Every notable Bitcoin bottom has been marked by a bout of capitulation in the crypto industry; at the end of 2018, BTC fell from $6,200 to $3,150 within Current news from the city and canton of Zug. Regional news around the clock in the Luzerner Zeitung. Survey shows growing interest despite crashes The independent group created by Facebook had run into regulatory hurdles with its plans to offer a coin backed by multiple currencies.
Every notable Bitcoin bottom has been marked by a bout of capitulation in the crypto industry; at the end of 2018, BTC fell from $6,200 to $3,150 within two weeks, the 2015 bottom was marked by a more than 50% decline in three days, and so on.
But, it isn’t just rapidly-falling prices that suggest a market has capitulated, it’s the health of the industry too, with new data showing that the size of crypto communities has shrunk at a rapid clip.
According to data shared by Aztek, a cryptocurrency trader, there’s been a notable decrease in the number of members of crypto-focused Telegram channels, from altcoin discussion rooms to trading chatrooms.
His analysis found that from June 2018 to 2020, there have been notable member losses of 25% to 75% in crypto groups from @Decred and @CryptoAlerts to @WhaleClub and @Litecoin. A good portion of these losses took place over the past six months from November 2019 to April 2020, now.
This would indicate that as the price of Bitcoin has suffered over the past few months, investors have capitulated, to leave this market for the time being as they fear it prospects have diminished.
While there isn’t any Telegram data for previous bear markets, the bottoms of previous bear markets, like the December 2018 and December 2019 bottoms, coincided with mass capitulation by investors. This historical precedent would suggest that the crypto market is nearing a bottom if it hasn’t hit one already.
All things considered, analysts are starting to agree that the Bitcoin bottom is in.
Per previous reports from Bitcoinist, Alex Krüger — an economist closely tracking the crypto space — suggested that the “stocks and Bitcoin bottoms are in” in his opinion, pointing out how the CBOE’s Volatility Index has fallen dramatically from the highs, which suggests peak fear has passed.
Scorecard$ES +18% from 2405$CLK -18% from 25$BTC +10% from 6275$VIX -45% from 74
Stocks and bitcoin bottoms are in IMO. VIX short worked like a charm.
— Alex Krüger (@krugermacro) April 14, 2020
While he didn’t elaborate on his assertion that Bitcoin (and crypto) found a bottom when BTC hit $3,700, he shared in a series of other messages that he thinks the bottom is in for stocks because “prices often overshoot,” referencing the sentiment that negative unemployment data from the U.S. has peaked.
From a technical perspective, it also seems that the cryptocurrency market’s bottom is in.
A popular trader shared the below chart on April 13th, indicating that considering the strong volumes seen in the Bitcoin market over the past five weeks, a “solid case” could be made that the worst of the crash passed on March 12th, when BTC hit $3,700.
Indeed, the chart above shows that near each one of Bitcoin’s macro tops and bottoms over the past three years, there were clusters of high-volume weeks as they indicate the exhaustion of a trend.
Photo by Bruno Nascimento on Unsplash
Recorded by Vanessa Varisco April 13, 2020
Andreas Faessler April 11, 2020
More advisers’ clients crave crypto coins despite risks
Of all the investment options that financial advisers have at their disposal to offer clients, virtual currencies are being touted by only a small number who dare to dabble in such things. But that may be about to change.
Growing ranks of retail and institutional investors drawn to bitcoin and its imitators have already been hit by a boom and bust in the sector. In 2017, bitcoin rose from under $2,000 to more than $19,000 per unit by the end of the year. Yet by January 2019 it had collapsed below $4,000. Last March, US economist Nouriel Roubini described crypto as “the mother and father of all bubbles”, noting that other “top ten” cryptocurrencies had suffered steeper falls of more than 90 per cent.
However, a partial recovery in the value of bitcoin and some of its rivals over the past year seems to have reignited interest in the sector.
About 6 per cent of financial advisers asked in December about their clients’ portfolios said they had allocations of cryptocurrencies, according to a study released in January by Bitwise Asset Management, which runs a range of cryptoasset index and beta funds. A further 7 per cent said they would probably or definitely follow suit in the coming year.
Some 17 per cent of the 415 advisers surveyed — including registered investment advisers (RIAs), broker-dealers, financial planners and wirehouse representatives — indicated that they owned “bitcoin, ethereum, or other cryptoassets” in their personal portfolios.
Hunter Horsley, chief executive of Bitwise, insists that cryptocurrency is established as an asset class just like oil, gas, gold or other precious metals. “It is here to stay,” he says.
More than half of advisers in the survey said that cryptoassets offered a useful hedge to their clients’ portfolios because of the low or uncorrelated nature of their returns when compared with traditional asset classes. Another 30 per cent of advisers mentioned the high potential returns; 26 per cent said clients were asking for them; and 23 per cent said that it was something new that they could offer clients.
But opinion on the suitability of investments in virtual currencies remains sharply divided. More than half (56 per cent) of respondents cited regulatory concerns as the biggest obstacle in preventing them from increasing their investment in cryptoassets or making their first allocation.
Others argued that cryptoassets remained “too volatile” (43 per cent), while many advisers also cited the lack of “easy accessible investment vehicles like ETFs or mutual funds” to justify exposing clients to the sector (39 per cent).
Attempts by proponents to widen access to investing in virtual currencies and their derivatives have come up against regulatory constraints.
Last year, Bitwise itself failed in its attempt to have one of its funds, the Bitwise Bitcoin ETF Trust, authorised for trading on the New York Stock Exchange. The US Securities and Exchange Commission rejected the application, stating that the proposal did not comply with rules aimed to prevent “fraudulent and manipulative acts”.
That ruling coincided with the decision by Facebook to abort plans to launch its own cryptocurrency, Libra, in the face of a backlash from regulators and politicians concerning its potential misuse, in a retreat that has also stymied the sector. Bitwise subsequently dropped its attempt to secure SEC approval for this full listing earlier this year. But the group appears undeterred. Last month, it indicated it would instead push ahead by seeking to market its cryptoproducts via OTCQX, the less stringent over-the-counter market.
The aim is to make shares on one of its funds, the Bitwise 10 Private Index Fund, tradable through traditional brokerage accounts such as Charles Schwab, Fidelity and TD Ameritrade by the end of 2020. Mr Horsley says his ambition is to establish Bitwise as the “Vanguard for cryptocurrency”
Daniel Simon, chief executive of fintech comminations agency Vested and author of The Money Hackers, argues that financial advisers will need to respond to what the next generation of investors will be interested in — and this includes cryptoassets.
He points to a Charles Schwab report published in December that revealed that while stalwart companies such as Berkshire Hathaway, Amazon and Microsoft ranked among the top investment picks for baby boomers and Gen Z, millennials were more prone to put money in cryptoassets.
The fifth most popular investment choice among millennials in the study was Grayscale bitcoin Trust, ahead of Berkshire Hathaway and Netflix — which Mr Simon views to be remarkable. Advisers “need to have a sense of the millennial client who asks you what they should be doing,” he says.
But sceptics remain. Peter Schiff, chief executive of broker-dealer Euro Pacific Capital, hit back at the notion of cryptocurrencies as a hedge to traditional market volatility. “The only people who will ever buy bitcoin are speculators, which is why bitcoin will never become a safe haven,” he tweeted this month.
Author: Stephanie Forshee
April 16, 2020
Facebook`s cryptocurrency project gets watered down as it attempts to woo regulators
A “Zuck Buck” is displayed on a monitor as David Marcus, the executive leading Facebook`s blockchain initiative, is questioned by U.S. lawmakers in Washington, D.C., on July 17, 2019.
Andrew Harrer | Bloomberg | Getty Images
Facebook`s cryptocurrency project is taking a new, scaled-down approach as transactions increasingly take place online during the coronavirus pandemic.
The Libra Association, an independent group organized by Facebook to manage the libra crytocurrency, said it now plans to offer stable coins backed by just one nation`s currency in addition to its coins backed by multiple currencies. That means some coins offered by the group would serve as the equivalent value of a U.S. dollar or a Euro, for example. The change comes after Facebook`s plans for libra were shot down by lawmakers around the world who worried about a company with a history of privacy scandals having control over their citizens` resources.
The move represents a big change for libra, which Facebook originally pitched last year as an alternative global system that would make it easier to make digital payments no matter where in the world you are. The new proposed design for libra would make it more like standard digital payments services such as PayPal.
The change also could ease some concerns among U.S. lawmakers who feared the new currency could compete with the U.S. dollar. The Libra Association also said it`s taking steps to make the currency more secure and safeguard it from illegal activity like money laundering.
David Marcus, the Facebook executive and former PayPal president who spearheaded the cryptocurrency initiative and is now a member of the Libra board, addressed the changes in a series of tweets Thursday.
“I keep on thinking about all the people and small businesses that could benefit from the Libra Network already being operational — especially now during these times of unprecedented hardship,” he wrote.
Marcus said the group is now fully funded by its members, with less than 10% of that funding coming from Facebook.
The Libra Association has seen a significant change in its makeup since the project was first announced. A slew of payments companies, including Visa, MasterCard and PayPal, abandoned the project following government scrutiny. After losing eight of its original members, Shopify joined the Libra Association in February.
It`s still unclear if the changes announced Thursday will be enough to sway regulators and policymakers in favor of the project. U.S. congressmen pressed Marcus and CEO Mark Zuckerberg in a series of hearings last year, even asking them to halt plans for the currency altogether until they could come up with a proper regulatory framework. The executives only said they would wait to launch until they got approval from who they deemed were the appropriate U.S. regulators.
The group is now waiting on regulatory guidance from the Swiss government. Libra said Thursday it had started the payment system licensing process with the Swiss Financial Markets Supervisory Authority (FINMA).
FINMA said in a statement Thursday that Libra`s application “differs considerably from the project originally submitted.” FINMA said it`s committed to coordinating with international partners during its evaluation of the project due to its global implications. It said it has been working closely with the Swiss National Bank and more than 20 supervisory authorities and central banks around the world.
“FINMA will give special consideration to whether strict national and international standards for payment infrastructures and also for combating money laundering can be upheld,” according to the statement.
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WATCH: Facebook`s libra head: I don`t see bitcoin as currency, it`s digital gold
Author: Lauren Feiner