Bitcoin’s Value Already Exceeds That of Billionaire Warren Buffet’s Company

Alexander Salazar
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Bitcoin’s Value Already Exceeds That of Billionaire Warren Buffet’s Company

Bitcoin also displaced the world’s largest electronic components company. The pioneering cryptocurrency outperforms firms Visa, MasterCard, and JP Morgan Chase Co.

The recent increase in the price of Bitcoin led the pioneering cryptocurrency to reach USD 32,000. In that way, it exceeds the value of the Berkshire Hathaway company, which American billionaire Warren Buffet runs.

The capitalization of Bitcoin, that is, the sum of its price multiplied by the total number of bitcoins in circulation, reached USD 607 billion. This value of the cryptocurrency exceeds that of Berkshire Hathaway’s Class B stock market, which stands at USD 543 billion.

Berkshire Hathaway is a US company that owns all or part of the shares of various insurance, energy, distribution, manufacturing, and retail business groups, as well as investment funds. In 2019, they reported revenues of USD 256 billion, with a workforce of almost 400 thousand people. Warren Buffet has bought shares in the company since 1962.

Bitcoin has become the ninth largest asset by market capitalization, displacing well-known firms such as Visa and MasterCard. The main crypto asset in the market has even surpassed the world’s largest electronic circuit company, Taiwan Semiconductor Manufacturing, which ranks No. 10 above Berkshire Hathaway.

In December 2020, Bitcoin surpassed Visa with a market capitalization of USD 505 billion. This is the largest finance company in the world, with a valuation of USD 497 billion.

Analysis firm Datalight released a report in which they indicate that the average value of transactions in Bitcoin exceeds that of traditional means of payment such as Visa and MasterCard. While each transaction in BTC is equivalent, on average, to USD 40,000, those of the aforementioned systems do not even reach USD 100 on average.

The two financial service giants and the world’s largest bank, JP Morgan Chase & Co., are below the main cryptocurrency.

At the time of writing this article, Bitcoin is behind Alibaba Group Holding, Tesla, and Tencent, which rank eighth, seventh and sixth respectively, according to data from AssetDash.

Warren Buffet Once Said that “Bitcoin Is a Gambling Device”

Warren Buffet has repeatedly spoken of Bitcoin as something worthless and went on to say in an interview with the CNBC television channel that he would never own cryptocurrencies.

The businessman stated that cryptocurrencies “have no value and do not produce anything”, adding that “you cannot do anything with them but sell them to other people.” In that case, he said that “those people that you sold them to are the ones who have the problem now.”

The investor continued to attack Bitcoin and other cryptocurrencies; disqualifying them in statements that he made to reporters, according to the abovementioned mass media outlet.

“Bitcoin is a gambling device and there have been many scams connected with it. There have been disappearances, so there is a lot of loss in it. Bitcoin has not produced anything,” said the billionaire, who Forbes magazine has ranked as the third richest man in the world.

Tron CEO Justin Sun tried to get Buffet to change his mind about cryptocurrencies. To do this, he paid USD 4.5 million for a charity dinner and waited six months to talk to him.

However, Buffet maintained his skepticism about cryptocurrencies, again referring to Bitcoin as “rat poison squared”. As to what the two executives discussed over dinner, Sun declined to comment.

By Alexander Salazar

A Study indicates that Bitcoin’s Price Will Continue to Rising Due to Its Scarcity in the Market

Alexander Salazar
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A Study indicates that Bitcoin’s Price Will Continue to Rising Due to Its Scarcity in the Market

In 2020, the liquidity of Bitcoin in the market steadily decreased. According to Glassnode, illiquidity was a determining factor for Bitcoin.

The future of Bitcoin in the market could be even more promising, after its price broke its all-time high, momentarily exceeding USD 28,500. The small amount of Bitcoin available in the market indicates this, according to a recent report by Glassnode.

The firm notes that only 22% of the existing bitcoins could be part of the market. At the same time, a growing number of large investors are clinging to the cryptocurrency as a store of value. They estimate that just 4.8 million BTC out of the more than 18.5 million BTC in existence are in constant motion.

The researchers consider that “a sustained increase in the number of illiquid bitcoins (not available for sale) indicates a strong sentiment of investor confusion and a potentially bullish signal.” In other words, since there is a smaller supply of coins in the market, it is more expensive to obtain them.

The bitcoins of the hodlers (or long-term investors) “are practically out of the liquid part of the coins in circulation accessible to trade. In contrast, exchanges with constant inflows and outflows contribute directly to the liquidity supply pool,” says Glassnode.

MicroStrategy’s investment attitude is an example of this behavior since the company continued to buy even though the price of Bitcoin increased. They made all Bitcoin purchases at an average price of USD 21,925, of which they already have an increase of more than 25%.

Glassnode calculated the liquidity of the entities that own Bitcoin, depending on the movements of the coins that they received in their entire existence, either from exchanges, companies, or other types of organizations. To that end, they take into account the relationship between address inputs and outputs over time, with an index between 0 and 1.

An entity is illiquid when the liquidity factor is less than 0.25. However, it is liquid if it has an index between 0.25 and 0.75, and highly liquid if it has a factor of 0.75 or more. Their calculations exclude internal movements, that is, transactions between addresses that the same entity controls, as they do not contribute to market liquidity.

Bullish Future on Bitcoin’s Market Horizon

The researchers identified that the amount of bitcoins in motion has been declining in recent months. There are a growing number of entities that do not want to sell their bitcoins. “This indicates that the staggering amount of illiquidity is driving the current bullish market,” according to the report.

The current behavior of holding BTC has been a trend of bullish markets, Glassnode notes. They identified it that way in 2017, when the biggest bullish run to date occurred, taking the price to the already exceeded all-time high of USD 20,000 per Bitcoin.

According to Glassnode, “we are currently in a stage where the illiquid supply is growing more than the total circulating supply. This is a pattern similar to the one that we observed during the bullish run of 2017”.

“Illiquid supply tends to decrease during bearish markets and increases during bullish markets (and vice versa for liquid supply),” the report adds. The research concludes that the lack of bitcoins in motion makes the future of the price of the cryptocurrency look even more bullish.

Given that the trend has been increasing in the last year, the scenario “looks potentially bullish for Bitcoin in the coming months, as there are fewer bitcoins available on the network to buy,” the report adds.

At the time of writing this article, the price of Bitcoin is around USD 28,000. Following the break of USD 20,000 in recent weeks, bullish sentiment is at the new psychological mark of USD30, 000.

By Alexander Salazar

China’s Bitcoin Mining Could Eventually Remain behind that of the Unites Stated and the Nordic Countries

Alexander Salazar
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China’s Bitcoin Mining Could Eventually Remain behind that of the Unites Stated and the Nordic Countries

Although China maintains dominance in Bitcoin mining, other countries are growing in this industry. Government pressure on Chinese miners is one of the factors discouraging the activity.

While the concentration of Bitcoin mining has been gradually and steadily decreasing in China, this industry has been growing in countries with better conditions. Those other territories include the Nordic countries and the United States, where there are advances that could boost the development of the activity.

The main determining factors for the location of Bitcoin mining farms have been stated regulations and the cost of electrical power.

There are stricter government regulations, more inspections by authorities, and lower production capacity by equipment manufacturers. All this, in addition to the institutionalization of the industry, would be putting pressure on the miners based in China, a country that dominates this market.

Bitcoin Miners Put Their Eyes on the Nordic Countries

Locations with an influx of new miners include the Nordic countries. In 2020, wet weather favored hydroelectric plants in Denmark, Finland, Iceland, Norway, and Sweden. That brought the price of electricity to its lowest levels since 2000.

Philip Salter recently said that “there were times when mining brought us no benefit, but our profitability has more than tripled over the last year.” Salter is Chief Operating Officer of Genesis Mining Ltd., a Hong Kong company that owns mining farms in Sweden.

There could still be a favorable situation in the medium term. Electric power distribution company Svenska Kraftnat predicts that prices will decline in Sweden and Norway, at least for the next five years.

Salter considers that political issues and regulatory transparency are not minor details to explain the reason why the concentration of Bitcoin miners in the Asian giant is decreasing. He assures that “there is a very important strategic shift from mining in China to mining in western countries like Sweden. The reason for this is that Bitcoin investors are becoming increasingly public and want more stability and security.”

The United States Does Not Want To Remain Behind in This Industry

The creation of new local mining pools, which aim to comply with all regulations, shows that the United States does not want to remain behind. As a result, new farms could emerge on US soil.

Ethan Vera, CFO of Luxor, the first pool in that country believes that there are advantages for miners using these pools. He explains that they can “sign a contract with a company that operates in the same legal jurisdiction, with a legal recourse in case of a problem.”

The future of the activity looks promising due to the massive purchase of mining equipment by existing US mining farms. For example, Core Scientific recently signed an agreement with manufacturer Bitmain to acquire more than 58,000 Antminer S19 ASIC miners.

This purchase, which will take place in September 2021, will allow Core Scientific to bring its fleet of equipment to a total of 77,000. Only this company could generate 5% of the total power of the Bitcoin network.

The Marathon Patent Group, which operates mining farms in the United States, also agreed to purchase 70,000 of these miners with Bitmain. They would have 100,000 active miners by the end of 2012; thus, making it one of the largest farms in that country (with more than 7% of the current Bitcoin hash rate).

Smaller mining farms in the United States, including Riot Blockchain, are investing to grow their performance. They recently announced that they will buy around 15,000 ASICs, which they will install in mid-2021.

China’s Dominance Is Greater Than 65%

Despite the aforementioned changes, it will be necessary to wait and invest a lot of money for the scenario to be favorable. China’s dominance in Bitcoin mining still exceeds 65%, according to the Center for Alternative Finance at the University of Cambridge.

The United States is in second place, with 7.24% of the market. During the second quarter of 2020, the North American country managed to take the place from Russia, which came to third place with 6.92% of computing power.

By Alexander Salazar

After Making a Millionaire Investment, SkyBridge Capital Says that Bitcoin Is Better Gold than Gold Itself

Alexander Salazar
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After Making a Millionaire Investment, SkyBridge Capital Says that Bitcoin Is Better Gold than Gold Itself

SkyBridge has invested USD 182 million in Bitcoin on behalf of its customers. The halving event has been the biggest catalyst for Bitcoin’s bullish cycle, according to the firm.

Hedge fund management firm SkyBridge Capital recently claimed that Bitcoin (BTC) adoption, both individual and institutional, is growing faster than its supply. Besides, they described the pioneering cryptocurrency as digital gold, with several characteristics that surpass physical gold.

“Near-zero interest rates and unprecedented money printing pose an existential risk for 60/40 portfolios. Also, they provide a premium on scarce assets such as gold, real estate, and Bitcoin,” noted SkyBridge Capital.

The firm highlighted that a decentralized public ledger supports the holding of Bitcoin, and that cryptography rather than a central authority supports it. SkyBridge added that, in the last year, in particular, there have been advances in regulations and in Bitcoin’s infrastructure itself.

For example, they cited the authorization of the US Office of the Comptroller of the Currency to several banks to offer cryptocurrency custody programs to their customers and the offer to buy and sell Bitcoin that PayPal initiated last November.

Wall Street Welcomes Bitcoin

SkyBridge stated that Bitcoin has gained respectability among institutional investors, which they summarized by saying that “Wall Street welcomes Bitcoin.” To reinforce this assertion, the firm added quotes from JPMorgan, BlackRock, Citibank, Deutsche Bank, and Morgan Stanley, among others, who highlight the potential of Bitcoin as a store-of-value asset or as a means of portfolio diversification.

The investment firm then pointed to twelve institutional investor announcements that occurred in 2020, as a sign of the growing interest in Bitcoin for the aforementioned purposes.

The most prominent Bitcoin acquisitions are those of MicroStrategy and Square, which lead to the use of Bitcoin as a corporate treasury reserve. Likewise, well-known mutual fund managers such as Paul Tudor Jones and Stan Druckenmiller decided to invest percentages of their assets in Bitcoin.

SkyBridge showed some details of its Bitcoin fund and claimed that it has invested USD 182 million in it on behalf of its customers.

In recent days, the investment firm notified the SEC that it had created a Bitcoin fund with a minimum participation of USD 50,000.

Bitcoin Is More Gold Than Gold Itself

“Bitcoin is digital gold, and as such it is better gold than gold itself,” said SkyBridge. Although both can coexist, the tendency that “the winner takes everything” marks the history of money,” according to the firm.

SkyBridge explained that a central point about the supply of Bitcoin is that Satoshi Nakamoto set it at 21 million units. The company clarified that there are currently about 18.5 million BTC in circulation. They estimate that there are 120 years to mine the remaining 2.5 million BTC.

The Demand for Bitcoin Exceeds Its Supply

Bitcoin’s third halving, which occurred in May, brought the daily supply to 900 BTC. That represents 27,000 BTC monthly and 82,200 BTC quarterly, SkyBridge noted.

During the fourth quarter of the year, BTC acquisitions exceeded USD 4 billion. Estimating the average price of Bitcoin to be USD 20,000, such acquisitions would represent around 200,000 BTC. In other words, institutional demand alone nearly tripled the amount of BTC mined during the fourth quarter of 2020.

Several institutions announced their Bitcoin acquisitions during the third quarter. Among them, SkyBrige mentioned Grayscale (who bought more than USD 1 billion worth of Bitcoin), PayPal (who acquired USD 600 million worth of Bitcoin), and English fund manager Ruffer Investment Company (who bought USD 744 million worth of Bitcoin).

SkyBridge predicted that this acceleration in institutional investment and tight supply will cause the trend to intensify and the sectors that have so far not participated will join in. For example, they claim that the insurance sector will turn to invest in Bitcoin, as will the treasuries of public companies and pension funds.

By Alexander Salazar

Bitcoin Will Never Again Be So Cheap as a Consequence of New Bullish Phase, According to Willy Woo

Alexander Salazar
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Bitcoin Will Never Again Be So Cheap as a Consequence of New Bullish Phase, According to Willy Woo

The analyst notes that the capital flowing into the pioneering cryptocurrency is similar to that of 2017. At least USD 170 billion flowed into Bitcoin in 2020.

For three months, the price of Bitcoin (BTC) has been on the rise, drawing the steepest bullish curve in the last three years. However, the pioneering cryptocurrency is going through a vigorous cycle that has barely completed an initial phase of optimism. Analyst Willy Woo believes that the true bullish run for BTC is about to begin.

On his Twitter account, Woo recently noted that the amount of capital now flowing into Bitcoin is equivalent to that of April 2017. That previous bullish cycle pushed the price of the principal cryptocurrency on the market close to USD 20,000.

He estimates that this year the capital that came into Bitcoin was at least USD 170 billion. The USD 15 billion in purchases that users made from Black Thursday in March to October reached that amount. Users have invested USD 50 billion in BTC since the beginning of October when the price of the cryptocurrency exceeded USD 11,000. Also, institutional investment reached USD 650 million only with MicroStrategy.

All this investment has grown as the price of the cryptocurrency keeps rising, explains Willy Woo in his posts. According to a Glassnode chart that the analyst shared, a large flow of capital will propel the price towards new all-time highs just like it did in 2017.

Woo based his prediction on his estimate of the capital investment in Bitcoin this year, thus verifying that the current capital flow rate is equivalent to the maximum price that the cryptocurrency recorded in 2017. This appreciation indicates that the value of the crypto asset will gain new momentum from now on.

Willy Woo Believes that Bitcoin’s Price Will Skyrocket

According to the analyst, the current price of the cryptocurrency seems to have puzzled many people, who may interpret it as a speculative bubble. He adds that “few understand that a blockchain allows measuring capital flows accurately and providing answers rather than narratives.”

Bitcoin is currently trading at a price of around USD 28,000, according to data from CoinMarketCap. Even though this is an all-time high for the value of Bitcoin, Woo predicts that the cryptocurrency may never again be so cheap.

Woo forecasts that this cryptocurrency will be worth more than USD 200,000 by December 2021. He even describes this prediction as conservative, stating that he does “not totally exclude the possibility that the price will reach USD 300,000.”

Following the price rally at the end of July, Woo stated that a major bullish run was beginning. Considering that the price of the cryptocurrency rose by more than 40% in December alone, it is possible to say that his prediction was correct.

By Alexander Salazar

SEC Lawsuit Is an Attack on Crypto Industry, Says Ripple

Jenson Nunez
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SEC Lawsuit Is an Attack on Crypto Industry, Says Ripple

The price of XRP was up 39% after the announcement. Ripple claims that it is willing to collaborate with the new officers of the SEC.

Ripple published a statement on Tuesday establishing its position regarding the lawsuit against it from the United States Securities and Exchange Commission (SEC). He maintains that there is “a dangerous lack of regulatory clarity” at the moment and that the lawsuit does not concern just Ripple but is “an attack on the entire cryptocurrency industry in the United States.”

“We have always said that there is a dangerous lack of regulatory clarity for cryptocurrencies in the United States. The SEC’s lawsuit has already hit numerous retail investors who have no connection to Ripple. It has also unnecessarily stirred the waters for exchanges, market managers, and traders. The SEC has introduced uncertainty into the market, hurting the community it is supposed to protect”, stated Ripple.

The statement also says that Ripple will continue to operate and support all of its products and customers in the US and globally. Most of the clients are not in the United States and are not from the United States. There is a vast foreigner community says Ripple, and emphasizes that the volume in trades is bigger outside of the country.

Ripple adds that, unlike in the United States, in other countries such as the United Kingdom, Japan, Switzerland, or Singapore there are clear rules for the use of its XRP cryptocurrency.

The SEC sued Ripple on Tuesday, December 22, for the sales of USD 1,388 million of XRP, as well as the use of those funds for operating expenses. The SEC assures that XRP is a security, while Ripple keeps its statement, saying that it is a “virtual currency.”

Once the lawsuit ended, during the last week, announcements from several exchanges appeared stating that there was an ongoing exclusion of XRP from various platforms.

The major fear is that the commercialization of this cryptocurrency could be considered illegal by the regulator. Among the exchanges that made that decision are Coinbase, Bitwise, and Bitstamp, among others.

Following the release of Ripple’s statement, XRP saw a notorious price boom, going from $ 0.1767 to $ 0.2472, or 39.8% in CoinMarketCap figures. At the time of this writing, XRP is trading at $ 0.2213.

By Jenson Nuñez

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