Bitcoin Price Hits $9,155 as Whales Reportedly Jump on the Digital Coin
Bitcoin price rose from $8,730 it traded on Monday to $9,155 on Wednesday after some Whales reportedly increased their holdings of the dominant cryptocurrency.
A respected Twitter account, @santimentfeed, had tweeted that some Bitcoin wallets holding at least 100 or more Bitcoins have added a combined 12,000 BTC to their holding, an estimated $108,000,000 (at $9,000 per coin).
Bitcoin price had risen to $9,791 on May 08 before Bitcoin Halving of May 12.
However, it fails to break the $10,000 resistance level anticipated by traders globally. The digital currency plunged to $8,730 on Monday and hovered around that support levels until certain whales were reported to have acquired 12,000 BTC despite the uncertainties surrounding the cryptocurrency market.
The price of Bitcoin surged immediately the report became public. This was after Goldman Sachs discredited Bitcoin in a recent report published on Wednesday,
The globally respected investment bank said “We do not recommend Bitcoin on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum oriented traders.”
3 Important Differences Between Bitcoin and Dogecoin
Dogecoin, a meme-inspired cryptocurrency, hit a record high on Wednesday after reaching about 69 cents.
With it’s price up over 12,000% this year, and with big names, like Elon Musk talking and tweeting about it, dogecoin has become one of the buzziest cryptocurrencies, alongside bitcoin, which itself hit a fresh record of over $63,000 last month.
Searches like “Is dogecoin the next bitcoin?” are even trending on Google.
But the two cryptocurrencies have major differences. Here are three important distinctions between dogecoin and bitcoin, according to experts.
Bitcoin has ‘built-in scarcity’
“There are many differences between dogecoin and bitcoin,” says Meltem Demirors, CoinShares chief strategy officer.
One of the “most important” is the supply of each, she says.
Dogecoin is inflationary, says Demirors, meaning “more doge is printed every minute of every day, giving doge a potentially infinite supply.”
For example, “every minute of every day, 10,000 more dogecoin are issued. That equates to nearly 15 million doge per day or over 5 billion doge per year,” she says.
An unlimited cap on supply can negatively impact value over time.
Bitcoin, on the other hand, has a finite supply of 21 million, which creates a “built-in scarcity … akin to the way that gold or diamonds are valuable because they are scarce,” James Ledbetter, editor of fintech newsletter FIN and CNBC contributor, says.
This scarcity is central to why bitcoin bulls argue for holding the cryptocurrency long-term – because it is limited, as demand increases, the price of bitcoin should as well.
Because of this difference, “I see most people trading dogecoin on a short-term basis,” with investors hoping to make a quick profit, “and choosing to hold bitcoin over a longer duration,” Demirors says.
Dogecoin was ‘created for sillies’
Another difference between dogecoin and bitcoin is the premise on which each was created.
Bitcoin launched in 2009 with an extremely detailed white paper written by Satoshi Nakamoto, the pseudonym used by bitcoin’s creator or creators. Nakamoto’s intention was for bitcoin to become a prominent decentralized digital currency. Bitcoin supporters see the cryptocurrency as digital gold and a hedge against inflation.
Trust in bitcoin has grown with institutional and retail investors during its 12-year run, which led to the cryptocurrency selling for record high prices this year.
In comparison, dogecoin was created as a joke in 2013 by software engineers Billy Markus and Jackson Palmer. Based on the “Doge” meme, which portrays a shiba inu dog, Markus and Palmer didn’t intend for dogecoin to be taken seriously.
It was “created for sillies,” Markus wrote in a recent Reddit post. “I threw it together, without any expectation or plan. It took about 3 hours to make.”
As a result, dogecoin lacks technical development and isn’t as secure as bitcoin.
Over the years, Markus was surprised to see how quickly the dogecoin community grew, as it bonded over a common love for the shiba inu dog meme, and recently, the cryptocurrency exploded after social media buzz from the likes of Musk and Mark Cuban.
“Dogecoin currently exists as a kind of inside joke,” Ledbetter says.
But “for many people, investing is becoming a form of entertainment,” Demirors says. “For dogecoin, the meme is the message. As the influence of FinTwit [financial industry twitter] grows, so will the memes and the way they move our markets.”
Nonetheless, both dogecoin and bitcoin have both been called risky investments, as cryptocurrencies are highly volatile. In fact, experts warn that investors proceed with caution before buying dogecoin, deeming its rally to be highly speculative. In turn, experts warn that people should only invest what they can afford to lose.
Bitcoin has a well-funded ecosystem
Though for many years dogecoin was developed by engineers who copied the exact code from bitcoin software, bitcoin has an extensive and well-funded ecosystem that does not exist with dogecoin.
Mike Novogratz, a crypto bull and CEO of Galaxy Digital, told CNBC’s “Squawk Box” on April 20 that bitcoin is “a well-thought-out, well-distributed store of value that’s lasted for 12 years and is growing in adoption, where dogecoin literally has two guys that own 30% of the entire supply.”
“I worry that, once the enthusiasm rolls out, there’s no developers on it, there’s no institutions coming in. But it’s got this moniker of the people’s coin right now,” Novogratz told CNBC on Wednesday.
“It’s a little bit of a middle finger to the system. I think it’s dangerous because once that enthusiasm dies, if it dies, you could have a long way down. But I don’t want to discredit.”
Goldman Sachs Offering Bitcoin Derivatives to Investors
Goldman Sachs is offering investors access to non-deliverable forwards (NDFs), a derivative tied to bitcoin’s price that pays out in cash, according to a Bloomberg report.
The bank will then protect itself from volatility by buying and selling bitcoin futures in block trades through CME Group, using Cumberland DRW as its trading partner.
NDFs are futures contracts in which counterparties settle the difference between the negotiated NDF price or rate and the spot price or rate on a notional agreed sum.
In January, CME took the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation.
In March, Goldman Sachs relaunched its cryptocurrency trading desk after a three-year hiatus, with plans to once again support bitcoin futures trading.
A source with knowledge told CoinDesk that Goldman quietly began offering bitcoin derivatives contracts to clients last month to test its hedging methods.
Fintech CEO: George Residence Bitcoin Acceptance Has Policy Implications, More than Simple Brand Awareness
Last month, luxury hospitality icon, George Residence, announced that it would be the first hotel in Nigeria to accept Bitcoin. Most reviews of this announcement came using the lens of brand awareness, both for the property, as well as cryptocurrency. But, Richard Gardner, today, offered a different take on what’s unfolding in Nigeria.
“When we see news like this, it’s easy to trumpet the mainstream appeal of Bitcoin, and, over the past six months, there certainly has been a huge increase in familiarity with the alternative to fiat currency. Between business icons like Mark Cuban and Elon Musk openly supporting the growth of cryptocurrencies, it is easy to read news like this as just one in a line of businesses moving to accept a form of payment that’s becoming more and more popular. But, there’s something else at play here,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
In his announcement, George Residence CEO Yanju George said that, not only was he accepting Bitcoin, but that he planned to make Bitcoin the company’s primary reserve asset, noting that “[w]e have allocated around 50% of our cash reserves to Bitcoin… We hope to increase that as time goes on. Bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind.”
“I think if you look at the policy behind the move, you’ve got to see this as a hedge against inflation. The Naira has had significant struggles. We’ve seen a surge in Bitcoin in 2021, but, at the end of the day, the surge means different things in different places. In the United States, folks may be looking at Bitcoin as an investment opportunity, but in places like Nigeria, Bitcoin and cryptocurrencies offer more than that. They are really a way to make sure that the assets you have today aren’t devalued over the next six months. Unchecked inflation is not just an economic problem; it’s a problem that deeply affects the citizenry when the fiat currency they rely on to purchase food and energy and life essentials is worth a fraction of what it was last year. In places with rampant inflation, Bitcoin is being considered by the populace as a potential solution to a number of institutional problems,” explained Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“As Nigeria looks towards the future, there is a lot of work to be done, to be sure. But, there is much to be optimistic about, as well. The fact that the citizenry is so engaged in cryptocurrencies means that, if the country can put the pieces together and get a handle on infrastructure-based issues, not the least of which is inflation, then it can begin to look at how it can invite innovation and enhance technology’s role as a tool in its economic engine. The interest is already there,” noted Gardner.
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