Bitcoin price LIVE: BTC slips after rise
8.15am MORNING HEADLINES
Good morning, and welcome to our rolling coverage of all things cryptocurrency, including price, regulation, innovation and financial crime.
However, despite enjoying a positive week so far, bitcoin bull Arthur Hayes from BitMEX warns that bitcoin hasn’t bottomed yet.
The joke doing the rounds in the crypto community right now is that the world’s first trillionaire will well be a billionaire who has invested a significant % of their wealth in bitcoin.
Having previously predicted that BTC would reach $50,000 by year’s end just a few weeks ago, the expert told CNBC, “I don’t actually think we’ve seen the worst.
“I would like to see us test $5,000 to really see if we put a bottom in.”
On the end of year predictions he said: “I think the current rally will top out close to but not greater than $10,000. Then we will fall and test $5,000. If that holds then we can rally to $50,000 by year end.”
This week’s price rise arrived on the back of news that the world’s largest asset manager was moving towards crypto.
Alexander Mann, Associate at Concentric told Express.co.uk that big players like BlackRock are beginning to recognise that bitcoin is not going away anytime soon and perhaps beginning to understand the technical properties that make it special.
He said crypto has learnt how to roll with the punches, adding: “Bitcoin has now been around for almost 10 years, surviving numerous attacks – from the media, governments and hackers – and has created over $300bn of dollars in value.
“It’s an extraordinary achievement and likely has a long way to go yet.
“If you compare it to other asset classes, it is still only a fraction of their total value.
“Commonly compared to gold due to the more widely understood ‘Store of Value’ use case, bitcoin is still only something like 2 percent of the overall gold market yet has numerous properties that potentially make it much more valuable, such as a fixed supply of 21m coins, the ability to divide it into smaller and smaller amounts, low transaction costs, the fact the network is constantly being upgraded by some of the world’s brightest minds and of course it’s security through decentralisation.”
Bitcoin price LIVE: BTC at its ‘bottom’
Mr Mann says that, from a financial perspective, if it achieves just 10 percent of the gold market – a “conservative prediction” – we’ll see massive price appreciation.
He adds, “that’s very possible and from an investor standpoint it seems like these institutions have decided the potential rewards now finally outweigh the risk.
“The joke doing the rounds in the crypto community right now is that the world’s first trillionaire will well be a billionaire who has invested a significant % of their wealth in bitcoin.”
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Updates below throughout the day…..
8.49am – Robos warn against crypto
Financial News report that three of the UK’s largest robo-advisers have called on the country’s main financial watchdog to regulate bitcoin and other cryptocurrencies.
Senior managers at firms backed by Aviva, Schroders and BlackRock have warned the top regulator that consumers could be at risk of losing vast amounts of money if the UK’s Financial Conduct Authority does not step in soon and regulate the crypto space.
Richard Theo, Wealthify’s chief executive and founder, told Financial News: “The FCA is way too slow. [As a regulated firm] there are a lot of tests we have to do before we can take on a client. But that same client can go and buy bitcoin with no questions asked. There are far more risks involved when investing in bitcoin.
“The FCA should get on to it fast.”
Cyber crime update
9.36am – Cyber security crypto update
Paolo Passeri from Netskope has been in touch to update us on the week that was in crypto cyber security.
He said: “Last week saw yet another cryptocurrency cyber-attack take place, with Bancor, a cryptocurrency trading startup, having $23.5 million in digital assets stolen.
“Not only was this attack striking because of the sum of stolen cryptocurrency, but also because it sparks a storm of debate on decentralisation. To carry on their attack, the hackers used a control created by the company: they infiltrated a wallet used to upgrade smart contracts.
“No doubt that this incident will lead many to call for the centralisation and regulation, further adding weight to the current controversy.
“The dilemma here is further intensified by the fact that the same decentralised capability allowed Bancor to deploy an emergency code that froze the process, leading to the recovery of $10 million of its own BNT tokens.”
“This event shows that cybercriminals are mining the foundation of the blockchain – this creates a problem. Imbedded security mechanisms can be abused by cybercriminals to launch attacks, but they also provide the ability to protect communities, like Bancor’s, in the event of an emergency.
“Since the attack, Bancor has come out in favour of replicating its model to ensure other business communities are protected.”
Bitcoin GOLD rush
10.55am – Bitcoin as digital GOLD
Bitcoin is set to become “digital gold” and the move could send prices souring even if just a small chuck on the world’s $7 trillion pot of gold was put into crypto as a store of value.
Gabor Gurbacs, director of digital asset strategies at VanEck/MVIS told CNBC that the continuing rise of bitcoin will lure traditional investors out of physical gold and into “digital gold”.
He said: “Gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — bitcoin has upside.”
In short, with bitcoin’s current market capitalisation (total value of coins in circulation) at $128 billion, according to CoinMarket Cap, Mr Gurbacs estimates that if just 10 percent of the gold trade were to shift into bitcoin, this could triple to a sum closer to $400 billion.
He said: “Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold – bitcoin.”
Read the full report here.
Bitcoin price LIVE: BTC rising
12.26pm – Buffett banter and Stiglitz sledging
Members of the crypto community are now fully comfortable with responding to inflamatory comments from some of the leading figures in global finance incluing the world’s third richest man in Warren Buffett and a Nobel-Prize winner in Joseph Stiglitz.
Perhaps the most shocking comment of all however, came from Warren Buffett’s partner at Berkshire Hathway, Charlie Munger, who said: “I regard the whole business as anti-social, stupid, immoral.”
When questioned on the ‘immorality’ of bitcoin, Mr Munger hit back, “suppose you could make a lot of money trading freshly harvested baby brains. Would you do it? To me bitcoin is almost as bad.
“I regard the whole thing as a combination of dementia and immorality. I think the people pushing it are a disgrace.”
However, Romal Almazo, Cryptocurrency Lead at Capco told Express.co.uk that these type of explosive comments are representative of the polarisation which mass technological change creates.
He said: “This scenario has been repeated many times in history when it comes to technology. On the one side, you have the disruptors and drivers of change who promote progress and innovation, and on the other side you have the traditionalists and protagonists who see no reason for change.
“We need to remember that technology needs to be solving a problem for someone and with cryptocurrency and blockchain we have a solution which is removing the need for an intermediary in a financial transaction.
“In computer science they refer to this as the ‘Byzantine Generals’ Problem’ and it has been in existence since the 1970’s. The removal of the need for a ‘middle man’ in a transaction will have implications for all walks of life, and people are wrong to say that there is no value in cryptocurrencies or blockchain because the underlying value is technology.
“It’s just hard to agree on its value right now and this will become clearer over time.”
Bitcoin price live: Ripple SEC
14.16pm – XRP and the Securities and Exchange commission
Olymp Capital CEO Christophe de Courson told Express.co.uk that the process could be painful.
He said: “If the SEC states XRP is a security, the coin will definitely take a big hit because it is listed on all the major exchanges – except Coinbase – and moreover, I would expect a strong negative reaction of the global crypto-market for such news.
“The coin will not be the only one to be hurt from such a decision, indeed affiliated ripple corporate entities will also suffer. It is interesting to note that several lawsuits targeting ripple entities already claimed that XRP was a security.
“On the other hand, XRP is not needed when using xCurrent, the product that gives banks ability to move efficiently money across border. xCurrent being the most used ripple’s product, I think that even if a classification of XRP as a security will be painful for ripple , they could cope with it.”
IBM are moving towards crypto
14.50pm – IBM and crypto
IBM has sent a big boost to the crypto community after the tech giant backed a new cryptocurrency pegged to the US dollar.
However, with big firms looking for a way into crypto, Daniel Wolfe, CEO of Tradingene, told Express.co.uk that there is no such thing as a risk-free entry.
He said: “For so long as moving from fiat currency to cryptocurrency is as difficult and expensive as today, there will be a place for stable currencies. Given the widespread doubts about Tether, I believe the move by IBM is a very wise move.
“There will be far greater faith in their currency than in Tether. Given that Tether plays a major role in the market today, I see a very bright future for the IBM currency, particularly when institutional investors enter the crypto market.”
14.56pm – BTC in the green
Bitcoin has turned losses into gains and is currently up $1.07 on the day so far.