Ep20: Weekly Cryptocurrency News 11/28/18

Consensus Network Weekly Crypto News 11/28/18

Cryptocurrency Market Capitalization: $138 billion

Bitcoin Price (Coinbase): $4196

Bitcoin Upturn or Dead Cat Bounce?

Bitcoin broke through the $4000 level and flirted with $3500. Today, everyone is getting excited because the market is up. In fact, bitcoin is up almost 20 percent since yesterday.

I’m not a trader. I’ve made that very clear in the past so I don’t buy and sell on short-term market movements. However, I am looking for a bottom because my long-term view on bitcoin and blockchain is very bullish. So, I’m eager to buy more when it’s on sale.

Now just because I’m not a trader doesn’t mean I don’t respect the abilities of those who are. Tyler Jenks was on the show a few weeks back when bitcoin was sitting in the mid $6000s and was about as sure as anyone that it was going to plummet in the short term. To be honest, I didn’t believe him until he literally called it the day before on Twitter. It was like watching Babe Ruth point to the rafters and hit it out of the park.

Now Tyler says that this really is short term and, even if it goes back up to $6K, it’s going easily sub $3k before it takes off. Tyler is seriously bearish on bitcoin price but highly bullish on bitcoin’s future so he’s looking to buy in as well. But he thinks we are going lower before we go back up. One of the things I have learned over the years is that it’s not a good thing to be the smartest guy in the room. You want to surround yourself with people who are smarter than you at various different tasks.

Tyler is a technical analyst and can identify good times to buy better than me for sure. So, I’m just going to buy more when Tyler tells me to buy more on his YouTube channel. You should check it out. It’s way over my head but fascinating nonetheless. 

So… bitcoin price may be headed south, but don’t let that fool you into this narrative that bitcoin is dead. While this uptick in bitcoin price may be a dead cat bounce, bitcoin has shown over the years that it has at least nine lives.

We’ve talked about the institutional frameworks that are now being built and those are not slowing down. And people are not slowing down their use of bitcoin. Bitcoin transactions have actually reached their highest level since mid-January. In fact, the number of daily transactions on the bitcoin blockchain is approximately the same as Mastercard.

Why is this significant? What gives Bitcoin its value? What gives anything value? Ultimately it’s faith in the system and the bitcoin blockchain is not being utilized any less than it was at $20K bitcoin.

I don’t know when, but I am quite sure a bitcoin bull run will happen again and this time it will include big money institutional investors that will take it to new highs.  I truly believe that we are seeing a tremendous transfer of wealth happening from scared retail investors selling to institutional ones who are buying from over the counter platforms like genesis. Individuals are selling and institutions are buying and they are going to make most of the money…like they always do.

SEC Chairman Comments Cast Doubts on ETF Approval

Jay Clayton, chair of the U.S. Securities and Exchange Commission, speaking at Consensus: Invest Conference reiterated previous concerns about the cryptocurrency market’s exposure to market manipulation.

This was one of the reasons cited by the SEC in multiple rejections of ETF applications. Many were optimistic about the CBOE/Van Eck Solid ETF being considered by the SEC, but Clayton suggested he did not think that had yet been accomplished.

Of course, the CBOE application addresses this problem with pegging the eta prices to over-the-counter trading such as Genesis Trading but given the recent events in the cryptocurrency world, I would personally be shocked if the application is in fact approved next year although eventually I think it is inevitable given the interest from institutional and retail investors.

Ohio Accepts Bitcoin for Tax Payments

The Wall Street Journal disclosed on Sunday that Ohio will become the first U.S. state to accept bitcoin for taxes. 

The guy behind this is Josh Mandel, the forty-one-year-old State Treasurer of Ohio who wants Ohio to be the national leader in embracing blockchain. 

Mandel says he believes in “leveraging technology for the democratization of finance”. 

In case you are wondering, Ohio will be using BitPay as a payment processor that will immediately convert bitcoin into US dollars. They do not currently plan on HODLing although that could actually be the smartest they could do given the price of bitcoin right now!