Cryptocurrency update: Bitcoin wobbles on China concerns

Bitcoin starts the week in the red thanks to stock market woes and a potential tightening of regulatory oversight.

Cryptocurrency update

China and regulation fears rock Bitcoin

As Bitcoin becomes ever more prevalent, the influence of non-crypto markets on futures contracts is becoming larger.

As of Monday 20th September, Bitcoin had dropped roughly 5% on the day, thanks to a fall in S&P 500 futures triggered by the China Evergrande Group situation.

Property giant Evergrande fell 10% in Hong Kong during Asian trading this morning, causing globe-spanning stock market ripples. As the S&P 500 fell 1%, Germany’s Dax had also fallen 2%.

The fallout from this is investors looking to mitigate risks across their portfolios. As cryptocurrencies exhibit high volatility, Bitcoin and other tokens may be on the chopping block.

Anticipation of an October or November stimulus taper from this week’s Fed meetings has also strengthened the greenback, making the BTC/USD pairing a little weaker, hence the price drop.

Additionally, further scrutiny is being paid to stablecoins. Stablecoins are crypto tokens backed by the USD. The most prominent of these is Tether. This is meant to cut out much of the volatility we see in the most popular coins, but regulators aren’t so sure.

There are rumblings that further regulation is going to hit stablecoins, which promises big changes for the crypto market as a whole. Some observers believe they may be a threat to the US’ entire crypto situation. A formal review into stablecoins by the Financial Stability Oversight Council could be on the way.

The total market capitalization of all stablecoins has reached $115 billion, growing over ten times over the past 12 months.

Essentially, it will be a rocky week for cryptocurrencies. Right now, all of the major tokens are in the red.

AMC to accept crypto payments

Every so often, you get an overlap of two great internet sensations. Now, the worlds of crypto and memestocks are colliding as AMC Entertainment Holdings announces its plans to accept Bitcoin and crypto tokens as payment.

AMC is the meme stock de jour; one of the stocks exceptionally popular with a new breed of traders. The likes of GameStop have already seen their prices somewhat artificially pumped by a younger generation of traders and investors in an attempt to rattle the old guard.

We know cryptocurrencies are also a favourite of new, younger investors. It seems only right that these two paths should cross.

AMC CEO Adam Aron has been fairly clever here. By aligning AMC with the crypto market, he’s continuing to appeal to the types of investors and traders already interested in the meme stock.

Additionally, the crypto sector may help create further revenue streams for the cinema chain. One idea that Aron allegedly loves is tapping into the non-fungible tokens (NFT) sector. This burgeoning digital asset market has picked up steam massively across 2021, and AMC’s entry point could be to offer its own NFTs in the form of commemorative movie tickets users can buy and keep.

It’s a shrewd move from AMC no doubt – but is banking on NFTs help alleviate the company’s potential future woes around declining cinema attendance?

Litecoin activity outstrips Dogecoin and Bitcoin Cash

Move over Doge: crypto users have a new best friend.

According to Litecoin Foundation Director Jay Milla, the number of active addresses on the Litecoin network has overtaken the number using Dogecoin and Bitcoin Cash.

The growth of wallet activity has overtaken many other large-cap tokens, as Milla recently tweeted:

At 450,000, active Litecoin addresses is over double that of Cardano’s 214,000. Bitcoin Cash’s network user numbers clock in at 101,000. Surprisingly, Dogecoin’s only totals 60,890.

Active addresses are used to monitor and rate on-chain network activity across the crypto market. Analysts use it to sport patterns across the wider sector. It is not necessarily an indicator of the number of traders or investors buying a particular cryptocurrency.

Litecoin recently took a hit thanks to some fake news. It was reported that Walmart had agreed to partner with Litecoin to accept the token as payment. This is false. No such partnership exists.

According to Litecoin, the confusion was caused by an employee tweeting the partnership announcement without authorisation. Walmart has subsequently confirmed it has not partnered with the Litecoin foundation.

Cryptocurrency update: Bitcoin passes $50,000 in 3-month uptick

Bitcoin starts the week in fighting form as it reaches heights not seen since mid-May.

Crypto update

Bitcoin continues fightback after breaching $50,000

Bitcoin started the week strongly by building on weekend momentum to break above $50,000 for the first time in three months.

The world’s most popular cryptocurrency is currently trading at $50,345 and is up over 3.25% in a 24-hour period. According to Coindesk data, Bitcoin is now up 71.4% year-to-date.

A couple of new reports have helped push BTC towards new highs.

Firstly, Coinbase has announced it plans on adding a further $500 million worth of new crypto assets, including BTC, to its holdings. Institutional support tends to be a big support for Bitcoin. It’s no different here.

We’ve also seen PayPal announce it will offer crypto wallet services to UK customers. More on that later.

Price action remains above the 200-day moving average. That could mean we’re seeing a sustained rally, rather than a flash-in-the-pan trading moment. That said, trading volumes have remained relatively flat since the weekend, despite the uptick in price action.

Bitcoin is the crypto industry’s bellwether. With it back in the green, several other popular tokens are subsequently rallying. Cardano is up over 7%, XRP, is up over 3.75%, and Ether is showing a 2.31% rise.

Is Bitcoin back in business? We all know how quickly things can change in the world of digital finance and token trading. We’ll just have to wait and see, but the fundamentals suggest we could at least see the rally continue across the week.

PayPal offers crypto services to UK customers

As digital token trading gets more popular, an increasing number of platforms are starting to offer crypto buying, selling, and holding on their platforms.

The latest to throw its hat into the digital currency ring is PayPal. It is now offering crypto services to its UK customers. Users will be able to exchange or hold four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Crypto derivatives, like CFDs, are banned for retail customers in the UK. However, retail clients can still buy and hold the physical coins themselves, circumventing this ban. That’s essentially what PayPal is offering here.

The same service was launched in the US fairly recently. Users there can also pay for transactions using their crypto holdings too.

For some, PayPal’s decision to accept digital currencies on its platform came as a bit of a shock. There have been questions around money laundering and potential fraud caused by cryptocurrency users’ anonymity. Such critics have thought maybe PayPal and other institutions may have been put off by this.

There’s also volatility to consider. While we’ve seen Bitcoin reach a new 3-month high this week, it fell away dramatically from its all-time highs in April to below $30,000 weeks later. This may have been seen as an impediment to adoption by the likes of PayPal in the past.

This is obviously not the case. PayPal is now happy to ride the crypto train until the wheels fall off.

Jose Fernandez da Ponte, vice president and general manager for blockchain, crypto and digital currencies at PayPal, said his company’s new service could help introduce more people to cryptocurrency.

“The pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services.

Global digital currency adoption soars over two years

The adoption of cryptocurrencies has grown 2,300% over the past two years Chainanalysis research has revealed.

Those stats represent the acceleration in crypto trading at the end of Q2 2021 against Q2 2019. Chainanalysis data also reveals it is up 881% across the last year.

The blockchain specialist said it rated activity in 154 countries against three criteria to establish its results:

  • The amount of on-chain crypto received
  • On-chain retail value transferred
  • Peer-to-peer (P2P) exchange trade volume

The above metrics were weighted by purchasing power parity (PPP) per capita. P2P exchange trade volume was weighted by the number of internet users in a given country.

Institutional support, i.e., that from banks, businesses, and brokers, is what drove adoption in North America, Western Europe, and East Asia.

According to Chainanalysis’ report, digital tokens have been seen as “compelling” by such players, particularly as prices were reaching all-time highs at the start of the second quarter.

On the other hand, peer-to-peer activity pushed growth in emerging markets. Crypto users and investors in these areas see digital currencies as a to preserve savings in the face of currency devaluations. They also can use it for overseas remittance or carry out business transactions.

“Central and Southern Asia, Latin America, and Africa send more web traffic to P2P platforms than regions whose countries tend to have larger economies, such as Western Europe and Eastern Asia,” the report states.

Cryptocurrency update: Polkadot jumps while Bitcoin stalls

A jump in Polkadot’s market cap catapults one of the newest cryptos on the market to a new position of prominence. Meanwhile, after its amazing rally, Bitcoin might be hitting resistance under $40,000.

Cryptocurrency update

Polkadot shares leap 100% over last 7 days

At the time of writing the price of Polkadot’s DOT token has accelerated. Now it is the world’s fourth-largest cryptocurrency by market cap, outstripping rival currencies XRP and Litecoin, with total cap now valued at $15bn.

During the period 11-17 January, DOT hit as high as $18.90 from starting the week at $7.80. It is currently consolidating around $17.50.

Polkadot was founded by Gavin Wood, one of the brains behind the Ethereum platform and its cryptocurrency ether. Ether is the second most popular crypto in the world, behind Bitcoin, and also the second most valuable per-coin.

Polkadot itself is a blockchain platform aiming to become the standard platform for all blockchain-related programmes and transactions going forward. DOT is the currency used to process transactions on the Polkadot protocol. In many ways, it has lots of similarity with Ethereum, but Polkadot is fixed firmly on expansion.

According to Gavin Wood, Polkadot is already the second most used token in the decentralised finance infrastructure.

Altcoins, i.e. those cryptos that aren’t Bitcoin, have been gaining traction in the wake of Bitcoin’s recent massive gains. It’s a general rule of thumb that if Bitcoin is trading high, then other cryptos will too. But as we’ll discuss, this might not always be the case.

Bitcoin uncertainty could signal crash

Bitcoin has been roaring in recent weeks, hitting above $40,000 for the first time ever – but its also taking a bit of a beating too. It fell $10,000 to the $30,000-mark last week. Subsequent recovery climbed back to the $35-36,000 level. Bitcoin futures are trading at above $36,500 at the time of writing.

Does this mean another crash is on the way? It’s difficult to pinpoint. Whales continued their accumulation during last week’s drop, with the number of whales, i.e. crypto wallet clusters owned by a single network participant holding at least 1,000 Bitcoin, reached 2,140 last Monday. That’s an all-time high, and an indication of confidence in an ongoing Bitcoin bull market.

According to JPMorgan analysts, the speed at which a new high happens, if it does happen, is all down to institutional inflows. Several organisations are backing Bitcoin and other cryptos and flashing the cash on big digital asset purchases.

Greyscale is experiencing extremely high interest in its crypto investment offerings – so demand might be enough to keep bullish sentiment high amongst investors.

Greyscale reports largest daily crypto asset raise in history

Greyscale, the largest cryptocurrency asset manager in the world, announced on January 15th it had attracted $700m toward its investment products – the single largest one-day investment rise in crypto history.

As of Q4 2020, Greyscale had accrued $3.3bn in cryptocurrency investment products. Its weekly average, says CEO Michael Sonnesheim, prior to the intense demand caused by the recent Bitcoin rally, was about $250m.

Its total assets have now jumped above $27bn. Greyscale continues to accumulate cyrptos. In 2021 so far, bearing in mind the year is still only three weeks old, 10,000 Bitcoin, alongside 9,000 Litecoin and 1,000 Bitcoin Cash.

To show the speed at which crypto investors like Greyscale are accumulating wealth, and the rate at which cryptocurrencies have climbed in the past year, we can look at its asset value growth from 2020. Greyscale started that year with $2bn in cryptocurrency assets under management. It ended 2020 with AUM worth $20bn.

Explaining cryptocurrencies: What is Litecoin?

Litecoin is, in terms of market capitalisation, the third-largest cryptocurrency in the world, behind only Bitcoin and XRP.  

Like its rivals, it is a digital currency, mined and generated using blockchain technology, that can be used to facilitate online payments. Unlike some of its rivals, however, Litecoin can boast a much faster transaction rate – 2.2 seconds per transaction – and has a higher level of supply. 

Only 21 million Bitcoins will ever exist, for example, whereas 82 million Litecoins will be mined.  

A good comparison is if Bitcoin is digital gold, then Litecoin is a digital silver: still precious, but much more abundant.  

However, the rate at which Litecoin can be successfully mined is slowing. It will half until the total number has been mined, thus keeping supply limited. 

Despite this, Litecoins can be mined with off-the-shelf computer parts. Bitcoin, on the other hand, requires huge computing power to successfully mine a coin.  

Over 200 vendors accept Litecoin as payment on their platform or offer the ability to buy, sell and hold Litecoin, including Apple Pay and PayPal. It has also begun to gain traction as a legitimate payment method in online stores. For example, Litecoin is the official cryptocurrency of US NFL team the Miami Dolphins and fans can buy merchandise from the team shop using Litecoin. 

Litecoin prices 

Like many cryptos coming in Bitcoin’s wake, Litecoin has enjoyed stronger positive price movements in 2020. 

From November 2020 to January 2021, the LTC/USD pair had accumulated 108% gains. 

At the time of writing, Litecoin was trading at $126.87.But, like all cryptos, LTC is also subject to high volatility. Its record high was registered in December 2017, at $336.72.Despite this, this fluctuation is not as dramatic as some other cryptos.Dash for example had an all-time high of $1,441 in December 2017 but is now trading at around $122.82. 

How is Litecoin traded? 

Litecoin is available on crypto exchanges for investors looking to buy the tokens and hold onto them. Binance is currently the world’s largest cryptocurrency exchange.

Traders, who speculate on Litecoin price movements instead of holding onto the asset itself, prefer derivatives like CFDs and futures. Litecoin futures are available to trade via the Marketsx platform.  

Please be aware trading any financial product contains risk of capital loss. Only trade if you can afford any potential losses. 

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