Bitcoin Fell 35% in March

Matt Thalman - INO.com Contributor - ETFs - Bitcoins Price


During March, the price of Bitcoin fell just about 35%. It started the month at $10,805 and ended just below $7,000. Bitcoin’s decline in March has been massive, but what I find even more interesting is this decline has been somewhat slow and steady. In the past when Bitcoin would crash, 30%, 40%, 50% or even more, it would happen in a matter of days or even hours.

The slow decline is an indication that the Bitcoin craze or Bitcoin Bubble is likely over. When the craze hit a fever pitch following the Thanksgiving Holiday in the US, the price more than doubled in just about 25 days. The Bitcoin rally hit a peak on December 17th, 2017 when they were trading for more than $19,205 per coin. More so than that, the last time Bitcoin traded in the low $6,000 range, was before the Thanksgiving Holiday when it is believed many families sat around the dinner table and discussed the “can’t miss opportunity in cryptocurrencies.” Those discussions helped fuel 100,000 new accounts being opened that weekend and the price of Bitcoin hitting $9,000 for the first time.

The Thanksgiving dinner table conversations helped foster the “fear of missing out” trend that we saw catapult Bitcoin both into the limelight and at breathtaking prices. That fear soon faded as Bitcoin fell hard, from $19,205 to $14,500 in just five days, following it hitting its record and still all-time high. Ever since then the cryptocurrency has been on a downward trajectory.

The declining price has lessened interest from both the general public and big investors, and even now we have seen the media outlets reducing coverage on Bitcoin and other cryptocurrencies. Even Alphabet’s Google searches (Fig.1) are down dramatically since the peak. A further look at the price of Bitcoin (Fig.2) and the Google search trend of Bitcoin may tell another story. The two charts side by side look very, very similar. Continue reading "Bitcoin Fell 35% in March"

The Ultimate Buzz Word ETF

Matt Thalman - INO.com Contributor - ETFs - Buzz Word ETF


On January 30th the team at Exchange Traded Concepts, an Exchange Traded Fund issuer, released the "Ultimate Buzz Word" ETF, the Innovation Shares NextGen Protocol ETF (KOIN). Alright, I’ll admit, the name may not be loaded with buzz words. But the fund’s concept is loaded with recently popular buzz words such as “Blockchain” and “Artificial Intelligence.”

The KOIN ETF is a fund that tracks an index that uses artificial intelligence to pick global stocks which have current or future interests in blockchain technology. On the surface, this ETF just feels like someone trying to take advantage of today’s hot investing buzz words.

Even after Bitcoin rose from under $1,000 to above $19,000 in less than a year, most retail investors didn’t fully understand what blockchain technology was. But they knew that while a lot of big-name investors and economist were skeptical of Bitcoin and other cryptocurrencies’, the one thing most people would agree on was that blockchain technology was great. Continue reading "The Ultimate Buzz Word ETF"

Bitcoin Bonanza Rolls On

Matt Thalman - INO.com Contributor - ETFs


As the Bitcoin phenomenon rolls on, we continue to see new prospectuses for possible Bitcoin funds despite the Securities Exchange Commission denying the creation of one Bitcoin Exchange Traded Fund due to the lack of market surveillance and regulation. Oddly enough, the currency was started to give its user autonomy from governments and other regulatory agencies.

So the main reason why the currency grew in popularity is the reason why investors are finding it difficult to invest in the asset. Thus far two different proposed Exchange Traded Funds have been denied in the US, but it would appear the once denied Winklevoss Bitcoin ETF might have a chance of being approved the second time around. What is interesting is that the Winklevoss Twins were not the ones who filed the petition for reconsideration of their ETF, it was the Bats exchange, which the proposed ETF would trade on if approved. Continue reading "Bitcoin Bonanza Rolls On"

Bitcoin ETF Rejected

Matt Thalman - INO.com Contributor - ETFs


Late Friday afternoon the Securities and Exchange Commission released their ruling on the proposed Winklevoss Bitcoin Trust, what would have been the first Bitcoin ETF. Bitcoin's had traded as high as $1,300 per coin on Friday prior to the announcement from the SEC, but following the ruling, the price had fallen more than 20% at one point, leveling off down 10%.

What Happened?

The Security and Exchange Commission released their ruling denying the proposed Bitcoin ETF and within the ruling, the SEC's reasoning for denying the application follows below.

"As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest. The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated."

In plain English the SEC is saying the Bitcoin ETF was rejected because the underlying commodity, in this case Bitcoin, needs to be regulated, which that’s the whole purpose of Bitcoin, it's not regulated. Bitcoin was designed to be unregulated, with no ties to banking institutions or governments. With relationships with either of those entities, the currency therefore is an unregulated form of investment. The reason this matters is because at the end of the day, the SEC is required to do its best at protecting the general investing public from fraudulent and easily manipulated investments. And because Bitcoin is unregulated in some terms, the SEC can't allow the ETF. Continue reading "Bitcoin ETF Rejected"

Bitcoin Is NOT The New Gold

Lior Alkalay - INO.com Contributor


Last week, the price of one Bitcoin surged above $1,227, the price of an ounce of Gold. And the headlines soon followed, screaming, “Bitcoin worth more than Gold.” The implication, of course, that Bitcoin is the new Gold in the world. In reality, however, Bitcoin is hardly the “new” Gold, real or digital.

In arguing for Bitcoin’s allure, enthusiasts tend to fall back on one singular point; like real Gold, there is but a finite number of Bitcoin that could be mined (21 million to be exact). But that is hardly the case. Bitcoin’s allure is not a factor of its rarity, but rather its ecosystem. That ecosystem enables financial transactions between two parties, both anonymously, and at very low costs. The fact is that that ecosystem could be easily replicated with an alternative to Bitcoin. So, while the number of Bitcoins we can mine is limited, the amount of alternative ecosystems that could emerge for Bitcoin wannabes is not. In fact, even today, there are already 12 different alternatives to Bitcoin, including Litecoin, Peercoin and Primecoin.

However, there is one area in which Gold and Bitcoin have something in common and, unfortunately, for Bitcoin bulls, it is in their vulnerability rather than strength. Both Bitcoin and Gold do not pay interest like a currency, nor a dividend like a stock. And when interest rates rise the allure of Bitcoin and Gold quickly fades. Because, simply put, there are better alternatives. Continue reading "Bitcoin Is NOT The New Gold"