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