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Quick Guide on Mechanics of Bitcoin Trade

There have been distinct modes of trading from the time humans lived in caves, started cultivating fruits and vegetables, to recently using physical and/or digital currencies. Using Bitcoin while trading could be perceived as an up-gradation to the utilization of credit or debit cards. Doing financial transactions through Bitcoin or its alternative is still niche […]

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There have been
distinct modes of trading from the time humans lived in caves, started
cultivating fruits and vegetables, to recently using physical and/or digital
currencies. Using Bitcoin while trading could be perceived as an up-gradation to the utilization
of credit or debit cards. Doing financial transactions through Bitcoin or its
alternative is still niche as the overall schema is gradually becoming popular
and utilized across the world. It’s quite early to predict whether
decentralization trading would become the norm in the short-term or long-term.
But the probability of shifting completely to digital fiscal trading is very
much on-the-cards (metaphorically speaking).

Blockchain Ledger

A ledger has been
one of the crucial building blocks in maintaining financial balance. As the
error frequency increased with time in almost every transaction (irrespective
of size and nature), adding up the decentralization aspect has become somewhat
mandatory. There’re numerous benefits of imbibing a blockchain ledger while
trading, and more specifically via bitcoin. One is the decline in error
frequency. Another is a low probability of data leak. This piece of research indicates that utilization of ledgers in bitcoin
trading which run on proof of work besides digital signatures aid in
safeguarding and heightening up the robustness of the activity. In layman
words, employing a blockchain ledger makes the overall activity more transparent,
simplistic, and decreases the chances of hacker(s) taking control over it
easily. The protocol uses a couple of ways for ensuring utmost security at all
times like multicasting, the random oracle, synchrony, etc.

Irreversible transaction along with Trust

Besides
decentralization, trust is another crucial factor assisting in making bitcoin
trading become mainstream just like a Dollar, a Yen, a Pound, a Renminbi, etc. So
far, it has been successful in a few industries. With more appropriate
alterations, attaining an ideal digital currency wouldn’t be much of a hassle. According
to this piece of research, trust can be built in two ways. One is through
intensifying the transparency between people and technology. The second one
being, trust in people who’re interacting with the technology. Constant
modifications to the hashing algorithms is a big factor for users having reliability on
bitcoin while using it for trading purpose or even for storage purpose.

Combining quantum
mechanics along with bitcoin is like eating a chocolate-vanilla ice-cream
instead of eating separately. Intermixing the functionalities of quantum mechanics and bitcoin would assist in replicating complex computational
techniques with a decentralization feature being intact. As proof of work is
employed to get authentication for proceeding to bestow block data, the
probability of a specific network or complete grid getting hacked minimizes. It
might be hard to believe but people started experimenting with quantum
mechanics way back in the 1970s. Working on a subject like that in such a
period was like trying to fix a Honda car engine inside a Rolls-Royce automobile.
In the quantum bitcoin framework, the blocks include the details of freshly
added quantum bitcoins. The transactions are not included as they’re finalized
locally. It should be kept in mind that blockchain, bitcoin, and quantum
mechanics all came into existence recently. So, a lot of research and
experiments need to be undergone to reach near-perfect functioning
capabilities.

A few technical
experts in bitcoin and quantum mechanics have been suggesting that quantum mechanics might be
somewhat dangerous for blockchain developers. But credit to their
proactiveness, they changed their potential threat to an opportunity by mixing
their frameworks. By altering the computing power available in the grid and by
confirming the proof-of-work, some degree of protection can be intensified. Hashed
based schemes also help in avoiding hindrance from third party hackers.

The usage of bitcoin, while trading can also be examined through variations, is its
utilization. in this piece of research, the findings suggest that at the
moment, people prefer to store and save it for future use rather than using
regularly. One reason for it could be that it’s slowly and gradually picking up
the pace when it comes to the consumer base. Another factor for velocity
variations in bitcoin trading is how the user perceives it ethically and try
and imbibe it within their daily practical lives.

A potential future challenge – Pseudo-anonymous Transaction

Just like any
product, service, or a platform that’s famous and used widely (in the 21st
century) went through hurdles, Bitcoin and similar technical architectures are
experiencing similar hurdles. Let’s state the facts as they are. Bitcoin is not completely pseudo-anonymous, rather partially pseudo-anonymous. It
has many characteristics among which is ownership of money being implicitly
anonymous, but its flow is visible worldwide. To have some clarity in regards
to pseudo-anonymousness, it’s appropriate to distinguish three types of models
for financial activities:

  1. A
    scenario where parties and transactions are ambiguous.
  2. A
    scenario where both the parties and transactions as well are known (for example
    PayPal).
  3. A
    scenario where parties are wrapped with uncertainty, but the transactions made
    are known (for example Bitcoin).

The Unique Selling
Proposition (USP) of a Bitcoin is that it’s a chain of activities from one
owner to its successor. The owner is located via a public key, which acts as a
pseudonym.

Another factor that
arises up due to anonymity is regular fluctuations in the value of cryptocurrencies. A better-equipped tool is like a sword. It’s double-edged.
Depending on from which side one holds, the result may vary accordingly. Like
in the entertainment industry, political environment, stock market, etc, the
media majorly have showcased the questionable effects of bitcoin trading. But
if accurate algorithms are written, the small percentage of loopholes present
in the bitcoin trading will get wiped out as well.

Need some help?

We at PrimaFelicitas will be able to offer a nuanced perspective as our team members are experts in technology and know the inside-out of marketing/business strategy. Our offices are located in those parts of the world where constant innovation is the norm irrespective of industry. As we have been in the bitcoin/blockchain area for over 5 years, and have seen the rise and downfall of ICOs and STOs (to name a few), you shouldn’t hesitate in receiving some help if you’re new to the industry and require some guidance.

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Blockchain

Bitcoin price hits $50K after bullish outlook from Citigroup and Goldman Sachs

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On March 1 cryptocurrency investors woke up to the sight of Bitcoin (BTC) rising from it weekend correction to $44,000 as the market found its bullish momentum and altcoins rebounded from their swing lows.

Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin increased 16.6% from its low of $43,504 on Feb. 28 to the $50,000 level which bulls are attempting to flip back to support.

BTC/USDT 4-hour chart. Source: TradingView

Earlier in the day, MicroStrategy CEO Michael Saylor tweeted that the firm had purchased another $15 million worth of Bitcoin, bringing its total holdings to 90,859 BTC and further demonstrating that institutional demand for the top cryptocurrency continues to grow as firms buy each dip’

Analysis of key BTC price indicators also shows that bulls were eager to buy the $43,000 retest which occurred over the weekend.

Not every analyst is bullish

Bitcoin’s surge above $49,000 has some calling for new all-time highs in the near future, but according to veteran analyst Peter Brandt, nothing is certain when it comes to the cryptocurrency market.

Today Goldman Sachs announced that it would restart its crypto trading desk and Brandt was quick to tweet the following chart and point out that its launch didn’t work out so well for the cryptocurrency market in December 2017. 

BTC/USD 1-week chart. Source: Twitter

According to David Lifchitz, Chief Investment Officer of ExoAlpha, it’s still “too early to tell” if the pullback in Bitcoin is over but $44,500 appears to have provided strong support.

In terms of whether the top cryptocurrency could breakout to new highs in March, Lifchitz said he’s uncertain on exactly what might happen as March is historically a bearish trading month for BTC.

According to Lifchitz, tax season in the U.S. could put bearish pressures on the market as investors may need to “sell some of their holdings to pay for earlier realized capital gains.”

From a bullish perspective, the 20% correction during the second half of February may have signaled an “early start” to the usual March weakness, with the worst of the downturn already transpiring.

Lifchitz said:

“Despite the 20% pullback, we’re still in an upward sloping trend since the October $10K breakout. The big unknown is what the miners will do as they are net sellers. They are the real short-term risk.”

Analysis of Glassnode’s Net Unrealized Profit and Loss (NUPL) metric shows that while both 20% corrections experienced during this cycle have created the “signature sideways and choppy” price action typically seen during bull markets, buyers have been stepping in sooner than they had in previous bull cycles and fewer long-term holders are willing to sell their BTC. 

Bitcoin Entity-adjusted NUPL. Source: glassnode

Steadying yields help to stabilize traditional markets

The traditional financial markets also rallied on Monday as Treasury yields stabilized and optimism related to the COVID-19 vaccine rollout boosted investor sentiment about the future of the global economy.

The S&P 500, Dow and NASDAQ all closed the day in the black, finishing up 2.38%, 1.95% and 3.01% respectively. The strong performance from each index occurred as global central banks world continue to reaffirm commitments to accommodative policies that will support the global economic recovery.

Altcoins also recovered their recent losses as Bitcoin price broke out to $50,000.

Daily cryptocurrency market performance. Source: Coin360

Binance Coin (BNB) was the best performer in the top 10, increasing 21% to $248, while Ethereum (ETH) saw its price rise 9.46% to $1,525. PancakeSwap (CAKE) and Fantom (FTM) both rallied price 36% and currently trade for $12.30 and $0.558 respectively.

The overall cryptocurrency market cap now stands at $1.52 trillion and Bitcoin’s dominance rate is 61%.

Source: https://cointelegraph.com/news/bitcoin-price-hits-50k-after-bullish-outlook-from-citigroup-and-goldman-sachs

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Blockchain

Goldman Sachs Plans to Relaunch Its Cryptocurrency Trading Desk

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Reports on Reuters today revealed that American multinational investment bank, Goldman Sachs, will offer bitcoin futures and non-deliverable forwards on behalf of its clients starting next week.

According to sources familiar with the matter, the move is part of the bank’s effort to take advantage of the fast-growing crypto space, which is gradually becoming an investment of choice for institutional players. 

Notably, the bank is also considering developing a Bitcoin Exchange-Traded Fund (ETF) soon as part of its commitment to fully venture into the industry. 

Based on this regard, the unnamed source noted that Goldman Sachs had already “issued a request for information to explore digital asset custody.” 

Goldman’s First Shot At Crypto

In late 2017, Goldman Sachs became the first Wall Street biggest firm to ever consider offering crypto-related products, as the bank was planning to open a cryptocurrency desk.

At the time, the Wall Street financial institution was working on how to address security challenges associated with the business, as well as how it would custody the assets.

Plans were on the way for the launch slated for late 2018 when reports emerged in September that same year that the bank has chosen not to offer crypto-related investments. 

Sources said that the bank dropped its crypto plans due to the regulatory concerns associated with the industry, with regulators breathing down the neck of most projects. 

The issue of regulatory uncertainty has been the major stumbling block that hindered several institutional players from getting involved with cryptocurrencies. 

Interestingly, there have been clearer regulations in recent times luring institutional investors like Microstrategy and Tesla. 

The entrance of these large corporations has given other institutional investors the greenlight that crypto is safe compared to how it was viewed in 2018. 

Thus it could be the reason Goldman Sach is making plans to restart its cryptocurrency trading desk in earnest.

A Change Of Heart? 

However, Goldman Sachs’ second shot at launching a cryptocurrency trading desk comes less than a year after the bank told its clients during a conference call that bitcoin and cryptocurrencies are not an asset class.

Reports at the time suggested that part of the reason for the call was to discourage its customers from including bitcoin and cryptocurrencies in their portfolio.

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Source: https://cryptopotato.com/goldman-sachs-plans-to-relaunch-its-cryptocurrency-trading-desk/

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Blockchain

Bitcoin Still Has an Uncertain Future: Citibank Analysts

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In a 100-page deep-dive report dubbed “Bitcoin, at the Tipping Point,” Citibank’s global perspectives and solutions team noted that the cryptocurrency could potentially “become the currency of choice for international trade.”

The analysts acknowledged that the massive interest shown by several large institutional investors like Tesla, Microstrategy, and PayPal is one of the major propellants for the digital asset gaining mainstream adoption.

The team further noted that several other factors, including a wide range of digital payment options like stablecoins and Central Bank Digital Currency (CBDC), could also increase the chances of bitcoin adoption for cross-border settlements.

An Uncertain Future

The report also pointed out that a side-by-side comparison of the risks associated with bitcoin and the opportunities it presents makes it very easy to conclude that the digital asset is at a tipping point.

They wrote:

 “There are a host of risks and obstacles that stand in the way of Bitcoin progress… Weighing the potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point… Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”

Bitcoin Going Mainstream Already 

The concluding part of the report quoted the famous philosopher, Schopenhauer, who said,

“All Truths pass through three stages, first it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”

The team states that the positive change in stance on issues about bitcoin by several financial institutions very well prove these words of Schopenhauer, which he said more than 150 years before the bitcoin idea was born.

Several banks had actively shunned bitcoin in the past, arguing that it has no intrinsic value as it is allegedly backed by mere speculations from its proponents.

However, bitcoin’s immense growth has forced its former critics to re-evaluate their stance and join the bitcoin adoption trend. Some of the biggest banks in the world have started offering bitcoin services to their clients.

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Source: https://cryptopotato.com/bitcoin-still-has-an-uncertain-future-citibank-analysts/

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