5 key facts why Bitcoin is facing seriously strong headwinds
Bitcoin is facing the music.
According to Coindesk, Bitcoin is increasingly looking topped-out as excitement fades over the recent launch of the first futures products to focus on the cryptocurrency, despite a 24-hour trading volume that jumped above $19bn, its highest since Dec. 8.
Issues are surfacing all over the place, and the hype, though escalating in the UAE, is globally coming to terms with some hard facts.
Let’s count them down, shall we?
Fact 1: Bitcoin contenders
Business Insider, said the price of Bitcoin dropped sharply, below $17,000, during trading early in the European morning on December 20, following a series of troubling developments for the cryptocurrency in recent days.
Bitcoin is down about 15% from a record high Monday.
It said trouble came knocking when a day earlier Coinbase, one of the largest cryptocurrency trading platforms, introduced Bitcoin cash, an offspring of Bitcoin that launched earlier in 2017.
The saving grace came when Bitcoin cash trading soared, and its price rose sharply “prompting concerns about possible insider trading by people who had been pre-briefed about the announcement.”
According to Bloomberg, investors have shown more interest in smaller digital coins such as ether and ripple, despite gains lagging Bitcoin’s huge rally this year.
“Many speculate there is more room to gain because of their smaller market capitalizations.”
The global market capitalisation of cryptocurrencies now exceeds $600bn.
Coindesk expects that these factors could drop Bitcoin to as low as $11,000.
Fact 2: Bitcoin underworld
Also on December 20, a group of Australian researchers published the findings of a University of Technology Sydney study that showed almost half of all transactions in bitcoin are associated with buying and selling illegal goods and services, including drugs, weapons and pirated software, reported Business insider.
Fact3: Bitcoin exchange bankruptcy
On December19, a South Korean cryptocurrency exchange said it is shutting down after it was hacked for the second time this year, the latest causing a loss worth 17% of its total assets.
This has cast shadows on security practices by those entrusted protecting investors interests and caused growing concerns as trade in Bitcoin and other virtual currencies become more prevalent.
Fact 4: High Bitcoin fees
According to Business Wire, new data by BitInfoCharts shows that people are currently paying $28 on average to make transactions using the digital currency.
CNBC reported that users of cryptocurrency exchanges, such as Coinbase, incur such transaction fees when transferring money to external bitcoin addresses, which are like virtual bank account numbers where users can store their tokens.
While profitable to Bitcoin “miners,” who work out complex cryptographic puzzles to add transactions to the blockchain, and are paid in bitcoin for their services, where last Monday alone they grossed $11 million for just that, investors don’t cherish those payments, especially when losses start to pile up.
Fact 5: High Bitcoin transaction time
There is also a debate surrounding Bitcoin transaction times.
According to Business Wire, it currently takes an average of 78 minutes to confirm a bitcoin transaction, but on real busy days, like last Sunday, the average time was as high as 1,188 minutes (that’s 20 hours long).
That was one of the reasons that led to a number of splits in the original blockchain and the creation of Bitcoin cash and later Bitcoin gold.
This is it for now, but What’s the UAE up to?
NCR Corporation recently announced that it has teamed up with CoinHub, a cryptocurrency exchange in the UAE, to enable users to make cash withdrawals from their cryptocurrency account at the ATM.
NCR’s CxBanking software will provide users in the UAE easy access to their bitcoin funds, it said in a statement.
“When we first showcased this solution to mark the 50th anniversary of the ATM this year, the positive feedback from our leading financial institution customers in the UAE helped guide our decision to bring this to market,” said Panicos Demetriades, vice president, professional services, NCR Financial Services.
He said the execution of the crypto currency transaction is as simple as any other transaction at the ATM. It gives bank customers the choice to use either an ATM card for regular ATM transactions or just initiate a cardless session to complete a withdrawal transaction from their CoinHub cryptocurrency account.