New crypto millions pumped into market signal renewed trust in Bitcoin

June 26, 2018 12:27 pm


When Bitcoin fell below the $6,000 range last Friday, it sparked a minor panic for about 15 minutes total.

That’s how long it took for it to bounce back and its price to regain some $300.

Market movers are not hiding their intentions to bring the crypto back to higher peaks, despite the naysayers and regardless of the dangers.

Consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018, an official for the US Federal Trade Commission said Monday during an event on cryptocurrency fraud, reported industry site Coindesk.

“Consumers will lose more than $3 billion by the end of 2018,” Andrew Smith, director of the trade watchdog’s Bureau of Consumer Protection, told Coindesk.

That may be so, but the march is on for winning Bitcoin long-term credibility.

Read: FIFA WC accepts Bitcoin but is your digital wallet insured for theft?

Price bounce up, on the way down

Blockchain venture capitalist Spencer Bogart, who said he’s “super bullish on crypto right now,” told CNBC that prices will likely go lower.

The summer of 2017, when crypto prices were booming, there was about a 100, 200, or 300 new crypto hedge funds that were formed.

Bogart explained that one year later, many of these funds’  intermediaries –agents between the broker and the exchange –are now looking to sell since the price of several cryptocurrencies is down more than 50%.

Bitcoin reached an all-time high of around $19,500 last December, but today’s price around $6200 is a decline of nearly 70%.

$5,900 is the cost of mining the underlying blockchain technology and therefore miners will keep Bitcoin prices above that level, reported CNBC.

Take sides: Bitcoin swinging between boom and doom

Tether (USDT) to boost Bitcoin

Industry site CCN said cryptocurrency startup Tether issued $250 million in new tokens on Monday, sparking speculation that a bitcoin price rally could be inbound.

USDT is pegged to USD at a 1-to-1 ratio, serves as a proxy for physical dollars on many cryptocurrency exchanges, and over the past 24 hours, tether’s $4.2 billion in trading volume was second-highest among all cryptocurrencies, ranking behind only Bitcoin.

That Tether is issuing new tokens is an indication that new capital is flowing into the cryptocurrency markets.

Monday’s creation of 250 million new tokens marked the first significant tether issuance since May 18, when Tether issued $250 million in USDT, and Bitcoin price rose in the days following this event, from $8,100 on May 18 to $8,500 on May 21, according to CCN.

USDT currently has a circulating market cap of more than $2.6 billion, making it the 11th-largest cryptocurrency.

According to Tether’s “Transparency” page, the firm is holding more than $3 billion in its reserve bank accounts, indicating that it could issue approximately $400 million in new tokens without exceeding its assets.

Revealed: Reasons behind Bitcoin’s fall from grace and price pendulum swings

New Multi-Million dollar crypto fund

Top Silicon Valley venture firm Andreessen Horowitz launched a $300 million venture fund, called a16z crypto, which will invest in cryptocurrency companies and protocols, Business Insider (BI) reported.

“The new crypto fund will invest in companies and protocols at all stages, from seed-stage pre-launch projects to fully developed later-stage networks like Bitcoin and Ethereum,” said BI.

The firm said it plans to hold investments for over 10 years, which means it cares a lot less about the day-to-day fluctuations in price than about building long-term platforms and infrastructure that it hopes will serve billions of people someday.

Read: Overcast skies for Bitcoin, but Blockchain is taking the UAE by storm

Bitcoin non-believers

Alibaba’s Jack Ma repeated his assertion that Bitcoin may be in a bubble, in comments made at the launch of a blockchain-based remittance service.

According to Bloomberg, Ma told reporters at the launch that he believes in the potential of blockchain technology.

“Blockchain technology could change our world more than people imagine,” Ma said in Hong Kong. “Bitcoin, however, could be a bubble.”

Ma also criticized banks for charging excessive fees on international transactions.

“Traditional financial institutions serve 20% people and make 80% of profits. New (Blockchain-based) financial institutions should service 80%, and make 20% of profit,” said Ma.

Bitcoin’s market cap stays at $105 bn, while average trading volumes registered at $5.5 bn.

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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