Category Archives: CNBC

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Squawk Box Interview: The 3 Factors Driving Bitcoin’s Spike

smith, bitcoin, market, price

Bart Smith, head of digital assets at Susquehanna, appeared on CNBC’s morning business news program Squawk Box this week with his own reasons why Bitcoin has taken off in recent weeks.

Smith admitted like many other analysts that the Bitcoin revival is clearly not down to one independent factor, but in his words “… geopolitical drivers, there’s technological, [and] there’s regulatory to go with investor demand. So, it’s hard to isolate any one factor.”

However, he managed to tie it down to three drivers when speaking on the program: China and U.S. Trade War, the Consensus 2019 in New York, and Brokerages Offering Bitcoin to Retail Customers in 2019. On the first; President Trump’s immovable stance on Chinese Trade, he commented:

The net effect of the trade war with China and the U.S. is that the [Chinese] yuan is hitting a six-month low,” adding “Much of the rise in bitcoin in 2017 came out of Asia — countries like Korea and China that have capital controls and, in many people’s minds, [devalue their currencies]. And therefore, bitcoin was either a hedge or just an outright way to get capital outside of that country.”

The reaction to this year’s Consensus in New York, if in fact was a factor in Bitcoin’s spike, was indeed expected by some analysts, and appeared not to kick in immediately, but possibly this was a slow filter effect. Smith certainly thinks so.

However, if there is a key factor, in Smith’s opinion it was online brokerages stepping up to offer Bitcoin to retail customers in 2019 that has injected momentum into the market and heralded the end of crypto winter:

“Really, the big one is that there is a tremendous amount of optimism about U.S. brokerages, particularly online brokerages, said Smith. “While no one has come out and said that openly, there’s a lot of talk about that, and I think people are buying bitcoin ahead potentially of that new investor demand.”

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Bitcoin Bulls Make Reappearance to Smash $8,000 Resistance as Price Jumps 10% in 3 Hours

Bitcoin Bulls Make Reappearance to Smash ,000 Resistance as Price Jumps 10% in 3 Hours

The weekend trading session for Bitcoin proved yet again to be a source of inspiration as the bulls came back in force and smashed the stubborn USD 8,000 resistance line to trade now in the USD 8,750 range after hitting a 12-month high at USD 8,937 (CoinDesk).

Bitcoin market optimists were proven right after all, when buyers repeatedly attempted to scale USD 8,000, failing at USD 8,200 again and again over the past week and a half. Many analysts pointed to lower volumes at the falls as well as higher lows after each failure of resistance tests, to back up claims that Bitcoin bulls had merely paused to accumulate, reaccumulate and consolidate.

The 10% spike in price in just under three hours that started at midnight UTC also showed the willingness of Asian markets to set the trend for the week, just as they had done in previous weeks since April. If this pattern holds true, then Europe markets about to awake will follow suit, while North American markets due in about eight hours should trigger profit taking and sell offs.

Nevertheless, the bulls will be in high spirits today, especially after such a strong rally to overcome a price level that had withstood many attempts. Even CNBC could not resist tempting fate, asking if the next milestone of USD 10,000 could be coming next:

It happened. Could $10k be next for bitcoin? pic.twitter.com/NAfMHSe1dt

— CNBC’s Fast Money (@CNBCFastMoney) May 27, 2019

Buying volume has certainly intensified, and Bitcoin’s push has led to a global cryptocurrency market capitalization of USD 270 million, showing no letdown in terms of appetite for the world’s most used cryptocurrency.

 

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Reddit Founder Claims Crypto Market Needs a Crash Before Take Off

Reddit founder Alexis Ohanian has remarked in an interview with CNBC that he believes that a crash in the cryptocurrency market as seen over the past few days is needed in order for the market to stabilize and mature over time.

The Reddit entrepreneur feels that focus on software development and infrastructure within the cryptocurrency industry are important factors in building a stable future. He also suggested that the falls in cryptocurrency prices would have the effect of sifting out the undesirables in the industry from the genuine contributors, and those in for making quick money.

The Reddit founder feels that innovations being created now will have longevity and although blockchain pitches he has received may be fewer in number, Ohanian claims that they have more potential than those he was receiving in 2017.

Over the last few days, Bitcoin has suffered its biggest losses in over eight months. Although, after falling to USD 5,202 on 15 November, after a little price correction, trading picked up today at $5552.17 (time of writing). The newly hard forked BCH has fallen by 15% and is trading at $387.41. Brian Kelly, the founder, and chief executive officer of BKCM, has blamed the hard fork for the crypto market crash. Mati Greenspan from eToro says he saw it coming:

“The movement we saw today seemed to be the run-of-the-mill volatility surrounding Bitcoin and a breakout that’s been weeks coming….It’s difficult to say where it ends. No one can really predict.”

Forbes contributor Clem Chambers noted a correlation to the spike in the bond market:

“The obvious culprit causing this dump is Bitcoin Cash, the ‘wannabe’ Bitcoin usurper, which forked from Bitcoin last year. It is forking again and there are competing forks and all sorts of conniptions are expected. It sounds plausible this is causing the move but the fact the bond market spiked at the same time suggests something else is going on to me.”

Stephen Innes who heads up trading at Asia Pacific of Oanda Corporation suggested that the crash was an even worse scenario than he had anticipated and that pre-BCH online chat had the effect of creating doubt and uncertainty among investors.

Ohanian sticks with his view that the crash is necessary, arguing that during hard times people start to focus on the essentials.

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BlackRock Waiting for Market ”Legitimacy” to Launch Crypto ETF

The largest asset manager in the world, BlackRock, has said that any plans to launch a cryptocurrency exchange traded fund (ETF) will be put on hold until the market matures.

BlackRock CEO Larry Fink featured on CNBC Thursday, where he shared, “I wouldn’t say never, when it’s legitimate, yes.”

While a number of Bitcoin ETFs have been proposed to the Securities and Exchange Commission for its required approval, the agency has identified a number of issues that have prevented any being launched as of yet. Most notably included is a need to protect investors from activities such as insider trading that it believes the market is particularly susceptible to due to a lack of oversight.

It is this level of independence that the market operates with that Fink sees as a factor stifling its growth into mainstream finance.

“It will ultimately have to be backed by a government. I don’t sense that any government will allow that unless they have a sense of where that money’s going for tax evasion and all of these other issues,” he said, although due to the ideology behind Bitcoin‘s creation, it is very unlikely to become backed by the state.

While Fink was skeptical of the cryptocurrency’s apparent ease of use in illicit activities, he does see a future where a digital currency could be traded as a store of value, something that some investors say is Bitcoin’s primary use case. For now, however, he says that there is no need that he can see for a store of wealth unless it involves ”things you should not be doing”.

Blockchain is something that the CEO does have faith in though, describing BlackRock as a ”huge believer in blockchain”. He cites the most likely area for mass adoption as that which involves laborious paperwork such as mortgage applications and ownership.

 

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CNBC Reverse Indicator Proves Accurate for Recent Bitcoin Crash

There’s a joke going around on Reddit’s r/bitcoin that CNBC’s Bitcoin price predictions are actually the exact opposite of what will happen. This is called the CNBC Reverse Indicator, which actually proved extremely accurate this past week.

Bitcoin rallied from USD 5,800 in the middle of August 2018 to as high as USD 7,500 in early September, and CNBC issued a forecast on 28 August that USD 8,000 was probably next. The market went in the complete opposite direction a few days later, crashing to USD 6,300, which was CNBC’s stop-loss level.

Bitcoin breaking back above $7K today and @Bob_Iaccino says $8K could be next pic.twitter.com/lZQu1V2dzd

— CNBC Futures Now (@CNBCFuturesNow) August 28, 2018

Jokes were abundant on Reddit following this verification of the CNBC Reverse Indicator. CashCoinsCrypto says, “the prophecy was fulfilled”. Chieres wrote, “So all I need to do is to follow CNBC and always do the opposite?” In response, badinsie says, “Yup, you’ll win 95% of the time”. Utoko added, “About 3 weeks ago they had a guy on there who said [Bitcoin] will go close to zero”; in response Fuadiansyah says, “So we need that guy to present every day at CNBC”.

Is there anything real to the CNBC Reverse Indicator? Redditors will be keen to point out that CNBC simply doesn’t have true crypto expertise and is wrong most of the time since they are used to typical asset classes, which differ distinctly from crypto. Others speculate jokingly that the program is deliberately issuing forecasts that are the opposite of reality to manipulate the markets in their favor.

In reality, no study has been done to see if the CNBC Reverse Indicator is accurate, which would be necessary before anyone starts making trading decisions that are the opposite of everything CNBC says.

Assuming the CNBC Reverse Indicator is legitimate, what should Bitcoin traders do next? CNBC’s latest prediction is for Bitcoin to rise to USD 7,250, with USD 6,450 being a good buying level. Therefore, if the CNBC Reverse Indicator is accurate it’s time to sell since Bitcoin will be crashing some more.

#Bitcoin getting crushed again. Here’s how @BrianStutland is trading the #crypto pic.twitter.com/BgTCXsAOLZ

— CNBC Futures Now (@CNBCFuturesNow) September 6, 2018

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Blockchain Reality Show BlockBattle Premiers October on South Korean TV

It looks like TV might be the next medium for cryptocurrencies through BlockBattle, a South Korean show planned by Asia Economy TV, using blockchain as its theme.

A team game called ‘BlockBattle — Who’s the Next Satoshi’ is due to air on the station on 19 October featuring blockchain development teams facing off against each other with the aim to become the next big thing in blockchain. Blockbattle will also be streamed live via YouTube on the Coincast channel.

The game show consists of five episodes open to worthy applicants who will be guided through the process and aided by international experts in technology, business, law, marketing, and finance. The producers explained:

“After the screening, ten projects will qualify for the finals. They will go through a series of presentations, one-on-one battles, and other team competitions.”

Judges will consist of representatives from two major local universities, the Korean Blockchain Industry Association, Open Blockchain Association, and the Korea Blockchain Association, plus prominent individuals from the industry.

Although BlockBattle is a fresh approach to marketing and disseminating cryptocurrency technology, it isn’t the first TV outing for the space. Another new show, Japan’s ‘Bitgirls’, has already hit the air on Tokyo MXTV, allowing cryptocurrencies to be used for voting. A long-running show from Sony Pictures, ‘Startup’ is due for a third season while CNBC launches the documentary ‘Bitcoin: Boom or Bust’ tonight. Other crypto-based programs are either in production or being considered.

There are some commentators who feel that blockchain could have a major impact on television in the future in terms of how a decentralized model could give users total authority over viewing choices. Alan Bridgewater of Techwire Asia sees blockchain TV as a way of breaking the current monopoly of viewing distribution sources such as Netflix and Amazon. He argues:

“Crucially, television services on blockchain foundations could represent a fundamentally decentralized model where a degree of peer-to-peer network connection exists with no central authority. That scenario is rather further than even the keenest blockchain TV proponents are suggesting, but it is an extreme aspect worth appreciating.”

 

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Brian Kelly: One Last Hurdle for Bitcoin Rally

CNBC Fast Money’s bitcoin bull Brian Kelly sees a Bitcoin rally as just one hurdle away: ETF approval. Although, he does not see this as likely until August 2019.

The Big Hurdle

Getting the first Bitcoin ETF approved by the Securities and Exchange Commission (SEC) has become a competition between those fighting for the trophy, as well as for Kelly, the biggest hurdle in seeing a real Bitcoin bull market emerge. He fears that any delay, rejection, or request to withdraw could postpone any substantial price appreciation.

Kelly noted that last years SEC rejection of the Winklevoss brothers ETF actually became a boost for altcoins. Right now, he recognized, the market is flat for altcoins like Ethereum and Ripple. But, this could be because all the new money is flowing into Bitcoin. While part of this may be accounted for by people spending fiat on Bitcoin to then purchase altcoins, Kelly estimates that it is more likely to be coming from investors counting on an ETF approval.

If the ETF applications are rejected or delayed, he predicts that the alt market could experience a capital influx as some investors leave Bitcoin. Kelly pointed to the year’s overall growth in the cryptocurrency market, which saw the movements of Bitcoin and altcoins tightly correlated, with the former outperforming throughout August.

Be cautious to buy Bitcoin today if you are counting on an imminent ETF approval, he warned investors. As a short-term trader, Kelly said he had just sold off some of his Bitcoin holdings.

ETF: For Retail Traders or Not?

As the hosts queried whether an ETF would benefit retail investors, Kelly noted that VanEck’s USD 200,000 share price was likely to weed out any potential for them, and rather serve institutional players.

The SEC gave prospective providers 31 points needed to be met to receive approval, with one of these being protections for retail investors. It would seem that Vaneck responded to this by raising the costs to such an extent that they are cut out of the market.

One issue that the Fast Money hosts did not think had been addressed yet remains the problem of providing a sufficient custodial service, with Kelly citing this as a significant reason why approval is not imminent.

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Crypto Investor Sues AT&T for $224M After Phone Hack Losses

A cryptocurrency investor in the US has filed a lawsuit against his cell phone service provider AT&T on the grounds of gross security negligence that lead to his personal loss of USD 24 million in crypto.

The plaintiff, California resident Michael Terpin, filed a 69-page complaint with the US District Court in Los Angeles on Wednesday alleging that AT&T not only violated its statutory duties and Privacy Policy commitments but went so far as to willingly cooperate with the phone hacker. Terpin claimed that he was victim to digital identity theft two times in seven months when his digital assets were taken via his cell phone number.

Suspicious circumstances were cited by Terpin regarding the actions of at least one AT&T employee. He alleged that ”insider cooperation with the hacker” took place after a store employee offered out his phone number without verifying the person’s identity or requesting any of his private information. Terpin’s complaint details that his number was then used to break into his cryptocurrency accounts and compares the incident to a hotel providing a thief with a fake ID the key to a room and the safe to steal from the rightful owner.

The legal complaint seeks from AT&T USD 200 million in punitive damage and USD 24 million in compensatory damages.

AT&T responded to the accusations, providing CNBC with a statement reading: “We dispute these allegations and look forward to presenting our case in court.”

Terpin may well have been considered a profitable target by potential thieves due to his work in the cryptocurrency industry. In 2013, he co-founded Bitcoin angel investor group BitAngels, as well as the BitAngels/Dapps Fund.

The cryptocurrency community has recently placed a significant focus on increased security as imperative for increasing adoption levels and seeing market prices recover from a relatively poor performance this year, although in this instance it appears to be only AT&T at fault.

 

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Price Poor Metric to Judge Bitcoin, Says CoinShares

Digital asset management company CoinShare’s chief strategist Meltem Demirors featured on CNBC’s Fast Money on Monday, where she discussed the problematic nature of judging Bitcoin on price alone.

Demirors offered that actual utilization may be a better alternative metric for institutional and retail investors to consider, which she put down as the real struggle right now. Although she said that it is not yet clear when or how Bitcoin may regain its value, the best way to predict this is by determining solid metrics that best fit Bitcoin.

The strategist noted that ”real traction” is imminent but a lot is relying on analysis to find the key metrics that will drive growth.

She compared cryptocurrency with similar innovative enterprises such as Intel, Amazon, and Microsoft in the early days of internet stocks, noting that it took Amazon nine years to recover from its initial price high during the dotcom bubble, Intel 15 years, and Microsoft 17 years.

Such as these early internet stocks, Demirors said that the real traction for Bitcoin will come with time. The late 2017 price run can be put down to “fear of mission out” (FOMO), which caused a similar type of speculative bubble, she said. With that bubble burst, real businesses with real-life use applications are being developed in the space.

As she put it: “New technologies that shift the paradigm take a long time to really understand.”

This goes to what she described as a key issue right now in the lack of a coherent narrative from the cryptocurrency community. With institutional interest in the space growing, Demirors said that this could well be an opportune time for Bitcoin, but it is not being considered a store of value because of the poorly-relayed narrative.

Bitcoin (BTC) currently sits at USD 6,038.18 after struggling this year to make significant gains compared with last years highs of nearly USD 20,000.

 

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Pantera CEO: Investors Overreacting to SEC Delay on ETF

Crypto hedge fund Pantera Capital’s CEO Dan Morehead has said that investors have been pushed into a state of panic by the SEC’s delayed decision on Bitcoin exchange-traded funds (ETFs).

Morehead said on Wednesday’s CNBC “Fast Money” that ETF wasn’t imminent, a view shared a week prior on the same show by Brian Kelly, who saw next year as the most likely date for approval rather than September. He commented:

“The main thing to remember is that Bitcoin is a very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact… I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years.”

The SEC has delayed another decision on approval of a Bitcoin ETF after several attempts by investors over the years to push one through. On the announcement of a delayed decision, Bitcoin lost further ground last week.

Morehead suggests that the new Bakkt project should be enough to hearten investors rather than to sell Bitcoin on the basis of a delayed decision. He explained:

“The ETF rejection is the same story we’ve had for five years. The SEC has been very cautious with an ETF… That’s huge news. That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on.”

CNBC’s Fast Money regular Brian Kelly was the first to predict that an ETF was unlikely to happen this year, and is in total agreement with Morehead, arguing that a sell Bitcoin position is not the right one to be taking. He explained:

“It [Bitcoin] has had a tremendous run off of USD 5,800, and that was all really because people thought there was going to be a bitcoin ETF. The SEC came out and postponed that decision. A little spoiler alert, on September 30, SEC will likely postpone it again, because the market is not ready for it and the SEC hasn’t had the answers to their questions yet.”

 

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