Čvn 22

The Federal Reserve Could Be Helping Bitcoin to $100K

Many factors are contributing to Bitcoin’s renewed trajectory towards its USD 100,000 target. One of them is increasingly gaining prominence: The U.S. Federal Reserve.

Fed Interest Rate Cuts to Weaken Dollar and to Strengthen Bitcoin

The U.S. Federal Reserve’s latest moves might be unintentionally propelling Bitcoin to new 2019 highs with renewed impetus. On Jun 19, 2019, Jerome Powell, the chairman of the Fed announced the decision to maintain the benchmark for the federal funds interest rate within the target range of 2.25% to 2.5%.

Bitcoin federal reserve

However, upon review of the statement, financial experts noticed that The Federal Open Market Committee (FOMC) made several changes to its policy statement. Most relevant, the term “patient” was replaced by a policy language promising to “closely monitor the implications of incoming information for the economic outlook.”

For many, this is a hint that inflation and geopolitical risks are putting pressure on Federal Reserve officials to advance the case for an interest rate cut.

As a result, investors on the trading floors are already betting that the Fed will lower the rates as soon as July, putting the dollar under pressure.

In contrast, investors believe that a Fed rate cut would propel Bitcoin and gold to higher values. For example, according to CNN digital correspondent Paul La Monica,

That has been viewed as a positive for bitcoin as well as gold, which are looked at as alternative currencies that should rally when central banks take actions that reduce the value of government-backed currencies.

Moreover, Central Bankers perspective about Bitcoin might be shifting from a negative to a more positive outlook.

Last week, both Fed Chairman Jerome Powell and his counterpart Bank of England Governor, Mark Carney, reportedly advised that central banks “should look at bitcoin and other cryptocurrencies with an open mind,” writes La Monica.

Moreover, Carney has made it clear that he favors imposing strict controls. At a conference organized by the European Central Bank in Portugal, referring to cryptocurrencies, Carney pointed out, “Anything that works in this world, will become instantly systemic and will have to be subject to the highest standards of regulations,”

More regulations, according to La Monica, would bring benefits to the crypto markets, by smoothing Bitcoin’s volatility and helping to further validate Bitcoin’s legitimacy in global financial markets.

Gold And Bitcoin Solidify Their Safe-Haven Status

In addition to a Fed rate cut in July and a weak dollar, another key factor affecting the financial markets and Bitcoin, in particular, is, as the Fed statement put it, “uncertainty.”

Given the ongoing Brexit upheaval, China/U.S. trade war, Hong Kong demonstrations, and the Middle East rising tensions, gold and Bitcoin are moving to the foreground as safe-haven assets.

Thus, as of this writing, gold reaches a five year high, hovering on the USD 1,400 per pound. And Bitcoin just smashed through the USD 11,000 mark, within 24 hours of having surpassed the USD 10,000 price barrier.

What are your thoughts on the possible Fed rate cuts and recent Bitcoin’s price surge? Let us know in the comment section below!

_______________________________________________________________

Images via Twitter/@PeterLBrandt, Reddit

The Rundown

Share
Pro 28

The Federal Reserve Could Launch a ‘FedCoin’- But There’s Really No Point

It seems as if the Federal Reserve really understands the core values of Bitcoin and that launching a national cryptocurrency is pointless.


Director of the IMF Christine Lagarde spoke out about the benefits of central bank digital currencies (CBDCs) this November. She said that they could improve security, accelerate financial inclusion, reduce poverty, and afford greater privacy. She even made a reference to cryptocurrencies as a “contender” in our cashless society.

And many crypto enthusiasts took heart. It seemed that finally, aging institutions were coming around to the technology and understanding its value. After all, cryptocurrencies can already achieve most of the things that Lagarde suggested. They can lower the cost of international remittances, streamline efficiencies, and protect the identity of their users.

But It’s Not Interesting to The Federal Reserve

At the height of bitcoin’s price explosion last year, when crypto entered the mainstream, many people called it the future of money. In fact, a former governor at the Federal Reserve Kevin Walsh, who was among the candidates to become chairman, said that if he were elected he would allocate resources to explore the creation of Fedcoin–a national cryptocurrency.

St. Louis Federal Reserve Bank: 3 Qualities Bitcoin and Cash Share

Why? Because it could improve transparency, increase efficiency, and allow the Fed to access negative interest rates and other financial tools.

But when you get down to the nitty-gritty, none of these things are of interest to the Fed, the banks, or national governments.

Sorry, No National Cryptocurrency for Now

The IMF is famous for imposing loans on struggling countries and crippling them with exorbitant interest rates. So it seems unlikely that such an institution would race to adopt a technology that would unchain the downtrodden from their shackles.

Moreover, researchers at the St. Louis Fed, Fabian Schar and Aleksander Berentsen, noted that a central bank “could easily” create its own crypto:

However, the key characteristics of cryptocurrencies are a red flag for central banks.

The red flags, they argued, were that law enforcers must be able to monitor who is using a currency at all times, which means that they would need strict identification requirements to eliminate fraudsters and money launderers.

They fail to mention that some two-thirds of all $100 US dollar bills are outside of the United States–and that no one has any idea who is using them.

They do make some very valid points, however, that underpin the reason there may never be a Fedcoin or any other national cryptocurrency:

Once you add a central bank and remove the “permissionless” network—with nodes that can leave and join as they wish, there isn’t much left to the cryptocurrency you started with.

In fact, a centralized cryptocurrency isn’t really a ‘cryptocurrency’ at all. It’s just centralized electronic money, which they’ve already got bucketloads of.

The two St. Louis branch of the Federal Reserve researchers further pointed out that this kind of centralized electronic money doesn’t even need a blockchain to work, in fact:

The technology for issuing virtual money in a centralized way existed long before the invention of the blockchain.

The Old Money Laundering Argument Again

A Federal Reserve Board governor Lael Brainard tore the concept of CBDCs apart at San Francisco’s Decoding Digital Currency Conference. While praising blockchain’s innovation, she went on to note that crypto’s volatility made it unsuitable as a unit of currency or store of value and that it was susceptible to hacks and money laundering.

She repeated Schar and Berentsen’s red flag of identity management and noted how a national digital currency would affect banks–again, pointing out that we do, indeed, already have electronic money.

So, while its certainly true that the Fed could digitize the US dollar and turn it into a cryptocurrency, it would only work against the interests of existing institutions and essentially be totally pointless.

Could There Be a Middle Ground?

It’s interesting to note that while adding centralized authorities to crypto does, in fact, seem to be missing the point, that doesn’t render crypto entirely useless for national purposes. Neither does it make fiat any more suitable. Cryptographer Peter Todd noted that:

It’s fashionable to criticise all blockchain stuff when applied to centralized systems as nonsense, because most of the solutions peddled have been nonsense. But the truth is somewhere in between.

Which means there may be some middle ground. But perhaps the main takeaway is this:

That the Federal Reserve wants nothing to do with a national cryptocurrency should be about as surprising as the Vatican failing to embrace gay marriage or abortion. Or if you want a further comparison, asking Jamie Dimon about bitcoin is like asking a taxi driver about Uber.

It’s still a young technology, and we’ve got a long way to go. So for now, it’s really no shocker that the old institutions aren’t diving in to expose their ills and remove their controls.

Do you agree with the Fed’s position on national cryptocurrencies? Share below!


Images courtesy of Shutterstock

Share
Čvn 02

Federal Reserve Faced Hundreds of Cyber Attacks Since 2011

Source: bitcoin

Bitcoinist_Federal Reserve

According to a report from the Federal Reserve, the financial institution has faced over 300 cyber attacks between 2011 and 2015. This number is quite significant, but it is not surprising in the last, as hackers have taken a liking to attacking financial institutions.

Also read: Spoofed Kraken Email Is A Mt.Gox Victims Phishing Attempt

Although the report is only available in heavily redacted format, Reuters has managed to extract some interesting details. In several dozen occasions, somebody managed to access information that was beyond their level of authorization. Most of these attacks were executed by hackers and spies, though, rather than people working for the Federal Reserve.

Federal Reserve Is A Popular Target

It is important to keep in mind this report only serves as a representation of what has really gone on behind the scenes. Financial institutions such as the Federal Reserve are constantly under threat. However, the report only mentions attacks affecting the Board of Governors, rather than the privately owned branches.

Malicious code, unauthorized access, and information disclosure were the most common threats to the Board of Governors.Interestingly enough, the Federal Reserve’s national cybersecurity team greatly exceed the number of reports by the local cybersecurity team.

In total, 310 reports were filed by the Board of Governors between 2011 and 2014. Nearly half of those attacks were labeled as hacking attempts, although some reports were not classified under a specific banner. Moreover, there have been eight information breaches between 2011 and 2013, all of which occurred through malicious code used by hackers.

Espionage is a factor as well through these incidents, as four incidents were classified under this moniker. Two of these attacks resulted in data being stolen, although the report doesn’t mention specific details. The Federal Reserve report mentioned an additional 51 information disclosure incidents.

What are your thoughts on the Federal Reserve not disclosing the full truth about cyber attacks? Let us know in the comments below!

Source: Reuters

Images courtesy of Federal Reserve, Shutterstock

The post Federal Reserve Faced Hundreds of Cyber Attacks Since 2011 appeared first on Bitcoinist.net.

Federal Reserve Faced Hundreds of Cyber Attacks Since 2011

Share
Dub 18

Bitcoin Price: Stagnant or Satisfactory?

Source: bitcoin

Finance bitcoin

The bitcoin price has remained steady over the last few months, hovering around the mid $400 USD range. Typically, one bitcoin has equaled anywhere between $420 and $430.

Also read: Blockchain Platform Waves Raises More Than $2M at the Start of the Crowdsale Campaign

Is the Recent Bitcoin Price Stability a Good or Bad Thing?

We’ve recently heard it said that the state of bitcoin has become “stagnant.” I suppose this is one way to look at it. The price hasn’t moved much. Bitcoin seems to have found a comfortable place on the financial ladder and is preferring to keep its ground for the time being. Instead of moving up, bitcoin is deciding to stay as it is.

A potential reason for bitcoin’s halt may be a “recent altcoin pump action.” Most posts in cryptocurrency chat forums have to do with rising altcoins while questions and publicity regarding bitcoin have died down. Magikarpeles from r/BitcoinMarkets explains:

“Serious amount of pumping going on in the alt-verse. I hope no one thinks it’s anything more than P&Ds because anyone that’s been around in crypto for a few years will tell you – if you put your money based on the hope your coin is ‘the next bitcoin,’ you’re going to have a bad time.”

Furthermore, the Federal Open Market Committee, a board holding power over our current monetary policy, saw to a rise in interest rates last December, yet left the rate unchanged the following month.

Suppose, however that there’s another way of looking at things. We likely all remember the tumult, stress, and hassle that bitcoin brought us in 2015. We received quite a scare in January when the price fell to below $200. Certainly, cryptocurrency investors felt a sharp pain in their chests as the price dropped, later receiving only marginal relief when bitcoin rose back up and temporarily made its home at around $230. It was a scary time for bitcoin lovers and financial analysts alike, and it took quite a while for the trouble to subside. It wasn’t until November when bitcoin began to rise through the ranks yet again, reaching $300, then $330, then $360 and finally $400, something we hadn’t witnessed since 2014.

So of course, the word “stagnant” could be used to describe the present scenario regarding bitcoin. It hasn’t risen in some time, and there isn’t much action to report, but it also hasn’t experienced a massive drop, and this is something we can all be grateful for. Bitcoin has found its “happy place,” and we can express joy and feel some much-needed reprieve knowing that such a place isn’t necessarily less that it ought to be. As we’ve witnessed in the past, the bitcoin price can rise again in the future. When that moment arrives, we’ll throw our hats in the air to celebrate our strengthened independence, but until that moment comes forward, we can lie back and rest beneath a sky that bears no signs of an oncoming financial storm.

Do you foresee a sudden bitcoin price rise in the near future? Post your thoughts below!


 

Images courtesy of The Slovenia Times, pokernews.com

The post Bitcoin Price: Stagnant or Satisfactory? appeared first on Bitcoinist.net.

Bitcoin Price: Stagnant or Satisfactory?

Share