The Three Most Controversial Bitcoin Price Models and What They Predict

The Three Most Controversial Bitcoin Price Models and What They Predict

There are several well-known Bitcoin price models and theories that are often highly debated and considered controversial. Models like stock-to-flow, Hyperwave and Elliot Wave typically predict large price movements in the medium- to long-term.Stock-to-flow: Prediction and criticismThe first and most widely acknowledged Bitcoin price model is stock-to-flow. The S2F model predicts the long-term trend of Bitcoin’s value based on its scarcity. Since Bitcoin has a fixed monetary supply, the biggest value proposition of the dominant cryptocurrency is its scarcity and the reducing supply of BTC.The model takes the stock-to-flow of gold and silver as its benchmark. The term stock-to-flow refers to the flow of new supply relative to the amount of existing circulating supply. The model believes the value of gold held up over time because it is not possible to newly create all of the circulating supply of gold to render the precious metal worthless.Unlike gold and silver, the supply of Bitcoin is fixed, and every halving decreases the rate of supply production. As such, in theory, Bitcoin is even more scarce than gold and silver. The model predicts the market capitalization of Bitcoin to exceed $1 trillion after the May 2020 halving. The prediction goes in line with the performance of Bitcoin following previous halvings in 2012 and 2016. PlanB, the creator of the model, explained:“The predicted market value for Bitcoin after May 2020 halving is $1trn, which translates in a Bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving.”The main criticism around stock-to-flow comes down to two main arguments. First, some say the assumption that gold’s value derives solely from scarcity is inaccurate. Second, others think that the use of linear regression might lead to imprecise predictions. Nico Cordeiro, the chief investment officer at Strix Leviathan crypto hedge fund, wrote:“From a theoretical foundation, the model is based on the rather strong assertion that the USD market capitalization of a monetary good (e.g. gold and silver) is derived directly from their rate of new supply. No evidence or research is provided to support this idea, other than the singular data points selected to chart gold and silver’s market capitalization against Bitcoin’s trajectory.”Cordeiro also argued that the use…

Could a Cardano & Litecoin Team Up Be in the Works?

Could a Cardano & Litecoin Team Up Be in the Works?

Cardano founder Charles Hoskinson recently said that he would not mind working with Litecoin founder, Charlie Lee, to test cross chain communication.”It would be great to do something together,” Hoskinson said in a July 7 tweet to Lee. Both men founded industry giantsHoskinson founded Cardano (ADA), which, at press time, sits seventh on the list of crypto assets in market cap size, according to CoinMarketCap. Litecoin maintains the eighth spot. Both figure heads hold notable status in the crypto and blockchain space. “I love the idea of testing cross chain communication between Litecoin and Cardano. We got a lot of ideas and I’m sure you guys do too,” Hoskinson also said in the tweet. Cointelegraph’s list of the top 100 most influential people in crypto and blockchain positions Lee as the 13th most influential person in the industry, while Hoskinson has the 39th spot. 

Dogecoin Volumes Spike 1,900% in 2 Days Amid Viral TikTok Videos

Dogecoin Volumes Spike 1,900% in 2 Days Amid Viral TikTok Videos

Social media has thrown dogecoin traders a treat. Trading volumes for the Shiba Inu meme-based cryptocurrency spiked nearly 2,000% in the last two days, according to data from Messari, as videos on TikTok encouraged users to invest. The whimsical asset’s price climbed 35% to $0.035 over the same period.  Dogecoin is a “joke cryptocurrency,” according to one of its founders, Jackson Palmer. As such, impromptu social media-based frenzies may be a fitting use case. Daily volume for the cryptocurrency stayed well below $5 million for the past two months.  “The recent rise of dogecoin, a meme coin, should serve as a reminder to everyone in the space that the most popular use case for crypto is still purely speculation,” said Anil Lulla, former analyst at Bloomberg and co-founder of cryptocurrency research firm Delphi Digital. Global search interest in “how to buy dogecoin” also skyrocketed from a score of 25 to 100, the highest possible search popularity score, over the past few days, according to 12-month Google Trends data analyzed by CoinDesk.  Some of the videos on TikTok, a newly popular social media platform, garnered more than 100,000 “likes,” while all videos with the “dogecoin” hashtag amassed several million. For speculators and meme aficionados, dogecoin offers a different value proposition than other cryptocurrencies, according to Qiao Wang, an independent cryptocurrency trader formerly at Tower Research. The value of most top cryptocurrencies “comes from monetary premium,” said Wang. “Dogecoin’s value comes from memetic premium.” DisclosureThe leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

How Apple’s COVID Policy Limited a Public Health App in Taiwan

How Apple’s COVID Policy Limited a Public Health App in Taiwan

The Taiwanese startup Bitmark, which participated in a government-sponsored hackathon in May, was unable to promote its blockchain solution due to Apple’s pandemic moderation policy.  “We were trying to essentially build a weather forecast but for public health,” said Bitmark CEO Sean Moss-Pultz. “It allowed people to volunteer their symptoms and what they are trying to do to get better, and connect that to public data from public health offices.” Precisely because the World Health Organization excludes Taiwan, the small Asian nation has developed a unique set of software tools for combatting COVID-19. However, the Apple store only lists health apps published by government entities or nonprofits. This means the small nation’s startup community has limited access to mobile device users. (Apple did not respond to requests for comment by press time.) According to a report by the analytics and accelerator company AppWorks, there are now roughly 112 blockchain startups in Taiwan, including the supply chain management startup BSOS, which received an investment from Taiwan’s National Development Fund earlier this year. Read more: Austrian Government Funds Development of Blockchain-Based COVID-19 App “What are the next growth opportunities for blockchain? Everyone has different interpretations and expectations,” the AppWorks report said. “However, currently, conversations are mostly centered around the pandemic, with criticisms mainly targeted at the limitations and failures of centralization.” Moss-Pultz said his firm experienced those limitations first-hand. The mainstream app stores would only accept the resulting app, called Autonomy, if the Taiwanese government itself released the mobile app. “People all around the world are getting their apps blocked,” Moss-Pultz said. “We spent most of June trying to figure out what type of strategy we could have. … Most likely we’re just going to [release Autonomy] as a web thing.” IncentivesApple and Google are hardly the only tech giants defining the public pandemic narratives. Amazon, for example, forced bitcoin advocate Knut Svanholm to remove a brief mention of the coronavirus from his self-published book in order to distribute it through Kindle in April.  As the Svanholm incident illustrated, moderating health tools during a pandemic without resulting in blunt-force censorship is a difficult task to automate. Colin Steil, co-founder of the Taiwanese blockchain startup Cartesi, said tech companies “always have to proceed with caution” to avoid their…

DeFi Driving Chainlink’s Link Token to Record Highs

DeFi Driving Chainlink’s Link Token to Record Highs

Chainlink’s link token jumped to record highs on Monday, far surpassing bitcoin’s returns since the start of 2020. The ever-increasing use of Chainlink’s price oracles in decentralized finance (DeFi) is driving the cryptocurrency higher, according to analysts.  The 12th largest cryptocurrency by market value clocked a lifetime high of $5.72 at 11:45 UTC (7:45 a.m. ET) and was last trading at $5.65, representing over 200% gains on a year-to-date basis. Meanwhile, bitcoin is down more than 50% from its lifetime high of $20,000 reached in December 2017 and has gained only 29% so far this year, according to data source Coin Metrics.  The link cryptocurrency has decoupled from bitcoin, the crypto market leader. Observers are associating link’s massive rally with Chainlink’s increased usage in the decentralized finance space.  “We’re attributing this short-term price spike to Chainlink’s scaled usage in the DeFi space,” said Vance Spencer, co-founder of Framework Ventures, which is one of the largest private holders of link tokens. “The market cap for DeFi projects have quintupled in the last half year, and most of the ecosystem is now relying on (or planning to rely on) Chainlink for connecting on-chain DeFi smart contracts to off-chain data feeds like commodities and crypto price data.“ Read more: Investment Firm Plans ETF-Like Product for Compound Yield Farmers Meanwhile, Simon Peters, crypto market analyst at investment platform eToro said, “The crypto asset has been displaying a bullish trend for some time now, with Chainlink making all the right noises by partnering with a number of projects in the decentralized finance (DeFi) space.”  Chainlink is a system of oracles built on top of the Ethereum blockchain that supplies data to decentralized blockchains. For example, if two users bet on the outcome of a binary event, the oracle will tell the smart contract which user won, so it can pay the winning bettor. With Chainlink, the advantage is that it supplies data to smart contracts in a decentralized way, or from multiple sources. That ensures the security and reliability of the blockchain, which can be compromised in case the oracle depends on a single source. For instance, lending protocol bZx suffered multiple hacks in February as the platform once used Kyber Network as a single oracle, or supplier of asset…

Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin

Market Wrap: With Low Volatility, Traders Seem to Like $9,000 Bitcoin

Over the past month, while market action has been relatively quiet, crypto traders have punched the buy button when bitcoin’s price drops below $9,000. Bitcoin (BTC) trading around $9,208 as of 20:00 UTC (4 p.m. ET), slipping 0.80% over the previous 24 hours.Bitcoin’s 24-hour range: $9,201-$9,379BTC above 10-day and 50-day moving average, a bullish signal for market technicians, although trading volumes on Tuesday are lower than Monday.Bitcoin trading on Coinbase since July 5.Source: TradingView“Bitcoin managed to approach the level of $9,300, after which immediately rolled back to the $9,250 area,” said Constantine Kogan, partner at cryptocurrency fund of funds BitBull Capital. “The coin continues to trade in a narrow price range,” he said, adding that crypto markets are experiencing record low volatility.  Read More: Exchanges See Drop in Volumes as Bitcoin Volatility Approaches 2020 Low “Such low volatility is uncharacteristic of bitcoin,” said Vishal Shah, an options trader and founder of derivatives exchange Alpha5. “However, this sentiment has permeated through the trading community.”  Less volatility has translated into fewer options bets. Open interest has dropped since the June 26 expiration date and is now hovering at the $1.1 billion mark. That’s quite a bit off from where it was in June, when it hit a record $1.8 billion high, according to derivatives data aggregator Skew. Open interest in the bitcoin options market. The drop coincides with June 26 expiry. Source: SkewThe lack of action is causing vigilant traders to change their strategies. For example, there appears to be sentiment that bitcoin at $9,000 is a good price point for traders to buy. “Every time the market has poked its nose below $9,000, buyers have stepped in,” said Rupert Douglas, head of institutional sales at London-based broker Koine.  Indeed, over the past month, when the world’s oldest cryptocurrency dipped below $9,000, traders scooped it up on spot markets like Coinbase.  Bitcoin over the past month. Black line is $9,000 price level.Source: TradingViewDouglas says the narrow bitcoin price action might not last because most traders surely would like more volatility, which is what attracts many to crypto in the first place. “Bitcoin is coiled for a big move,” he told CoinDesk. “I still favor the upside. I think we will see bitcoin heading above $11,000 in short…

Crypto ‘OG’ Thinks Altcoins Will Outperform BTC in the Near Future

Crypto ‘OG’ Thinks Altcoins Will Outperform BTC in the Near Future

Dan Morehead, the founder of the first crypto venture capital firm, Pantera Capital, believes that altcoins will outperform Bitcoin (BTC) over the next couple of years.Speaking at the Unitize virtual event, Morehead said that in the short-term, his firm is betting on altcoins:“And it’s our opinion that these altcoins and particularly smaller cap smart contract tokens are going to outperform Bitcoin over the next couple of years.”Portfolio altcoins are up 100%He emphasized that it would be incorrect to suggest that Pantera does not believe in Bitcoin. Rather, they are of the opinion that smaller coins will go up in value more:“We think Bitcoin is going to go up a ton, but altcoins will go up even more. An example is Bitcoin is up about 30 percent year to date, which is amazing. Given that equities are down and real estate’s down and almost all assets are down in price. But other things in the cryptocurrency space are up much more, Ethereum is up 80% and then other smaller projects like Augur (REP) and 0x (ZRX) are up 100% on the year.”Pantera is an investor in Augur and 0x; however, it missed out on the Ethereum (ETH) initial coin offering back in 2015.Digital assets outperforming traditional asset classes should incentivize more institutional interest in the space.

Legal Implications of Secondary SAFT Sales, Part 1

Legal Implications of Secondary SAFT Sales, Part 1

The enfant terrible of the digital token world, the Simple Agreement for Future Tokens, or SAFT, continues to grab headlines. In the recent Telegram case, the federal district court for the Southern District of New York enjoined Telegram Group Inc. from proceeding with its long-planned token generation event, finding not only that the issuance of their tokens, Telegram Open Network, would violate the registration requirements of the Securities Act of 1933 but that the initial placement of SAFTs constituted an illegal unregistered offering of securities. On June 26, 2020, the court approved a settlement between the United States Securities and Exchange Commission and Telegram that included an $18.5-million civil penalty, the return of some $1.22 billion to investors and a three-year requirement to notify the SEC before issuing digital assets. That settlement extinguished the appeal, leaving the decision as the final legal determination. The SEC has made similar arguments in the case of the Canadian startup Kik last year. Nonetheless, billions of dollars of SAFTs have been issued by other issuers of which many remain outstanding and are subject to potential secondary market trading. Although there have been variations, in a quintessential SAFT offering, an issuer raises funds to finance the development of a platform that will be driven by tokens by selling to investors a SAFT that represents the right to receive an allotment of tokens once the platform is launched. The purchase price is paid upon receipt of the SAFT, and the number of tokens to be delivered in settlement is determined on the date of the token generation event, usually at a discount to the public purchase price. For many issuers, numerous delays in launching the platform have caused SAFT holders to look for pre-launch exits, and as anticipated launch dates approach, other investors look for ways of buying tokens at discounted prices. Thus, there is a natural supply and demand for secondary transfers of SAFTs. However, such secondary sales are complicated by a number of contractual and regulatory factors, which are discussed in turn below.Secondary sales of SAFTs vs. secondary forward contractsMost SAFTs are subject to contractual transfer restrictions that prohibit the assignment of the SAFT contract or any rights thereunder to a third party without the prior written consent of the…

Bitcoin Double-Spends an Inevitable Network Feature, Legitimate or Not

Bitcoin Double-Spends an Inevitable Network Feature, Legitimate or Not

Double-spending is an issue that has existed ever since Bitcoin’s (BTC) inception, and according to a recent report from ZenGo, it still persists across cryptocurrency wallets such as BRD, Ledger Live and Edge.Although these companies have updated their product offerings since ZenGo pointed out this discrepancy, it is speculated that millions of crypto users could have been exposed to this particular exploit, dubbed BigSpender. Ledger, one of the impacted crypto wallet firms, even claimed that this vulnerability is only a user experience flaw.What is double-spending?Double-spending is a flaw that arises across digital cash platforms wherein a single digital token can be spent more than once. Although this is not a weakness that is unique to blockchain and cryptocurrency, it becomes a very significant issue for crypto users. With centralized currencies, this issue is solved by having a trusted third party in place that verifies if the token has already been spent.With decentralized currencies such as Bitcoin, the unique selling point is that they offer a system that is not linked to any central bank, with the double-spend issue attempting to be solved by having many servers store up-to-date copies of the public transaction ledger.The hurdle faced by this approach is that once broadcasted, transactions will reach each server at slightly different times, and if two transactions attempt to spend the same token, each server will consider the first to be valid and void the second transaction. If these two servers were to disagree then there would be no way to reconcile the true balance, as each server’s observation is considered valid. Cointelegraph spoke about the matter with Bilal Hammoud, founder and CEO of NDAX — a cryptocurrency exchange based in Canada — who said that despite recurring issues, Bitcoin does have a prevention system in place:“Bitcoin network utilized multiple measures to prevent such attacks such as time to produce 1 block which averages about 10 minutes and recommendation of 6 confirmation which makes it near impossible to reverse a transaction unless the attacker owns a significant network hash power.”Legitimate and fraudulent waysThere is a myriad of ways that a crypto user or an entity can double-spend. While some of these methods are legitimate, most are, unsurprisingly, fraudulent. Some of the well-known double-spending techniques are race…

Trump’s Former Sanctions Chief Joins Major Crypto Firm Chainalysis

Trump’s Former Sanctions Chief Joins Major Crypto Firm Chainalysis

A former key executive at the United States Department of the Treasury has joined a major cryptocurrency investigation firm, Chainalysis.Sigal Mandelker, a former Treasury Under Secretary for terrorism and financial intelligence, has reportedly joined Chainalysis’ board of advisors. As officially announced on July 7, the new position on the startup’s board comes alongside Mandelker’s participation in a Chainalysis’ extended $49 million Series B funding round.Mandelker to share blockchain investigation experience with ChainalysisAs reported by Forbes, the new position on the board marks Mandelker’s first public work since she left Trump’s White House for the private sector in October 2019. At the startup, the former Treasury exec will meet with the Chainalysis team to share insights on investigating crypto crimes as well as help them build new partnerships in both the public and private sectors.Chainalysis is a major crypto analytics firm and a primary source of crypto transaction data for federal agencies like the Internal Revenue Service and the FBI. Addressing the company’s broad cooperation scope, Mandelker highlighted that further development will be crucial for the future of the industry. She said:“The fact that they’re building relationships, terrific relationships, both with financial institutions and with the government sector, including with law enforcement, is going to be really important for the future of this industry.”Mandelker is known for her 2019 crypto investigations involving three hacker groups that helped the North Korean government launder billions of dollars in cryptocurrency funds. According to official records, the former Treasury exec also played a role in convicting an illicit digital currency platform known as “E-Gold” back in 2008.Michael Gronager, co-founder and CEO at Chainalysis, told Cointelegraph that Mandelker’s entrance to Chainalysis will contribute to further adoption of the crypto industry. He said:“We believe that by getting regulators and law enforcement comfortable with cryptocurrency, financial institutions will more meaningfully invest in the space and cryptocurrency businesses will grow. Sigal brings a wealth of knowledge from her time at the Treasury Department to help us propel this flywheel of growth for the industry.”Chainalysis expands Series B to $49M after raising $36M in 2019The news comes alongside Chainalysis expanding its Series B to $49 million after raising $36M in February 2019 from companies including venture capital giant Accel. The fresh $13M investment featured participation…