechain

,

blockchains

,

BTC.com

,

cross-chain bridge

,

ETH compatible

,

EVM

,

Genesis Validators

,

Matrixport

,

Smart Chain

,

Smartbch

,

Smartbch devs

,

Smartbch team

,

three nodes

,

ViaBTC

,

voting period

Image Credits: Shutterstock, Pixabay, Wiki Commons

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.

Amazon rumored to be accepting Bitcoin, MicoStrategy pledges to buy more BTC despite losses, Bitcoin struggles at $40K: Hodler’s Digest, July 25-31

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

Pro traders look for this classic pattern to spot Bitcoin price reversals

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

Kentucky Regulators Crack Down on Blockfi Interest-Bearing Accounts

Kentucky Regulators Crack Down on Blockfi Interest-Bearing Accounts

The crypto lender Blockfi is now dealing with regulators from five states as Kentucky has joined the fray against the firm’s Blockfi Interest Accounts (BIAs). On July 30, Blockfi shared a statement on Twitter that explained the Kentucky Department of Financial Institutions (DFI) has sent the company an order that aims to ban new BIA accounts.

Blockfi Now Has Problems With Regulators From 5 States

The New York City-based cryptocurrency finance company Blockfi was founded in 2017 by co-founders Zac Prince and Lori Marquez. The firm is a cryptocurrency lending firm that offers interest-bearing accounts called “BIAs” and also provides customers with a cryptocurrency-denominated credit card. Since January 2018, the company has allowed lending services that leverage crypto collateral.

Bitcoin.com News reported on Blockfi’s initial issues with New Jersey regulators which was followed by problems with Texas, Alabama, and Vermont. The regulators from all of the states take issue with the BIA products and statements indicate officials believe they might be unregistered securities.

Following the four states that sent notices to Blockfi, the Kentucky Department of Financial Institutions (DFI) sent the company an order, according to Blockfi’s official Twitter account.

“Friday afternoon we received an order from the Division of Securities of the Kentucky Department of Financial Institutions regarding the Blockfi Interest Account (BIA) operations in the state of Kentucky,” Blockfi’s message notes. The crypto lender’s message adds:

The order prohibits Blockfi from soliciting or offering ant securities in Kentucky. Blockfi firmly believes that the BIA is lawful and appropriate for crypto market participants. But in light of the order, Blockfi will stop accepting new BIA clients residing in KY immediately.

Much like the other four states, Blockfi cannot allow individuals to create new BIAs until the issues with regulators are solved. So far, no other crypto companies have been targeted for offering interest via crypto accounts. Blockfi’s statement on Friday further adds that current BIA customers in Kentucky were not affected and like the statements it made prior, Blockfi says it is in discussions with U.S. regulators.

“We remain steadfast in our commitment to protect consumers’ rights to earn interest on their crypto assets,” Blockfi’s message concludes.

What do you think about the issues Blockfi has with Kentucky and the four other states? Let us know what you think about this subject in the comments section below.

Tags in this story
Alabama

,

BIA

,

Bias

,

Blockfi

,

Blockfi accounts

,

Crypto

,

Crypto lender

,

Cryptocurrency

,

Interest Bearing Accounts

,

Kentucky

,

New Jersey

,

Regulation

,

Regulators

,

Securities

,

Texas

,

unregistered securities

,

Vermont

Image Credits: Shutterstock, Pixabay, Wiki Commons

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.

Bullish Against All Odds Bitcoin Breaks $40K, Beats Coordinated FUD?

Bitcoin sits comfortably north of $40,000 after a rally propelled it beyond this key resistance mark. The first cryptocurrency by market cap even managed to break above $42,000, in its most solid attempt to reclaim new highs since May’s crash.

Bitcoin BTC BTCUSD
BTC on a rally in the daily chart. Source: BTCUSD Tradingview

The bullish momentum has held for the past week, BTC’s price records a 24% profit in this period with the fear and greed index on the greed side after months in extreme fear. Dan Tapiero, founder and CEO of 10T Holdings, noted that achieving the rally has been hard.

Bitcoin, cryptocurrencies, and the entire industry have been receiving attacks from all over the world. Especially from the United States and China. These countries seem to rarely agree on something, Bitcoin is the exception. Tapiero said:

Cannot remember a time of so many attacks against Bitcoin and Crypto. From every angle…tax, regulatory, political etc. Insanely good price action in the face of a lot of bad news is very bullish. Bitcoin does not care. HODL, be long or get out of the way.

Even the most legitimate actions have been received with certain animosity from traditional financial institutions. Following El Salvador’s Bitcoin Law, the International Monetary Fund (IMF) warned other countries that the cryptocurrency “is not suitable as legal tender”.

The Central American country was negotiating a loan with the financial institutions. The talks apparently grew tense when Bitcoin was granted legal tender status. In an official blog, the IMF explained how this measure could have a “serious negative effect on financial and economic stability”.

Thus, the financial institutions seem to be sending a message, similar measures by other countries could impact their relationship with the IMF. The country that follows in the footstep of El Salvador is adopting a currency that, according to the IMF, is mostly used to “launder ill-gotten money, fund terrorism, and evade taxes”. Tapiero added:

BTC one of the great inventions of the past 50-100 years. Math and science are hard for most people especially when it upends the existing social order. US should embrace new technology. Fear of it will only lead to failure and decay.

Bitcoin Won The Week, But The Fight Continues

The main narrative that boosted Bitcoin to new highs is its capacity to be a hedge against inflation. Many companies acquired the cryptocurrency to protect themselves in an inflationary economic landscape. That narrative seems to be under attack.

In Asia, China banned BTC mining and has put additional pressure in an attempt to stop any crypto-related operations with their financial network. Experts speculated that the Asian giant could be trying to stop corruption, stop capital from exiting the country, and clear the field for the roll-out of its central bank digital currency (CBDC), the digital Yuan.

In the U.S. The outlook seems to be equally bleak, as two bills could completely change the dynamics in the Bitcoin and crypto market. As Bitcoinist reported, The Digital Asset Market Structure and Investor Protection Act was introduced by Representative Don Beyer (D) and the bipartisan Infrastructure bill. Both have been the subject of debate in the crypto community.

The U.S. Infrastructure bill would expand the tax code’s definition of a “broker”. As Jake Chervinsky, General Counselor at Compound Labs said this could include “nearly every economic actor” in the U.S. crypto industry even Proof-of-Work and Proof-of-Stake miners, and DeFi market participants. Chervinsky said:

The Tax Code requires brokers to comply with IRS reporting requirements. Most importantly, they have to give Form 1099s to their customers & file them with the IRS too. To fill out Form 1099s, brokers have to collect customer data including name, address, phone number, etc.

The legal expert highlighted that the bill could hurt the crypto industry by forcing it to comply with these regulations. Unlike previous occasions, this time the bill is “moving quickly through Congress” and “is highly likely to pass”. Chervinsky believes this legislation could be an existential threat to the Bitcoin and crypto-based sector.

Bitcoiner Uses Portable Mini Rig to Mine BTC at Starbucks

Recently, Idan Abada, the owner of an online store (“Bitcoin Merch“) that specializes in crypto mining equipment, shared on TikTok a video of him using “free” electricity at a Starbucks cafe to mine Bitcoin on his laptop via a custom mini mining rig.

In this TikTok video, we see Abada, who lives in Los Angeles, California, using a custom mining rig connected to his laptop to mine BTC while enjoying his coffee.

According to a report by CNBC published on July 28, the tiny rig that cost around $875 to build “consists of a multi-port USB hub, a mounted mini fan, and ten USB-sticks, each containing two Bitmain-manufactured ASIC mining chips.”

Abada told CNBC:

It’s one of the easiest miners to set up and run, because all you need is a computer or a laptop,” explained Abada. “It’s powered by USB, and that’s pretty much it. Everyone can become a miner and be a part of the crypto world.

Abada says that he became an online seller of crypto mining equipment in 2017 after he noticed how difficult it was to buy Bitcoin mining hardware. Apparently, this year’s sales revenue is already over $428,000 (up 355% from last year).

Abada also mentioned that his store has sold thousands of units of “GekkoScience NEWPAC USB Stickminer” (which has a hash rate of 90+GH/s and which sells for $79.99), the main component of the mini Bitcoin mining rig shown in his video.

He went on to say that “Missouri-based GekkoScience took apart a big miner from China and re-purposed the parts for the NewPac” and that “each of the mini-USB rigs has two ASIC chips, so all in, the $875 rig has 20 chips.”

Abada admitted to CNBC that it is very hard to make a profit mining Bitcoin with this rig unless you are not paying for your electricity” and the such novelty mining rigs probably could be profitable for “kids in public places, college dorms, buildings that share electricity prices, employees stealing electricity from their company.” For everyone else, the main benefit would be learning more about Bitcoin mining.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Image by “gwons” via Pixabay