Welcome to the Crowdify digest of interesting and important news and views about Bitcoin and Cryptocurrency.
Bitcoin Price Crosses $3,000 Milestone to Set New All-Time High
The price of bitcoin topped $3,000 for the first time in history today, according to the CoinDesk Bitcoin Price Index (BPI).
After spending much of the last week seeking direction in the $2,700 to $2,900-range, the average price of bitcoin across major international exchanges edged up over this threshold finally at roughly 17:00 UTC.
The new record comes at a time when alternative digital assets are seeing robust inflows, with ethereum's ether token setting a new all-time high of more than $300 today as well.
Indeed, analysts spoke to the ongoing broadening of the cryptocurrency market as a tide that is benefitting bitcoin.
Full story at http://bit.ly/2r9NWyw
Hedge Funds Are Quietly Investing in Bitcoin
Hedge fundsHedge Funds Are Quietly Investing in Bitcoin are investment funds whose clients are accredited or institutional investors. They are less regulated than mutual funds since they are not subject to strict rules designed to protect investors. Some of them are not even required to register or file public reports with financial regulators.
Investments in hedge funds are only restricted by each fund’s mandate. They can effectively be anything including land, real estate and currencies, as long as they seek to maximize investors’ returns while reducing risks.
The comprehensive overall returns of hedge funds are measured by the hedge fund absolute return index (HFRX), which is representative of all hedge fund strategies. Hedge Fund Research (HFR), which provides data on more than 150 hedge fund indices, is the industry’s leading provider of hedge fund index data. According to HFR, the HFRI Weighted Composite Index only returned 0.46% in May and 3.5% year-to-date. In comparison, the S&P500 total return was 1.16% in May and 9.61% year-to-date.
Full story at http://bit.ly/2r9FxLr
Bitcoin Is At An All-Time High, But Is It About To Self-Destruct?
The bitcoin price has been on a tear recently, more than doubling to about $2,900 over the last three months. (It didn't hurt that Sunday, the popular Tim Ferriss podcast released a two-and-a-half-hour episode on the subject.)
But its meteoric rise belies a fact apparent to anyone active in the space: The bitcoin community is at war with itself and at greater risk of splitting apart than ever in its history. Already, the impasse has been a drag on its value.
The power struggle - over the seemingly simple question of how to upgrade the network to handle more transactions - is pushing fees so much higher that, for certain types of transactions, bitcoin is nearly unusable. Transactions that should take 10 minutes are taking days or not going through at all, and the average fee costs $4.75 — a negative development for a network whose proponents once touted the fact that it was cheaper than Visa.
Even more foreboding is the fact that, even as new money flows into crypto assets, businesses are pivoting away from bitcoin to build on other blockchains. That means countless transactions that could be processed with bitcoin, pushing up its price, will now take place on other blockchains, instead boosting their prices. Accelerating that trend is the fact that non-blockchain companies are now creating their own cryptocurrencies - but not on bitcoin. For instance, Kik, which plans to launch a new cryptocurrency called Kin, is building it on Ethereum. The factors above combined with the full speculative frenzy in non-bitcoin tokens and the civil war in bitcoin finally pushed its market cap as a percentage of all cryptocurrencies below 50% for the first time a few weeks ago; for years it had been at 80-90%. It hasn’t recovered since.
Full story at http://bit.ly/2soLsQD
Bitcoin Malware Changes Destination Wallet To Steal 13 BTC
Another timely lesson in crypto security comes as a user reports malware stealing 13 Bitcoins by automatically replacing their destination address.
When u/ask_for_pgp appealed to miners on Reddit in an attempt to halt the transaction before it was confirmed, the community soon realized the worst.
"I copy pasted BTC address into electrum and confirmed the bitcoin transaction. the clipboard replaced my [...] bitcoin address with a different one. few minutes later i discuss with friend if he already sees it in his wallet. he didnt. It sent to wrong address,” the user wrote."
"i checked all browser windows, private messages, chat histories. i do not know this address that grabbed the 13 BTC."
Full story at http://bit.ly/2soPqZL
How Cryptocurrencies Maintain Their Price, Explained
While being traded on the markets, cryptocurrencies experience various forces which push their price up or down. There is a range of measures which can be implemented in order to keep the price stable, or rising.
The price of a cryptocurrency is a reflection of its value. The more useful it is, the higher the demand for it will be. That demand is what drives the price of any one coin up.
However, internal factors are not the only ones affecting the price. Speculative pressure, exerted by traders who buy cryptocurrencies only to sell them later, is an external factor which may affect the price of a coin regardless of its actual usefulness.
Oftentimes, this pressure is negative - when the traders start selling, the price goes down. In such cases, the developers behind a coin may resort to an arsenal of their own tricks to push the price upwards and counter the downward dynamic. Let’s take a look at some of those methods.
Full story at http://bit.ly/2soAwTa
Blockchain Startup Stratumn Closes European Record $7.8 Mln Series A Round
Business-to-stakeholder Blockchain startup Stratumn has raised €7 mln ($7.82 mln) in a joint venture with names including Nasdaq and Digital Currency Group (DCG).
Stratumn, which launched in 2015, says the Series A round represents the "largest" such investment closure in the European Blockchain space.
"Our new investors will enable Stratumn to continue and accelerate its development and more effectively address growing needs in our markets," CEO and Co-Founder Richard Caetano said in a press release this week.
"We are especially happy with the continued and increased support from Otium Venture, who have accompanied us for a year, and excited to welcome CNP Assurances, Nasdaq and Digital Currency Group, who will help us reinforce Stratumn’s presence in the insurance and capital markets sectors."
Full story at http://bit.ly/2snZceM
Norwegian Investor’s “All-In” Bitcoin Buy Hits National Headlines
A Norwegian investor’s decision to sell all his shares for Bitcoin has seen the virtual currency hit the front page in the national press.
Business newspaper Dagens Næringsliv reported on Friday how Kristoffer Hansen, by day an IT advisor from the town of Trondheim, turned in everything he had in return for Bitcoin as prices hover around $2,800.
"I sold all my shares and put everything on Bitcoin. I’ve gone ‘all in,’" he told the publication.
While the exact amounts at stake are not known, the event is a further example of Bitcoin’s increasing prominence among traditional fiat investors.
Full story at http://bit.ly/2soxbU0
US State of Montana to Fund Local Bitcoin Miner With $416,000 Grant
While Bitcoin’s future may still be uncertain in the United States as various states aim to regulate the industry, the first state government to take a big leap into Bitcoin is the state of Montana.
As part of its efforts to boost local employment, the state has recently allocated public funds to help with a local Bitcoin mining firm project, according to the press release from the Office of Montana Governor, Steve Bullock.
The state has allocated a $1,124,030 mln local job aid package, $416,000 of which was awarded to Missoula County of BSTF Job Creation funds that are backing up a Bitcoin mining firm named Project Spokane, LLC to assist with its expansion plans.
This will allow it to create 65 new jobs in the Bonner area.
Full story at http://bit.ly/2soxeiE
Bitcoin Price Will Hit $250,000 by 2020 If Seven-Year Trend Continues
BitGo Software Engineer Jameson Lopp revealed that if the seven-year trend of Bitcoin price continues, Bitcoin will be valued at around $250,000 by 2020.
Lopp calculated the seven-year trend of Bitcoin price based on daily value change. With the exception of 2014, which was affected by the downfall of now-defunct Mt. Gox, Bitcoin has continuously recorded positive daily value change since 2010.
In the past three years, Bitcoin price has increased exponentially, surging by 0.09, 0.22 and 0.66 percent in 2015, 2016 and 2017 respectively on a daily basis. In 2017, Bitcoin price increased by 0.66 percent on a daily basis, as Bitcoin price surged from $980 to $2750 within a six-month period.
If Lopp’s Bitcoin daily gain since 2010 is considered, by 2020, Bitcoin price should reach $250,000. This, of course, assumes that Bitcoin price will increase at an average rate of 0.42 percent on a daily basis.
Full story at http://bit.ly/2soxwq2
Fee-For-All: Kraken to Charge Almost $7 for Bitcoin Withdrawals
The effect of Bitcoin fee increases on businesses continues as major exchange Kraken announces BTC withdrawals will now cost $7.
In a circular to customers on Thursday, Kraken, which together with Coinbase is one of the US’s largest cryptocurrency exchanges, said the move "brings the withdrawal fee more in line" with costs.
"Kraken always pays a miner fee that is sufficient to ensure transactions are processed quickly," it said.
"However, the average miner fee required to prioritize and confirm Bitcoin transactions has been increasing for some time without a corresponding increase in the fee we charge to clients."
Full story at http://bit.ly/2soU6i6
Bitcoin Will Make Many More Millionaires Before Diving
Bitcoin has been flying high lately, making many investors overnight millionaires - investors who poured money into the digital currency when it was trading at a tiny fraction of its current price. And it will make more millionaires, as it could reach for new highs before coming back down to earth.
There are a few good reasons for Bitcoin to do so. First of all there’s the ultra-low interest rate environment, which makes the Bitcoin “carry trade,” an appealing proposition.
Then, there’s a growing mistrust of national currencies, following a number of government policies that have pushed more investors to Bitcoin.
One of these policies is the pouring of new debt onto old debt by issuing new treasury bonds at record low rates. Japan, for instance, sells treasuries that yield next to nothing, though its debt amounts to as much as 250 percent of GDP. China’s treasuries yield something, but no one knows what its unofficial debt is.
Full story at http://bit.ly/2soABpW
Is bitcoin in a bubble? This metric suggests there’s more room to grow
One of the biggest financial stories of 2017 has been the seemingly unstoppable rise of bitcoin, which has more than tripled this year and seems to make new records by the day.
Such a rally has inevitably raised questions over whether there is a bubble in the digital currency, or in the broader space of cryptocurrencies, which earlier this week topped $100 billion in combined market capitalization. Breaking that milestone was largely due to bitcoin BTCUSD, +3.45% which by itself accounts for nearly half the value of the still-nascent sector. However, a new measure of bitcoin valuation, one based roughly on the price-to-earnings ratio applied to stock valuation, suggests that rally still has room to grow.
Gauging whether bitcoin is overvalued is tricky, as it is divorced from many of the standard attributes that can measure a security’s fundamentals. Unlike a stock, bitcoin has neither traditional revenue nor profits behind it, ruling out such equity statistics as price to sales or earnings before interest, tax, depreciation and amortization.
And because it isn’t backed by a central bank or government, viewing it in the way one might a currency isn’t an apples-to-apples comparison. A commodity like oil can be measured based on the principles of supply and demand; bitcoin has no equivalent underlying asset. (The Internal Revenue Service classifies bitcoin as property rather than a currency, while the U.S. Commodity Futures Trading Commission classifies it as a commodity.)
Full story at http://on.mktw.net/2sourWT
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