Lis 13

Stock Market Slump Could See Bitcoin Price ‘Make New All-Time High’

Cryptocurrency inventor, fund partner and advocate Max Keiser is predicting new all-time Bitcoin price highs as the stock market tumbled again this week.


Bitcoin to ‘New All-Time High’ as Stock Market Slumps

A drop in share prices for both Goldman Sachs and Apple has equated to an approximately 160-point loss for the Dow Jones November 12, leading Keiser to suggest the index could collapse to below the significant 10,000 barrier in future.

“10 (years) of cash transfusions from central banks – masking the globe’s economic death in 2008 – hasn’t worked,” he wrote on Twitter.

“Dow 10,000 here we come. (Bitcoin) will make new (all-time high).”

The Dow last saw 10,000 during the banking crisis a decade ago, having hovered around 25,000 for most of 2018.

Anticipation Of Crypto Awakening Grows

While Keiser like many other well-known commentators has long heralded a return to form for Bitcoin price 00, cryptocurrency markets have yet to signal their bear market is over this year.

As Bitcoinist has frequently reported in recent months, the anticipation of institutional investor money buoying sideways prices continues to run high. Major crypto assets themselves, however, continue to trend slowly downwards.

Big money remains faithful to the optimistic narrative on Bitcoin, however. Last week, billionaire investor Tim Draper took to the stage at Europe’s largest fintech conference Summit 2018 to double down on his prediction the largest cryptocurrency would hit $250,000 per unit by 2023 at the latest.

He was joined by Blockchain wallet CEO Peter Smith and Managing Capital co-founder Garry Tan. While both stopped short of endorsing the quarter-million figure, there appeared to be unanimous agreement that Bitcoin would be worth more in USD terms by this time next year.

“…My prediction for $250,000 by 2022 – maybe 2023 but in that range – is absolutely solid, but I’m not so sure how we’re going to get there,” Draper said.

What do you think about Max Keiser and Tim Draper’s predictions? Let us know in the comments below!


Images courtesy of Shutterstock

Share
Říj 30

Japan’s Financial Regulator Says Stablecoins Are Not Cryptocurrencies

The lack of uniformity in stablecoins has led Japan’s Financial Services Agency (FSA) to conclude that stablecoins are not cryptocurrency.


Not All Digital Assets Are Created Equal

Japan’s Financial Services Agency (FSA) recently announced that it does not believe stablecoins should be classified in the same category as cryptocurrencies.

According to Japan’s Payment Services Act and the Fund Settlement Law, cryptocurrencies are considered a method of payment that users do not need to pay taxes for. Meanwhile, stablecoins do not meet these criteria as the majority of the current dollar pegged digital assets have varying characteristics, and the lack of a uniform set of characteristics makes it impossible to categorize them.

FSA Japan

JVCEA Cannot Regulate Stablecoins

Under the Payment Service Act, stablecoins fail to meet the current criteria for classifying as a “virtual currency” and an FSA spokesperson said, Due to [varying] characteristics [of stablecoins], it is not necessarily appropriate to suggest what those companies need to obtain or register before issuing stablecoins.”

Interestingly, while the FSA recently ceded authority to Japan’s Virtual Currency Exchange Association (JVCEA) by granting the collective the authority to self-regulate Japan’s cryptocurrency exchanges, the JVCEA will not be able to regulate stablecoins as they have been determined to not be cryptocurrencies.

It appears that the task of regulating stablecoins to will fall to the FSA and regulators will need to analyze each stablecoin on an individual basis.

Do stablecoins function the same as non-fiat pegged digital assets? Share your thoughts in the comments below! 


Images courtesy of  Shutterstock

Share
Říj 29

UK Fintech Industry Slams Govt’s ‘Blunt Instrument Approach’ To Cryptocurrency

The UK could compromise its fintech sector with “very blunt instrument” regulation currently under consideration, a new report from several industry entities warns.


‘Ashamedly Geared Around Bitcoin’

As local news outlet the Telegraph reports October 29, the report criticizes plans to award more power to regulator the Financial Conduct Authority (FCA) and says treating all cryptoassets in the same way as Bitcoin was counterproductive.

“Bad regulation is worse than no regulation at all,” the Telegraph quotes it as reading, adding that the extant proposals are “ashamedly geared around Bitcoin.”

Politicians had lobbied for wider FCA jurisdiction in September, six months after the regulator had launched a dedicated “task force” with the remit of formalizing the domestic space.

Far from increasing security and consumer protection, however, one of the report’s authors argues a laissez-faire attitude would be considerably more beneficial for a sector which is only just beginning to mature.

“It is a very blunt instrument approach and I haven’t seen this in other countries,” Patrick Curry, chief executive of the British Business Federation Authority (BBFA) commented about the plans.

The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.

Overreaching?

The government had pledged to make London a home for fintech in the coming years, sounding out concerns that Brexit would make the city an unattractive place for innovative newcomers.

Blockchain Expo - Crypto La La land

At the same time, the Bank of England has said it is open to the concept of a self-issued national digital currency while also claiming that cryptocurrency poses “reputational risks.”

“Crypto-assets also raise concerns related to misconduct and market integrity,” Deputy Governor Sam Woods wrote in June.

Many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks.

What do you think about the UK’s cryptocurrency regulation plans? Let us know in the comments below!


Images courtesy of Shutterstock

Share
Říj 28

Fidelity Won’t Build Its Own Exchange, Focused on Bitcoin Custody, Exec Confirms

Tom Jessop, President of Fidelity Digital Asset Services says that the asset manager will take crypto to the next level by enhancing the sector and providing a secure Bitcoin custody solution so institutional investors can get a piece of the crypto pie.


Bitcoin Custody Solution Will Remove Barrier

In the most recent episode of her Unconfirmed podcast, Laura Shin interviewed Fidelity president of Digital Asset Services Tom Jessop. The two had a cryptocurrency and blockchain focused discussion about the company’s plans to help develop the Bitcoin 00 and cryptocurrency market to a higher level of functionality and value.

When asked whether or not Fidelity would build its own cryptocurrency exchange, Jessop explained that he believed that the current exchanges do a fairly good job at this and Fidelity is more focused on providing custody services for institutions looking to become involved in cryptocurrency.  

Jessop also explained that a current barrier to cryptocurrency has been service providers that require pre-funded accounts and Fidelity intends to remedy this problem by building a more traditional investment platform, which allows users to execute trades on one or more exchanges at best price, then determine how to settle once completed.

Fidelity Foresees the Future of Crypto

Shin and Jessop them delved a bit deeper into the nuts and bolts of Fidelity custody solution and Jessop explained that at the moment there are plenty of investors with sizeable cryptocurrency positions that lack a custody solution and also find it tedious to carry out trades.

Fidelity intends to fill this niche by providing a cold storage solution and Jessop believes that the well-known fact that Fidelity manages more than $7 trillion in assets will provide the assurance of security that institutional investors require. According to Jessop, this is why Fidelity chooses to focus on custody rather than developing an exchange since “we know how to manage security at scale.”

Shin and Jessop closed the interview by forecasting future events in crypto and Jessop believe that retail and institutional interest in crypto is increasing as the market matures. He points out that hedge funds managers, family offices and emerging market analysts are all focused on creating new cryptocurrency products and instruments that will move the industry forward.

When asked what does 2019 hold, Jessop said the world can “expect more [influx] over this year and into ‘19, which will raise the bar for everyone and help accelerate growth in the market.”  

Do you think Fidelity’s Digital Assets Service will usher in the next cryptocurrency bull run? Share your thoughts in the comments below! 


Images courtesy of  Shutterstock, Twitter

Share
Říj 27

10 Years On: Five Things Needed for the Mass Adoption of Bitcoin

It’s been ten years since Satoshi Nakamoto published the Bitcoin White Paper and introduced cryptocurrencies to the world. His radical vision of a decentralized peer-to-peer electronic cash system was groundbreaking, as it sought to rebuild the structures that upheld our global financial institutions. A decade on, the cryptocurrencies market is now worth $209 billion globally, and there are more than a thousand separate tokens in circulation.


[Note: This is a guest op-ed article submitted by Samuel Leach, Founder of Yield Coin]

Despite this success, Nakamoto’s vision is yet to be fully realized. Although “cryptos” and associated phrases have entered the popular language, and awareness of them is at an all-time high, uptake has been restricted to a narrow subset of society.

Bloomberg estimates that around a thousand users own approximately 40 percent of all bitcoin currently in circulation and cryptos have failed to supplant fiat currency. Before we see the mass adoption of cryptocurrencies, there are a number of obstacles that first need to be overcome.

Regulation

While regulation is often treated as a pariah among many in the crypto community, if executed properly, it will bring beneficial change for all. Cryptocurrencies have only been in existence for a relatively short amount of time meaning many governments are still figuring out the best way to regulate them. The result of this has been a crypto market structured in a laissez-faire fashion. While it can be argued that this has fostered further innovation, it has undoubtedly led to several negative side effects.

At present, anyone could set-up a new cryptocurrency and raise significant capital without having to face repercussions if they fail to implement their plans. This has reduced overall confidence in the market, as it can be difficult to differentiate legitimate projects from nefarious ones. This is also preventing many institutional investors from entering the market, as the lack of regulatory guidelines will lead to compliance issues on their part.

Volatility

A daily price swing of 10-20 percent is not uncommon among most cryptos, making them exceptionally volatile in comparison to fiat currencies; in comparison, the pound lost 4 percent of its value against the dollar on the infamous Black Wednesday. Finding a way to temper this instability would go some way to certifying cryptos as legitimate currencies.

Bitcoin Price Volatility

At the moment, it would take a very brave consumer and equally brave merchant to conduct a transaction using cryptocurrencies. The inherent volatility of most cryptos means consumers run the risk of massively overpaying and similarly, the outlet risks the value of the crypto received being eroded.

Practicality, Usability & Accessibility

While cryptocurrencies have seen some mainstream usage among investors interested in day trading and investing, this uptake hasn’t been reflected by everyday consumers.  This is mostly due to crypto’s impracticality for day-to-day usage. Some of this is due to its price volatility but a more central factor is the lack of businesses who are willing to accept it as a form of payment. If individuals are unable to find a legitimate use case for their crypto, then its value as a form of electronic cash is zero. Further, the process of acquiring crypto itself is difficult, meaning uptake has been restricted to a tech-savvy subset of the overall population.

It should be noted, however, that while numerous solutions are in place allowing the spending of bitcoin via third-party services such as gift cardsBTMs, etc. — this often adds friction and introduces more middlemen into the experience.

BTCPay is a Better (and Cheaper) BitPay, Says Core Developer Nicolas Dorier cryptocurrencies

Security

In the beginning, cryptocurrency related crime was almost non-existent, but as the market has grown, it has attracted the attention of organized scammers and hackers. Earlier this year, criminals stole $530 million worth of crypto from the Coincheck exchange, and there have been many other examples of large-scale thefts.

With ‘traditional’ financial systems, when a payment is made, third parties ensure that the transaction goes through and if anything does go wrong, they are liable for recovering the funds. Similarly, if your credit or debit card information is stolen, then you aren’t responsible for any transactions made. With cryptos, however, it is the user’s responsibility to ensure that all the data associated with a transaction is correct. If a user’s private key is stolen, then crypto can be stolen with a low chance of recovery.

Understanding

Research has found that 38 percent of the British population do not ‘understand’ cryptocurrency. With the commonly held misconception that it is a tool for criminals to launder money being the most cited reason for mistrusting it. While those involved in the community understand the revolutionary possibilities of cryptos, the wider public still needs further education on the potential benefits.

For those not familiar with trading concepts, the notional value and artificial scarcity that underpins crypto may be hard to grasp.  Further, the existing way in which money has been exchanged for goods has been long established, and cryptocurrencies will require people to think about transactions in an entirely new way.

Without a doubt, the introduction of cryptos has been revolutionary. However, whether we are within the midst of a complete reconstitution of the financial system remains to be seen. If the engineers and developers involved with cryptos can find a way to deal with the intense volatility and lack of widespread understanding around cryptos, then their benefits will be able to be enjoyed by all.

Do you agree with these barriers to adoption? Are there more? Share your thoughts below!


Images courtesy of Shutterstock

Share
Říj 13

Goldman Sachs Ex-President Gary Cohn to Advise Blockchain Startup

Former Goldman Sachs president and Trump chief economic adviser, Gary Cohn, will take an advisory role with Spring Labs. The FinTech startup aims to use blockchain technologies to revolutionize credit and identity services.


New Horizons

Cohn resigned as director of the US National Economic Council in April, after disagreements with President Trump over trade tariffs. Prior to taking this position, he served as president and chief operating officer at Goldman Sachs for over ten years.

The Spring Labs venture will be his first major move since leaving the Trump administration. He joins a host of high-profile names in financial services, blockchain technologies and regulatory bodies on the advisory team.

The First Days of Spring

[nb: this is the title of a Dali painting. not sure if it can be used as an image to illustrate]

Spring Labs is building a decentralized network using a distributed ledger to improve transparency, security, and efficiency in exchanging credit and identity information. It also intends to allow consumers to view information held about them without charge.

The company, which has offices in Los Angeles and Chicago, raised nearly $15 million in seed-funding, without an ICO in sight. CEO Adam Jiwan explained:

We don’t have a need to use a coin offering or token offering as a means to raising capital. We might deploy a digital asset. But at the moment, our focus is on architecting the network and driving adoption.

Role Play

On taking the position, Cohn received an undisclosed amount of equity in the company. And as to the role he will fulfill, Jiwan says:

We envision him playing a role around helping us think through for developing something that’s regulatory compliant and that others need to see in order to adapt it.

In the press release, Cohn himself states:

I have been very interested in blockchain technology for a number of years, and Spring Labs is developing a network that could have profound implications for the financial services sector, among others.

Is traditional finance becoming more embracing of cryptocurrencies? Share your thoughts below!


Images courtesy of Shutterstock, wikimedia.org

Share
Srp 13

Soaring ICO Failure Rate Sees Investors Flock to ‘Bigger Players’

ICO failure rates are increasing. However, there seems to be a trend of fewer projects receiving bigger sums. Due to regulatory pressure, ICO bans, and a bear market, investors seem to be taking a new strategy to funding blockchain projects.


ICO Failure Rates Surge

There is new evidence to suggest that one in two Initial Coin Offerings (ICOs) failed in Q2 of 2018, while those that succeeded suffered huge loses. This is according to the agency, ICORating, whose data suggests 55% of ICO’s failed to complete in Q2 of 2018.
Last Call for 3 Must Buy ICO’s in 2018

The difference in returns between Q1 and Q2 is significant. In Q1, ICOs enjoyed an average return of almost 50%. In Q2, returns equaled -55%.

According to Michael Spencer, Editor of Future Sin, this as a sign of blockchain projects deteriorating in quality. But, he believes there is more than meets the eye. Other factors are at play. In particular, regulatory pressure from the SEC, ICO bans, and the Bitcoin price slump.

“While ICOs exploded from almost nothing to be a multibillion-dollar market in 2017, however in 2018 they appear even more speculative, risky and dangerous to the layperson investor,” Spencer writes

Less Projects, More Money

But while the failure rate is increasing, investment is not. In fact, the amount of money pouring into ICO tokens is rising. In fact, Business Insider notes that out of a total 827 ICO projects, investment totaled $8.3 billion in Q2 and $3.3 billion in Q1.

At the same time, fewer projects are attracting bigger sums, suggesting that bigger players are entering the market. Spencer also interprets this is a pivot towards private blockchain projects. He explains:

It spells a movement towards bigger players that we are seeing in the larger space; where private instead of public blockchains might be more the order of the day as bigger players enter the space: e.g. Bakkt. Bakkt’s focus on digital assets was wildly acclaimed by crypto insiders and the media as being potentially disruptive.

ICO Investment Dependent on Project Location

As the blockchain market continues its rapid development, investors are adapting as the country of registration is becoming an important factor. In other words, the country in which the company’s legal entity is registered at the time of the ICO.

North American startups attracted the bulk of funding, according to the ICO Rating report, with 64.6% of the total raised in the quarter. But smaller countries are increasingly hosting projects that are attracting larger sums.

The total amount of ICO funding per country presents an interesting picture:

  • Malta: 8 projects raised $113M
  • Cyprus: 8 projects raised $124.7M
  • Isle of Man: 2 projects raised $37M

This is compared to $393.7M and $301M raised in the US and UK, respectively. Put simply, projects within countries that have less red tape and friendlier regulatory frameworks tend to raise more capital per ICO.

In any case, as blockchain technology develops and regulations play catch up, ICOs appear to also be adapting to this borderless new industry.

Is the ICO space experiencing a cool-down? Or is it only getting started? 


Images courtesy of Shutterstock

Share
Čvn 11

Healthheart / Keyqo Announces New Security Product

· June 10, 2018 · 8:00 pm

On top of a successful rebranding from HealthHeart, Keyqo has announced significant progress towards the release of their new healthcare IT security product.


In a recent update, CEO Mark Rudnitsky, described the product as follows:

For this first phase, we are developing a security monitoring tool, which tracks the transfer of sensitive data within and out of a given clinic’s network. We have a small ‘agent’ that gets installed on each machine on the network. It monitors all traffic coming in and out of that machine. It interfaces with an intrusion-detection system (IDS), which tells it certain ‘patterns’ to look for, which indicate patient data is being compromised. If those patterns are detected by the agent, it will report to a central server with what it found. The server will take those logs, encrypt them, and store the information on a private blockchain (this is a requirement so we’re HIPAA-compliant). So no matter if the machine is compromised by an attacker, the logs can never be modified. There’s a dashboard/admin console that the end user utilizes to see any alerts or indicators of compromise, as well as separate tools for storing customer data, reporting, and billing.

Velvetech, Keyqo’s software development partner, has provided an estimate of Phase One completion in about three months. First to be completed are the IDS and blockchain components, with the agents and dashboard following later.

Blockchain technology

While the original blockchain EHR concept has been temporarily placed on hold, Rudnitsky seems optimistic on the pivot to HCIT security software:

The cost of healthcare data breaches is higher than it’s ever been. Every single record breached can cost an organization $380. The security solutions offered by others clearly aren’t working. So not only do healthcare organizations of all sizes need the blockchain security solutions we’re building, we are also able to benefit them with minimum disruption to their operations. We can integrate with any IT system that a hospital could use. No need for a full EHR migration, no need for system downtime – providers can secure their patient data without even thinking of compromising the quality of care.

The pivot to security seems to be paying off. Several hospital chains reportedly have reached out to Keyqo and the company’s leadership has been developing awareness among Illinois podiatry clinics.

Rudnitsky seems optimistic about the future:

What we’re doing right now in the HCIT space is nothing short of revolutionary. The recent increase in healthcare blockchain companies shows exactly how forward-thinking we were when we started back in September. We’re the vanguard, bringing healthcare IT into the 21st century. The future looks bright for Keyqo.

What are your thoughts on Healthheart / Keyqo’s new direction? How can blockchain help secure healthcare providers’ patient records? Let us know in the comments below.


Images courtesy of AdobeStock, iStockPhoto

Bitcoinist does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. Readers should do their own research before taking any actions related to the company.

Show comments

Share
Čvn 04

Disrupting Video-On-Demand Streaming with Blockchain

· June 3, 2018 · 8:00 pm

The entertainment industry has been greatly impacted by mobile technologies such as 3G, 4G, and video streaming on demand. Companies like Netflix, Twitch, HBO, and Amazon Prime leverage the power of the Internet to provide better viewing experiences to average consumers at the global scale. As people’s interest in video entertainment switches to smartphones and tablets, cable TV is losing ground.


A new technology has risen above the rest to disrupt on-demand video streaming as well. With its ability to implement “smart contract” systems to ease transactions, provide better transparency, and improve processes, blockchain technology enters the stage with sharing and content storage capabilities that go beyond what Netflix currently provides.

Video-On-Demand Powered by Blockchain

Video-On-Demand Powered by Blockchain

Slate Entertainment Group (SEG) is set up by Binge Media to develop decentralized platform SLATE powered by the SLX utility token. The blockchain-based VOD (video on demand) service will be an entertainment utility protocol that adheres to a multi-layer network: BVOD (blockchain video-on-demand), the electronic ticketing app Slatix, and the SLX utility token to enable access to premium entertainment. At the core of SLATE lies an immutable, distributed ledger meant to ensure trustworthy payment systems, seamless transactions, and structured incentives.

Slate’s SLX token aims to disrupt the entertainment economy and become a universal digital currency used by all platform users.  With blockchain at its core, the decentralized ecosystem will deliver high-definition, fast, and affordable media access to consumers worldwide. For service providers and content creators, the token can be used to provide access to exclusive entertainment services on the Slate platform.

Binge aims to leverage distributed ledger technology to become the first commercial platform for conveniently-priced, scalable video-on-demand streaming services. Slate token holders will be exclusive users of the platform with full access to a tokenized ticketing system, industry-leading open analytics, unrestricted global access, and more.

Slate’s exclusive ticketing system, SLATIX, is the decentralized solution designed to prevent fraudulent ticket sales, slash end-user fees, and become a reliable payment conduit of Slate for sporting events, movies, theater performances, and concert venues. Considering that blockchain technology promises to track, store, share, and verify user information, purchased tickets with SLX tokens are instantly transferable but impossible to fake. The usage of Slate’s SLX utility token is better highlighted in the video below:

Slate Announces New Partnerships and Exchange Listing

To speed up the mass adoption of the SLX token and raise awareness about its potential to disrupt the entertainment industry, Slate attended this year’s Cannes Film Festival, where it acquired full rights to video stream the upcoming crypto documentary “Beyond Bitcoin” via its BVOD platform, Binge. Watch the short teaser trailer below:

During Cannes, SEG formed a solid partnership with Spanish film festival SIFF. For the first time, a centralized organization in the film industry will provide cryptocurrency as an alternative payment method for acquiring tickets.

Hong Kong-based HitBTC, one of the top 10 cryptocurrency exchanges in the world, will be listing SLATE (SLX) currency.  HitBTC will host SLX with trading pairs against Bitcoin (BTC) and Tether (USDT). SEG is especially pleased to announce the agreement during the presale as it assures buyers that they will be able to trade SLX on the open market.

HitBTC to list Slate (SLX)

The team behind Slate managed to raise $20 million in just one day following the pre-sale date. For a limited amount of time, those interested in contributing and purchasing SLX tokens will benefit from a significant discount of up to 45 percent off the public sale price. An additional 4 percent bonus was available for those that choose to participate before May 31. The pre-sale ends June 9 !

What are your thoughts on Slate’s VOD platform? How can blockchain benefit video-on-demand streaming? Let us know in the comments below.


Images courtesy of Slate Entertainment Group, DepositPhotos

Show comments

Share
Kvě 26

Bitcoin as a Store of Value Could be Worth $40K Within the Next Decade, Says Matt Hougan

· May 25, 2018 · 9:00 pm

Matt Hougan of Bitwise Asset Management believes that the price of Bitcoin could increase by 500 percent in the next ten years. Hougan hinges his prediction on the cryptocurrency becoming an actual store of value and the blockchain permeating several facets of human life.


Is Bitcoin a Store of Value?

Finding a consensus on any argument related to Bitcoin is almost a futile effort at this point. There’s the bubble argument, the economic definition argument, and of course, the store of value argument. Matt Hougan, in a recent op-ed for Forbes, examines the store of value debate for Bitcoin, drawing some interesting parallels with gold.

Right from inception, the virtual currency has been compared with gold. Some proponents are even in the habit of calling the crypto “digital gold.” Critics, however, dispute this idea, saying that the cryptocurrency cannot be compared to gold because it is highly volatile and, as such, cannot be a store of value.

Matt Hougan

One of the most basic definitions of a store of value is an asset that is both tradable and can be stored for future use. By this definition, a store of value must maintain some stability over a reasonable period. Bitcoin is a volatile asset, no arguments there. However, is the volatility exhibited by the number one crypto a misnomer in the finance world? It turns out the answer is no, and Hougan provides hard evidence.

A Little Bit of History Featuring the Post-1971 Gold Market

Today, gold is not only solid based on its physical form, but as an asset, it maintains some level of price rigidity. However, it wasn’t always so. In 1971, U.S. President Richard Nixon dropped the gold standard for the USD. The price of gold and the value of the dollar was no longer tethered together. What happened next? Well, the table below gives an idea of the wild volatility in prices of gold in the decade following 1971.

Gold pricesToday’s crypto critics would be bellowing that gold isn’t a store of value if they examined these figures. However, today, it is universally accepted that the precious metal is indeed a store of value. So, what has changed? The answer isn’t utility as some might point out. Gold has some industrial application use cases but that it is not enough to justify its current price. According to Hougan:

[Gold] is worth $1,300 per ounce because people are willing to pay $1300 per ounce for it as a store of wealth.

Bitcoin price chart

Bitcoin Mirrors Post-1971 Gold

Bitcoin is less than a decade old, which means it isn’t yet a fully formed asset. Hougan believes that expecting the cryptocurrency to behave like a fully matured asset is an argument that lacks economic merit. According to the cryptoanalyst, Bitcoin is passing through the two-stage process of rapid appreciation and declining volatility over time.

2017 saw a parabolic rise in prices that seem to have plateaued in 2018. The Bitcoin volatility, while still considerably high, is declining over time. This pattern exhibited by the number one crypto bears striking similarities to gold after 1971.

Bitcoin volatility chart

Speculative Investment Will Give Way to Real World Use

If Bitcoin follows the pattern set by gold, then it is well on its way to establishing itself as a store of value. Right now, the crypto is held as a speculative investment, but within the next decade, as blockchain utility increases, Bitcoin will become an even more significant part of global finance. The current market capitalization for the virtual currency is $130 billion, which is approximately two percent of the $7.5 trillion gold market cap.

In ten years, Bitcoin could comfortably hold 10 percent of the value of gold, which would mean a conservative price estimate of $40,000. A lot of this depends on how quickly real-world utility applications can be implemented for the cryptocurrency and the assumption that it continues on a similar trajectory to gold.

Do you agree with the argument that Bitcoin is like gold, and as such, a store of value? Will an increase in real-world utility drive the price of Bitcoin higher? Let us know your thoughts in the comments below.


Images courtesy of MarketsMuse, Forbes, Macrotrends, Shutterstock, and Buy Bitcoin Worldwide.

Show comments

Share