Bitcoin 

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New Bitcoin wallet addresses have reached a 2-year high, possibly fueled by a campaign by the Chinese government to start advocating for the cryptocurrency sector in a systematic campaign. These findings were disclosed by a market analyst by the name of Cole Gardner in a series of tweets on the popular microblogging platform Twitter.

Bitcoin addresses are like bank account numbers but instead of a bank-generated number attached to your ID card, Bitcoin addresses are large combinations of numbers and other characters that show what amount of Bitcoin is by whom. Now if the number of Bitcoin addresses increase over time, it largely means that the number of people owning the cryptocurrency are also increasing. This in turn means that the overall adoption and usage of the premier cryptocurrency are seeing a considerable uptick as well, thus contributing towards the growth of the crypto sector. 

New Addresses Increasing at Unprecedented Rate

Commenting on the increasing number of Bitcoin addresses, Garner showed that over 22,000 new addresses have been added to the network in one day alone in recent memory, which is much bigger than the average number of around 5,000-10,000 per day. He made these discoveries using a simple tool provided by analytics website Glassnode. 

This finding came out after analyst Willy Woo also highlighted a spike in activity in the generation of new Bitcoin wallets in the network. Woo also crucially pointed out that this activity wasn’t reflected on the actual price of the cryptocurrency and therefore, the future may witness some appreciation because of this factor as many of these new wallets will be looking to buy the cryptocurrency when the value is at intermediate level and nowhere near all-time high.

China Advertising Crypto Sector

A part of the reason why the sector is showing growth when it comes to new wallet addresses is the fact that the Chinese government which has historically been critical of public appraisal of the sector has now come out all in favour of the sector. 

Garner tweeted:

“Last week the Chinese government began a coordinated marketing campaign to focus Chinese retail investor psyche on crypto. Yes, this is really happening,”

Now the governments, especially the secretive ones like China’s usually don’t go in full public advertisement mode easily as many of them see it as a threat to the strength of the local currency. China is also locked in a trade war with the United States and this tussle between the largest and the second-largest economies of the world is expected to last some time. Both China and the USA would therefore be looking to keep their local currencies stable as the war plays out. China has historically banned cryptocurrencies officially but a considerable number of deals are happening via Bitcoin through Chinese traders as the government has looked the other way. It has also invested heavily in cryptocurrency mining facilities itself as well as incentivized big miners from around the world to invest in the country and take advantage of the cheap power prices produced from large government-run power producing units. It appears that China is looking at the cryptocurrency and blockchain sectors to give it a technical edge over the rest of the world as it increases its influence in the region and beyond. The new Chinese silk road project that connects more than 20 countries across Asia and even Europe is part of this expansion. 

Verdict

This considerable interest and investment into the crypto sector is already showing results and if the growth is sustained, we may be in for a price rally of the Bitcoin price index in the near future. It is therefore a good time to invest in the sector but one needs to be careful and only buy crypto from official exchanges only to avoid any possible online scams and counterfeiture. 

Bitcoin technical analysis 

With a turbulent week in both crypto and traditional markets, it's necessary to get an up-to-date look at the markets at every opportunity that is presented. With that said, let’s take a look at the current state of Bitcoin and extrapolate out some future predictions for the short, medium, and long-term.

Short Term

By short term, we mean on a timeframe that uses candles that are 1 hour each. This should give us a look at the upcoming hours and next couple of days. Here we have the 1-hour Bitcoin chart.

BTC/USD short term chart

As you can see, we’ve been working for a few days at filling out this wedge/pennant. The thing about these patterns is that they often don’t lean one way or another. The best bet for the next couple of days and upcoming hours for Bitcoin would be that we continue to go sideways.

For the short-term, this is a neutral viewpoint. Though there’s nothing extreme here to predict, you can still use the pattern to your advantage based on which way it ends up breaking. If the pattern breaks up from this pennant, you can bet on a short-term trend to continue up. The same can be said of the opposite.

 At the present, we see nothing of particular note on this timeframe and expect some calm sideways movement.

Medium Term

For the medium term perspective, we’ll be looking at a chart with 4 hour handles. This chart should give us a good idea of what is to come in the next few days. Here is the chart we are looking at for the medium term.

BTC/USD medium term chart

This timeframe also displays the pennant pattern that we saw on the short-term timeframe. This view, once again, is a pretty neutral viewpoint. The fact that we haven’t recovered highs from the previous leg up and really haven’t even tried is somewhat discouraging.

However, we won’t know for sure until we break the pennant pattern that we are currently forming. With 4 touches on the bottom end of this triangle, one would think that the next move is a breakout of the pennant. However, we could just as easily bounce from the top again. With the MA line as support and the Stoch RSI near the bottom and ready to crossover, this view is overall bullish, but still filled with uncertainty.

Long Term

The long-term chart is one that is much more appealing. This chart will be looked at using 1-hour candles. With this view, we’ll get an idea of what we can expect in the coming days and weeks for Bitcoin price action.

BTC/USD long term chart

This chart gives us a much more clear picture of what is happening with Bitcoin over the long-term. We view this chart to be very bullish, albeit indicating a short-term drop down to previous levels of support.

As you can see, Bitcoin has recovered very nicely and performed well in the midst of global unrest and volatility and markets. We have consistently established higher lows, albeit resulting in somewhat neutral price action. The good news is that by no metric is Bitcoin overbought right now. We expect Bitcoin to continue its rise and continue setting higher lows.

Factors to Consider Moving Forward

As we move forward, it is going to be important to take note of current events. With so much going on in the world, markets including cryptocurrency and traditional markets are sure to be affected. Make sure you keep your pulse on the worldwide economy and be ready to adjust at a moment’s notice.

 

 

 

 

bitcoin and fiat currency 

Bitcoin price has been slowly but steadily rising for the past months. As more and more signals that suggest an incoming bull run keep appearing, optimistic prognoses regarding the long-time future of the most valuable cryptocurrency are also getting increasingly popular. Recently, the entrepreneur and author Jeff Booth decided to share his outlook on bitcoin’s future with the crypto community.

Booth, author of the popular book “The Price of Tomorrow: Why Deflation is the Key to an Abundant Future” and the founder of Canada-based tech company Builddirect, has discussed the current state of the global economy in an interview with Cambridge House International. The focus of the interview published last week was bitcoin, and specifically, how the economic situation will affect BTC price and the digital currency’s ultimate future.

The world economy 

Booth believes that the world’s economy will not be able to successfully deal with the effects of the coronavirus pandemic. Although Booth’s book has been published before the start of the pandemic, he claims that COVID-19 has only accelerated the mechanisms that were already in place long before. Central banks were printing fiat currency ever since the gold standard was abolished, but the pandemic-related stimulus packages greatly increased the rate at which the governments print money. For Booth, it’s a sign of an imminent, worldwide economic depression, and a severe crisis of the entire economic system built around fiat currency and central banking.

Devaluation of Fiat-money 

Booth predicts that the unrestrained money printing will lead to a massive devaluation of the dollar and other fiat currencies: “once the Fed loses its credibility then all bets are off in inflation”, he says. However this grim outlook on the world’s economic situation is precisely what makes Booth so bullish on Bitcoin - he believes that as inflation gains momentum, people will turn to deflationary assets like BTC and gold.

Optimism about Bitcoin 

Although Booth has revealed that he owns both bitcoin and gold, and he encourages everyone to diversify their portfolio, he also states that he is “much more bullish on bitcoin”. Booth claims that BTC “could be the new gold”, and he even goes as far as saying that “everyone’s portfolio must include bitcoin”.

Booth believes that bitcoin’s major advantage over gold is its portability. As national fiat currencies start to rapidly lose value, people will flee to BTC - the asset that not only is immune to inflation, but unlike gold, it’s also very easy to store and transfer. According to Booth, when the fiat system collapses, bitcoin may even go from a safe haven asset to the world’s reserve currency - the dominant form of money to which all national currencies are pegged.

British flag 

Image source: pixabay.com

One of the world’s largest cryptocurrency exchanges Coinbase is handing over its customer data to Her Majesty’s Revenue and Customs (HMRC) for all who received more than £5,000 (€5,510) worth of cryptocurrency payments during the last tax calendar. Now Coinbase had sent a notice to its UK-based users via Twitter that their information will be shared with the tax department in the United Kingdom on October 2 last week. 

Initially, the exchange was liable to send all previous transactions starting from 2017 but now it is only giving the data from the last tax calendar only, in a sign of compromise. The €5,510 cut-off amount was also deliberated and eventually agreed upon with the government demanding an even lower scrutiny amount while the exchange itself was looking for a smaller one. The demand is similar from tax authorities of governments around the world with many of them looking to get even greater access into user information of crypto users. New Zealand’s government for instance has gone one step even further than the UK and demanded even more specific information from local crypto exchanges. 

The Centralized Exchanges

Centralized exchanges like Coinbase, Binance, Bitstamp, Bitfinex, Huobi and others do make things easy for users around the world. They allow instant purchases with our bank cards, instant trading capability, etc. However, despite their increasing utility, we are also seeing how they can be used by government agencies to track citizens even though many of them look to cryptocurrencies as a means to avoid government censorship. According to a spokesperson from the Coinbase UK said:

“These requests are commonplace for financial services companies. Through a series of constructive conversations, we agreed upon a more limited and focused disclosure…”

While the exchange itself may be sincere in doing so, the truth is that these centralized exchanges have their hands tied in a constant barrage of governmental regulation which often forces them to reveal sensitive customer data to the authorities. They need to comply with these demands or else they are banned from operating in these respective countries. It is a classical centralized trap for centralized ventures. The government can easily shut them down according to will. Some cryptocurrency promoters believe that this centralized model of exchange is the single biggest threat faced by the crypto community because even if there is no government regulation, these organizations have direct control over other peoples’ funds worth hundreds of billions of dollars which is antithesis to the crypto industry that despises this over centralization. This setup allows many exchanges to misreport their data. 

Decentralized Exchanges

Decentralized exchanges that are autonomously operated and don’t have a central authority in complete control over the proceedings are probably the holy grail of the cryptocurrency sector. They envisage an exchange platform that is not controlled by a centralized model and thus it is not answerable to government regulation and censorship. However, despite fast-track development on this front, many of the concepts coming from the crypto sector couldn’t fulfill their promise of a fully functioning decentralized exchange for some time. Either there was some hidden centralized feature or the functionality just wasn’t there. However, now it seems like the next crop of these exchanges will fulfill many of the user requirements and challenge the centralized exchanges as a means of exchange in the crypto world. Exchanges like Uniswap and others may solve the issue of over centralization in the sector but they also have a long way to go if they wish to become the industry standard. The centralized exchanges will therefore need to adapt quickly or risk becoming obsolete in the end. 

President Maduro of Venezuela

A few weeks ago, the president of Venezuela, Nicolás Maduro ruled the beginning of the use of cryptocurrencies with regard to national and world trade, now, you will wonder where that interest comes from?

Certainly, Venezuela has been closed in terms of the use of cryptocurrencies, reaching a point where they even created a national "cryptocurrency" that is maintained thanks to the country's natural resources; however, they have surprised with this news.

This is due to a kind of counterattack to neutralize the devastating economic sanctions of the United States.

All this was officially announced in Parliament on September 29, it is well known that in Venezuela the use of cryptocurrencies used to be an open secret, because it was not legal to use or mine them.

Even so, Venezuela had and has high transaction rates, especially because it is an option for sending remittances.

For his part, President Nicolas Maduro said verbatim "this measure will give new strength to the use of Petro and other cryptocurrencies, national and global, in national and foreign trade ..."

When it comes to the Petro. talks about the cryptocurrency named above, which does not really enter the cryptocurrency categorization and has not had the success that was expected by the government. Also, the method of use is quite cumbersome and it is not a frequently used payment method.

For his part, Maduro was delivering an anti-sanctions law aimed at stimulating economic and social development, which was also affected by the United States sanctions.

These types of economic sanctions tend to strangle Venezuela's trade relations with nations that use the dollar as their official currency, because other countries decide to avoid as much as possible any rapprochement with the South American country.

For this reason and its consequences, the country decides dictatorially, to set its sights on the Petro. It should be noted that the sanctions applied to countries like Venezuela do not usually bear the fruits that are believed since ending a dictatorship of this magnitude goes beyond constant economic blockades.

Venezuela, being the sixth largest oil producer in the world, hopes that through cryptocurrencies the restriction of petrodollars can be compensated, which is included in the consequences of economic sanctions.

Outrage by the cabinet

The entire cabinet of this left dictatorship has been scandalized by these sanctions (and to be honest, by all the previous ones and by whatever the president of the United States says or does).

He also said “Donald Trump and his sanctions prevent Venezuela from carrying out transactions in any of the world's banks. There are other ways to pay, and that's what we are using, because our payment system works perfectly in China and Russia "because China AND Russia are its main allies, there is no problem with the use of their payment systems, but in Definitive are not the best example to demonstrate the functionality of the system.

Now, according to the report made by Bloomberg, the central bank of Venezuela is taking into account the statements and studying if they can have crypto reserves and how this would help or affect the country and its economy, which is already in decline.

They also have bitcoin (BTC) and Ethereum (ETH) as their immediate targets.

In fact, they are assets that have already been requested by the state-owned Petróleos de Venezuela SA.

This oil company plans to send BTC and ETH to the central bank and once that is done, have it pay the company's suppliers with the coins.

To conclude

It is not a secret that the deepening of the economic crisis in Venezuela has led the country to massive adoption of cryptocurrency, this is proven in the more than $ 8 million in bitcoins that are traded every week according to Coindance data.

However, it should be noted that decisions like these are not taken lightly and are not necessarily going to help the common Venezuelan citizen, since this probably comes with laws that charge high fees and criminal penalties for not using cryptocurrencies in the way in which they prefer. In fact, it could even become another bump for Venezuelan society and its daily quests to survive.

Finally, it is important to note that the government recently signed a new tax agreement with which it will be able to collect taxes and fees on the petro, as we said before, most of its decisions have more pros than cons.