Crypto Guides, Knowledge & Insights

Ray Dalio: Bitcoin Is "Alternative Currency"

During his interview on CNBC“ Bridgewater Associates CEO Ray Dalio told Managing Asias Christine Tan that Bitcoin is ”an alternative currency.　　Dalio said that it was important to distinguish between the digitalization versions of existing currencies and alternative currencies:　　Using blockchain technology and so on…Thats a different thing than having an alternative currency, and Bitcoin is an alternative currency versus the digitalizing.　　As reported by U.Today, Dalio recently revealed that he was a Bitcoin holder.　　Bitcoin vs. Chinas digital yuan　　The head of the worlds largest hedge fund claims that the digital yuan could potentially compete with the largest cryptocurrency, but it wouldnt completely take over the crypto market.　　The digital RMB could be “a very viable” alternative to “a lot of people” if it reaches internationalization, according to Dalio.　　However, the billionaire also pointed out that it would have cons in terms of privacy issues.　　Speaking of a digital dollar, Dalio said that it would also be viable but it wouldnt be as competitive.

2021-05-31Deep Dive

REGULATORS CANNOT ACTUALLY BAN BITCOIN

“Youd have to shut down the internet.” Hester Peirce, Commissioner to the U.S. Securities and Exchange Commission (SEC) on implementing a Bitcoin ban.　　Although Bitcoin‘s market capitalization has surpassed $1 trillion, statements from governmental authorities and business leaders continue to fuel speculation about a U.S. ban on bitcoin. U.S. Treasury Secretary, Janet Yellen, has publicly criticized Bitcoin and other cryptocurrencies for their role in “illicit finance.” In the private sector, Ray Dalio, founder of the world’s largest hedge fund, has commented that Bitcoin may be outlawed just as gold was in the 1930s. Jesse Powell, the CEO of Kraken, a U.S.-based cryptocurrency exchange, has also warned that “there could be some crackdown” on the digital assets.　　Could the United States implement such a “crackdown” by joining countries like India, Nigeria and Turkey in implementing a ban on Bitcoin？ While a complete ban is certainly feasible, the practical, legal, economic and political difficulties of implementing such a ban make it unlikely. Instead, we can expect the U.S. to join other developed economies in further regulating Bitcoin. Regulators will face the challenge of writing laws that can be enforced without strangling the new opportunities for economic growth that Bitcoin offers those countries that embrace

2021-05-31Deep Dive

What Crypto Traders & Investors Can Learn From Daniel Kahneman About Noise

Imagine two doctors presented with identical information about the same patient giving very different diagnoses. Now imagine the reason for the difference is because the doctors have made their diagnosis in the morning or afternoon, or at the beginning or the end of the week.　　This is “noise” – the reason human judgements that should be identical vary – which Daniel Kahneman, one of the worlds best-known psychologists and winner of the 2002 Nobel Prize in Economics, tackles in his latest book, Noise: A Flaw in Human Judgment.　　Kahneman won his Nobel prize for his pioneering work with fellow Israeli psychologist Amos Tversky on how cognitive biases shape judgement. Their work, beginning in the late 1960s, laid the foundation for the new field of behavioural economics, which challenged the economic orthodoxy that decisions are rational.　　Kahnemans previous book Thinking, Fast and Slow, published in 2011, brought much of this work to the attention of a broader audience and cemented his reputation as a foundational figure in the understanding of human behaviour.　　In Noise, co-authored by Olivier Sibony and Cass Sunstein he explores a different phenomenon to cognitive bias.　　Bias is a psychological process, and can be detected in individual judgement, the genial 87-year-old explained to

2021-05-31Deep Dive

Chia In Spotlight Amid Global Hard Disc Shortage

Chia Network, the developer of blockchain and “smart transaction” platform with a cryptocurrency branded as a “green” alternative to Bitcoin (BTC), has reportedly caused a global shortage of hard discs, whilst its president Gene Hoffman denies the cryptocurrencies bad impact on the environment.　　Chia Network uses proof-of-space (PoSp) consensus algorithm in a bid to consume less energy. Nevertheless, these discs still require energy to produce and run, and some reports indicate that hardware involved in PoSp mining could be rendered useless merely after a few weeks.　　According to New Scientist, some 12m terabytes of hard disc space was being used to mine Chia on May 26, seeing an exponential rise since its launch in March, with the figure being at just 3m terabytes two weeks prior.　　Whats more, the Chia network has grown by almost one exabyte (974 PiB) in the last 24 hours according to Rick Branson, engineer at PlanetScale. In his words, this is equivalent to burning a single 1 terabyte (TB) solid-state drive (SSD) every 3 seconds. “The scale of this is hard to comprehend,” he said.　　The increase in demand for SSDs has reportedly caused price rises, however, Hoffman argues that the increased demand driven by Chia will lower the

2021-05-31Deep Dive

2 Bitcoin price indicators suggest BTC has not bottomed yet

Traders are using various strategies to determine whether Bitcoin price has bottomed, but on-chain activity and derivatives data hint that the situation remains precarious.　　Has Bitcoin price bottomed yet？ According to @noshitcoins, derivatives and on-chain data signal that further downside could be in store.　　Traders have been trying to time the much-anticipated trend reversal ever since Bitcoin (BTC) initiated its 48% correction to $30,000 on May 12. The move culminated with $12 billion worth of futures long positions being liquidated, and to date, traders confidence remains somewhat dampened.　　The community started looking everywhere for trend reversal signs, including technical patterns, United States CPI inflation data and Bitcoin exchange deposits. For example, some analysts stated that a higher high, followed by a move above $40,000, would be enough.　　However, two days later, Bitcoin managed to break the $40,000, although the move didnt last for more than six hours. Meanwhile, other traders inferred that a retest of the $30,000 bottom is needed before a bounce.　　Although there could be empirical evidence or even logic backing those statements, market prices dont always react to external news or previous chart formations. Unlike stocks, Bitcoin investors cant rely on commonly used valuation multiples or even comparables.　　Sure, a digital store of

2021-05-31Deep Dive

Will Nigeria Lead The Digital Currency Movement In Africa?

Nigerias apex regulatory bank, The Central Bank of Nigeria (CBN), earlier this week hinted at its plans to create a digital Naira.　　Godwin Emefiele, the nation‘s CBN Governor, made this disclosure at a Monetary Policy meeting held in Abuja, the country’s capital. The CBN Governor also made use of the opportunity to address the recent trends of growing volatility and value decline in the cryptocurrency market, taking a swipe at the recent fluctuations that have rocked the market as a result of Teslas CEO, Elon Musk changing predilections. Godwin was quoted as saying:　　“We saw the market collapse. Initially, when Elon Musk tweeted around the time when we said our banking and payment facilities are no longer available for cryptocurrency transactions and he tweeted that he will invest $1.5 billion and the price (Bitcoin) went up. He now tweeted and raised a few concerns and the thing (Cryptocurrency) plunged.”　　Crypto Through Thick and Thin　　The CBNs latest intention comes as a mild shocker. Early February, Nigerians woke up to a red-alert warning on crypto-trading within the country, followed by an outright ban on all transactions related to cryptocurrencies with local banks in the country, forcing tens of millions of Nigerians to seek other indirect

2021-05-31Deep Dive

Volatility Paves Way for USDC Presence on Balance Sheets

The volatile nature of crypto market front-runners like bitcoin (BTC) could lead to their replacement on company balance sheets.　　As price swings lead to low returns for corporate treasurers, they look for an alternative. An alternative in the form of the stablecoin USD Coin (USDC). According to Bloomberg, Circle Internet Financial Ltd., one of the chief developers of USDC, has proposed an alternative for corporations looking to have a hand in the crypto space but are reluctant to go down the precarious BTC avenue.　　The proposal asserts that firms can invest their savings in USDC, and earn up to 7% interest per year when placed in a high-yield account. Reports indicate that this figure equates to over ten times the return expected from a one year Treasury Bill.　　More specifically, corporate treasurers will open a special account in which fiat money gets converted to USDC. The subsequent interest is therefore paid out in USDC. Meanwhile, Circle lends the funds to a network of investors willing to pay an interest rate, which in turn generates the yield.　　The appeal of stablecoins　　Stablecoins like USDC have their value tied to that of another reference. Such as, in USDCs case, the US Dollar, with which it is pegged

2021-05-31Deep Dive

Dogecoin Is Not Worth $37 Billion, Says Crypto King Barry Silbert

Digital Currency Group CEO Barry Silbert has doubled down on his criticism of Dogecoin.　　During a recent Twitter spat with Billy Markus, the co-founder of the meme crypto who tweets under the “Shibetoshi Nakamoto” handle, Silbert wrote that DOGE wasnt worth $37 billion.　　The “crypto king” claims that the coins value comes from “a collective belief” instead of any sort of utility.　　On May 5, Dogecoins market cap surpassed an eye-popping $90 billion.　　On May 8, Silbert announced that he shorted the joke coin while urging its holders to convert their proceeds to Bitcoin. Tesla CEO Elon Musk had his “Saturday Night Live” hosting debut on the same day, which ended up being a typical “sell the news” event: DOGE tanked over 30 percent.　　While Dogecoin has so far failed to recover, it remains the seventh-largest cryptocurrency with a market cap of $39 billion, according to CoinMarketCap.　　Image by tradingview.com　　Dogecoin is here to stay　　Even though Silbert has emerged as the arch-enemy of the Dogecoin community, he admits that the canine coin is here to stay because it has “one of the most passionate” communities.　　The Dogecoins subreddit recently surpassed 2 million followers. Only r/Bitcoin can boast a higher number of followers among coin-specific subreddits.　　Earlier this year, Dogecoin

2021-05-31Deep Dive

America's Oldest Bank Creates Cryptocurrency Unit in Ireland

BNY Mellon, Americas oldest bank, has set up a Digital Innovation Hub in Dublin, Ireland, according to a May 30 report by Business Portal.　　The cryptocurrency unit will provide custody services for different types of different assets.　　As reported by U.Today, BNY Mellon announced its foray into crypto in February, racing ahead of rivals like Citi and JPMorgan. It claimed that it would allow its customers to hold and trade digital assets in 2021 but didnt specify when exactly the new service would launch.　　In March, the bank also disclosed its strategic investment in cryptocurrency startup Fireblocks.　　The largest custodian bank in the world with roughly $41 trillion worth of assets under management established its presence in Ireland back in 1994.

2021-05-31Deep Dive

‘I felt like a moron’ for not buying Bitcoin, says billionaire Stanley Druckenmiller

Billionaire investor Stanley Druckenmiller has recently explained why invested only $20 million in Bitcoin (BTC), skeptical of Ethereum (ETH), and prefers to pretend that Dogecoin (DOGE) doesnt exist at all.　　“For the first move in Bitcoin—I think from like $50 to $17,000—I just sat there aghast. And […] I wanted to buy it every day. It was going up and—even though I didn‘t think much of it—I just couldn’t stand the fact that it was going up and I didnt own it,” Druckenmiller said in an interview with The Hustle earlier this week.　　The problem Bitcoin solves　　A few years ago, Druckenmiller famously said that Bitcoin is a “solution in search of a problem.” Since then, however, he “evolved on this” thanks to a couple of occurrences. First, he finally realized what problem Bitcoin aims to solve—and that problem was called “central banks.”　　“I found the problem: When we did the CARES act and Chairman Powell started crossing all sorts of red lines in terms of what the Fed[eral Reserve] would do and wouldn‘t do. The problem was Jay Powell and the world’s central bankers going nuts and making fiat money even more questionable than it already has been when I used to own

2021-05-31Deep Dive

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