VanEck Considers that Bitcoin Can Exceed USD 4.8 Million

Alexander Salazar
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VanEck Considers that Bitcoin Can Exceed USD 4.8 Million

Eric Fine and Natalia Gurushina said the implied price of BTC would range between USD 1.3 million and USD 4.8 million. The predictions allow formulating a framework to value gold and BTC if one of them becomes a world reserve currency.

Although there are many estimates about Bitcoin, some are more optimistic than others. For example, American investment company VanEck considers that Bitcoin has twice the upside potential of gold and could be worth USD 4.8 million.

Undoubtedly, VanEck has had its sights on the cryptocurrency world for some time. The firm recently filed documents with the US Securities and Exchange Commission (SEC) to launch a new exchange-traded fund (ETF). Since that company would focus on gold and cryptocurrency mining companies, they are also interested in the value of crypto assets in the long term.

VanEck Thinks Bitcoin Can Be Worth a Lot of Money

Eric Fine, head of EM debt at VanEck, and Natalia Gurushina, chief economist, commented on the lofty and optimistic prediction.

The executives compared the price implications of gold and Bitcoin if people adopted either as a store of value. They said that the implied price of BTC would range between USD 1.3 million and USD 4.8 million.

They based the lower prediction on Bitcoin as the monetary base (M0), including the circulating supply of a currency and bank deposits. However, experts and economists do not commonly use that marker.

Meanwhile, their higher prediction came from the evaluation of M2. That measure of the money supply encompasses all bank deposits in a currency and their ability to convert into cash.

The Context in Which the Prediction Occurs

The implications of the conflict between Russia and Ukraine have led to reassessing many economic concepts previously taken for granted. For example, that event has caused Russia to reconsider using alternative currencies due to the number of sanctions it has to face.

They have even evaluated the use of Bitcoin to conduct transactions in the energy sector with China and Turkey. Pavel Zavalny, the chairman of the energy committee of the Russian Duma, said they would accept the lira (TRY), the yuan (CYN), and the crypto asset.

Other Alternatives to the US Dollar and Bitcoin

Experts from VanEck believe that the trend could eventually extend to the central banks of more countries. Both Fine and Gurushina believe the Chinese yuan should be the primary option for a new reserve currency.

The predictions are just the starting points to plan possible future investment strategies. Those scenarios allow investors to formulate a framework to value gold and BTC if one of them becomes a world reserve currency.

BTC is trading at around USD 45,864 and has accumulated a 0,1% loss over the last week. Its daily trading volume is above USD 21.56 billion, and its market capitalization is about USD 871.51 billion, according to CoinGecko.

Bitcoin plays an increasingly relevant role in the economy and might become a world reserve currency. Due to the conflict between Russia and Ukraine, many many consider the idea of using the crypto asset to make cross-border transactions.

By Alexander Salazar

Bitcoin ASIC Miner Prices Fall 22.6% since the beginning of the Year

Audy Castañeda
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Bitcoin ASIC Miner Prices Fall 22.6% since the beginning of the Year

Amazon and MercadoLibre show a variety of prices this week, compared to last March 16. Meanwhile, high-generation miners average above $9,000, according to the Hashrate Index.

A slope, like a slide, is the best way to describe the prices of Bitcoin (BTC) ASIC miners in the last two weeks, especially the high-end ones, as they average just over $9,000, the lowest figure in so far this year.

According to the Hashrate Index charts, prices for highly efficient Bitcoin miners cost up to $9,116 on average. Of course: this varies depending on the countries, in terms of freight and shipping issues. Among this high-end equipment, we can mention the S19 Pro from Bitmain, one of the largest ASIC manufacturers on the market.

This is a significant drop, taking into account that, when 2022 began, these miners averaged USD 11,154. That is, high-end miners have fallen 18% since the beginning of this year.

In the case of miners with medium efficiency, where Bitmain’s Whatsminer M20 stands out, the drop was around USD 3,728 on average. They accumulate losses of 30% since last January 4, when they reached USD 5,327.

Regarding the oldest and least efficient miners, among which a Bitmain Antminer S9 stands out, they currently average around USD 284. In this group, the drop has not been so large because, since the beginning of the year, they have kept prices relatively low. Even so, they accumulate drops of 20%, falling from USD 358 in January.

ASIC prices continue to decline at a time when bitcoin is experiencing mixed numbers, which allowed it to break through the $45,000 barrier and remain, at press time, above $46,000, according to the CriptoNoticias Price Calculator.

What Marketplaces have to say

To confirm the declines in the mentioned models, CriptoNoticias reviewed the prices of Amazon.com and MercadoLibre Venezuela, given the high presence of Bitcoin miners on this side of the world.

Starting with the Antminer S19 Pro (110 TH/s), at the close of this article, it is trading around $10,475 on Amazon.com. This is a drop of 18% in a matter of two weeks when the equipment cost USD 12,795.

In MercadoLibre, meanwhile, the same team is trading above USD 2,225. That is 11% less compared to the week of March 16, when it reached prices of USD 2,500.

The other model, the MicroBT Whatsminer M20 (70 TH/s), maintains similar prices compared to last week on Amazon, where they are sold for around USD 5,500.

Towards South America, rather there was an increase. From USD 1,350 where it was trading two weeks ago to USD 1,500 per unit at the close of this note. That represents an increase of 11%.

Moreover, about the S9, which are the most used miners in Venezuela, in the words of a CriptoNoticias source, Amazon reports parity with two weeks ago. The miner, which has a hash rate of 13 TH/s, is trading on this marketplace at USD 749.99.

In MercadoLibre, there was a difference. On March 16, this hardware was selling for around USD 470. Two weeks later, however, a 25% drop to USD 350 is reported.

Conclusion: Mining is a Good Option

The price of Bitcoin miners all averages down could become a clear opportunity for new investors to target the area. This will help to expand cryptocurrency mining to new markets, such as Latin America.

As recorded in a series of reports in CriptoNoticias, in Latin America there is a nascent niche for mining. According to specialists from Argentina, Paraguay, and Venezuela, it appears that mining cryptos can be profitable.

Climates, renewable energy sources, and growing adoption formulate the equation that would allow any miner to develop in these spaces. Paraguay, for example, is a viable option, looking like the Promised Land for profitable Bitcoin mining.

By Audy Castaneda

The Salvadoran President Receives a Message from Michael Saylor about the Bitcoin Bonds

Alexander Salazar
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The Salvadoran President Receives a Message from Michael Saylor about the Bitcoin Bonds

The CEO of MicroStrategy considers there is a better way for the Central American country to obtain funds. The executive stated that people are not as optimistic about the volcano bonds as the Salvadoran government expects.

Michael Saylor, the founder of MicroStrategy, considers that the market is not ready for Bitcoin-based bonds. For that reason, the executive sent a message to Salvadoran president Nayib Bukele.

In November, Bukele announced the issuance of more than USD 1,000 million worth of Bitcoin-based bonds.

Bukele plans to raise funds with state Bitcoin-based bonds to solve the financial situation of El Salvador. He wants to increase the Bitcoin holdings of the nation, which are already on the order of 1,800 BTC.

His government will also use the money raised to finance the construction of the Bitcoin City. They will power it with the geothermal electrical energy generated by the Tecapa and Conchagua volcanoes.

However, Saylor thinks it is not a good idea to issue 10-year Bitcoin-based bonds at an interest rate of 6.5% per year. He said those assets are a hybrid sovereign debt instrument rather than a Bitcoin treasury game. He highlighted that this has credit risk and has nothing to do with the risk of BTC itself.

The billionaire believes El Salvador should request a term loan from a leading bank. He pointed out that retail investors are skeptical about buying Bitcoin-based government bonds.

Saylor may be suggesting that Bukele withdraw his volcano bond offer to copy the strategy of MicroStrategy. The software company recently reported using its Bitcoin fund as collateral to obtain a 3-year loan worth USD 205 million through Silvergate Bank.

MicroStrategy has 125,051 BTC worth almost USD 6,000 million in its treasury. They are showing a new way to obtain loans without giving up the bitcoins in their balance.

What Is Wrong about the Salvadoran Bitcoin-Based Funds?

Saylor recently stated that the world is less optimistic about the volcano bonds, consistent with his comments on the Salvadoran Bitcoin bonds. Then he noted contradictions between Alejandro Zelaya, the Salvadoran finance minister, and Paolo Ardoino, the CTO of the exchange that will launch the volcano bonds.

In early March, Zelaya told institutional investors that the Bitcoin bonds attracted USD 1.5 billion in demand at a meeting in Paris. Nevertheless, Bitfinex CTO Paolo Ardoino said there was about USD 500 million worth of interest from users around the state bonds of El Salvador.

Although the figure mentioned by Ardoino represents around a third of the estimate by Zelaya, it only refers to clients of the exchange.

The launch of the Salvadoran Bitcoin-based bonds should have been during the third week of March. However, the government has not yet launched the investment instrument, suggesting the prevalence of caution.

Zelaya said they are waiting for better market conditions and might launch the Bitcoin bonds in September. Several signs indicate El Salvador is striving to rid itself of the US dollar and the financial system that keeps it indebted. As it is the first country to adopt the pioneering cryptocurrency as legal tender, it bets on Bitcoin.

By Alexander Salazar

Is Bitcoin an Inflation Hedge?

Audy Castañeda
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Is Bitcoin an Inflation Hedge?

Putting money into value investments like gold, real estate, stocks, and cryptocurrencies helps curb inflation.

As cash loses purchasing power over time, holding cash causes people to lose their savings. This has led people to put their money into value investments like gold, real estate, stocks, and now, crypto. There has been a question in town ever since Will Bitcoin protect against inflation?

To become a store of value, an asset must be able to maintain its purchasing power over time. In other words, it should increase in value or at least remain stable. The key properties associated with such assets are scarcity, accessibility, and durability.

An asset intrinsically associated with a system that asset holders cannot affect is not reliable coverage, as centralized authority exerts one-button control over procedures.

Ways to Find Protection against Inflation: Gold, Real Estate, and Stocks

With inflation considered a given in fiat-based economies, gold, stocks, and real estate have long provided a reprieve for investors who are always afraid of losing value. It would be fair to say that these commodities have always had their limitations as a hedge.

Lately, however, bullion, or commodities like gold and silver, have proven less reliable over short investment horizons. In 2021, bullion steadily lost ground. Real estate has low liquidity and higher transaction costs and requires ongoing management and maintenance. Stocks, require investors to have sophisticated financial skills and most ordinary people lack the skills to be efficient stock managers.

Bitcoin as an Inflation Hedge: Limited Supply and Decentralization

Bitcoin appears to be an effective hedge against inflation, thanks to limited supply and decentralization. These factors bring scarcity and resilience power.

The supply of Bitcoin (BTC) has been algorithmically capped at 21 million coins. By the end of 2021, 18.77 million BTC have already entered circulation. In other words, 83% of the Bitcoin that could exist was mined within 12 years of the cryptocurrency’s inception.

Preset limits on Bitcoin in circulation mean there is no oversupply, which keeps inflation in check. Additionally, the annual mining rate of the digital currency drops by 50% approximately every four years. Taking into account the current supply schedule, Bitcoin’s annual production rate will be roughly half that of gold and will continue to decline, making it scarcer than the metal and increasing in value.

The decentralized structure of Bitcoin takes it out of the control of a centralized authority. With thousands of nodes running around the world, the network is optimally resistant to outside attacks that might be trying to alter its monetary policy, potentially jeopardizing the inherent scarcity of the digital currency. When it comes to levels of decentralization, no other currency even comes close to Bitcoin.

Anyone can run a Bitcoin node, check transaction history, and broadcast transactions over the network. Extensive decentralization means that people cannot spend cryptocurrencies twice. It also helped distribute coins and helped Bitcoin survive numerous challenges. It has helped Bitcoin avoid centralized control of information. In addition, it allows all coin holders to participate in decision-making.

In conclusion, Bitcoin performs surprisingly well against inflation and outperforms it by a large margin, although you have to be careful about extraneous factors like the regulatory environment. Statistics reveal that the odds are much better while storing value in Bitcoin than in assets like gold, real estate, stocks, and others.

Underlying strengths such as limited supply and decentralization prop Bitcoin into a unique position as an asset that can keep inflation at bay.

By Audy Castaneda

There Are Only 2 Million Coins Left to Issue the Last Bitcoin

Alexander Salazar
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There Are Only 2 Million Coins Left to Issue the Last Bitcoin

Miners will extract the last bitcoin within about 120 years, but nobody should let time slip away as global demand has skyrocketed. Miners request collateralized loans as their business model is moving away from block rewards toward fees paid by users.

The issuance of the 19 millionth bitcoin occurred in block 730,034, representing another milestone and a reminder of its scarcity.

There are currently 2 million coins left to reach the maximum issuance. The mining of the last bitcoin will occur within about 120 years.

However, nobody should let time slip away, as global demand has skyrocketed among financial institutions, countries at war, and individuals. They use it to make payments and save, and even governments see it as a trading alternative and a store of value.

Just 13 years after its creation and launch, the trend to adopt Bitcoin seems to have become irreversible. For that reason, some consider reaching 19 million issued coins as a wake-up call.

The Future of Bitcoin Mining

Each block currently generates 6.25 new BTC, which goes to the miner who has confirmed that block and user fees.

The block reward divides in half in the Bitcoin halving event every four years. In the beginning, each block generated 50 BTC, which first decreased to 25 BTC, then to 12.5 BTC, and lastly to 6.25 BTC.

In other words, there will increasingly be few coins available for Bitcoin miners, which has led them to act accordingly.

Miners have been saving and requesting collateralized loans to avoid spending their Bitcoin holdings to pay for their activities. It is public knowledge that their business model is moving away from block rewards toward fees paid by users.

That does not imply that users will pay higher fees for their transactions, but it will represent some of the primary income for miners.

Still, the use of on-chain or mainnet transactions may drop, and the usage of the Lightning network may rise. That will not involve only retail users but also payments requiring more liquidity.

People will use the mainnet to consolidate higher balances and payments, as those exchanges and users might need for storing their coins in hardware wallets.

Analyst Lyn Alden explained that thesis in an essay where she argues that fees will support Bitcoin mining in the future.

Bitcoins that are lost or destroyed

Although the maximum issuance of Bitcoin will be 21 million units, many coins have gotten lost forever over time. A study by the Cane Island firm indicates that 4% of the issued bitcoins disappear every year. For that reason, they say that only 14 million BTC will be in circulation.

Some users could lose their private keys and not be able to access their wallets anymore. A person could send some BTC to an unused wallet or one whose keys are lost. An account holder could die without leaving heirs, thus making his wallet inaccessible forever. The above are some unintentional ways of destroying bitcoins.

However, some individuals might send them to wallet addresses whose owners destroy the private keys with premeditation. In that regard, Satoshi Nakamoto stated that each bitcoin would become more valuable if other coins disappeared forever.

By Alexander Salazar

European Union Consents to a Rule that Represents a Menace to the Crypto-Anonymity and Self-Custody Wallets

Jenson Nunez
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European Union Consents to a Rule that Represents a Menace to the Crypto-Anonymity and Self-Custody Wallets

Lawmakers in Europe voted in favor of the Funds Transfer Regulation, a procedure that could end anonymous crypto transactions, even the less prominent ones.

The Parliament of the European Union (EU) voted this Thursday in favor of a controversial rule that threatens the anonymity of cryptocurrencies and could limit the use of self-custody wallets throughout the bloc.

European lawmakers approved the so-called “Transfer Funds Regulation” (TFR) in a vote held on March 31. News outlet CoinDesk reviewed. MP Stefan Berger also released unfavorable results for the digital currency sector through his Twitter account.

Stefan Berger regretted the results of the amendments to TFR. According to Berger, this situ weakens Europe as a spot for innovation; he also notes that the provision had won bipartisan approval in Parliament.

The regulation in question suggests revising the current Funds Transfer Regulation (TFR) to expand the requirement for instructions to attach information about the parties carrying digital asset transactions. It also intends to include non-custodial wallet digital asset transactions to anti-money laundering (AML) control protocols.

What the Regulation Proposes

A report led by The Block, which reviewed the latest draft of the bill, said the rule would need users of “crypto-asset transfer providers,” typically cryptocurrency exchanges, to highlight the identity of the beneficial owner of wallets.

The policy would also need merchant platforms that make those transfers easier to confirm that information regarding the entity. At the same time, the regulation would extend anti-money laundering requirements that apply to conventional payments surpassing €1,000 ($1,114) aimed at the digital assets environment.

The core issue with these requirements is that it could be difficult for crypto service providers to confirm a non-custodial counterparty. Patrick Hansen of blockchain firm Unstoppable Defi previously warned that these measures could guide the closure of smaller entities and undermine the industry’s growth in Europe.

The term self-custody wallets, also called “non-hosted” or “non-custodial,” refers to software or hardware to house digital assets that are not in the hands of a third party. Some examples of such wallets are MetaMask and WalletConnect.

According to The Block, the regulation itself defines them as “a crypto asset wallet address that is not held or managed by a crypto asset transfer provider, “according to The Block.

Rule Passed Despite the criticism

According to CoinDesk, a separate legal bill under recent debate would avoid transfers from being carried out to “non-compliant” crypto service providers, including those that carry out activities in the EU without permission or are not affiliated with or set up in any jurisdiction.

Various center-right European People’s Party (EPP) representatives rejected many problematic changes, lamenting a “de facto ban on self-hosted wallets.” Among them, Berger (EPP member) condemned the position of his S&D counterparts (Socialists and Democrats), who supported the reforms.

By: Jenson Nuñez

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