Is Cryptocurrency Taking Over the World?
The US Federal Reserve may include a cryptocurrency market crash scenario when conducting stress tests. Watch the vide to learn more:
Are Cryptocurrencies Poised to Become the New Standard in Digital Payments?
Lisa Ellis is an expert in the payments industry and one of Wall Street’s top analysts. She is also a partner at MoffettNathanson, a research firm. In the past, she has stated that cryptocurrencies such as Bitcoin are attempting to solve a non-existent problem. She had remarked in an interview with CNBC that the current payment system in place works very well and that it would be extremely difficult to replicate.
In more recent interviews and in notes to clients, Ellis has begun to change her mind. She said that an unbranded payment system such as Bitcoin could likely put the big players such as Visa, Mastercard, and PayPal at risk, but that this was not something likely to happen in the near future. She stressed that problems with the system are gradually being solved and there are some cases where usage of cryptocurrencies could prove useful.
Companies such as Ripple that allow you to buy cryptocurrency instead of mining for them, are another risk for traditional payment systems. However, Ellis says that using blockchain technology, combined with the authentication ability of these networks, could open new doors for companies such as Visa and Mastercard.
In more recent interviews, Ellis has admitted that Bitcoin may very well disrupt the existing payment structure. We may be on the eve of a new type of payments system that is decentralized, unbranded and open to the public.
So what do the existing payment companies say about the issue? Al Kelly, the CEO of Visa, stated that he does not see cryptocurrencies as a threat so far. He did say that if they must adapt their business in the future, they will.
MasterCard is attempting to work with cryptocurrencies rather than fight against them. They are trying to speed up digital transactions, so more merchants are willing to accept these payments from consumers.
John Rainey, CFO of PayPal, states that his company hasn’t seen consumers showing very much interest in cryptocurrencies yet. He feels consumers are still worried about the volatility of such payments. He did not say, however, that PayPal will not get behind crypto in the future.
The use of Bitcoin in commerce is rising at a steady rate. Cambridge Associates, a consultant firm for pensions and endowments, stated that investors should begin researching cryptocurrencies. Their opinion is that currencies such as these may very well upend the entire digital payment system in the future. Though there is some risk involved in using currencies such as Bitcoin, it certainly seems that they are here to stay.
January Ripple Price Analysis: Head and Shoulders Pattern May Emerge After Ripple Gains
For the most part, bearish conditions in the cryptocurrency showed were prevalent throughout January; however, day traders who follow technical analysis noticed that a few digital currencies are starting to distance themselves from Bitcoin in terms of market activity. While BTC/USD was mostly flat during the final week of the month, things were picking up for Ripple with an uptick in volume and price gains around 7 percent.
Optimists who were hoping XRP/USD touching the $0.50 mark in January had to settle for a high of $0.3314 on January 30. it should be noted that XRP almost dipped below $0.28 just one day before it reached its highest price for the month; it is interesting to note, however, that technical analysis observations on this token suggest that a head and shoulders pattern formation is underway, thereby supporting a bearish period.
Understanding the Ripple H&S Pattern
H&S patterns form when an asset hits a peak price and then proceeds to decline towards the base of the previous lower level. What happens next is a price increase that subsequently drops back down to the base. The initial peak is once again reached before heading back down. To a certain extent, H&S patterns form in sideways markets, particularly when looking at daily charts, and they offer traders opportunities to look for good market positions.
In the case of XRP/USD, a strong trend line has been in place since July 2017, and the time to test it could be near. Should the trend line be broken during a bearish period, XRP could test the waters at $0.277, which would become a support level. An even more bearish scenario could bring prices closer to $0.2, which would signify a 35 percent drop from late January.
Looking at the H&S pattern formation, resistance for XRP/USD would be around $0.4, a price that has not been seen since May 2017, and a level that is a lot closer to the optimistic $0.5 forecast that many traders have in mind for 2019. The left shoulder of the pattern formed during the bullish rally that most cryptocurrencies experienced in 2017.
The H&S Pattern for XRP/BTC
Traders who take positions on XRP/BTC are also looking out for signs of H&S patterns. The upper trend line of the resistance level has already been tested, which means that XRP/BTC could see a major bearish move towards 0.00007. Since H&S patterns also have a bullish aspect, which is represented by the head peak, a trip back up towards the resistance level would result in XRP/BTC pricing around 0.00009.
In the end, traders should keep in mind that H&S pattern formation features various necklines, some going up and some retreating. Prices can rise three times during the H&S period, but it is a mostly bearish pattern that many investors prefer to see develop and come to an end so that they can take a position after the final neckline.
STOs, not ICOs Are the Future, New Research Says
Node Blockchain Inc. published a new research called “Security Token Offerings. The Evolution of Capital Formation”. The company is based in Toronto, Canada and specializes in independent digital asset research and analysis, asset management and proof-of-stake mining.
In the research, the authors claim that the ICO (Initial Coin Offering) industry has come to an end. What happened to the Ethereum was a huge success, they say, but after that greed and fraudulent schemes came. It is true, that according to the latest data the ICO market has shrunk substantially. As the ICO Rating’s study reported, only for the last couple of months ICOs raised 48% fewer investments. According to the Node Blockchain group, in toto, the ICO market lost 80% since quarter one of 2018.
The researchers posit the Security Token Offerings (STOs) as the best business option for the future. They state that the STOs are much safer in terms of legislative requirements. They are regulated by the SEC (Security and Exchange Commission) in the U.S.A. and could be submitted under Regulation D, A+ or S. They also need to pass the Howey test.
[…]it appears that we are only scratching the surface of what is possible with the use of blockchain technology and tokenized securities. We don’t believe a “revolution” will unfold, rather an “evolution” of the existing infrastructure and framework will take place,
The paper reads. The authors strongly believe in the tokenization of financial instruments, but they oppose the independence of third parties the blockchain ideology imposes. According to them, bankers, lawyerс, and accountants should not be removed from the operations but rather their position should be augmented. What that means is a change in their role. Because contracts are programmed in these digital entities’ protocol, financial staff would have to learn to read some code. Moreover, they would be crucial upfront in developing these contracts.
Most ICOs use utility tokens. They differ from security tokens by the value they represent. Recently, most ICOs sell an idea for a developing business. In fact, 76% of the ICOs launched in the past quarter had nothing but an idea, the latest statics say. Security tokens, on the other hand, are backed up with company dividends and give stakeholders part of its services or products. They are also supported by the blockchain platform, the Ethereum team recently developed a new token standard called ERC-1400 designed especially for STOs (whereas ICOs work with ERC-20 in most cases).
The Node Blockchain research group believes there will be a huge uptrend of the STOs in the next 12 to 24 months. However, do not take financial decisions before conducting a deep inquiry of the chosen company and its legal rights.
Disclaimer: this article cannot be used as a financial advice and is not responsible for investment decisions. The author currently does not possess any sort of crypto assets.
Bitcoin Shows Signs of a Slow Recovery
The Bitcoin’s price hit a 2018 record low yesterday at $4,200 USD. It has not been so low since 5th of October 2017. Today, it marked a small movement up over $4,400. At the time of writing, it is worth almost $4,500 according to the crypto watcher CoinMarketCap.
The most popular cryptocurrency’s plunge began on 14th of November hours before the infamous Bitcoin Cash hard fork. The hype around the two new coins, results of the split, brought many investors to the altcoins positions. Also, many expressed the opinion on social media that perhaps developers sell their Bitcoins and Ethereum to fund Bitcoin Cash mining.
However, in the days after November 14th, the Bitcoin was in an oversold situation. That richly supplied the crypto market which logically led to a price drop. But it seems that as of today, investors started to really buy the dips. The latter is a popular trading slang phrase ‘buy the dip, sell the rally’ meaning to buy on a low price and sell on a higher. If buying the dip really forms a trend, that would create a strong momentum for the Bitcoin and the price could possibly moon again. This is how experts explain the surge that usually occurs after a plummet.
In total, Bitcoin’s price fell by 34% in the period after last Wednesday. Today has a slow movement of 1.87% down but it holds the line of resistance at $4,200. Bitcoin still lies in a bearish territory, though. It would need a strong momentum to break out the $6,000 line again. But currently, the sentiment towards world’s first crypto coin is rather negative.
