Daily Archives: November 18, 2020

Bitcoin has risen by nearly half since PayPal said last month it would open its network to bitcoin.

Bitcoin on Tuesday soared to its highest level since December 2017 as the asset's perceived quality as a hedge against inflation and expectations of mainstream acceptance lured institutional and retail demand. The largest cryptocurrency in terms of market capitalization climbed to $17,868, its highest level since December 20, 2017, and was last up 6.1 per cent at $17,760.

It hit just shy of $20,000 in mid-December, 2017, during a buying frenzy driven by retail investors. Bitcoin has climbed roughly 150 per cent this year and rallied about 360 per cent from its March lows."Driven by a mix of market structure and strong fundamentals, bitcoin could now be within days of reaching its all-time high," Nicholas Pelecanos, head of trading at NEM, said. "Underlying this bullish price action is the inflation hedge narrative that has captured Wall Street since the immense money printing campaigns undertaken by the Fed earlier this year," he added.

Citi's technical analyst Tom Fitzpatrick said in a note that bitcoin could climb as high $318,000, based on his charts. Other major cryptocurrencies including ethereum and XRP, which often move in tandem with bitcoin, rose 4.2 per cent to $479.91 and climbed 4.5 per cent to 30 U.S cents, respectively. Bitcoin's 2020 rally has drawn momentum from strong appetite for riskier assets, following unprecedented government and central bank stimulus measures to combat impact of the COVID-19 pandemic, and its reputation for being inflation-proof.

Investors, such as family offices, which manage money on behalf of wealthy individuals, have sought out the cryptocurrency as a hedge against any future inflation that might stem from central bank stimulus, analysts said.

Bitcoin's supply is capped at 21 million.

Proponents say its scarcity provides an innate value and shields it from central bank or government policies that stoke inflation.

An expectation that mainstream companies will embrace bitcoin and its use as a means of payment will become more widespread also drove buying, analysts said. Bitcoin has risen by nearly half since PayPal said last month it would open its network to bitcoin and other cryptocurrencies.

In an interview with Bloomberg TV early this month, Rick Rieder, BlackRock Inc's chief investment officer of global fixed income, said crypto assets were a useful addition to a balanced portfolio.

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Bitcoin Trading Hits Nearly 3-Year High, Well Above $17,000 - NDTV Profit

Bitcoins reputation as digital gold has grown this year, with a number of high-profile investors naming it as an emerging inflation hedge.

The bitcoin price has more than doubled so far through 2020, climbing to almost $16,000 per bitcoin this week and sparking celebration among long-suffering bitcoin bulls.

Now, after Wall Street legend Bill Miller said he "strongly" recommends bitcoin last week, billionaire U.S. investor Stanley Druckenmiller has revealed he now owns some bitcoinsaying he's "warmed up to" the cryptocurrency as a store of value.

Stanley Druckenmiller, a hedge fund billionaire, made his pro-bitcoin comments on an appearance on ... [+] CNBC.

"Bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they got a lot of it," Druckenmiller, who, along with George Soros, famously bet against the British pound in 1992 and made massive profits, told CNBC this week. "Its been around for 13 years and with each passing day it picks up more of its stabilization as a brand."

Druckenmiller, after made headlines last week for his bearish views on the U.S. dollar, said he expects his bitcoin bet to "work better" than gold, though he holds a gold position that is "many, many more times" larger than his current bitcoin holding.

The gold price is currently just under its all-time high of around $2,000 an ounce set earlier this year, adding around 30% over the last 12 months and benefiting from many of the same trends that have lifted bitcoin through 2020worries about the coronavirus pandemic, lower-for-longer interest rates, and inflation fears.

"Frankly, if the gold bet works the bitcoin bet will probably work better because its thinner, more illiquid and has a lot more beta to it," said Druckenmiller, reversing comments he made in 2018 when said he "didn't want to own bitcoin."

Druckenmiller, who shut down his $12 billion hedge fund Duquesne Capital Management in 2010 and now manages his money through a family office, also said that inflation is likely to rise over the next five or six years due to the Federal Reserves massive stimulative measures put in place to offset the economic damage wrought by the pandemic.

The bitcoin price has added around 80% over the last 12 months--climbing around three-fold since the ... [+] coronavirus crash in March sent bitcoin to under $4,000.

Alongside a raft of high-profile investors turning to bitcoin this year, the bitcoin and cryptocurrency community has also been celebrating a number of other significant developments.

Last month, payments giant PayPal PYPL said it plans to allow its 346 million users to buy and spend bitcoin along with a handful of other major cryptocurrencies, while payments company Square SQ , led by Twitter TWTR chief executive and outspoken bitcoin advocate Jack Dorsey, said it has added $50 million worth of bitcoin to its corporate accounts.

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A Legendary Hedge Fund Billionaire Just Flipped To BitcoinCalling It Better Than Gold - Forbes

Crypto lender Creds bankruptcy is more than it appears. Two publicly traded bitcoin mining firms reported this week: Neither are profitable. ECB President Christine Lagarde has a hunch about the digital euro.

Top shelf

Chapter12?Creds Chapter 11 bankruptcy filing doesnt tell the whole story. With $67.8 million in assets and $136 million in liabilities, the crypto lender called it quits last weekend, leaving hundreds of depositors worrying about their collected $100 million loaned to the company. Cred has officially blamed malfeasance on the part of an outside investor entrusted with 800 BTC, although corporate insiders also say a $39 million line of credit to a Chinese lender went south. Theres a lot else going on, Daniyal Inamullah, former head of capital markets at Cred, said. CoinDesks Nathan DiCamillo investigates.

Bleeding BTC?Two publicly traded bitcoin mining companies are nearing profitability. Marathon and Hut 8, prominent within the sector, both narrowed quarterly losses, according to quarterly financial statements. Marathon bumped revenues to $835,184 in Q3, a 160% increase from the same period last year, while also recording a net loss of nearly $2 million. The companys loss per share, however, dropped from 12 cents to 6 cents a share year over year. Meanwhile, Hut 8 saw C$5.3 million (about US$4 million) in Q3 mining revenue, down 43% from the previous quarter, but also managed to trim its losses of C$0.07 a share in Q3 2019 to C$0.01 this quarter.

CBDC hunchEuropean Central Bank President Christine Lagarde has a hunch there will be a digital euro in two to four years. At a virtual panel yesterday, Lagarde said an European Union-wide central bank digital currency should be explored, If it is going to facilitate cross-border payments. The ECB previously said it is researching a CBDC. The latest statements are another indicator of what to expect and when: A digital euro will not be a substitute for cash, Lagarde said. It will be a complement. Separately, Benoit Coeure, head of the Innovation Hub at the Bank for International Settlements (BIS), said any potential CBDC for the supranational bank could involve blockchain. Everything is possible, he said.

Audited and attackedDecentralized finance (DeFi) platform Akropolis suffered a $2 million loss following a sophisticated flash loan attack. According to the platforms founder Ana Andrianova, the attacker pulled out tranches of $50,000 in DAI from the projects yCurve and sUSD pools, leveraging derivatives platform dYdX. While much is said about the audit trails of novel DeFi protocols, especially after hacks, Akropolis code was in fact audited twice: once by CertiK and also by firms SmartDec and Pessimistic.

Exchange flowsBitcoin flows to Binance from Huobi have reached an all-time high. According to data provided by CryptoQuant, some 18,652 bitcoins, worth nearly $300 million, were transferred from Huobi to Binance from Nov. 2 to Nov. 11. The bustling trade spiked ever since the Huobi chief operating officer, Robin Zhu, went missing at the beginning of the month. For months, Chinese regulators have been clamping down on crypto trading platforms, as part of a broader sweep of the fintech industry.

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At stake

Dignity and bitcoinThe systems dont always work, Robby Gutmann, co-founder of Stone Ridge Holdings Group, told NLW in his first podcast interview since the company made waves by investing heavily in bitcoin. Thats why the $10 billion alternative asset manager has placed its primary treasury reserve in bitcoin.

In short, bitcoin is an exit from an inflating monetary base that has failed to serve the public. Last month, Stone announced it would stash more than 10,000 BTC with its crypto subsidiary NYDIG. This follows other corporate firms like MicroStrategy and Square moving some of their cash treasuries into bitcoin, also citing monetary debasement.

The expansion of the money supply in the U.S. hasnt shown up in growth of CPI in a measurable way, but in other measurements of inflation, Gutmann said. Notably, Gutmann considers the prospect of living a dignified retirement as an ideal marker for inflation.

The idea of financial security is much broader in bitcoin, he said, when claiming that only a single-digit number of fiat monetary systems are functional or scale. Can I save my days labor in something I can spend tomorrow next week, isnt a question most U.S. workers are confronted with, but it may be a legitimate concern elsewhere.

Thats why a bitcoin-based world economy could better serve nations that werent part of the industrializing processes of the 19th and 20th centuries.

Gutmann further explained NYDIGs thesis is in fostering the long-term development of an open source monetary system. This includes opening some of its in-house bitcoin infrastructure up to other companies we wont be the last people that have this challenge and applying for New York States BitLicense and a limited trust charter.

To the extent we can move the bitcoin project forward, it feels like we can do something measurable in society today around this idea of financial security for people outside the first world, he said.

The full, hour-long interview can be found here.

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Blockchain Bites: Bankrupted Cred's Missing Millions, Bitcoin Miners' Quarterly Losses and More - CoinDesk