Ross Ulbricht, founder of infamous dark web, predicts a $100,000 bitcoin price in 2020. Ulbricht is currently serving two life sentences plus 40 years without the possibility of parole after being found guilty on charges of money laundering, computer hacking, conspiray to traffic fraudulent documents, and conspiracy to traffic narcotics.Read More
Bitcoin is poised to move beyond $10,000. At the time of writing, it currently sits at $9,922, and has already surpassed $10,000 on Chinese exchanges. Its record high is $19,666. Bitcoin is currently at its highest price since May 2018.
Bitcoin has tested the technical resistance set in April 2018 of $9,949, and the psychological resistance of $10,000 is next. Since April 1, Bitcoin is up 140 percent. Read More
In spite of bitcoin’s recent gains, the digital currency’s exchange volume still remains well below historic highs. The peak for Bitcoin exchange volume was December 2017, just before the entire crypto index collapsed after the 2017-2018 ICO craze.
US exchange volume fell precipitously after a November high. On May 28, the available stat, US trade volume for bitcoin sat at 150,000,000. When it peaked in December 2017, exchange volume shy of 4,000,000.
In bitcoin’s history, USD trading volume has increased exponentially. In April 2013 amid bitcoin’s first bullish run to $1,000, USD bitcoin exchange trading volume touched $55,000,000. Later that year, in November 2013, bitcoin USD exchange trading volume peaked at shy of $175,000,000.
More recently, in November 2018, amid what many termed a crypto bear market, bitcoin’s exchange trading volume surpassed half a billion. The current 150,000,000 is comparatively small for USD exchange trading volume compared to bitcoin’s recent bull runs.
What this means is ambiguous. Cryptocurrency enthusiasts have long claimed major crypto exchanges falsify trade data. Furthermore, the cryptocurrency market in late 2017 was much different than it is today, for 2017 was the Age of the ICO, when projects were spinning up tokens, launching crowdsales, and paying money to be listed on exchanges.
Now that the ICO craze has calmed down, and the market has returned to earth, increased scrutiny on the token space has forced exchanges perhaps to implement further reaching AML and KYC.
When we zoom into the 30-day timescale for Bitcoin trading volume on US based exchanges, trading peaked on May 13, 2019 at just over $7,000.
Coinbase, perhaps the leading bitcoin exchange, has been busy adding tokens in recent months in order to establish itself in a market where Binance came out of nowhere.
The San Francisco-based exchange hinted this week that it could introduce bitcoin margin trading, bringing ever more sophistication to what’s still, admittedly, a nascent industry. Bitcoin margin trading has been BitMEx’s territory until now, but that could be changing.
With the halvening one year away, and bitcoin USD exchange trading volumes nowhere near all time highs, its easy to imagine increased trading volume and price in the mid-t0-long term. In the short term, with $9,000 showing formidable resistance, there’s no telling where bitcoin could go.
In 2020, the next Bitcoin halving will take place. Increasingly over the coming months, this will become discussed on internet forums, social media, and at conferences. The current bullish cycle we see, even if shortlived, is most likely a sign of what’s to come throughout the rest of 2019 and 2020 due to the halving event.
There are currently 17,700,000 bitcoins in circulation. That means just shy of 85% of the bitcoins to ever be produced have already been mined. There are just over 3 million bitcoins left to mine. There are at present 1,800 bitcoins minted per day.
The next Bitcoin halving takes place on May 24, 2020. The block reward for miners on the network will decrease from 12.5 to 6.25 bitcoins. This represents the third “halving” event ever in the history of bitcoin. Due to Bitcoin’s overall controlled supply of just 21 million, that the supply halves every four years ensures scarcity for bitcoin.
“Large drawdowns are not unique to digital assets and occur across all asset classes and markets, typically following periods of excessive risk-taking,” wrote Grayscale about halving. “These ‘re-pricings’ can create compelling investment opportunities and in many cases offer above-average risk-adjusted returns in the years that follow. For investors with a multi-year investment horizon and a high-risk tolerance, the confluence of discounted prices, improving network fundamentals, strong relative investment activity and the upcoming halving may offer an attractive entry point into Bitcoin. This is especially relevant for investors building core strategic positions in Bitcoin over time.”
The daily price change in May has averaged 4.7%, compared with 3.5% in April and 1.1% in March, reports Bloomberg. December, the last time prices had swung so much, averaged 4.2%.
While bitcoin fell on Tuesday 2.4%, it had not fallen in the four days prior. Bitcoin is currently at $8,860. The last time the price of bitcoin reached $9,000 was a year ago.
“The recent surges in Bitcoin are mainly based on the supply side,” wrote eToro’s Mati Greenspan in a note this week. “There’s already a shortage of Bitcoin in the world and with the halving event coming up next May, the countdown to even less supply has already begun.”
The Crypto Index pushed its upper band during Tuesday’s trading sessions and then fell. Bitcoin makes up 30% of that index.
In analyzing the state of the Bitcoin network as a payment system, people often point to transactions per day. Yet, since Bitcoin is a one-to-many payments solution, meaning one transaction can have multiple recipients, to truly know the state of the payment network, one must dig a bit deeper.
Increasingly, people are catching onto the fact that outputs per day, as illustrated at Outputs.Today, which is a feature used by exchanges and senders of considerable bitcoin transactions to minimize the fees they must pay to miners.
Critics of Bitcoin as a payment network point towards high transaction fees, which have at various points through the lifecycle of bitcoin, such as in mid-2017, been a main critique of the network.
Exchanges have faced pressure to batch transactions, and thereby make better use of this scarce block space. Bitcoin’s scaling issues during periods of increased transactions meant that transactions took longer and cost more.
Exchanges, mixers, payment processors, and mining pools employ ‘batching’. A sender can do this by combining transactions into one input. This means the transaction input has multiple outputs (addresses to send bitcoin or recipient).
The Bitcoin mempool is a pool of bitcoin transactions that have as yet been confirmed. Sometimes this becomes congested and transactions slowed. By combining, say, 10 payments into one transaction, block space might be freed up. Transactions can have unlimited outputs. Batched transactions might have three or more outputs.
Outputs Per Day
Outputs.Today tracks ‘outputs per day’. The top of the website reads, “better indicator of overall economic activity on the bitcoin blockchain than transactions per day.”
The website claims the number of total outputs is a more accurate indicator than the number of transactions. “Large players in the Bitcoin space use batching – the process of including multiple outputs in a given transaction – to reduce their overall transaction fees,” the site says. “Therefore, looking at only transactions misses an important part of the picture.”
As seen in the chart above, the Average Outputs to Transaction Ratio declined throughout 2018. The ‘Average Outputs Per Block’ in 2018 approximately mirrored ‘Average Transactions Per Block’.
On January 4, 2018 we saw the average output per block reach a high of 7,420. The peak for Transactions Per Block came much earlier when there were 2,532 transactions per block on January 4.
Throughout 2018, the Average Outputs to Transaction Ratio has declined. So far in 2019, the use of transaction batching has been on a steady rise, and just recently, accompanying the price rise, it spiked.
This could be indicative of one particular important price indicator: buying demand.
Bitcoin has yet to recover from a flash crash which took place one week ago. Since that time, global markets have endured major volatility. Yet Bitcoin – which some Bitcoiners champion as a hedge against an empty global financial system – has trended down in the past week.
On August 18 around 5:00pm PST, a Bitcoin flash crash brought the price of the digital currency down to $162 from north of $250. The flash crash came amid much controversy regarding the block size debate. Michael Hearn and Gavin Andresen, Bitcoin programmers, have launched Bitcoin-XT, a new Bitcoin client, and wish to fork the Bitcoin community in favor of their client. While there have been criticisms, that the number of current Bitcoin transactions is programmatically limited makes such considerations importants. Here is a chart of the crash:
Bitcoin broke $162.
The price has bounced between $200-250.
In the wake of the flash crash, Bitcoin has shown enduring volatility to the downside. Institutions dealing in Bitcoin are likely taking a step back and re-assessing their positions until the Bitcoin block size debate settles decreasing demand. Bitcoin, now at $216, could trend lower. Global stock market volatility – with the DOW down 1,000 points – could bolster the case for Bitcoin, but Bitcoin does not seem to be in the right position to cater to such a market.
The Bitcoin price further decreased today upon news that Bitfinex shut down its order book. The Hong Kong exchange endured a flash crash last week and halted trading for seven hours this morning.
Zane Tackett, In a statement, Zane Tackett, Bitfinex’s director of community and product development, stated on Reddit:
“Earlier today, at 5:27 UTC, we encountered an issue with post-trade processing, upon which we decided to halt trading to ensure consistency in the order book.”
[heading]Bitcoin Responds To Its Environment, Gold Has Not…Yet[/heading]
I like Bitcoin and I like gold.
But as late, gold has not behaved as one would expect gold to. Of course, that gold has been so tied to the paper markets via GLD, has probably helped this.
Bitcoin has yet to weighed down so.
[heading]Bitcoinomics, Chapter 15: Bitcoin Trading Analysis[/heading]
“Bitcoin is the most important invention in the history of the world since the Internet.” – Roger Ver Read More