- Bitcoin Dips to $8,689 After Third Bitcoin Halving on Monday
Bitcoin, the most dominant cryptocurrency, declined on Monday following its third halving.
Bitcoin halving is a process where block reward for mining its block is halved. It has occurred three times since the digital currency was established some 11 years ago.
In the first two halvings, the price of the digital currency rose with a decline in the supply of the coin. For instance, Bitcoin was trading at slightly above $2 a coin prior to the first halving in 2012 before jumping to over $600 per coin four years later.
This was repeated during and after the second halving in 2016 as the price of the coin rose above $9,000 a coin.
However, the story was different on Monday when the dominant digital currency halved its reward for the third time. The price of the coin dipped slightly from $9,000 to $8,840 on Sunday before moderating further to $8,689 on Monday.
Two possible explanations for the occurrence. The surge in uncertainty and risk associated with the global financial market impacted the inflow of funds into the cryptocurrency market on Monday and likely to remain so in the near-term as predicted by Investors King on Monday.
The second possible explanation is that the price of Bitcoin has risen more than any assets in history from trading at a few cents 11 years ago to $8,689 per coin as the time of writing. Meaning, more capital is now needed to instigate substantial move in the market, a move retail traders can no longer make happen but the institutional investors that are present wary of current global uncertainty.
However, Investors King remained bullish on Bitcoin for long term investors.
Cryptocurrency: Facebook Owned Libra to Launch Stablecoin in January 2021
Facebook Inc led Libra Association is planning to launch Libra stablecoin pegged to only the United States Dollar as early as January 2021, according to three anonymous people quoted by the Financial Times.
The stablecoin was initially proposed to be pegged to a basket of multiple currencies before the group faced several setbacks after the US parliament pressure Facebook on data breach and other issues that allegedly allowed Russia to meddle in the 2016 US presidential election.
The social media giant has now cut down on its ambition to focus on US dollar-pegged stablecoin in an effort to reduce regulatory bottleneck.
PayPal Inc., one of the first members of Libra Association that pulled out after regulators increased scrutiny on Facebook operations, has since started a cryptocurrency exchange business.
Bitcoin Drops Over $3000 to $16,806 Per Coin as Whales Prepare to Take Profit
Bitcoin price depreciated by over $3000 in the last three days to $16,806 per coin following the transfer of almost $1 billion worth of Bitcoins from wallets to exchanges by bitcoin whales.
Also, almost $2 billion worth of derivative positions have been liquidated in the last 24 hours while $1.6 billion worth of positions have been closed in the last 12 hours, according to data from Bybit.
Bitcoin Whales are individuals or groups that own 1000 BTC or more in a single wallet.
The world’s most dominant cryptocurrency Bitcoin rose from $10,000 to $19,400 per coin in the last seven weeks due to global uncertainty and the negative impact of COVID-19 on traditional assets.
However, it was the report that the United States Treasury Department plans to track owners of self-hosted cryptocurrency wallets that halted the bullish run and forced a pullback as whales that preferred to remain anonymous have started moving their coins to protect earnings against potential taxes.
Alex Kruger, Coinbase CEO, said “This [regulatory concerns], against a backdrop of euphoria and unsustainable high leverage among longs led to the largest 24-hour drop since March.”
Quoting Brian Armstrong, who first tweeted about Treasury Department’s plan to track Bitcoin Whales, Kruger said bitcoin and the entire cryptocurrency space could turn extremely bearish if that tweet turned out to be true. However, he said it is highly unlikely in the short-term.
He said “if what Armstrong talked about comes to be, it would be extremely bearish. As of now, I see that as highly unlikely (in the short-term).”
Kruger added that OKEX’s recent announcement that it has resumed withdrawals might have amplified the bearish trend that led to over a $3000 plunge in bitcoin value.
“Most of the frozen bitcoin [on OKEx] had traded up around 70%, so there were a lot of unrealized profits locked up there,” Sui Chung, CEO of CF Benchmarks, said in a statement. “Once these coins were free to move, it’s likely many traders sold them for dollars and stablecoins to realize those gains, adding greater momentum to the selling.”
Bitcoin Hits Record $19,259 a Coin on Tuesday as Demand Jumps Through the Roof
Demand for the world’s most dominant cryptocurrency, Bitcoin, rose to a record high on Tuesday amid Trump’s renewed attack on China and general global uncertainty.
Bitcoin rose by 5.2 percent to $19,259.64 or N9.471 million per coin as of 2.24 pm Nigerian time on Tuesday.
Ripple rose by 25.05 percent to 0.00003271 BTC or N233.25 per coin, representing over 100 percent increase in the last one week.
Similarly, Bitcoin Cash advanced to fourth place among the most capitalised cryptocurrencies after gaining 16.90 percent in the last 24 hours to 0.00154 BTC or N129,101 per coin with N2.36 trillion market capitalisation and N170.29 billion volume of trade in the last 24 hours.
Demand for cryptocurrencies rose late on Monday after President Trump renewed his trade war with China, in a move that suggested he is out for revenge.
Few reports have said China was supporting the President-elect, Joe Biden, prior to the US presidential election, and as such was using cyberspace to push that agenda like Russia did in 2016.
The surged in global tension despite COVID-19’s three different vaccines led to an increase in demand for cryptocurrencies by institutional investors in the last 24 hours.
Also, demand for crypto assets on both PayPal and CashApp platforms has exceeded the entire supply of newly minted bitcoins, suggesting a serious supply pressure and likely surge in price above the current level in the near-term.
Bitcoin could set a new all-time record high in few days if demand remains high.
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