• Bitcoin’s spot price briefly surpassed $10,000 early this week.
• Its one-year average price just crossed $9,500, a new all-time high.
• The largest cryptocurrency is up 37% year-to-date.

As bitcoin’s price grinds toward $10,000, its performance over a much longer timescale reached a significant milestone this month.

BTC’s One-Year Average Price

While most traders focus on bitcoin’s spot price, zooming out on a more extended timeframe reveals a bullish trend for the cryptocurrency. As Twitter user The Moon points out, bitcoin’s one-year average price just reached an all-time high.

Bitcoin’s price continues to impress over more extended time frames. | Source: Twitter

Based on The Moon’s analysis, bitcoin’s 365-day moving average has crossed $9,531.

Now, granted, The Moon doesn’t offer the most objective take on bitcoin (the tweet before this one was simply, “I love bitcoin”). But that doesn’t make the milestone any less significant.

This time last year, BTC was in the middle of a parabolic move that would eventually take the price to a high near $14,000 in late June.

Then, just a few months ago, BTC crashed below $4,000 in a mass coronavirus-driven liquidation event. Neither the upper end or lower band of the yearly price range has been reached since.

Bitcoin’s one-year price chart. | Chart: TradingVIew

BTC’s Post-Halving Performance

Bitcoin’s quadrennial halving came and went on May 11, producing the third “quantitative hardening” for the blockchain network. Post-halving, bitcoin miners now receive 6.25 BTC per block rather than the 12.5 BTC they’ve grown accustomed to over the past four years.

Galaxy Digital’s CEO Mike Novogratz talks about bitcoin post-halving:

With bitcoin’s inflation rate cut in half, proponents believe the digital asset will become scarcer and thus more valuable. If history is any indication, they’re probably right.

Although bitcoin’s price tends to fall after the halving, the supply cut is a significant tailwind over the next six-to-twelve months. Bullish expectations are magnified by the number of new users joining the network and the percentage holders who are simply accumulating and not moving their BTC.

Data from Glassnode suggest bitcoin holders are taking matters into their own hands by moving BTC out of exchanges and, possibly, into hardware wallets. Bitcoin’s daily active addresses and new addresses are also on the rise.

Bitcoin’s proponents believe the quadrennial halving is one of several major catalysts that will boost prices over the long term. | Source: Mc_Cloud/shutterstock.com

The bitcoin price has rallied more than 12% since the halving took place on Monday. Year-to-date, the price is up roughly 37%, making BTC the best-performing major asset of 2020. By comparison, spot gold is up 14.2% over the same period.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com. Sam Bourgi is long bitcoin.

Source: ccn.com

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• A stimulus check worth $1,200 invested in Bitcoin in mid-April is now worth $1,640.
• U.S. Senators are pushing for a second wave of stimulus checks worth $2,000.
• While the U.S. is preparing to reopen, economic consequences from the pandemic make additional stimulus compelling.

If a stimulus check was invested in Bitcoin (BTC) in the first week it was sent out by the Internal Revenue Service (IRS), it is now up by 36%.

Since April, the price of Bitcoin increased from $6,540 to $8,700, rising to as high as $10,050 on May 7.

A stimulus check of $1,200 invested in Bitcoin in mid-April is now worth $1,640. When the price of BTC was at $10,000, the stimulus check was worth $1,825.

The Bitcoin price is up 130% since March 12 | Source: Tradingview

The Demand For Bitcoin is Increasing in a Highly Uncertain Period

As a large part of the workforce in the U.S remains closed, a growing number of retail investors are experimenting with stocks and cryptocurrencies. Counterpoint Mutual Funds co-founder Michael Krause suggested retail investors helped boost April’s U.S. stock market recovery.

Similarly, the rally of Bicoin from $6,540 to $9,000 was primarily led by individual investors.

The spot volume of major Bitcoin exchanges like Binance and Coinbase rose to levels not seen since 2017 when the price of BTC was at $20,000.

Monthly volume of Bitcoin on Binance | Source: Tradingview

Binance, as an example, processed 2.528 million BTC in volume in the month of April. In USD terms, the exchange facilitated about $22.75 billion worth of Bitcoin trades.

Many retail investors in the U.S. seemingly bought Bitcoin with their stimulus checks in the latter half of April.

On April 17, Coinbase CEO Brian Armstrong said that the number of deposits that match the size of the stimulus check of $1,200 surged substantially.

Four days after the first batch of stimulus checks were sent, the number of $1,200 deposits to Coinbase increased by nearly four-fold.

Deposits to Bitcoin exchange Coinbase at the size of a stimulus check rise by 4x | Source: Brian Armstrong

In the near-term, retail investors trading stocks and other high-risk assets like Bitcoin is expected to increase as a result of additional stimulus payments and extended stay-at-home requests.

Democrat Senators including Bernie Sanders are pushing for a monthly stimulus check worth up to $2,000. While they face fierce opposition from Republicans, another one-off stimulus check is a possibility based on general sentiment.

According to a survey conducted by WalletHub, 84% of Americans believe a second stimulus check is necessary to cope with prolonged lockdown measures.

More Stimulus Means More Liquidity, As Economy Reopens

The U.S. economy is preparing to reopen and President Donald Trump is taking steps to ease the restrictions that were placed since March.

The economy may open soon, but it is not likely to trigger an immediate boost to business productivity and the stock market.

While medical experts continue to preach social distancing and effectively lockdown measures, Trump is pushing ahead to reopen the country. | Source: Brendan Smialowski / AFP)

Based on the economic consequences the coronavirus pandemic will impose on the U.S., the government may still consider a second stimulus check to boost the economy.

If a second one-off $2,000 stimulus check is issued and Americans begin to reenter the workforce, it can cause a new inflow of capital into stocks, Bitcoin, gold, and other asset classes.

Source: ccn.com

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• With less than 10 hours until the Bitcoin halving, price of BTC dropped by nearly 20%.
• Selling pressure seems to come from whales, as open interest surged on BitMEX before the big fall.
• Whales are seemingly taking advantage of retail investors around the halving narrative.

In less than 10 hours, the highly anticipated Bitcoin halving will be activated. But, whales seem to be taking the opportunity to dump on the market.

Since Friday, bitcoin price dropped by more than 14% from $10,020 to $8,550. At its lowest point on May 10, it reached $8,100, marking a 20% decline ahead of the halving.

Bitcoin price sees a steep sell-off ahead of halving | Source: TradingView

What is the Bitcoin Halving And What Impact Will It Have on BTC?

The Bitcoin blockchain network is primarily divided into three groups: developers, users, and miners.

Miners verify blocks that contain payment data using electricity and mining equipment such as high-power computing chips. When a miner verifies a block and the block then enters the Bitcoin blockchain, the miner is compensated with BTC.

When the block reward halving occurs, which happens every four years, it decreases the compensation miners receive by half.

Prior to the 2020 halving, Bitcoin miners earned around 1,800 BTC every day. Post-halving, miners are expected to generate around 900 BTC per day.

Bitcoin miners will generate 900 BTC a day after halving | Source: Willy Woo

Bitcoin is a deflationary currency because of its fixed supply of 21 million BTC. As such, any occurrence that affects the supply of BTC will inevitably have a significant impact on its long-term price trend.

In theory, the halving is likely to have a positive effect on the price of Bitcoin over the next four years. Less BTC will be mined by miners, which means less BTC will be sold to the market.

But, as seen in the 2016 halving, the Bitcoin price tends to drop right before and after a halving occurs.

Source: TradingView

A post-halving drop happens as whales move to take advantage of rising retail demand.

In April, data shows that spot volume of Bitcoin rose noticeably on platforms like Coinbase and Binance. Hence, heading into the halving, the demand for Bitcoin from retail investors is higher than in previous months.

For whales, this means liquidity. Whales that hold millions of dollars worth of Bitcoin cannot sell BTC when they do not see much buying demand in the market.

Whales typically wait for BTC price to rise to a local high point, and then initiate a sell-off. It is for this reason that the Bitcoin price sees a large shift in trend and a predictable cycle.

BitMEX open interest increased significantly before 20% bitcoin price drop | Source: Hsaka

Why Are Whales Dumping in Tandem?

In the past three months, the Bitcoin price increased from $3,600 to $10,065, by nearly three-fold.

Most of the buying demand came from spot exchanges that saw record high volume in late April.

Whales that accumulated in the $3,000 to $4,000 range have the incentive to sell at $10,000 where there is high liquidity and retail demand.

The high price also coincided with a positive narrative in halving, similar to October 2019 when Chinese President Xi Jinping encouraged the development of blockchain technology.

At the time, the Bitcoin price abruptly rose from $7,700 to $10,500 within a 48-hour span. Given that Bitcoin trading remains prohibited in China, it is difficult to state that a fear of missing out (FOMO) hit the Chinese market and retail investors bought in.

Source: ccn.com

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• Bitcoin’s price peaked at $9,972.03, its highest in two-and-a-half months.
• Billionaire hedge fund manager Pual Tudor Jones says he bought BTC futures to hedge against inflation.
• Bitcoin’s quadrennial halving event is likely to fall on May 12.

The price of bitcoin edged closer to the psychological $10,000 level on Thursday, as investors geared up for the quadrennial halving in roughly five days. Meanwhile, one of the world’s most famous investors just threw his weight behind BTC as a hedge against inflation.

Bitcoin Approaches $10,000

Bitcoin’s value peaked at $9,972.03 on Bitstamp, the highest since late February. The largest cryptocurrency by market cap is now trading at $9,872, gaining 8% on the day.

Bitcoin is significantly overbought based on the daily relative strength index (RSI). | Chart: TradingView

At current values, bitcoin’s total market capitalization stands at just over $181.4 billion, according to CoinMarketCap. That’s equivalent to 67.8% of the overall cryptocurrency market.

Some say bitcoin failed the coronavirus test after its price plunged to $3,800 in late February. In hindsight, the flash crash may have been a prime opportunity to accumulate as BTC rebounded more than 162%.

Still, analysts expect bitcoin to pull back sharply in the wake of next week’s halving event. If previous post-halving cycles are any indication, a selloff is likely to be quick and painful before the next bullish cycle begins.

Bitcoin Gets an Unlikely Ally

Famed investor Paul Tudor Jones is buying bitcoin futures to hedge against central bank-inspired inflation. The billionaire and chief executive officer of Tudor Investment Group called bitcoin “the fastest horse” in the quest for profits.

In a note to clients entitled “The Great Monetary Inflation,” Jones said:

The best profit-maximizing strategy is to own the fastest horse… If I am forced to forecast, my bet is it will be Bitcoin.

By Jones’ calculation, central banks have printed $3.9 trillion in new money since February. If his estimates are correct, that’s roughly 6.6% of global economic output.

We are witnessing the Great Monetary Inflation — an unprecedented expansion of every form of money unlike anything the developed world has ever seen.

As CCN reported Thursday, the tsunami of inflation coming from the Federal Reserve could make the dollar and other fiat currencies less attractive over the long term. Jones is already hedging his bets.

Bitcoin is piquing the interest of some institutional investors, with the latest data showing a record surge in BTC futures trading.

Earlier this week, Arcane Research tweeted that open interest in CME’s bitcoin futures contract hit $399 million on May 6, a new all-time high.

Institutional uptake in bitcoin hasn’t been as great as many expected, but interest is growing. | Source: Twitter

Disclaimer: The opinions expressed in this article reflect the author’s opinion and should not be considered investment advice from CCN.com. Sam Bourgi is long bitcoin.

Source: ccn.com

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• Jack Dorsey’s love letter to bitcoin fans isn’t the ‘poetry’ that everyone thinks it is.
• The Twitter CEO’s Square Cash app stands to benefit more than the average cryptocurrency user.
• Bitcoin’s ridiculously high transaction fees make it an implausible candidate for an everyday global currency.

According to Twitter CEO Jack Dorsey, bitcoin is poised to become the native currency in a new global internet-based economy.

But Dorsey’s latest love letter to bitcoin on a recent episode of the Lex Fridman podcast suggests he only has his own best interests at heart. And specifically, those of his Square Cash app.

Twitter CEO’s Love Letter to Bitcoin

Jack Dorsey recently described the bitcoin whitepaper as “poetry.” The Twitter CEO joined AI researcher Lex Fridman’s podcast on April 24 to discuss cryptocurrency, and his company, Square Inc.

When asked how his Square Cash app could help plug people into the global economy as consumers and merchants, Dorsey said the currency used would be key.

I believe the currency we use is a huge part of the answer. And I believe that the internet deserves and requires a native currency, and that’s why I’m such a huge believer in bitcoin.

Facebook’s Libra venture failed to get off the ground when it ran into the roadblocks of many national financial regulations. Dorsey appears to have learned from Libra’s failure and sees bitcoin as a way of circumventing those same national regulatory hurdles.

Our biggest problem as a company right now is that we cannot act like an internet company. To open a new market we have to have a partnership with a local bank. We have to pay attention to different regulatory onboarding requirements.

Dorsey suggests dodging those requirements with bitcoin can expose Square to hundreds of new markets across the world.

By using bitcoin in conjunction with the Cash app, Dorsey can effectively pick up the Libra baton and help construct a global internet currency.

A digital currency like bitcoin takes a bunch of that away, where we can potentially launch a product in every single market around the world – because they’re all using the same currency.

Dorsey has previously stated he has no intention of adding any other cryptocurrencies to Square’s Cash app. It’s bitcoin all the way.

Now, that might be a problem for around 99% of the world’s population, given that bitcoin’s fees make it utterly useless as an everyday currency.

Bitcoin Can’t Function as the World Currency Dorsey Imagines

As recently as April 30, the average transaction fee on the Bitcoin network was as high as $2.94. Data from Bitinfocharts show the steep increase in bitcoin’s fees towards the end of April. Following a slight decrease, the average fee at the time of writing is $2.84.

Average transaction fees on the Bitcoin blockchain hit a ten-month high of $2.94 on April 30. | Source: Bitinfocharts

That fee applies whether you’re sending $100,000 or $10. Yes, fees can be set lower in bitcoin wallet apps, but then users run the risk of not having their transactions included in the next block.

Or even the next one! The data below from Blockchain.com show the massive backlog in Bitcoin’s mempool on April 30. The mempool is a measure of the data (transactions) waiting to be processed by the blockchain’s miners.

Bitcoin’s mempool was backlogged up to 80MB on April 30, with users potentially waiting several hours for confirmations. | Source: Blockchain.com

As Bitcoin’s 1MB blocks get filled up, more and more users compete to get their transactions included in the next block. That means setting higher fees to entice miners to pick up their transactions.

This results in a desperate race to the top, which ends up massively inflating transaction fees on the network.

Bitcoin’s developers make no secret of their intention to keep the 1MB block size in place. On April 30, there was 80MB worth of transactions waiting to be processed. Two days later, at the time of writing, that number still stands at 33MB.

$1,000 Fees?

This most recent spike brought about bitcoin’s highest average fees since July 2019. Yet as far back as December 2017, average fees reached as high as $55.

Some users, including Bitcoin.com executive chairman Roger Ver, claimed to have paid over $1,000 for the privilege of transferring money on bitcoin.

Ver even provided the following video proof, showing examples from publicly available blockchain data after bitcoin developer, Adam Back, denied that fees were ever so high.

If bitcoin’s fees make it unusable for everyday purchases, then how exactly is it going to become a global, shared currency?

At this point, what can bitcoin offer that Visa, Moneygram, Western Union, and PayPal cannot? Besides–as Dorsey reminds us–the ability to circumvent financial regulators?

A Square Peg in a Round Hole

Perhaps Dorsey was merely talking about a global currency for his rich Silicon Valley friends. After all, for them, $2.94 is less than pocket change. But for others, that pocket change is dinner.

Ultimately, Jack Dorsey is right when he suggests bitcoin can push Square Inc. to the forefront of a new global digital economy.

It’s us who are wrong if we think the average person stands any chance of being a part of that economy.

Dorsey went on to tell listeners of Fridman’s podcast:

The internet continuing to be accessible to people is number one. And then I think currency is number two.

Accessibility is indeed where it’s at, Jack. And if internet service providers charged $2.94 for every web page we visited, it would quickly stop seeming so accessible.

Perhaps Dorsey should keep that in mind when masterminding Square’s global takeover.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

Source: ccn.com

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• E-commerce stores saw a 50% increase in bitcoin-based purchases of cannabis and video games during the pandemic lockdown.
• Coronavirus has revealed people’s priorities, as general digital product sales take a fall.
• Bitcoin, stoners and gamers–the holy trinity of overlapping essentials amid this lockdown?

Stoners and gamers have turned to Bitcoin during the coronavirus lockdown, as web-based sales of both ‘essentials’ increased during the pandemic.

Revenue for video game and cannabis sales using bitcoin saw a 50% increase among the 100 e-commerce merchants surveyed by Blockonomics. The research states:

Cannabis orders are up: people are buying more weed than ever, with revenue up over 50%. I mean, what else are you going to do at home? 💨

Likewise, the lockdown has also turned people towards video games as a means of distraction. The data do not specify whether the people buying cannabis were the same people buying video games–but experience suggests there might be a slight overlap.

Digital Products Fall Out of Favor – But Cannabis and Games Survive

Two other business sectors also saw an increase in bitcoin-based sales– web-hosting, and nutritional supplements. The Blockonomics article states:

Nutritional supplements also saw an increase of revenue of up to 50%, as people continue to look for alternative ways to stay healthy (possibly in response to empty food shelves at the grocery store).

While web-hosting services saw a marked increase in revenue, the same cannot be said for all digital products. In fact, 75% of respondents said they witnessed a decrease in bitcoin-based revenue during the lockdown.

No website that offered digital products saw an increase in revenue, 25% of respondents reported no change in revenue, while the remaining 75% saw decreases.

So even though everyone is staying home, that has not manifested in a transparent boost to typical digital products. As the article speculates, this can likely be explained by people putting a greater focus on buying essential physical goods, which are at threat of being lost in a potential supply-chain slowdown.

Store Owners Still Holding Bitcoin

Almost half of the store owners surveyed revealed they were holding on to any bitcoin they received, while over 10% said they were continuing to buy even more. The article states:

Our e-commerce store owners continue to be major believers of Bitcoin: 44.9% of the respondents have decided to hold on to 100% of their Bitcoin during this time, with 10.2% additionally buying Bitcoin.

So, as gamers and cannabis users continue to part with their BTC, store owners are only too happy to hold on to it. That might have something to do with bitcoin’s 102% increase in value over the past month and a half.

Source: ccn.com

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Bitcoin’s ‘digital gold’ narrative suffered a major blow last week. Here’s how the whales could change that. | Image: allstars/shutterstock.com

• Evidence shows that whales are buying the massive bitcoin dip.
• Bitcoin’s digital gold narrative was crushed in the recent selloff.
• If whales are indeed buying the dip, bitcoin can eventually regain its digital gold status.

Bitcoin has wiped out many traders over the last few days. The intense selloffs coupled with extreme volatility are shaking weak hands out. We know this because the average lifespan of coins that moved in March is around one month. This suggests that those who bought between January and February this year have capitulated.

Glassnode data scientist providing critical onchain data. | Source: Twitter

The question now is who’s buying this massive dip? Evidence suggests that whales once again gobbling BTC at rock bottom prices. Their buying activity can reignite bitcoin’s digital gold narrative.

Whales Are Very Likely Buying the Dip

Whales often wake up when bitcoin tanks. We saw this behavior in 2018 when these high-rollers bought over 450,000 BTC in nine months. It appears that they are once again accumulating bitcoin at a huge discount.

Heavy shift in ownership suggests accumulation. | Source: Twitter

Trader Max, aka “Bitcoin Jack,” noted that BTC registered huge onchain transactions over the last few days. The volume is higher than the $3,000 bottom in 2019. This strongly indicates that whales are buying the dip and carving a bitcoin bottom.

HODL Waves supports the idea that whales are accumulating. Their analysis reveals that 42% of bitcoin has not moved in two years. The huge percentage of stagnant bitcoin shows that ownership may have likely shifted from weak hands to strong hands.

Bitcoin’s Safe-Haven Narrative Was Crushed as the Stock Market Cratered

Bitcoin’s unique value proposition as digital gold was thrown out the window over the last few weeks. The top cryptocurrency plunged harder than the Dow Jones and the S&P 500 combined.

The historical dump was due to a mad scramble for liquidity. Investors sold assets like bitcoin to meet margin calls. All of this is of course due to the elephant in the room: COVID-19 that’s now classified as a pandemic.

Last Thursday, bitcoin crashed in tandem with the stock market. The correlated move may have effectively killed bitcoin’s safe-haven narrative. Unless, whales can send bitcoin’s price skyrocketing after they accumulate.

Entities Are Buying in Bulk at Current Prices

When whales accumulate, they tend to carve a floor or a bottom. The floor is the price level that will set the stage for the next bull rally. There are multiple signs suggesting that whales are starting to accumulate.

Massive volume plus bullish candles indicate accumulation. | Source: TradingView

The BTC daily chart shows the highest recorded volume in two years. In addition, we can see long wicks below the daily candles indicating the presence of buyers. Entities are buying in bulk at the current price range.

If whales or smart money investors are buying now, they will very likely have the ammunition to drive bitcoin’s price higher.

The bullish move can happen in the next few months around the halving as the stock market continues to struggle with the impact of the coronavirus. That’s how bitcoin can bring back the digital gold narrative back to life.

The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

Source: ccn.com

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Bitcoin is down over 50 percent over a 30-day period but one trader took a particularly hard hit recently. | Source: Shutterstock.com

• One bitcoin trader lost 1,220 bitcoin on a single day, worth $11 million before the drop.
• Accounts using low leverage were also liquidated as BTC dropped by 50%.
• Similar liquidations can happen again as downtrend intensifies.

One bitcoin trader lost 1,220 BTC on March 12, when the price of the dominant cryptocurrency fell by 50 percent in a single day. As the downtrend of the crypto market worsens, large-scale multi-million dollar liquidations can happen again.

How 1,220 bitcoin was lost in less than 24 hours

Last week, the bitcoin price briefly fell to around $3,600 on BitMEX, liquidating more than $1.2 billion in long contracts.

The steep correction of bitcoin was intensified when the price of BTC fell to the $5,000s from $7,900, recording a 35 percent drop. The initial pullback caused a massive amount of long contracts to either get liquidated or deleveraged, leading the BitMEX liquidation engine to sell tens of millions of dollars worth of bitcoin at a time.

Often, large accounts on BitMEX and other cryptocurrency exchanges trade with low leverage, and that substantially decreases the probability of liquidation.

When the price of bitcoin drops by 30 to 40 percent, even accounts with low leverage in the 3~5x range are vulnerable to liquidations.

That ultimately led accounts with more than $10 million to start being liquidated, adding an immense level of selling pressure on bitcoin.

As shared by cryptocurrency trader that goes by “I am Nomad,” one user on BitMEX South Korea lost 1,220 BTC worth $11 million based on the price of BTC before the 50 percent drop.

One BitMEX South Korea user loses 1,220 bitcoin on a single day (source: I am Nomad)

Although the price of bitcoin has recovered from $3,600, it rejected $6,000 twice in the past two days with a double top structure at lower time frames.

The sharp rejection of $6,000, which is a much weaker level of resistance than $6,400, the previous yearly low, suggests that there is insufficient demand from buyers as the bitcoin price continues to fall to the low-$4,000s.

In the near-term, due to the frantic sell-off of high-risk assets in the global financial market, institutional demand for bitcoin is expected to be non-existent.

The premium of the Grayscale Bitcoin Trust has dropped from 30% to around 10 to 15% in the past two weeks, and according to entrepreneur Kim Dotcom, institutions have sold off BTC massively in the recent downtrend.

What’s next for BTC?

The Dow Jones Industrial Average (DJIA) is indicating a fall of more than 1,000 points at open, despite the move of the Federal Reserve to cut the benchmark interest rate to zero.

Given the correlation of bitcoin with the U.S. stock market since early March, the weakness of the equities market is likely to apply more selling pressure on the entire cryptocurrency market.

Tyler Winklevoss, the co-founder and CEO of major cryptocurrency exchange Gemini, said that bitcoin is not a hedge to pandemics, and in the short-term, it is not anticipated to respond positively to intensifying fear towards the outbreak.

He stated:

Bitcoin is not a hedge to pandemics, it is a hedge to fiat regimes. A sudden, negative demand shock in the global economy’ will affect every asset, including gold, in the short term.

Source: ccn.com

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Bitcoin had its worst day since 2013 and is no longer being taken seriously as a safe haven asset in times of global uncertainty. | Source: Shutterstock.com

• Bitcoin plunged by nearly 40% in the last 24 hours.
• The brutal stock market selloff is killing other asset classes.
• Bitcoin’s safe-haven and uncorrelated asset narratives have been thrown out of the window.

Bitcoin has a history of heart-stopping volatility but they all pale in comparison to what happened in the last 24 hours. The king cryptocurrency bowed down to macro forces as it lost nearly 40% of its value in yesterday’s trading. The last time something similar happened was back in 2013 when bitcoin plummeted by close to 50% in a day.

BTC crashing harder that it has in seven years | Source: Twitter

Virtually no one has foreseen yesterday’s drop considering that bitcoin has made tremendous leaps in fundamentals. However, one must also take into account that the entire crypto market has never faced a global financial meltdown. The stock market tanking has ignited a sequence of events that forced investors to dump bitcoin.

The S&P 500 Selloff Is Killing Other Asset Classes

America’s bellwether index is now down by over 26% from its peak of 3,393.5. Bears are flexing their muscles as the S&P 500 tripped circuit breakers and halted trading. Since its implementation in 1987, this is the first time that circuit breakers kicked in twice in one week.

The severity of the stock market selloff has ripple effects that impact other asset classes. Gold, a supposedly safe-haven asset in times of turmoil, is also in the midst of a brutal dump. Bitcoin, an uninitiated asset, appears to be taking the heaviest damage in the middle of the crossfire.

Traders Are Finding Liquidity Where They Can

A stock market crash is a vicious cycle that’s very difficult to stop. Overleveraged traders are selling all assets in their portfolio to meet margin calls. This leads to increased selling pressure which kills buying momentum which further increases selling pressure and so on.

We’re seeing this unfold in the stock market.

Jonathan Ferro, anchor of “Bloomberg Markets,” perfectly sums up the situation. He wrote:

People are raising cash to meet redemptions and margin calls. Market liquidity is freezing up, people are struggling to trade. The buy the dip mentality has totally flipped.

Traders will find liquidity where they can even if it means selling assets outside equity markets.

People are selling gold to fund margin calls | Source: Twitter

Bitcoin’s market cap is a drop of water in comparison to the trillions of dollars that power the stock market and gold.

Bitcoin’s Liquidity Is All But Gone

Bitcoin is performing like a risk-on asset. The safe-haven and uncorrelated narratives of the top cryptocurrency have been exposed. Liquidity in the BTC market is being sucked dry as the cryptocurrency is dangerously close to trading back to $3,000 levels.

One trader revealed the thinning order book for the Bitcoin US Dollar pair (XBT/USD) on Bitfinex. In other words, everyone is selling and almost no one is buying.

One at one point, 135 million in liquidity exists on Bitfinex | Source Twitter

Let’s face it, bitcoin is too young to be in the midst of a financial meltdown. As a risk-on asset, it is one of the first to get sacrificed in times of turmoil.

The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

Source: ccn.com

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Steven Seagal’s involvement in promoting a shady cryptocurrency would be hilarious if it not for the fact that projects structured almost exactly like this one stole billions of dollars, leaving many victims penniless. | Source: PATRICK BAZ / El Gouna Film Festival / AFP

• The SEC charged action “star” Steven Seagal with unlawfully promoting a cryptocurrency.
• The naked bitcoin rip-off was so comical it almost looked like a self-parody of the ICO hype machine.
• It’s safe to say everyone except Seagal saw this legal backlash coming.

Washed-up B-list action hero Steven Seagal had to know he was on deadly ground when he agreed to promote a scammy bitcoin rip-off called Bitcoiin2Gen.

Two years later, his involvement in the bizarre and almost comically shady project has left him with exit wounds – along with a hefty fine from U.S. securities regulators.

Steven Seagal Fined for Promoting Shady Crypto Project

Steven Seagal endorsed the Bitcoiin2Gen ICO and served as “Brand Ambassador” for the project. Even he may have been bilked by the shady cryptocurrency. | Source: Markus Wissmann/Shutterstock.com

The Securities and Exchange Commission announced today that Seagal – the “Zen Master” and “Brand Ambassador” for Bitcoiin2Gen – had agreed to pay $314,000 in disgorgement and penalties for encouraging investors to purchase the cryptocurrency without disclosing that he was a paid promoter. He’s also barred from promoting securities for three years.

It’s safe to say everyone except Steven Seagal saw this coming.

Praised by supporters as a revolutionary way to decentralize capital investment, the initial coin offering boom that accompanied the 2018 bitcoin bust was dominated by hordes of scam artists who preyed on gullible investors searching for financial freedom in all the wrong places.

Investors who paid $5.00 for Bitcoiin2Gen tokens during the coin’s “ICO” purchased an essentially worthless “asset.” | Source: CoinMarketCap

Bitcoiin2Gen was the poster-child for the sleazier side of this fundraising model. From its deliberate misspelling of “bitcoin” to a press release gleefully announcing its founders’ “exit” from the project, it almost seemed like a self-parody of the ICO hype-machine.

And a heavy-handed one at that.

The project’s marketing materials told investors their cryptocurrency would surge by more than 7,500% in value in less than a year and even advertised its referral program pyramid scheme using a literal pyramid graphic:

Steven Seagal promoted a bitcoin rip-off that marketed its “referral program” using a graphic that looked curiously like a pyramid. | Source: Bitcoiin2Gen

It would be hilarious if it not for the fact that projects structured almost exactly like this one stole billions of dollars, leaving many victims penniless.

And far too often, celebrities like Steven Seagal and Floyd Mayweather only made the infestation worse by promoting these projects with no apparent regard for the investors inevitably left holding the bag.

Seagal May Have Been Hoodwinked Too

As for Bitcoiin2Gen, it’s essentially dead. But it’s still listed on at least two cryptocurrency exchanges.

It’s hard not to revel in the irony that it seems Seagal himself may have been hoodwinked too.

According to the SEC, he only received $157,000 for his services, far less than the $1 million ($250,000 in cash and $750,000 in cryptocurrency) he had been promised.

Source: ccn.com

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