This past week saw a sharp rise in the cryptocurrency market valuation. Likely it’s due to news surrounding Blackrock and an announcement from the Chartered Financial Analyst (CFA) regarding adding cryptocurrencies to their curriculum. Let’s take a look at these and other cryptocurrency trends happening across the globe.
The week started at ~$253 billion and finished at right about $286 billion, which is an increase of around $33 billion, or 11.5%.
Trading volumes have also picked right up, with the week starting around $11.8 billion, and finishing higher at $19.5 billion. This is a near 25% increase in trading volumes since this time last week, which is incredible, to say the least.
Figure – Coin market cap
In other cryptocurrency trends, Bitcoin dominance has picked up again this week. We started out at 43.2% and finished at 43.90%. Since this time last week, that’s an increase of 2.2%.
Figure – Coin market cap
The huge spike can be directly correlated with news circulating the Blackrock project, which is one of the world’s largest asset managers, and was in relation to the AM setting up a workgroup to look into cryptocurrencies.
Figure – Google trends
Unfortunately, the news itself seems to be largely hype-driven and not containing anything substantive. Blackrock CEO, Larry Fink, elaborated in an interview with Reuters;
“We are a big student of blockchain; [we don’t see] huge demand for cryptocurrencies”
The article which made headlines worldwide is referencing a working group that has been set up within Blackrock to study cryptocurrencies. Our sources tell us that this working group has been established since 2015 and is nothing new.
Regardless, news that references any connection between large old-world financial institutions and cryptocurrencies is a positive thing. Many investors are sitting on the sidelines, waiting for these institutions to get behind and endorse cryptocurrencies before they are willing to jump in.
We want more investment in this space, and we need more investment in this space. Especially from these large institutions like Blackrock. When they actually decide to jump in, only time will tell.
Technical Analysis of Cryptocurrency Trends
This week, we have some more expert commentary from Rabbi Ahmed, Head of Trading at Bit Trade Australia.
Rabbi’s analysis of the market indicates that July will be the low for Bitcoin. Additionally, the price should rally for 3 months. In regards to the low, Rabbi says:
“The low has either formed already, or one last shakeout to USD $5K to stop longs out before accumulating.”
“[The] fundamental catalyst for a strong bull run will be an introduction of an ETF. Coinbase and other large exchanges are building infrastructure to cater to the institutional clients”
Rabbi concludes with sentiments that if one were to accumulate Bitcoin, then the July low marks an appropriate entry point.
More Cryptocurrency Trends and News
‘The future of money: Digital currency’ FSC Committee
The United States House of Representatives Committee on Financial Services recently held a hearing on “The Future of Money: Digital Currency”
The hearing was to work out whether the U.S. Government should consider cryptocurrencies as money, including its uses. The merits of the use of cryptocurrencies by central banks were to be evaluated, including the future of cryptocurrencies and physical cash.
Those in Favour of Cryptocurrencies
Norbert Michel, Director of the Center for Data Analysis at the Heritage Foundation, testified at the committee. Speaking in favour of cryptocurrencies as a medium of exchange, he said:
“Even Bitcoin remains far from being a generally accepted medium of exchange, but all cryptocurrencies can—and many do—function as a money substitute”
And on cryptocurrencies being accepted as a form of currency:
“…it is possible that Bitcoin (or other cryptocurrencies) eventually will be widely accepted and recognized as money.”
Mr. Michel goes on to say that cryptocurrency will unlikely replace the U.S. dollar, but should still be available for people to use as a preferred medium of exchange.
Norbert seems to have a very good understanding of both cryptocurrencies and blockchain technology. His testimony reflects fundamental sound knowledge of the industry, reflected by his comments on the devaluing of global currencies by governments worldwide.
“government’s overall record of currency debasement highlights the importance of preserving citizens’ ability to use whichever form of money they choose, and the underlying technology that drives cryptocurrencies—a distributed ledger known as a blockchain—could have effects far beyond purchases of goods and services”
Those Not in Favour
Alex J. Pollock, Senior Fellow of the R Street Institute, spoke on both the potential for Bitcoin to become a globally used currency, and on central banks issuing their own digital currency.
Referring to Bitcoin as a private currency, Alex mentions that there has never been a private fiat currency, saying;
“…to my knowledge there has never been a private fiat currency. They all were claims on some kind of assets, which Bitcoin and its siblings are explicitly not.”
Using examples of gold and silver coin minting, Mr. Pollock uses an example of how these coins were minted privately. Thus serving as a medium of exchange but not requiring endorsement from the government. That is until the mints were prohibited during the civil war.
Alex goes on to say the following in reference to currencies issued by private state-chartered banks:
“All such notes were backed by the loans, investments and capital of the issuing bank—they were not fiat money, as Bitcoin wishes it might become.”
Are Bitcoin and Cryptocurrency Trends in Competition with Each Other?
The comments and sentiment from Alex refer to Bitcoin and cryptocurrencies vying for government endorsement, which I don’t believe is the case. As anyone who has been in this space for a while knows, Bitcoin is completely decentralised and not under the control of any one party. Government endorsement or not, Bitcoin can be obtained, used, and stored.
The use of asymmetric public and private key cryptography allows Bitcoin and other cryptocurrencies to operate securely over the internet. With distributed consensus as its security layer, crypto is virtually unstoppable.
The benefits that cryptocurrencies bring through transparent distributed ledger technology are insurmountable. Especially when compared to legacy financial systems. It’s a natural evolution that cryptocurrencies will continue to grow, taking over many of these existing legacy systems. How this will play out with federally issued fiat currencies will be a monumental challenge for governments worldwide. But only if they refuse to innovate.
Alex concludes his testimony by saying private fiat currencies without an underlying asset have a very low probability of ever being widely accepted and used as a medium of exchange.
Around 37 minutes into the meeting, Dr. Michel offered that cryptocurrencies should be used as an alternative form as payment.
The Hybrid Summit 2018 is a blockchain conference being held in Bangkok Thailand from the 28th to the 29th of July. Some significant industry veterans will be speaking, including Fundstrats, Tom Lee, the man behind the Bitcoin Misery Index. Also speaking, will be Reeve Collins, Co-founder of Tether, Jane Lippencott, Co-founder of ZenCash, and Miko Matsumura, Venture Partner of Bitbull.
If you are interested in attending, our readers get a special 50% discount on ticket prices by using ‘CRYPTOAUST’ discount code. We like to offer these discounted prices so our audience can experience cryptocurrency trends in person.
Check out more at the official website: Hybrid Summit 2018
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Beau is the Founder & Chief Editor at Cryptocurrency Australia Media, an educational platform designed to help anyone learn about cryptocurrency investment and blockchain technology. Beau is also the Founder & Principal Consultant of Blockchain Management Solutions, a specialist technical and project management consultancy, is an advisor with Masternode Ventures, a blockchain incubator, and is an advisor with THORChain, a new decentralized exchange protocol.