Bitcoin’s Volatility Not a Relevant Barrier to Investment

Willmen Blanco
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Bitcoin’s Volatility Not a Relevant Barrier to Investment

Bitcoin’s price has changed abruptly on several occasions throughout the years. Some changes in the price depend on the cryptocurrency’s programming

Fear can be an obstacle or a stimulus to discover what is shown on the horizon. In terms of capital investment, fear can be the element of the equation that, because of its individual and subjective magnitude, would prevent Bitcoin’s volatility from being above the objective analysis of the market.

Many people that plan to buy Bitcoins or Ethers at this time are taking a very high risk. It is understandable to fear, since there are actors that cannot be controlled, such as changes in the cryptocurrency market, due to the uncertainty they generate.

However, Bitcoin only recently emerged as a response to the 2008-banking crisis. It is unlikely that exchange models based on a technology that cannot be altered by the interests of a small part of the community can be imposed.

In the same vein, nor is it likely that governments can impose payments with Bitcoin if central banks do not have the power to issue more currencies or to control issuers. In other words, if the adoption of Bitcoin grows transversally to more communities and production sectors and governments, the massification of Bitcoin will eventually balance the scales of prices.

Cycles and Predictions

Throughout time, Bitcoin’s adoption seems to have achieved rates closer to the event known as halving, a programmed mechanism that reduces every 210,000 blocks the number of bitcoins that miners get as a reward for helping to maintain and update the status of the blockchain.

The purpose of this reduction to half the reward is to decrease the frequency in which more coins are issued to avoid inflationary systems. Hence, in principle, Bitcoin should be worth more if it is possible to keep the offer from growing disproportionately.

But halving by itself would have no influence on markets without counting on the adoption factor. That is, the demand for cryptocurrencies is determined by their use and their ability to exchange value.

For this reason, those that study the market analyze the periods prior to halving. During the first years, the number of transactions increased due to traders’ activity, the growth of mining and the increase in the number of exchange houses available.

Maybe if the price cycles in the market are considered, the risk of making an investment in Bitcoin can be controlled. In this way, it would be possible to better understand which periods are the most favorable for buying, selling or maintaining funds.

An Unsupported System?

The volatility of the market represents the system of financial games. The fear of unknown actors, with their personal ambitions, judgments, interests, successes and failures should not condition the future of users’ money.

The analysis of Bitcoin’s price behavior over time suggests that the various increases and falls in its market price greatly depend on programmed factors or cycles of the particular Bitcoin market. However, market volatility is not so predictable in the short term.

If investment capital is diversified, it is most likely that part of the money is saved in dollars or euros and another part in objects that can be stored or used, having the expectation that beyond such investment, their use and their possible sale, can produce dividends. Bitcoin can be understood as another tool to transfer or save value. It is supported by a protocol that is immune to people’s psychological variations.

By Willmen Blanco

Tether as an Anticipated Indicator of Bitcoin’s Moves

Willmen Blanco
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Tether as an Anticipated Indicator of Bitcoin’s Moves

Tether features the greatest offer at exchange houses for the trade of stablecoins. The trade of BTC/USDT moved about US $3.5 million in the last few days

Since the last bullish rally in late 2017, the correlation between the issuance of Tether (USDT) and the fluctuations in the prices of Bitcoin (BTC) has generated debate in the community. With BTC being quoted above US $9,000, it is time to analyze how influential Tether has been during the last price increase.

Tether is a stablecoin (or token anchored to fiat) owned by Tether Limited, emerged in late 2014. It aims to provide coverage for traders during highly volatile trading conditions.  The creators of this stablecoin assert that it has a 1:1 parity with US dollar, since the total of circulating Tether would be supported by an equivalent reserve. This includes fiduciary currency, as well as other assets and accounts receivable on loans made by Tether to third parties, as can be read on their webpage.

It has a market capitalization of US $3.4 thousand million, according to Messari data, which represents more than 80% of the total capitalization among main stablecoins such as USDC, TUSD, DAI, GUSD and PAX. It also has a daily trading volume that surpasses the amount of US $22 thousand million.

Its reach is so … that in May USDT’s network showed more transactions per day than the 99.97% of the market, with the exception of BTC, XRP, ETH, EOS y TRX. In the same way, its transaction volume surpassed the main 50 cryptocurrencies, with the exception of BTC, ETH and BCH.

Issuance of Tether as a Catalyzer

The impacts of the issuance of Tether on the prices of Bitcoin have been an arid topic within the ecosystem, especially for the lack of clarity shown by the states of USDT and its close relationship with Bitfinex exchange house. In fact, Bitfinex and Tether Ltd. have the same owners, the same banking relationship and the total of USDT transit is issued through the said exchange house. This made the New York Prosecutor sue Bitfinex and Tether for presumably hiding a loss of US $850 million.

When the market’s volatility is more evident, traders seek refuge in currencies such as the US dollar, and the issuance of Tether would come to meet this demand. Having participation that reaches 72.5% (about 585,917 Bitcoins) of the total BTC trading volume in the last days, it can be said that USDT is connected to this market, for which its issuance rate greatly influences the valuation of other crypto assets.

Current conditions provide an opportunity similar to that of central banks for those in charge of issuing Tether. The participation of USDT in Bitcoin volumes is such that misusing the issuance of this stablecoin could end in a bullish scenario between BTC y USDT, this is, similar to that experienced in countries such as Venezuela regarding the relationship between the dollar and the bolivar.

In other words, as Tether Ltd has a degree of power over the volumes of Bitcoin, during a bullish rally this company could start flooding the USDT market disproportionately to make Bitcoin appear more valuable than Tether. In theory, if circulating Tether grows to huge proportions surpassing the demand, more USDT will be needed to buy the same amount of bitcoins (creating an artificial inflation in USDT), which results in appreciation of BTC and a increase in its price. In bearish circumstances, a reduction of circulating Tether will result in an appreciation of USDT, since these will be scarcer among investors. Something similar occurs when a given token is burned or shares are repurchased. 

Correlation between Tether and Bitcoin

Bitcoin’s Price and the issuance of Tether have been closely related. Since 2018, the circulating offer of USDT (market capitalization) has shown moves that anticipate Bitcoin’s important fluctuations.

On August 16th last year, circulating Tether (green line) continued increasing to USDT 2.8 thousand million. Days later BTC’s price (blue line) broke the US $6,400 to reach the cash value of US $7,200, a steep bullish move. The correlation continued in October, when the circulation of the stablecoin was reduced in about 50% to USDT 2 thousand million and a month later Bitcoin broke below US $6,000 up to its annual minimums around d the US $3,200.

In early 2019 the correlation was much more pronounced. USDT reached its historical maximums as the total circulation grows up to 3.5 thousand million Tethers, which has been supported by Bitcoin’s price increases starting with US $3,800 in mid-February. Having the main currency per market capitalization around US $9,000 and sky-high circulating USDT, the performance of the price will become a litmus test to verify the degree of correlation of these assets.

By Willmen Blanco

Bitcoin to Outlive Facebook’s Cryptocurrency

Willmen Blanco
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Bitcoin to Outlive Facebook’s Cryptocurrency

The launch of Libra, Facebook’s cryptocurrency, is planned for 2020. Its success could give Bitcoin greater visibility and positively influence its price

Facebook’s cryptocurrency has generated great expectations, especially for what it might mean for Bitcoin and the ecosystem of crypto assets.

Below is a summary of the project, as well as some implications that this development of Mark Zuckerberg’s company and a corporate conglomerate called Libra could have.

Facebook’s Bitcoin

Although Libra has been presented as a cryptocurrency, its characteristics are not very close to Bitcoin.

This project has been supported by important companies such as Uber, PayPal, MasterCard, Visa, Mercado Libre, inter alia, and has attracted the public’s attention.

It is of paramount importance that each of these companies invested US $10 million to form part of the association that Libra will manage. This is the reason why its team ensures that neither Facebook nor any of the companies will control the crypto asset independently.

It should be noted that Zuckerberg’s company has created research and development teams for distributed accounting technology since 2018.

Despite this, technical details of the project have not yet been revealed: nobody knows which blockchain will be used or if one will be created, and nobody knows if the cryptocurrency will be compatible with other similar projects.

The launch of Libra, which was originally called GlobalCoin, is planned for 2020. It is expected to be an anchored cryptocurrency, like tether (USDT) or Paxos (PAX), but supported by a basket of assets from which its price will be derived.

The goal is to create a payment and exchange system that could be integrated into WhatsApp and Instagram, two other important social networks and platforms that are part of Facebook Inc. If this is fulfilled, said cryptocurrency could be within reach of more than 2.7 billion users of these networks.

This could mean competition between the Facebook system and far-reaching payment processors such as VISA, MasterCard or PayPal.

Facebook users could receive rewards in this cryptocurrency by viewing publications, having interactions and buying products on the platform.

Implications for Bitcoin and other cryptocurrencies

This launch is that Libra could give impetus and visibility to cryptocurrencies in general, especially to Bitcoin, the most capitalized cryptocurrency in the market.

The implementation of this cryptocurrency could translate positively into market prices. In terms of public opinion, it could mean a way of not losing track of technological development.

Millions of Facebook users would not only be exposed to Libra and its influence as a payment system, but they could also be induced to know more about the market and other active cryptocurrencies.

If Libra is successful, it could replace other digital payment methods such as PayPal, but it is unlikely that it will be able to bend Bitcoin’s decentralization as they do not compete at the same level.

Although Facebook’s cryptocurrency could gain relevance and weight, its characteristics could be different from those of Bitcoin. In any case, both would coexist, with the probability that the average Internet user prefers Libra, the credibility of the companies that support it, the project’s good progression and its visibility through social networks.

In case the Facebook project fails, either due to technical factors, differences between members of its association or lack of interest of the common user, the popularity of the topic could positively influence the perception of Bitcoin.

Due to the possible differences between both systems, a scenario where Libra fails would not have an impact on the community’s perception of the value or their trust in Bitcoin.

The corporate approach and the management of its operation by a business association call into question the possibility of making decentralized and censorship-resistant payments, as offered by Bitcoin.

Even though the launch of Libra may influence Bitcoin’s near future, this cryptocurrency will probably outlive it.

By Willmen Blanco

Spain would use blockchain to automate toll systems

Maria Rodríguez
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Spain would use blockchain to automate toll systems

Smart contracts have the potential to help make payments, while blockchain would verify vehicle and driver data

Blockchain developments are characterized by being versatile and providing solutions that did not exist before. One of these examples is the project of a Spanish mobility services payment platform specialized in electronic toll collection which works to implement blockchain.

In the near future, Distributed Ledger Technology (DLT) could enable toll payments efficiently. This challenge is part of the Blockchain Car program, the blockchain technology exploration project applied to mobility that takes place in Spain.

The information was issued in local media recently. Those who work in the project contemplate that the development will use smart contracts that will be auto-executed when a certain vehicle goes through the tolls so that even the rate to be applied can be calculated and can be paid by means of the virtual wallets of the occupants of the vehicle.

Among other possibilities offered by blockchain technology to the sector of toll charges is to be able to keep track of the data of the vehicle’s driver (name, profession, if it is a retired person…), as well as the vehicle data, such as its age.

“Blockchain is allowing us to be able to develop fully variable pricing models that encourage efficient and sustainable social mobility,” explains Josep Jové, a representative of one of the companies that have worked on various projects based on blockchain technology.

“In a world of alliances and agreements between institutions and corporations, the use of a blockchain technology that provides efficiency for the treatment of operations, verification and reliability of transactions generated between the parties, is really beneficial in all respects”, affirms Jové. This shows blockchain as an ideal platform for the processes in which information is exchanged and there are several people involved, which is why it works in different industries.

In the near future, technologies such as blockchain, Artificial Intelligence (AI) or big data could positively impact the processes that guarantee mobility. In addition, data captured by IoT (Internet of Things) devices would be more present to allow the automation, connectivity and integration of data and systems from different service providers, according to different analysts.

This scenario is consistent with the demand of some users who seek to control their identity information safely, as well as their personal data and preferences.

Recently, it was reported that another project is also being prepared in Spain to verify the origin of some products that will end up being recycled. The intention is to follow up from the factories of certain products until their distribution and subsequent recycling, a fact that would help to preserve the environment and would provide a greater presence to the base technology of the cryptoactives.

In this way, the objective that both companies and users of these platforms have in common is to be able to access a new open environment of services in an efficient and safe way, among which are health services, transportation, user identification, commercial exchanges and now the world of mobility.

By María Rodríguez

It is Possible to Pay Food with Bitcoins in Argentina

Maria Rodríguez
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It is Possible to Pay Food with Bitcoins in Argentina

Users can pay with cryptocurrencies from home delivery to restaurant food services in said country

The cryptocurrencies market is taking a lot of strength in South American countries. This market for digital assets is increasingly stable in terms of financial criteria. This is the reason why, in some Latin American countries, there are commercial establishments that accept bitcoins (BTC) as payment methods for the products and services they offer.

There is a large number of stores that have adopted BTC as a direct method of payment in Argentina. Thanks to this, its citizens have at their disposal a chain of restaurants, cafes and bars that have adjusted their collection systems to receive cryptocurrencies.

These are some of the restaurants and“Intelligent Services”in Argentina that accept Bitcoin:

Foster Nutrition

Very close to the General Consulate of Italy in the central area of ​​the city of Buenos Aires, there is a restaurant that is classified as “Intelligent Restaurant”; its name is Foster Nutrition. This restaurant has achieved a perfect combination between new technologies and good food. According to Martin Zuker, CEO of the establishment, the operation is fully automated. He explained to local media that the order must be made by means of a tablet, which processes the choice of the dish and send it to the kitchen by means of a digital command where it is prepared and delivered in automated boxes.

The menu is very varied; it goes from wraps, sandwiches, croquettes and soups, to desserts such as brownies, cookies, and fruit mousse. Customers can pay all the services offered by the restaurant with Bitcoin, scanning a QR code to execute the operation from their smartphones.

HoyPido

If clients want other alternatives, in Argentina there is a unique service exclusively for the delivery of food at home. HoyPido is a home ordering platform that is able to receive payment for its services with Bitcoin.

The menu is diverse and the dishes include salads, vegan meals, desserts and drinks, as well as specific dishes prepared with chicken and meat. According to the website of the service, orders can be made up to one day in advance and they also accept Bitcoin as a payment method.

 AntiDomingo

In other of the several options offered by Buenos Aires city, there is the AntiDomingo bar. Said bar offers its customers live music, alcoholic drinks, such as spirits as well as food, which goes from pizzas and hamburgers to desserts and typical foods of Argentina.

The official website of the bar states the following, “We created AntiDomingo 15 years ago with the purpose of counteracting the boredom of Sundays at night; chatting, enjoying a good wine, delicious food, art and good music”. The site has enabled a collection system that allows its customers to cancel all their consumption with Bitcoin.

These are not the only commercial establishments that have decided to expand their business strategy to active users of cryptocurrencies. Additionally, it has been demonstrated that digital assets are stable enough for some merchants to adopt this alternative payment for their services. The increase of users with cryptocurrencies and the growth of the crypto-market in these countries that experience economic difficulties have made this a viable option to protect their finances.

By María Rodríguez

According to Kaspersky 19 % of the People Have Acquired Crypto Assets Prior to 2019

Andres Chavez
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If you are a crypto investor, you surely know everything about the industry and the value of these assets or at least just enough to have taken the time and resources to make investments. If you are an average Internet user, you also know about cryptocurrencies and the blockchain technology. However, not everybody is familiar with the crypto phenomenon.

Whilst a sizable portion of the population with access to the web is acquainted to cryptocurrencies, there still are communities that have not heard of them. In fact, according to a recent survey conducted by online security Company Kaspersky Lab, roughly 19% of the world population acquired cryptocurrencies before 2019.

To put it in a different way, roughly a fifth of the world’s population has bought cryptocurrencies before the current year started. It goes to show that despite the power that these assets have demonstrated time and time again, they still have potential and room to grow.

The “The Kaspersky Cryptocurrency Report 2019”

The survey was published this week, but it was performed between October and November of 2018. It is dubbed “The Kaspersky Cryptocurrency Report 2019,” and 13,434 respondents in 22 nations took part in the proceedings.

The report states that approximately 81% of the population in the planet has never bought cryptocurrencies. One out of ten respondents explained they “fully understood how cryptocurrencies worked.”

The crypto industry does have work to do in order to captivate more investors and people in general, as evidenced by the fact that only 14% of the people that said they have not ever used crypto assets would like to acquire them in the future.

Driving Factors

When asked about the reasons why global crypto investors have “stopped” using these assets, most respondents replied that the high volatility was the main factor that drove them away, implying that stability is needed for the industry to grow.

The volatility answer was the most common when naming the reasons behind the lack of usage, but other factors mentioned in the report were loss of funds in the bear market and a lack of profitability, with each answer checking in at 23%. It is important to highlight that October and, specially, November were cruel months for bitcoin and most of the top altcoins regarding their price.

Another 22% of the population consulted in the survey responded that they do not use cryptocurrencies because they were not backed with real assets. Being feared of hacking attacks was the response that 19% of the time, and fraud vulnerabilities checked in at 15%. Combined, they accounted for a considerable 34%.

In the report, Kaspersky cited an official from Merkeleon, a partner company. Alexey Sidorowich, Head of Sales and Business Development at Merkeleon, expressed that “cryptocurrency certainly has its benefits but, as we can see, many consumers are still unaware of what they are due to concerns over security and how the technology works. It is an exciting industry to be involved in but it is one that is built upon trust. It is, therefore, imperative that cryptocurrency businesses do all they can to protect their networks and ensure their customers’ finances are safe and secure.”

By Andres Chavez

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