Bitcoin Rallies Above $8,000, Takes Altcoin Market With It: Week in Review Apr. 16
Originally published on: Bitcoin Rallies Above $8,000, Takes Altcoin Market With It: Week in Review Apr. 16
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April 16, 2018
In the past week, bitcoin investors finally experienced much-needed relief. The price of bitcoin rallied by over 15 percent to close the week above the $8,000 mark for the first time since March 28.
Despite Barclays Bank thinking that bitcoin has already reached its peak and Bank of America stating that the supposed bitcoin bubble is bursting, it seems that market sentiment is finally turning in the crypto asset market.
The reason for that could be that successful cryptocurrency investors, who have converted some of the digital asset investment income into fiat currency to cover their capital gains tax payments for the past tax year are now re-entering the market as U.S. tax day falls on Tuesday, April 17. Some investors may also be buying in anticipation of the end of tax season as some financial experts, such as Fundstrat’s Tom Lee, have suggested this could be a turnaround point for the market.
Altcoin investors also rejoiced this week as major altcoins gained up to 50 percent in value in the past week. Leading cryptocurrencies ether (ETH), ripple (XRP), and Cardano (ADA) gained around 30 percent while EOS (EOS) and IOTA (IOTA) outperformed, gaining 40 and 50 percent respectively week-on-week.
Expert strategists at Barclays say that a fear of missing out explicitly drove the December demand. Many investors went in because they were afraid of missing a great investment opportunity and this was probably one of the leading causes of the short-term price increase.
According to the Bank’s strategists, this was one of the main reasons pushing the value of bitcoin up, and now the race to buy the digital asset seems to have cooled down considerably. Barclay’s expressed its opinions in research presented on April 3, 2018.
“Combined with the results of our theoretical modeling, survey findings suggest that, unlike the peaks in bitcoin prices in 2011 and 2013, the most recent peak may have been the ultimate top and that speculative interest could decrease from here.”
This pause in speculative interest is leaving bitcoin holders oversupplied, overriding the supply-demand factor and thus dictating the bearish market sentiment.
Pantera Capital Management, a cryptocurrency hedge fund with more than $800 million in assets, believes that bitcoin will not go under $6,500 in this seemingly slowing market. In a note to investors, the fund mentioned that the pioneer cryptocurrency’s prices would most likely exceed their previous high of $20,000 in late December 2017.
Since January 2018, bitcoin’s value has been slowly declining. Despite the following prices, however, Dan Morehead and Joey Krug, CEO and co-chief investment officer of Pantera Capital, announced to investors that “a wall of institutional money will drive the markets much higher.”
Although the cryptocurrency markets have been historically volatile, the hedge fund recommends others to buy soon as the 200-day moving average shows positive signs.
“For those who are new to Pantera who might think a fund manager like Pantera would always be saying ‘Today’s a great day to get long.’ I rarely have such strong conviction on timing,” said Morehead and Krug.
Amongst the neverending chaos surrounding it, one question that stands out is bitcoin’s compliance with the religious ‘Shariah’ law. To answer that, Blossom Finance, a microfinance firm based in Indonesia, published a detailed 22-page paper this week which inferred “Bitcoin qualifies as Islamic money, except where it is banned by a local government.”
Since bitcoin has gained momentum worldwide, Muslims have wondered if cryptocurrencies are compatible with Shariah-compliant finance. The Islamic religion has a strict set of governing laws, and Islamic banks are very particular about the rules that apply to the sharing of profit, bearing of loss, leasing, safekeeping and more. Stock markets and speculative assets are “frowned” upon in the Islamic traditions. Thus, bitcoin and cryptocurrencies have been meandering in the battlefield of compliance within the Islamic law for years.
Recently, a Muslim cleric initiated the debate that Bitcoin was, in fact, compatible with Islamic financial laws. Contrastingly, other clerics refrained from agreeing with him, and one Egyptian Islamic cleric went to the extent of issuing a religious edict against bitcoin.
Bitmain, the world’s biggest ASIC crypto mining hardware manufacturer, might be in for some serious competition in the shape of Halong Mining if the tweet from an online mining rig retailer is to be believed. MyRig, an online mining rig retailer tweeted a photo of a thin slice of semiconductor material called a wafer.
According to MyRig, the 10-nanometer wafer is being produced by Samsung to fabricate Application-Specific Integrated Circuits (ASICs) for Halong Mining. In January 2018, MyRig and Halong signed a collaborative partnership.
In February 2018, BTCManager reported that Samsung was developing bitcoin mining hardware. The only real nuggets of information released at the time were that the mining company was based in China and that Samsung was getting ready to scale up its production to meet the potential market demand once the product was released into the market.
If the story from MyRig is to be believed, then Halong Mining is the mysterious mining company that is in partnership with Samsung. With the technical backing of Samsung, it is probably not beyond the realms of possibility to think that Halong might be able to challenge the market dominance of Bitmain.
The world leading ASIC manufacturer, Bitmain, currently controls 70 percent of the market for bitcoin mining rigs. The company has also taken steps to establish its dominance on other blockchains that have proven difficult for ASIC mining in the past.
On February 3, 2018, customers of JPMorgan chase along with some other banks were informed about the ban on cryptocurrency purchases with credit cards. However, they could still buy bitcoin and other cryptocurrencies via cash advances and other payment channels.
Under normal circumstances, customers are charged higher fees when they purchase bitcoin using cash advances compared to when they transact utilizing credit cards.
Meanwhile, Brady Tucker a ‘bitcoiner’ who regularly purchases bitcoin with his credit card at Chase claims he was slapped with hefty charges of over 30 percent a year on his purchases from January 27 to February 2, 2018, without any prior notice from JPMorgan Chase. The case is Brady Tucker v. Chase Bank USA NA, 18-cv-3155, U.S. District Court, Southern District of New York (Manhattan.)
According to reports, Tucker filed a lawsuit on April 10, 20,18 claiming he was charged $143.30 in fees and $20.61 in “surprise interest charges” by the bank for five virtual currency transactions he made before Chase banned crypto purchases with credit cards.
Just weeks after launching one of the most successful ICOs ever, Telegram is to be banned in Russia. The ruling came after the company refused to yield encryption keys to the Russian authorities and Moscow has now ordered telecommunications companies to block the app.
Russia’s Federal Security Service (FSB) said they need the keys to monitor the messages of potential terrorists, and had given Telegram a deadline of April 4, 2018, to hand them over.
The company, however, claimed that the way the app is built means it is not possible to provide the encryption keys that would grant access to user messages. The platform is critical to many communities in the cryptocurrency space and is also one of the most popular encrypted messaging services available in Russia.
Telegram is not the only private messaging service available in the country, but it is one of the most widely used. The service is particularly popular with Russian politicians and Kremlin officials but is also known to have been used by the Islamic State and its supporters.
On that last note, the company has stated that efforts have been made to close down channels supporting the radical Islamist organizations.
Part of the appeal of Telegram is that markets itself as a secure messaging app. It claims to allow groups of up to 5,000 people to share messages, documents, videos, and pictures freely and with complete privacy.