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Crypto Market Swings Wildly As More Billionaires Get Behind Bitcoin – eToro Crypto Roundup

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Ray Dalio, Elon Musk and Mark Cuban are weighing in on the growing crypto market.

Bitcoin appeared to hitch a ride on Elon Musk’s rocket on Friday. The cryptoasset soared by 20% to hit $38K as the world’s richest man added #bitcoin to his Twitter bio and a record number of options contracts expired. However, despite the spike, soon enough the world’s largest crypto was drifting back to earth.

This wild swing concluded an otherwise relatively quiet week in the cryptoasset market. Bitcoin largely drifted sideways as a report revealed that Ivy League universities have been accumulating the cryptoasset, while Stellar, EOS and other altcoins made double-digit gains.

This week’s highlights
  • Ray Dalio comes around to Bitcoin
  • GameStop saga puts crypto in spotlight
Ray Dalio comes around to Bitcoin

In yet another example of crypto-skeptics changing their tune, billionaire Wall Street legend Ray Dalio has come around to Bitcoin.

“I believe Bitcoin is one hell of an invention,” said the former doubter in a post on LinkedIn, before concluding that the cryptoasset “looks like a long-duration option on a highly unknown future.”

Dalio’s comments come in the same week as two other high-profile figures made their feelings known. VISA CEO Alfred Kelly said the company is “uniquely positioned to help make cryptoassets more safe, useful and applicable for payments,” and billionaire Mark Cuban wrote on his personal blog that blockchain-based assets have “now legitimately become stores of value.”

GameStop saga puts crypto in spotlight

Mayhem hit the US stock market this week as the WallStreetBets subreddit group coordinated a 700% rally in GameStop’s price, forcing hedge fund Melvin Capital to close their short position with billions in losses.

In response, many trading apps suspended functionality – spurring the turmoil further as traders sought alternative ways to buy and sell.

Industry commentators took this as a positive omen for decentralized assets. SkyBridge Capital’s Anthony Scaramucci told Bloomberg that the saga “is more proof of concept that Bitcoin is going to work,” and Anthony Pompliano said to CNBC that the events will serve to “accelerate the digital decentralized financial system.”

The week ahead

Looking ahead, Wall Street-inspired upheaval for the crypto market could be on the cards. Crypto subreddits saw 500% growth in the past week, and some suggest the new traders could be looking to hunt the stop losses of hedge funds shorting Bitcoin.

On Wednesday, another potential catalyst could move the market, as thousands of corporate directors come together for Michael Saylor’s Bitcoin Corporate Strategy virtual summit. This is designed to help other firms follow MicroStrategy and add Bitcoin to their balance sheet.

This post originally appeared on the eToro blog.

This content is sponsored and should be regarded as promotional material. Opinions and statements expressed herein are those of the author and do not reflect the opinions of The Daily Hodl. The Daily Hodl is not a subsidiary of or owned by any ICOs, blockchain startups or companies that advertise on our platform. Investors should do their due diligence before making any high-risk investments in any ICOs, blockchain startups or cryptocurrencies. Please be advised that your investments are at your own risk, and any losses you may incur are your responsibility.

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Source: https://dailyhodl.com/2021/02/02/crypto-market-swings-wildly-as-more-billionaires-get-behind-bitcoin-etoro-crypto-roundup/

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How strong is the floor to Bitcoin’s price?

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A volatile few weeks for the cryptocurrency market have instilled fear in the minds of investors, many of whom hadn’t anticipated the short-term sell-off. While Bitcoin’s price had recovered somewhat to trade around $47,700 at press time, research from Chainalysis suggests that Bitcoin’s floor prices are stronger than before.

Philip Gradwell, Chief Economist at Chainalysis, explained that the floor of these recent price swings can be determined by analyzing the price level at which different types of investors entered the market.

Source: Chainalysis

Gradwell found that investors who acquired at least 1,000 BTC since the end of November 2020 have bought 1.7 million BTC at an average price of $35,000 per Bitcoin. “This recent and rapacious willingness to buy at this price level likely puts a floor on the Bitcoin price of at least $35k,” the analyst went on to observe.

According to him, the market has changed radically since the end of November. Prior to the same, larger investors held 1 million BTC at an average purchase price of $14.8k. However, the same set of investors has since entered the market to hold more Bitcoin at double the cost, with the Chief Economist adding,

“There is a far stronger floor to the price than ever before.”

Gradwell’s analysis can be further supported by a recent report from CoinMetrics. The crypto-market analytics research firm found that on-chain indicators showed signs of a key metric resetting, one with positive implications for Bitcoin.

Source: CoinMetrics

Bitcoin’s Spent Output Profit Ratio (SOPR) is a ratio of the price at the time a UTXO is spent to its price at the time of creation. Essentially, this estimates whether holders are selling at a profit or at a loss.

CoinMetrics found that while the BTC SOPR dropped below one on 27 February for only the second time since October 2020, implying that investors were capitulating and selling at a loss, it rebounded back above one on 28 February. What did this mean? Well, it suggested that the market is stabilizing once again, a finding consistent with Gradwell’s findings.

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Source: https://eng.ambcrypto.com/how-strong-is-the-floor-to-bitcoins-price

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No crypto ban in India: Finance Minister predicts “very calibrated” stance

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Yet another “crypto ban” turns out to be temporary FUD.

In an interview with CNBC this morning, Indian Finance Minister Nirmala Sitharaman said that reports of a blanket ban on cryptocurrencies are overstated. While negotiations are ongoing, she said she expects the end result to be more tempered:

“Yes, a lot of negotiations, discussions are happening, with Reserve Bank,” said Sitharaman. “Obviously the Reserve Bank will be taking a quorum on how, what kind of unofficial currency, cryptocurrency will have to be planned, and how it has to be regulated. But also, we want to make sure that there’s a window available for all kinds of experiments which will have to take place in the crypto world.”

She went on to say that regulations won’t be as “severe” as have been previously reported. Authorities will “look inward” and take a “very calibrated” stance, in contrast to the “mixed messages coming in from across the world.”

“The world is moving fast with technology. We can’t pretend that we don’t want it. […] I can only give you this clue: that we are not closing our minds, we are certainly looking at ways in which experimentations can happen in the digital world, in cryptocurrency and so on.”

The comments from Sitharaman is no doubt a source of relief for crypto businesses, users, and hodlers in the world’s second most populous country. Earlier this month, a report from Bloomberg citing a senior Indian financial minister said that the country would be banning all cryptocurrencies

The hypothetical ban drew widespread criticism from across the crypto community, with some likening it to an attempt to ban the Internet. Some companies found the reports to be hot air, however, and continued on with developments apace

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Source: https://cointelegraph.com/news/no-crypto-ban-in-india-finance-minister-predicts-very-calibrated-stance

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Crypto Pundits Say US Money Laundering Legislation Could Cripple Bitcoin Market

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ECB's Lagarde Calls For Bitcoin Regulation At A Global Level

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Prior to leaving office, Donald Trump and his administration proposed new rules that they said were aimed at taking on money laundering via cryptocurrency. The new rules would require financial firms to record the identities of cryptocurrency holders.

Some experts believe this would cause a severe drop across the entire cryptocurrency market.

But the new proposed rules have opponents in both the cryptocurrency world and the traditional financial sector. Usual Bitcoin proponents like the Winklevoss twins have spoken out against harsher regulations and have been joined by other crypto companies like Coinbase and Kraken in voicing their anti-regulation opinions. But with companies like Fidelity and payment giants like Visa and MasterCard joining the anti-regulation movement, the cause has more power.

Matthew Maley, the chief market strategist for Miller Tabak & Co., a leading institutional trading firm, says it’s not the right time to be adding these rules. 

“Bitcoin is very risky and very volatile and it’s going to continue to be that way. If you add something like a new regulation, it’s going to be very vulnerable to a correction,” Maley said.

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Another tricky part of this situation is that the rules were proposed by Trump’s administration but must now be considered by the new Biden administration. Janet Yellen, Biden’s new Treasury Secretary has made seemingly positive and negative comments about Bitcoin and other cryptocurrencies but there is no real indication on whether or not she will impose rigid regulations on the cryptocurrency space. 

Crypto Pundits Say US Money Laundering Legislation Could Cripple Bitcoin Market
BTCUSD Chart By TradingView

There is no official timeline or deadline to determine how any rules will be considered or implemented at this time. But industry insiders remain steadfast in spreading information about the dangers of over-regulation. The Winklevoss brothers recently issued a statement that claims the new proposed rules could actually increase money laundering while damaging market value for no real reason.

Still, there is a healthy level of optimism in cryptocurrency regarding regulations for a few reasons. The crypto sector has allies in Congress on both sides of the aisle and a recent notice from the US chamber of commerce that anti-money laundering regulations could end up having a series of unintended consequences.

Furthermore, it was clear that the previous Treasury Secretary, Steve Mnuchin had a strong anti-crypto stance, while Janet Yellen seems to be taking a more neutral approach.


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

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Source: https://zycrypto.com/crypto-pundits-say-us-money-laundering-legislation-could-cripple-bitcoin-market/

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