Bitcoin Blasts Through $20,000 as US Dollar Hits Two-Year Low.

 

Bitcoin has pierced above the $20,000 

level for the first time in history.

The flagship cryptocurrency logged a surprising upside rally in the pre-market New York trading session Wednesday, hitting an all-time high of $20,822 before turning lower modestly. Analysts said it got the bullish boost from institutional capital’s arrival into the crypto space as mainstream investors looked for alternative hedging assets against fears of long-term inflation.

Bitcoin Fundamentals.

The cryptocurrency was on a tear after the Federal Reserve announced a set of accommodative fiscal policies to cushion the US economy from the impact of the COVID-19 pandemic. Their measures included a near-zero lending rate tool alongside a commitment to purchase governments and corporate debts indefinitely.

Bitcoin is maintaining its intraday gains near $20.7K. Source: BTCUSD on TradingView.com.

While the framework did help contain the damage caused by the pandemic, it left the bond market oversold, pushing their short-term yields into negative territory. In simple words, investors who purchased short-dated Treasurys risked losing a portion of their investments at the time of bond maturity.

That marked Bitcoin’s rise as an alternative hedging asset, the same as gold and silver.

Between March 2020 and today, the cryptocurrency rose by 439 percent (data from Coinbase). Meanwhile, it received further bullish support from the US government’s $2.3 trillion COVID-19 stimulus package that sent the US dollar index lower.

US Dollar Index has fallen by 12.48% from its mid-March high. Source: DXY on TradingView.com.

Factors at Play This Week.

On Wednesday, both the Fed and the government stimulus factors are at play.

The central bank will share its futures guidance at 1430 EST, with experts noting that it would keep buying Treasurys at the same pace while maintaining rates near zero. On the other hand, the US Congress is also close to finalizing the second stimulus package to aid an ailing labor market amid the rising coronavirus cases.

The US dollar index fell to its two-year low on Wednesday as a result.

Information source: NEWSBTC

Ten Years Ago Satoshi Nakamoto Logged Off - The Final Message from Bitcoin's Inventor.

 

Ten years ago today, the pseudonymous programmer (or programmers) Satoshi Nakamoto logged into the forum bitcointalk.org one last time, and left the Bitcoin community for good. The day prior Nakamoto wrote a final message to the crypto community by offering a quick build and telling developers that there’s more work to be done on denial-of-service (DoS) attacks.

“More Work to Do”

When Satoshi Nakamoto was around, Bitcoin’s inventor was a mysterious enigma and often led developers in the right direction from 2008 to 2010. Bitcoin’s creator also left a final message to the community when he/she or they added to the thread on bitcointalk.org called: “Added some DoS limits, removed safe mode.” The message was written over a decade ago on December 12, 2010, and Nakamoto stressed that “there’s more work to do.”

“There’s more work to do on DoS, but I’m doing a quick build of what I have so far in case it’s needed, before venturing into more complex ideas,” Nakamoto said at the time. “The build for this is version 0.3.19. Added some DoS controls. As Gavin and I have said clearly before, the software is not at all resistant to DoS attack. This is one improvement, but there are still more ways to attack than I can count. I’m leaving the -limitfreerelay part as a switch for now and it’s there if you need it. Removed “safe mode” alerts, ‘safe mode’ alerts was a temporary measure after the 0.3.9 overflow bug,” Bitcoin’s creator added.

Nakamoto further wrote:

“We can say all we want that users can just run with ‘-disablesafemode,’ but it’s better just not to have it for the sake of appearances. It was never intended as a long term feature. Safe mode can still be triggered by seeing a longer (greater total PoW) invalid block chain.”

‘Wikileaks Has Kicked the Hornet’s Nest, and the Swarm Is Headed Towards Us’

While bitcoin (BTC) was swapping for $0.20 per coin, Nakamoto left a great number of technical replies on the forum that month, which addressed the current Bitcoin build at the time. In fact, during the first two weeks of December 2010, Nakamoto was very active on the forum.

No one knows why the inventor left so abruptly, but Nakamoto had shown he was a bit upset the day before his very last bitcointalk.org forum message. This was because bitcoin was mentioned in a viral pcworld.com article called: “Could the Wikileaks Scandal Lead to New Virtual Currency?”

At the time, Wikileaks was blocked by a U.S. financial blockade and because Paypal, Mastercard, and Visa stopped servicing the nonprofit whistleblowers, Wikileaks leveraged bitcoin donations.

From Nakamoto’s responses to the Wikileaks subject, one can assume the crypto inventor was very annoyed by the attention the small little network was getting at the time.

“It would have been nice to get this attention in any other context,” Nakamoto stressed. “Wikileaks has kicked the hornet’s nest, and the swarm is headed towards us.”

Bitcoin was changing fast, and Nakamoto seemed to know that he was steadily losing some of the control and people were making up their own minds on how the cryptocurrency should be back then. The same day the Wikileaks article from pcworld.com published, Nakamoto also thanked Hal Finney in a post called: “minimalistic bitcoin client on D language?”

Six days prior to Nakamoto speaking about the pcworld.com editorial, he responded to someone who said “bring it on,” after hearing that Wikileaks was considering cryptocurrency acceptance. Again, Nakamoto seemed flustered and wasn’t a big fan of onboarding the nonprofit whistleblowing organization led by Julian Assange.

“No, don’t ‘bring it on,’” Nakamoto insisted. “The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to Wikileaks not to try to use Bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage,” the inventor added.

‘I Am Not Dorian,’ Self-Proclaimed Satoshis, and Logging Off

Nakamoto’s appeal did not sway Wikileaks and soon after, the nonprofit began accepting bitcoin donations. Bitcoin’s inventor has not been heard from in over a decade, but there are a number of ostensible emails and messages from the creator that many assume stem from his legitimate accounts. For instance, when Newsweek published a story about Dorian Nakamoto being Bitcoin’s creator, a post published to p2pfoundation.ning.com on March 7, 2014 says: “I am not Dorian Nakamoto.”

Moreover, ever since Nakamoto left, there have been many self-proclaimed Satoshi Nakamotos and even clues and messages that have been widely debunked. There are tales from individuals like Craig Wright, a man who has claimed to be Bitcoin’s inventor for the last five years. Although, Wright’s stories have been widely dismissed and debunked by the greater cryptocurrency community.

There was also that time when Bloomberg columnist, Matthew Leising, told people about a so-called Satoshi and published an alleged tell-all about the nakamotofamilyfoundation.org and an individual dubbed: ‘Duality.’ The patent holder and Hawaiian resident named Ronald Keala Kua Maria said he is Satoshi on a variety of website domains bearing the name “Bitcoin” and “Satoshi.”

A man with intense hair like Fabio believes he is Satoshi Nakamoto, but nobody believed Jörg Molt’s absurd story. In mid-August 2019, a PR firm called Ivy McLemore and the Pakastani Bilal Khalid said he was Bitcoin’s inventor. Of course, Khalid’s story was considered ridiculously unfathomable as well. A Belgium native called Debo Jurgen Etienne Guido has told the crypto community he is Satoshi Nakamoto on numerous occasions.

It has also been said that the 47-year-old cartel boss Paul Le Roux could have been Satoshi as well. Still, none of these suspects and self-proclaimed individuals have ever provided a smoking gun pointing in their direction and have always failed to sway the greater crypto community.

As far as recorded history is concerned, Satoshi Nakamoto left the Bitcoin community ten years ago on December 12, 2010, with his final message about adding some DoS controls. Almost everything else from that point forward has been suspect and lacking evidence of legitimacy.

After Bitcoin’s inventor published the post, the creator must have been curious about the responses and may have been prepared to write one last message. Nakamoto logged into bitcointalk.org on December 13, 2010, logged off, and has not been seen on the forum since then.

Information source: Cointelegraph

Bitcoin Is on Its Way to Becoming the World’s Reserve Currency.

Morgan Stanley’s global strategist has made a case that bitcoin is making progress towards replacing the U.S. dollar as the world’s reserve currency. “Do not assume that your traditional currencies are the only stores of value, or mediums of exchange, that people will ever trust,” he warned governments.

Bitcoin Is on Its Way to Becoming the World’s Reserve Currency.

Morgan Stanley Investment Management’s chief global strategist and head of emerging markets, Ruchir Sharma, published an opinion piece in the Financial Times on Wednesday. He explained how bitcoin is making progress towards replacing the U.S. dollar and becoming the world’s reserve currency.

The Indian investor began by recalling that when the coronavirus pandemic hit, the U.S. dollar was the world’s “reserve currency,” noting that it has been one for 100 years while other previous reserve currencies lasted about 94 years on average. “That would have been reason to question how much longer it could continue, but for one caveat: the lack of a successor,” Sharma described, noting some contenders that fall short, such as the euro or China’s renminbi.

“US officials were thus confident that, in response to the Covid-19 lockdowns, they could print the dollar in limitless quantities without undermining its reserve currency status, allowing the country to keep running large deficits without apparent consequences,” the strategist continued, elaborating:

“But a new class of contenders is emerging: cryptocurrencies … cryptocurrencies such as bitcoin are being pitched by their champions as decentralised, democratic alternatives.“

While pointing out that there are bitcoin skeptics, including those who prefer gold, Sharma said, “many people have bought bitcoin in bulk,” as they fear that “central banks led by the US Federal Reserve are debasing the value of their currencies.” This has boosted the price of bitcoin which has “more than quadrupled since March, making it one of the hottest investments of 2020.”

He proceeded to describe that after decades of mounting, U.S. debts to the rest of the world surpassed 50% of its economic output last year, citing that this is “a threshold that often signals a coming crisis,” according to the International Monetary Fund (IMF). Sharma added that since then, those liabilities have spiked to 67% of output as the government continued to borrow heavily under lockdown.

“The dollar’s reign is likely to end when the rest of the world starts losing confidence that the US can keep paying its bills. That is how dominant currencies fell in the past,” the strategist claimed, asserting:

“Bitcoin is also starting to make progress on its ambition to replace the dollar as a medium of exchange … Money printing is likely to continue, even when the pandemic passes. Trusted or not, bitcoin will gain from widening distrust in the traditional alternatives.”

Sharma believes that bitcoin is gaining mainstream acceptance. “Today, most bitcoins are held as an investment, not used to pay bills, but that is changing,” he opined, noting that small businesses are starting to use the cryptocurrency for international trade, “particularly in countries where dollars can be hard to come by (such as Nigeria) or the local currency is unstable (Argentina).” He further pointed out that large companies such as Paypal and its subsidiary Venmo are planning to allow 28 million merchants to accept bitcoin next year.

Sharma then warned governments that “Bitcoin’s surge may still prove to be a bubble, but even if it pops, this year’s rush to cryptocurrencies should serve as a warning to government money printers everywhere, particularly in the US.,” elaborating:

“Do not assume that your traditional currencies are the only stores of value, or mediums of exchange, that people will ever trust. Tech-savvy people are not likely to stop looking for alternatives, until they find or invent one.”

The strategist concluded, “And stepping in to regulate the digital currency boom, as some governments are already considering, may only accelerate this populist revolt.”

Information source: Cointelegraph

Bitcoin’s Model Value Based on Fed and ECB Balance Sheets Is More Than $500,000.

The Bitcoin (BTC) price is moving around $19,000 for a while as everyone is excited about the next move. Global investors and institutions have shown willingness to enter into Bitcoin, in recent times. The health of the global economy seems concerning, as central banks are pumping massive stimulus money into the system.

PlanB, the popular crypto analyst and the author of the stock-to-flow (S2F) model, shows an interesting comparison between central bank balance sheets and BTC price movement over the last 10 years. Before 2020, the chart shows that the central bank money printing and the BTC goes hand-in-hand.

However, the equation has changed drastically this year as there have been trillions-of-dollars flushed into the global economy by central banks worldwide, as part of the COVID-19 stimulus packages. Interestingly, based on the current balance sheets of the Federal Reserve and the European Central Bank (ECB), the BTC price stands anywhere close to half-a-million dollars.

It clearly means that Bitcoin has the potential to explode by 25x from the current levels. Note that $500,000 is exactly the price required for BTC to move past Gold’s existing market cap of $9 trillion. As per PlanB’s Stock-to-Flow- model, Bitcoin can easily achieve this milestone in the period between 2021-2024. He further adds that Bitcoin can approach the real estate market value between 2024-2028.

PlanB’s S2F model simply treats Bitcoin as a commodity and looks at the stock-to-flow ratios for evaluating the current stock of the commodity against the flow of the new production.

The Death of Macros Can Push Bitcoin Higher.

Interestingly, PlanB is not alone to expect a 25x jump in the BTC price over the next ten years. Bitcoin billionaires and Gemini exchange founder Winklevoss Twins also believe that this is very much possible. On the other hand, formed Goldman Sachs hedge-fund-manager Raoul Pal in a podcast interview with Anthony Pompliano said that the global macro factors are falling all apart.

Pal further adds that the currency markets are also not holding a convincing future. As per him, this gives Bitcoin considerable leverage ahead. Pal has recently liquidated all his gold holdings and moved it to Bitcoin and Ethereum.

Information source: Cointelegraph

Citibank analyst seemingly predicts $318K Bitcoin price for 2021.

 

However improbable this seems, it would represent the “weakest” major rally so far, at a 102 times increase from low to high.

A recent Bitcoin (BTC) technical analysis reportedly prepared by CitiFX for its institutional clients points to a potential high of $318,000 sometime in December 2021.

In a supposed note to clients seen by Twitter commentator Alex on Nov. 14,  Citibank managing director Tom Fitzpatrick looks at the long-term trend of Bitcoin price, characterized as it has been by “unthinkable rallies followed by painful corrections.”

Notably, the three major bullish periods of BTC so far have been increasing in length. Initially, there was a 10-month run from 2010–2011, followed by a two-year run from 2011–2013, and finally a three-year run covering 2015–2017.

Conversely, Fitzpatrick posits that the period of correction following the last two bull runs has remained stable at around 12 months.

This, according to the analysis, places us squarely in the middle of a bull run which started in early 2019 and is potentially set to run for four years until late 2022.

It could be argued that such an extended bull run would lead to even higher levels, and charting “what looks like a very well defined channel” over the past seven years gives Fitzpatrick his prediction of a $318,000 Bitcoin price in December 2021.

While conceding that this figure may seem highly improbable, he points out that this “would only be a low to high rally of 102 times (the weakest rally so far in percentage terms) at a point where the arguments in favour of Bitcoin could well be at their most persuasive ever.”

These arguments include a change in the United States Federal Reserve’s monetary policy which occurred when the coronavirus pandemic hit. This was characterized by a vast and sustained increase in new money production, with less intention to constrain this once the economy and employment pick up again.

Cointelegraph has reached out to Citibank for further comment on the report but has not received a response as of publishing time.

Information source: Cointelegraph

What’s Happened to Bitcoin Since its Whitepaper Appeared 12 Years Ago?

Since Satoshi Nakamoto published the Bitcoin whitepaper on this day 12 years ago, a lot has happened to the first cryptocurrency.

In brief

On October 31, 2008, Satoshi Nakamoto published the Bitcoin whitepaper.

Since then, Bitcoin's journey has taken in highs and lows, from the Mt. Gox hack to an all-time high price of $20,000.

In 2020, it's seen renewed growth in the face of the coronavirus pandemic, as institutional investors take a growing interest in the cryptocurrency.

October 31, 2020 marks the 12th birthday of the Bitcoin whitepaper. There will be no party, no cake: Bitcoin’s friendship network is decentralized, and its creator anonymous. Yet, since its release, the whitepaper has had a profound impact on the world. What’s happened? Let’s go year by year:

2008: the birth of Bitcoin 

On October 31, 2008, our story began. Satoshi Nakamoto, a pseudonym of Bitcoin’s anonymous creator—or team of creators—releases the whitepaper for Bitcoin: A Peer-to-Peer Electronic Cash System. In it, Nakamoto sketches a plan for a system that allows “online payments to be sent directly from one party to another without going through a financial institution.”

The previous month, Lehman Brothers, one of the largest investment banks in the US, collapsed as a result of the 2008 financial crisis. This was Bitcoin’s raison d'être—as the centralized US financial system ran into trouble, a gap in the market opened for a decentralized system that bypassed its burning wreck. 

2009: Bitcoin’s first year 

2009 marked the release of Bitcoin. In January, its code was released as open-source software, and the genesis block—Bitcoin’s first block—was mined. Nakamoto mined the first 50 bitcoins, though they weren’t worth anything at the time. A few weeks later, Nakamoto sent Hal Finney 10 Bitcoin in the first Bitcoin transaction between two individuals. As Bitcoin turned one, Wikileaks published 400,000 documents about the Iraq war, and the Times Square Bomber—who failed to detonate in the New York City tourist hotspot—was sentenced to life in prison.

2010: Bitcoin Pizza Day 

Bitcoin shared its 2010 birthday with Instagram; the photo-sharing app launched on October 6. In 2010, Bitcoin was worth around $0.20, and hit highs of $0.39 during the year. Nakamoto, who had mined around one million Bitcoins at the time, passed over the keys for Bitcoin’s code repository to Gavin Andresen. 2010 also marked Bitcoin Pizza Day: on May 22, Laszlo Hanyecz paid 10,000 Bitcoins for two pizzas from Papa John’s. At current prices, that’s over $137 million.

Years later, Hanyecz was sanguine about his multimillion-dollar purchase, telling the New York Times that, “It wasn’t like Bitcoins had any value back then, so the idea of trading them for a pizza was incredibly cool ... No one knew it was going to get so big.”

2011: The first Bitcoin bubble 

Bitcoin took off in 2011—and it didn’t take long for the black market to take note of its supposed anonymity, with Silk Road, the dark net market which traded Bitcoin for guns, drugs, and other illegal contraband, opening for business.. 

2011 was also Bitcoin’s first bubble: Bitcoin skyrocketed in price, rising to $31.50 on June 8, but  by Bitcoin’s third birthday, its price sunk to $3.12; an early sign of the volatility that continues to affect the cryptocurrency to this day.

Bitcoin was also met with competition on its third birthday:  Litecoin, the “silver to Bitcoin’s gold,” launched in October 2011. Elsewhere in the world, Libyan dictator Muammar Gaddafi was killed as part of the Arab Spring uprising.

2012: Blackout, schmackout 

October 31, 2012 marked something of a triumph for Bitcoin; on that day, the New York Stock exchange opened up again after closing for two days as a result of Hurricane Sandy. Bitcoin remained operational throughout, providing ample evidence of the power of its decentralized network.

Bitcoin’s price continued to grow throughout the year: by October, it reached highs of $12.4. Its price, which averaged $5.27, was a 1,656 percent increase from 2011.

In September, the Bitcoin Foundation was started, headed by Gavin Andresen, Jon Matonis, Patrick Murck, Charlie Schrem, and Peter Vessenes. BitPay, the Bitcoin payments service, announced that 1,000 merchants started accepting payments through Bitcoin.

2013: Silk Road seized 

In February 2013, Coinbase reported sales of over $1 million, and in March, Bitcoin’s market capitalisation surpassed $1 billion. Silk Road, which opened in 2011, was seized by the FBI in October, along with 26,000 Bitcoin; its founder, Ross Ulbricht, is now serving a double life sentence without parole; in 2020, he marked his seventh consecutive birthday in prison. Prosecutors said that, from 2011-2013, sellers on Ulbricht’s site made over $214 million.

By its third birthday, Bitcoin’s market cap had surpassed $2 billion and the price for a single Bitcoin was over $200. Elsewhere in the world, Peter Higgs and Alice Munro win Nobel Prizes.

 2014: Mt. Gox collapses 

By Bitcoin’s sixth birthday, its market cap is over $4 billion, the price of a single Bitcoin is $329, and its daily volume is over $13 million. But not all is well in Bitcoin world: back in February, the cryptocurrency exchange, Mt. Gox stopped accepting withdrawals after 744,000 Bitcoins went missing; around $473 million, or 6 percent of the Bitcoin supply. Around 200,000 of those Bitcoins have been recovered, though the rest are gone. 

 2015: Volume up 

By the end of October 2015, Bitcoin’s market cap was $4.6 billion, and the price of a single Bitcoin was $312. Though the price and market cap stagnated, Bitcoin’s daily volume skyrocketed to $52 million. Outside of Bitcoin, China started to build islands in the South China Sea, and Russia got involved in the Syrian war. 

 2016: Bitcoin goes mainstream 

In 2016, the price of Bitcoin begins to grow. On its whitepaper’s birthday, its 24 hour volume hit $93 million, its market cap $11 billion, and the price of a single Bitcoin, $703. Many more high profile businesses start accepting Bitcoin, including Valve’s Steam video games store and ride-sharing service Uber.

In October, Colombia signed a peace agreement with FARC rebels, and Kim Kardashian had $10 million stolen from her in a hotel room in Paris. If only she’d kept it in Bitcoin...

 2017: The Bitcoin bubble 

2017 ushered in a new US President in Donald Trump, but for cryptocurrency holders, it was the year of the Bitcoin bubble.

On the birthday of the Bitcoin whitepaper, one Bitcoin was worth $6,131, and its market cap was over $100 billion—a figure that some attribute to the Chicago Mercantile Exchange’s listing of Bitcoin futures contracts, which made it far easier for the world to bet on Bitcoin. CME traded $460 million in its first week. This price was to skyrocket to over $20,000 in December. On December 7, almost $50 billion worth of Bitcoin was traded. 

 2018: Down, but not out 

In 2018, everything came crashing down. The market, based purely on speculation, flipped, and Bitcoin fell to $6,538 in February. The cryptocurrency muddled through a tough year: on the 10th anniversary of its whitepaper, the price of Bitcoin was $6,325. While its market cap remained strong, at $109 billion, the crypto crash prompted a backlash from mainstream publications and social media.

Twitter, Facebook, and Google duly banned advertisements for cryptocurrencies, including Bitcoin. Google and Facebook have since lifted the ban, with Facebook going all-in on crypto as it tries to get its own digital currency, Libra, off the ground. 

2019: Bitcoin’s back, baby 

In 2019, the market came rushing back, following further price drops in 2018. Bitcoin started the year at $3,764, and its price skyrocketed to $13,796 in July. Since then, its price waxed and waned, but held relatively strong, boosted by Chinese President Xi Jinping's endorsement of its underlying technology, blockchain.

On its 11th birthday, Bitcoin cost around $10,000, and its market cap was around $165 million. By that point, the Bitcoin network comprised over 55,000 nodes, while over 820,000 addresses had traded Bitcoin.

2020: New heights

 Ah, 2020. Bitcoin started off strong, as excitement mounted for the imminent Bitcoin halving. But few could have foreseen how the year would pan out, as the coronavirus pandemic gripped the world in March. The chaos initially throttled the price of Bitcoin, with the cryptocurrency dropping to lows of $4,000.

But as massive stimulus packages followed lockdowns around the world, Bitcoin began to come into its own, with investors seeking it out as a hedge against inflation. Bitcoin’s price reached around $10,000, and stayed there for the remainder of the summer. The series of financial shocks endured by the world economy seemed to prove the case that Bitcoin is antifragile—not only resistant to shocks and stresses, but stronger for them.

Then the big money started to pour in; institutional investors such as Grayscale and Square scooped up vast amounts of Bitcoin, and digital payments giant PayPal introduced crypto buying and selling features, opening the door to mass adoption of the cryptocurrency.   

The news sent the price of Bitcoin soaring past $13,000; on the 12th anniversary of the Bitcoin whitepaper, it reached its highest price since 2018. Those who'd previously bashed Bitcoin, from Grayscale CEO Michael Saylor to JP Morgan, fell over themselves to sing the cryptocurrency's praises.

One thing's for certain: whatever happens next, Bitcoin is in a very different place from when it first emerged into the world, 12 years ago.

Information source: Decrypt