International Business Times Predicts The Bitcoin Price Will Soon Go To New All Time Highs

Bitcoin making new highsIf you’re aware of the remarkable benefits offered by Bitcoin, you’re probably a Bitcoin enthusiast. And if you are a Bitcoin enthusiast, you’re probably sick of hearing that Bitcoin is “dead.”

To paraphrase Mark Twain, “The rumors of Bitcoin’s death have been greatly exaggerated.”

Bitcoin is certainly not dead, and if you had a Bitcoin for every time the mainstream financial press had declared it so, you’d be a very, very wealthy person.

At least one global financial journal is, rather than declaring Bitcoin dead, singing its praises and predicting that the price of Bitcoin will soon surge to new all time highs (a viewed shared by us as well).

International Business Times reports,

Bitcoin has been pronounced dead almost 100 times by news outlet after news outlet. Year after year, we find articles from notable news outlets such as The Washington Post, The Guardian, Forbes, and even a former bitcoin developer concluding that bitcoin is dead and that it is time to move on. Yet it’s still here.

We, at XBT Provider, believe that the price of bitcoin is suppressed and that we are soon going to see an upward correction in the price that could break the previous highs of over $1,000 per bitcoin. We do not share the general view in mainstream media that bitcoin is soon forgotten, but instead, we believe that it will be an integral part of our financial lives, just like the internet is today.

Permissioned blockchains will not outcompete bitcoin

Open platforms, like bitcoin or the internet are all heavily dependent on network effects to gain traction. As an example, we can compare the development of the open internet in comparison to closed company versions of it.

While the internet was not the only protocol being developed for sending information, it won over similar centralized solutions because of its open characteristics which in the end led to faster innovation.

We believe that bitcoin is at a similar stage as the internet in the 1990s. We are seeing multiple centralized blockchain solutions being developed by companies, similar to what was promised about the internet. However, looking at the internet as a roadmap of what will come, we have a firm belief that bitcoin will become the dominating blockchain for the transfer of value in the not too distant future.

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Bitcoin will remain the dominant cryptocurrency

The Bitcoin blockchain is not the only blockchain, and there are many blockchains in which people see potential. Hundreds of different blockchains have been developed, and hundreds have died due to lack of demand.

Some, like Ethereum, promises more bells and whistles than the Bitcoin blockchain, but to date, the Bitcoin blockchain has the highest number of users, the highest amount of investment in its ecosystem and the highest amount of resources securing its network by orders of magnitude.

Network effects are hard to get but even harder to overcome by competitors once they are starting to take form. We believe that if adoption of blockchain technology happens further, it will mainly happen by the adoption of the bitcoin blockchain while other blockchains might become niche use-cases at best.

Chinese currency will devalue further

The Chinese Renminbi (also known as Yuan) have been devalued in the last months, as a consequence of inadequate performance from the Chinese economy. This has led to many investors taking bets against the Chinese Yuan expecting the People’s Bank of China to be forced to devalue their currency against the USD further. If current trends continue, we expect to see a positive effect on the bitcoin price since bitcoin, and the Yuan is negatively correlated.

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Capital controls

On top of this, China is seeing more and more capital fleeing China in anticipation of further Yuan devaluation. More and more Chinese investors are moving their assets out of the country as fast as they are allowed, and often in ways that are illegal, to make sure that they retain their wealth.

Since bitcoin’s primary function is as a store of value and as a value transfer network that functions outside of any regulatory framework, we can anticipate a surge in their demand from Chinese investors if capital controls increase further.

We couldn’t agree more. Our price target for Bitcoin in U.S. Dollars for 2016 remains at $2,000.

That’s far from dead.

>> Read the entire article at ibtimes.co.uk

Bitcoin Price Set To Surge As Latin American Countries Turn To Bitcoin

Bitcoin in Latin America
Photo credit: techcrunch

The global economy in 2015 was marked by a significant drop in oil prices. For Latin American economies that derive the vast majority of their income by exporting their oil, the impact was catastrophic.

In addition to falling oil prices, the top commerical parnter of many Latin America countries is China. Facing economic problems of its own – including a crashing stock market – trading with China has shrunk as well.

This one-two punch of falling oil revenues and subdued trading with China, has placed many countries in South America in dire financial straights, besieged by more money printing and higher inflation.

It is within this realm of financial chaos that some economies are weighing an alternative, namely, turning to Bitcoin.

Tech Crunch reports:

The economic prospects for Latin America in 2016 are grim. With political instability in some of the region’s largest economies, as well as a general slump in prices in oil and other commodities, businesses and consumers are facing a depression and, in the case of Venezuela, economic collapse. The crash of the Chinese stock market has severely hurt the economy, as well — China is the No. 1 commercial partner for several countries in the region.

Many Latin Americans are turning to bitcoin as a solution, and the recent crises seem only to have accelerated adoption.

Last year, adoption of the digital currency broke records in Latin America. Payment processor BitPay reported a 510 percent gain in merchant transactions in mid-2015, but the most notable growth took place toward the end of last year. Latin American merchant transactions finished the year having grown by a staggering 1,747 percent from the beginning of 2015. Other key figures from Brazil’s bitcoin ecosystem showed bitcoinexchange trades surging by 322 percent and bitcoin wallet adoption growing 461.4 percent. Exchange trading in Mexico grew by 600 percent in 2015.

In Latin America, the country most known for bitcoin is Argentina. And while Argentina has had the most bitcoin enthusiasts per capita, that may be starting to change. Brazilians and Venezuelans also have good reasons to adopt bitcoinbitcoin holders in 2015 enjoyed earnings during 2015 that performed more than 400 percent better than the Venezuelan Bolivar, more than 92 percent over the Brazilian Real, more than 65 percent over the Mexican Peso and more than 41 percent over the Argentine Peso.

Inflation and payment problems drive consumers and businesses to alternatives

The crisis facing Latin American economies did not begin in 2016. Argentina, Venezuela and Brazil ended 2015 with serious economic problems, including huge inflation rates — as high as 275 percent for Venezuela (63 percent for 2014), ~30 percent for Argentina (36.4 percent for 2014) and 10.4 percent for Brazil (6.3 percent for 2014).

There is simply no denying that adoption of Bitcoin by a sovereign Latin American country would propel the Bitcoin price tremendously higher versus that country’s formal currency.

The ripple effects will be felt worldwide.

>>Read the full article at techcrunch.com

Wall Street Journal Recognizes Bitcoin As “Best Performing Currency In The World Last Year”

Bitcoin Digital CurrencyAmidst report after report by the mainstream financial press that Bitcoin is doomed, (it’s NOT doomed, but the mainstream banking industry is doing everything it can to scare the masses away from Bitcoin), it is extremely refreshing to see a somewhat more balanced article in Marketwatch – a publication of the Wall Street Journal – that acknowledges Bitcoin as “The Best Performing Currency In The World Last Year.”

Marketwatch reports:

Bitcoins are booming. They have doubled in price in the last six months. Indeed bitcoins were actually the best performing currency in the world last year. I ran an exhaustive screen on FactSet, making sure to include everything from the Afghanistan afghani (down 16% against the U.S. dollar DXY, +0.05% ) to the Zambian kwacha (down 42%). Bitcoin trounced them all. The dollar value of each bitcoin jumped 40% during 2015, from $310 to $434. (The currency in second place, the Gambian dalasi of all things, was nowhere near: It rose just 9% against the U.S. dollar.).

At current prices, the total value of bitcoins in the world now tops $6 billion. That’s quite some “fad.”

Bitcoins are hard to get your head around until you’ve used them. (Alec Ross’s new book, The Industries of the Future, contains an admirable section explaining the technology.) But in a simplistic nutshell, you can go online and exchange your dollars for bitcoins, transfer those bitcoins anonymously to anyone, anywhere in the world, and they can then exchange them back into dollars — or leks, or yen, or whatever.

The entire transaction takes place outside of the banking system. No one has to show any ID to anyone. The exchange rate for bitcoins is set by a freely traded market. And bitcoins have value for the same reason that dollar bills and gold coins have “value” — because lots of people think they do, and they know that other people do as well.

What really matters is that the bitcoin infrastructure isn’t controlled by any entity. Not one government, not one company, not even one cooperative. It uses an incredibly ingenious and complex set of programs running on a giant network of independent computers around the world.

Bitcoins are the Matrix. They are everywhere and nowhere. And they’re going to be a problem for regulators.

Because right now the world’s governments are trying to tighten their regulation, supervision and control over any and all transactions bigger than buying a pack of gum.

The article goes on to attempt to convince the reader that banking privacy is somehow bad, and tries to make the case that anyone involved with Bitcoin or cash is doing so with “nefarious purposes.”

We strongly disagree. Cyprus was a test case for wider bank “bail in” implementation globally. In an age when the mega banks are violating laws daily with impunity, and have been given the power to confiscate depositors money, we believe it is more important than ever to be able to keep one’s wealth out of the hands of potentially criminal bankers.

Cash and Bitcoin are both critical to freedom itself.

Yes, they both CAN be used for nefarious purposes. But so can automobiles. Just because one person chooses to vilolate the law and drive intoxicated does not mean that we need to take automobiles away from every person on Earth.

The same logic applies to cash and Bitcoin.

>>You can read the full article at marketwatch.com

MIT Scientist Can Accurately Predict The Price Of Bitcoin

Photo credit: MIT
Photo credit: MIT

The Massachusetts Institute of Technology isn’t some ordinary grade school. It is world renown for being a global leader in technological expertise. When it comes to accurately predicting the Bitcoin price, an MIT researcher has gone where no man has gone before: developed an algorithm that can accurately predict the future price of Bitcoin.

However, before you get excited that this technology will be able to inform you what the Bitcoin price will be next month, next year, or 10 years in the future, you need to be aware that it can only predict 10 seconds into the future.

MIT.edu reports:

A researcher at MIT’s Computer Science and Artificial Intelligence Laboratory and the Laboratory for Information and Decision Systems recently developed a machine-learning algorithm that can predict the price of the infamously volatile cryptocurrency Bitcoin, allowing his team to nearly double its investment over a period of 50 days.

Earlier this year, principal investigator Devavrat Shah and recent graduate Kang Zhang collected price data from all major Bitcoin exchanges, every second for five months, accumulating more than 200 million data points.

Using a technique called “Bayesian regression,” they trained an algorithm to automatically identify patterns from the data, which they used to predict prices, and trade accordingly.

Specifically, every two seconds they predicted the average price movement over the following 10 seconds. If the price movement was higher than a certain threshold, they bought a Bitcoin; if it was lower than the opposite threshold, they sold one; and if it was in-between, they did nothing.

Over 50 days, the team’s 2,872 trades gave them an 89 percent return on investment with a Sharpe ratio (measure of return relative to the amount of risk) of 4.1.

The team’s paper was published this month at the 2014 Allerton Conference on Communication, Control, and Computing.

“We developed this method of latent-source modeling, which hinges on the notion that things only happen in a few different ways,” says Shah, who previously used the approach to predict Twitter trending topics. “Instead of making subjective assumptions about the shape of patterns, we simply take the historical data and plug it into our predictive model to see what emerges.”

Shah says he was drawn to Bitcoin because of its vast swath of free data, as well as its sizable user base of high-frequency traders.

>>Read the full article at MIT.edu

Bitcoin Price Suffers This Past Week As Battle For Control Rages On

Bitcoin MIT Technology ReviewWe’ve reported on the struggle over control of the Bitcoin protocol, and how that uncertainty is causing a pause in the price of Bitcoin. This past week, the battle raged on as the mainstream banking industry continues its attempt to co-opt and take control of Bitcoin.

As a result, the Bitcoin price suffered, briefly dropping to under $400 before recapturing that level.

MIT Technology Review reports:

For more than a year now, people who use or work on the digital currency Bitcoin have been arguing about how to fend off a looming problem that some leaders in the community say could kill the whole system. This week that problem has become very real. Some people and businesses using Bitcoin have found their funds stranded after trying to send them to other users.

The problem is caused by Bitcoin’s design, which is capable of processing at best only seven transactions per second. This week the currency, which is powered by a decentralized network of computers run by people and businesses around the world, hit its capacity limit. A backlog of stranded transactions has built up. (There is debate as to whether this happened naturally, or by a person or group intentionally trying to cause problems for Bitcoin.)

It is quite clear to us that the above problem is the latter, and did NOT happen “naturally.” The global banking industry does not like competition, and now that Bitcoin has emerged as  a serious alternative, the global banking oligarchy is doing everything it can to take control of Bitcoin and merge it into mainstream banking.

The jury is still out on whether or not they will be successful.

Stay tuned.

>> Read the full article at technologyreview.com.

Bitcoin’s Price In Limbo As Struggle Over Control Of Protocol Continues

Bitcoin Price and ChinaIn January of this year, one of Bitcoin’s insiders got upset and left the Bitcoin arena. In doing so, he burnt the bridge, so to speak, and will not have a place with Bitcoin in the future.

Despite his harsh words towards Bitcoin upon his departure, and despite his severing all ties, the battle for control over the Bitcoin Protocol rages on. Many people within the Bitcoin community believe this man had ulterior motives and was on the side of mainstream banks, and their desire to co-opt Bitcoin.

Forbes has the details:

For the last year, the Bitcoin community has been embroiled in what is, on one level, a technical debate over how to upgrade the network to accommodate growing transaction volume.

The fighting reached a head in mid-January, when a prominent developer declared the currency a failure and left Bitcoin. It promptly lost about 15% of its value and hasn’t recovered.

What has been called “the block size debate” (referring to the megabyte limit for each group of transactions processed) has now grown into a power struggle, with the group of volunteer developers working on the protocol splitting into several camps.

“This is not really about block size,” says core developer Eric Lombrozo. “It’s really about the control of the protocol.”

What seems like a technical debate on the surface is actually deeply informed by human politics and personality differences. But because major players in the Bitcoin ecosystem are based in China, the outcome of this dispute in the Western Bitcoin community is also being influenced by cultural gaps between the West and China of which they may be only vaguely aware.

On Wednesday, one of the new teams, which has christened itself Bitcoin Classic and is supported by Coinbase, one of the most well-funded companies in the space (the original team is called Bitcoin Core), released a new version of the software making another attempt at an upgrade, which Lombrozo called “a tactic to shift power away from the Core devs.”

However, by Thursday morning, two dozen people representing almost 20 Bitcoin companies, many of which would be directly affected by the software change (and accounting for more than half of the network powering Bitcoin) formed a group called the Bitcoin Roundtable and released a statement effectively rejecting the new software, at least for the time being.

In fact, one of the very companies listed on the Bitcoin Classic website as if it were a supporter, HaoBTC, disavowed this new version of the software in an email. Chief strategy officer Eric Mu wrote, “We did use the word 支持 (translated as ‘support’), in both the CEO’s statement and verbally when meeting with Classic lead developer Mr. Jeff Garzik in Beijing. However, that is by no means to say that we will switch our mining power to Classic.”

Mining is the activity that sustains the network — and it distinguishes Bitcoin from previous Internet applications. Bitcoin is often described as a way to transfer money peer-to-peer, without a bank or financial institution acting as a middleman. For this reason, the Bitcoin community likes to describe the currency as “trustless,” meaning that a user does not have to trust a third party such as a bank to ensure the proper processing of a transaction. However, using Bitcoin does in fact require trusting a collective third party: the miners who process the transactions by recording the most recent transactions onto a public ledger containing every Bitcoin transaction in history, copies of which are kept on computers around the world.

As David Evans, a lecturer at University of Chicago Law School wrote in a 2014 paper, “the fact that the public ledger is decentralized — so there is not a bank or a government acting as the intermediary — may have interesting political or social value to some. But from the standpoint of considering economic efficiency there is still an intermediary, just a very different sort of one.” He says Bitcoin is much more complicated than a typical open source project because it involves managing and incentivizing a large network of laborers — the miners — to process the transactions.

This is the problem that competing Bitcoin teams are running up against: no one camp can very easily wrest power away from the other without the support of the miners — and about three-quarters of their current network power is located in China.

At the present time, in spite of tirllions of dollars at their disposal, the western mega-banks, JPM, BAC, Citi, etc, cannot wrest control of Bitcoin due to the fact that the majority of Bitcoin mining is done in China, and the miners are the ones holding the control of the protocol.

This has been an interesting battle to watch, and one thing is very clear: the battle will continue to rage on. Meanwhile, the Bitcoin price is taking a breather to see which way the power struggle goes.

>> Read the full article at Forbes.com

Growing Bitcoin Demand Will Lead To Higher Bitcoin Prices In The Future

Bitcoin ETN
Photo credit: Bitcoin Magazine

The financial industry has not only stood up and taken note of Bitcoin in the past two years, they’ve actively been involved in funding and developing Bitcoin ventures. Of course, one of the most well known is Coinbase, where you can buy Bitcoin with complete confidence and security. Coinbase has received two rounds of financing totaling more than $25 million.

The reason that the financial industry has become involved with Bitcoin is basically because of Bitcoin’s success. It’s growing popularity  has not gone unnoticed. Financial experts believe the growing Bitcoin demand will lead to higher Bitcoin prices in the future.

Now a Swedish company that has launched the world’s first Bitcoin-backed instrument on a regulated exchange in order to give investors exposure to the anticipated Bitcoin price rise in the coming months and years.

Bitcoin magazine reports:

XBT Provider, a Swedish company that has launched the world’s first Bitcoin-backed instrument on a regulated exchange (Nasdaq Nordic) is planning a global expansion following its success in the Scandinavian region.

The firm manages two Bitcoin instruments called Bitcoin Tracker One and Bitcoin Tracker Euro. The latter was launched with the approval Sweden’s financial supervisory authority, Finansinspektionen, on October 5, 2015, for the purpose of mirroring the return of the underlying asset, U.S. dollar per Bitcoin.

Bitcoin Tracker Euro as an exchange-traded note (ETN) has since become increasingly popular among investors on the Swedish regulated exchange, securing the title of the most traded  ETN on Nasdaq Nordic.

With the explosive growth and increase in interest in Bitcoin ETNs, the XBT Provider team unveiled the company’s plans for global expansion of their Bitcoin instruments in an exclusive interview with Bitcoin Magazine.

Success of Bitcoin ETNs and Instruments

Bitcoin ETNs and instruments, including the Bitcoin Tracker Euro and GrayScale Investment’s GBTC, have performed exceptionally well against major reserve currencies and global asset classes since mid 2015. Currently, a share of GBTC is being traded at $57.40, and since a share of GBTC guarantees investors about one tenth of a bitcoin, investors are purchasing Bitcoin using GBTC at an average price of $602.71 per coin. That is a premium almost 40 percent higher than the actual price of Bitcoin.

>> Read the full story at Bitcoinmagazine.com

Is Bitcoin Ready To Test $450 USD?

Bitcoin Price Spike
Photo Credit fxnewscall.com

In Our news story of a few days ago, Bitcoin Price Near-Term Neutral, we stated, “After shooting up in price to near $500 USD late last year, the price of Bitcoin has been consolidating in the $400’s for the past two months. Technical analysis shows a near term neutral stance on Bitcoin’s price.” That process of consolidating in the $400’s is continuing.

We believe that Bitcoin has reached a temporary plateau and is currently building a base in the lower half of the $400’s from which it will launch its next rapid rise.

FXnewscall.com believes that the next target for Bitcoin is the $450 level:

Bitcoin price stayed in a bullish territory this week against the US Dollar, and it looks like there is a chance of it gaining in the short term. There is an ascending channel pattern formed on the 4-hours chart of BTCUSD, which may play a crucial role for both buyers and sellers moving ahead.

No doubt, BTC buyers are struggling to gather pace, but since the price is above the 100 simple moving average (H4), there is a possibility of a spike higher before it finds sellers.

If the highlighted channel support trend line holds, then the price may spike once towards the upper channel resistance trend line. The 76.4% Fib retracement level of the last drop from the $448 high to $409 low is acting as a hurdle for buyers.

>> Read the full article at fxnewscall.com

Accurate Bitcoin Predictions Are Difficult To Make

Bitcoin Price Predictions
Photo Credit: themerkle.com

Traders, speculators, and most professional financial investors use price charts to graphically illustrate recent price action. Chart analysis works because human nature doesn’t change. The pendulum continually swings back and forth from fear to greed, also known as risk-on and risk-off. These continuous swings in investor sentiment show up in recognizable price patterns, and thus the ability to use charts to predict future price movements and targets.

Even so, future price predictions are never 100% accurate. When if comes to Bitcoin price prediction, the challenges of coming up with an accurate forecast are even greater than they are in more traditional, established markets.

Themerkle.com weighs in:

One thing people can hardly argue about is how difficult it can be to estimate the upcoming Bitcoin price. Even when it comes to guessing the value in an hour from now, the result could be way different than what people anticipate it will be. But that isn’t keeping enthusiasts from posting their daily and weekly technical analysis, as well as a prediction of what the Bitcoin price might bring in the coming days.

While there are plenty of platforms to learn more about analyzing price charts and exchanging thoughts and ideas with like-minded people, Bitcoin has proven to be rather fickle creature in the financial world. The Bitcoin price responds in an untraditional way on the good, bad, and regular news.

Bitcoin price analysts have to keep in mind how there are a ton of different factors which can affect the value of one BTC at any given time. There are still lots of speculators holding semi-large amounts of digital currency, which can be sold at any given moment. This scenario of the so-called bears and bulls is not uncommon in the Bitcoin world, although is is taking place far less frequent than before.

>> read the full article at themerkel.com

Bitcoin Price Near-Term Neutral, Medium-Term Bullish

Bitcoin Price Fundamental
Photo credit: CryptoCoinNews.com

After shooting up in price to near $500 USD late last year, the price of Bitcoin has been consolidating in the $400’s for the past two months. Technical analysis shows a near term neutral stance on Bitcoin’s price, while the medium and longer term fundamentals remain decidedly Bullish.

CryptoCoinNews reports:

Friday’s technical analysis concluded that the outlook for bitcoin price is bearish while price fails to break above the prevailing resistance ceiling (blue down-sloping line in the chart). Going forward, technical analysis will be informed by the position of price in relation to this ceiling: if the market can successfully trade price above it, we can expect continuing advance. As long as price remains below it, we can expect another series of lower lows.

Should price fall away from overhead resistance, the downside target is the 4hr 200-period moving average (red in the chart above).

Social Mood

Yesterday, sentimental analysis considered wider public interest in Bitcoin as reflected in Google search trends. Assuming that the majority of mainstreet uses Google as their go-to search engine, the frequency of searches for the term ‘bitcoin’ has been declining.

Social mood in the Bitcoin ecosystem, it was concluded, is negative. Factions have polarized on either side of the “blocksize debate” and discord is rife. The contentious actions of a few tear-away developers and exchange owners threatens the security and integrity of Bitcoin and renders the commodity money a risky investment vehicle and potentially dangerous to hold.

Store of Value

An outcome of this fundamental insecurity that surrounds Bitcoin is that speculators and investors concerned with the faltering global economy are reluctant to utilize Bitcoin as a safe haven and store of value.

It can be concluded that Bitcoin does not, currently, enjoy much interest from the general public. Nor does it represent a sound store of value to the majority of investors and large investment institutions. Had there not been uncertainty surrounding the integrity of the blockchain – the prospect of a contentious and potentially borked hardfork – we might have seen Bitcoin’s fundamental value reflected in the price chart. Especially so, during the reeling markets of the past nine months.

While CCN correctly points out that the majority of mainstream investors do not currently consider Bitcoin a safe-haven asset, slowly and steadily that viewpoint is eroding. Longer term, when the opposite is true, and the majority of mainstream investors do view Bitcoin as a safe-haven asset, the price will be many, many, many multiples higher than it currently is.

You can read the entire article at CryptoCoinNews.com