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Sunday, August 19, 2018

Venezuela’s Currency Devalued By 96% as Maduro Announces New Crypto-Pegged Forex Rate


On Friday, Venezuelan President Nicolas Maduro announced a new single exchange rate for the bolivar that’s pegged to the Petro virtual currency. Under the new guidelines, one Petro would equal $60 dollars, which means the nation’s currency is essentially devalued by 96 percent. 

Amid immense political and economic turmoil in the South American nation, Venezuelan President Nicolas Maduro recently proclaimed a variety of economic overhauls during a speech broadcast on state television.

The socialist leader said he would boost the minimum wage by upwards of 3,000 percent, increase the corporate tax rate, and raise subsidized gas prices over the next few weeks.

Maduro also made another big announcement related to the nation’s Petro virtual currency. He said one Petro would now be worth $60 dollars and be equivalent to 360 million Venezuelan bolivars.

The new rate means one dollar will equal 6 million bolivars, which is a rate pretty close to what is seen on the black market. However, at the time of Maduro’s decree, the nation’s central bank exchange rate was 248,832 bolivars per dollar, meaning the new figure roughly represents a 96 percent devaluation.

A Cash-Strapped Country

While Maduro said the new economic initiatives are part of his “formula” to help “the country to recover,” many economists believe the plans will only lead to more disaster for the nation’s residents.

Experts said the new initiatives will only erode the already small salaries many citizens have and point out how tax and minimum wage increases will cause many businesses and companies to struggle even more.

Rising inflation rates have been a fact of life in the country for a while now, but have become increasingly acute in the last few days. The International Monetary Fund now believes inflation in Venezuela will hit 1 million percent in 2018.

Ever-worsening economic conditions have driven many citizens to emigrate to other nations across South America, sparking one of the worst migration crises in recent memory.

After Maduro’s announcement, opposition leader Henrique Capriles tweeted that:

No Venezuelan deserves to live this tragedy or that these incapable people destroy our nation!

A Pivot to Petro?

It is not immediately clear how exactly the Venezuelan government will carry out their economic changes, assuming it even does so at all. Many experts see little hope in a government that has little cash, is facing U.S. sanctions and has a history of defaulting on bondholders.

Venezuelan leadership has been trying to place their faith in the Petro to shore up the bolivar.

Maduro said in July the circulation and issuance of a new Sovereign Bolivar will begin in late August in order to birth a “productive, diversified, and sustainable economic model.”

Venezuela Ties Own Currency to Sanctioned Petro as Maduro Talks of 'Great Hope'

The Venezuelan President previously decreed in April that all government institutions were required to accept Petro.

Even though Maduro has been very bullish on the project, the Petro has been shrouded in controversy ever since it was first announced. Some see it as a tool to get around sanctions from the United States. Others are skeptical about the accuracy of early sales figures for the virtual currency.

The Petro is supposedly backed by the nation’s abundant oil resources, but some think the government might not even have total control over drilling operations in the country.

What do you think about the new exchange rate? Can the Petro (or cryptocurrency in general), play any part in the nation’s economic recovery? 

Image courtesy of Twitter, Bitcoinist Archives.

The post Venezuela’s Currency Devalued By 96% as Maduro Announces New Crypto-Pegged Forex Rate appeared first on Bitcoinist.com.

As No-Deal Brexit Looms, UK Blockchain Startups Are Weighing Options

The U.K. is on the cusp of leaving the E.U., sparking concern for blockchain startups working within a government-run regulatory sandbox.

Bitcoin Price Analysis: Welcome to ‘Bitcoin Purgatory’

bitcoin price

Bitcoin seemed on the verge of a breakout above $6,650 but a failed third attempt, followed by a lack of buying interest has given bears an opportunity to snatch back control and it looks like BTC has dropped a shelf for a bit of sideways trading in the $6,200 – $6,400 range.

Bitcoin Price Market Overview

Earlier this week on CNBC Fast Money, host Melissa Lee described the narrow channel between $6k and $7k as ‘Bitcoin Purgatory”. Guest speaker and head of Digital Assets group at Susquehanna International Group, Bart Smith, said “Bitcoin is in show me mode” as the cryptocurrency market currently seems resistant to trend changes driven by good news and positive developments for cryptocurrencies.

Smith believes investors are searching for verifiable proof that the market has turned bullish before setting up positions, hence the sporadic spikes and trend of declining volume for bitcoin.

It seems the entire market is contingent on the SEC’s approval or denial of exchange-traded funds (ETFs) but there are a select few who advise caution against placing all one’s hopes in the approval of such an ETF for a variety of reasons.

Meanwhile, the world, or at least Americans, were introduced to a new Bitcoin Exchange Traded Note (ETN) from Coinshares subsidiary, Tracker One. This provides US investors with a listed (regulated) vehicle to invest in bitcoin via their US brokerages without carrying the burden of needing to secure coins, register on various cryptocurrency exchanges, pay the premium that Greyscale adds or worry about exchange hacks and re-compensation.

4-Hour Chart

BTC 00 completed the inverse head and shoulders formation but a decline in volume followed by a few failed attempts to cross the daily high set at $6,644 lead to BTC eventually collapsing below the bullish trendline and the 55-EMA and 20-day moving average.

At the time of writing, the RSI has worked its way down from bullish territory and BTC appears to have dropped down a leg to last week’s trading range from $6,200 – $6,400.

A pattern of lower lows and lower highs has begun and BTC’s drop below the 55-EMA and 20-MA could resurrect the pattern of rejection at overhead moving averages that has plagued BTC since the drop from $8,500.

A positive note is BTC rides right along the 50-MA and the Stoch has already entered oversold territory, but the RSI continues to slide down below 50 and continued descent could take BTC along with it.

The 55-EMA and 20-MA have been flat since August 16 and the constricting bollinger band indicator could be indicative of further range bound trading even though BTC has dropped back to last weekend’s trading range.

The bollinger band on the 4-hr chart is really starting to tighten up but simply waiting for further constriction may not be sufficient enough proof of an upside move as the Stoch, RSI and bull volume are descending. Currently, BTC trades in the lower band below the 20 simple moving average so traders may be forced to hold tight for an oversold bounce if or when the RSI slips to the twenties.  

A glance at the weekly chart shows BTC 00 in the process of setting a lower low on the daily chart and the RSI is fairly close to dropping below the ascending trendline of this week’s earlier divergence.

Below the 50-MA at $6,313, BTC has soft support at $6,230, $6,137 and $6,000. In the event of a drop below $6,300 to $6,200, BTC has a relatively strong support at $6,100.

Looking Ahead

A drop below the inverse head and shoulders neckline could prove problematic, as would a drop below the $6,300 support but BTC has shown relatively consistent support at $6,300 and $6,100.

Multiple low volume bounces off the $6,350 support point to declining interest from buyers and BTC could drop to $6,200 and below if the RSI continues to descend as bulls weakly defend the $6,300 support.

A move above the inverted head and shoulders neckline ($6,500) followed by a pop above $6,650 (100-MA) would be encouraging.

A move to the key resistance at $6,800 would place BTC above the 38.2% Fib retracement level and back above the descending trend line.

Depending on technical indicators, $6,100 – $6,200 could be an attractive entry point for range traders.

[Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by BITFINEX. The charts for analysis are provided by TradingView.]

Where do you think the price of Bitcoin this weekend? Let us know in the comments below!

Images courtesy of Tradingview.com, Shutterstock

The post Bitcoin Price Analysis: Welcome to ‘Bitcoin Purgatory’ appeared first on Bitcoinist.com.

Saturday, August 18, 2018

UK Cryptocurrency Startups Suffer Dwindling Fortunes Amidst Market Decline

Bitcoin Price Analysis: Is BTC ‘Tethered’ to USDT?

Cryptocurrency startups in the United Kingdom are struggling in 2018. The fringe benefits that came with changing a company’s name to reflect an interest in blockchain technology seems to have all but disappeared.

“Cryptomania” is at its Lowest Ebb

In the last months of 2017, cryptomania gripped large swaths of the global business scene. With ICOs raking in hundreds of millions of dollars and cryptocurrencies reaching new all-time highs, the emerging market became the focus of interest from several quarters.

Fast-forward to 2018 and much of the hype and hysteria has dissipated with cryptocurrency prices taking a beating for most of the year. This price decline seems to have also affected many stakeholders from mining companies to crypto hedge funds, as well as other cryptocurrency startups.

Argo blockchain attempted to write major headlines at the start of August, becoming the first cryptocurrency company to be listed on the London Stock Exchange. Despite the buzz generated when the news emerged, the share price of the company has fallen by almost 50 percent from $0.20 to $0.11.

Share Price of Cryptocurrency Companies Plummet in 2018

At the height of cryptomania, some companies altered their corporate courses, steering firmly into the unknown cryptocurrency waters. The allure of the emerging market most likely buoyed them, they imagined that they could stake a significant portion of the market.

A few companies even changed their name of included a blockchain addendum with the hopes of securing a positive share price growth. Online Blockchain and Blockchain Worldwide were two such companies. Both based in the UK, they have also more or less experienced the same downturn in fortune.

According to a recent Financial Times (FT) article, the two companies jumped into the cryptocurrency arena in late 2017 and early 2018. Online Blockchain was originally called On-line, an information technology incubator enterprise. After making the transition to cryptocurrency and rebranding itself, its shares also rose from $0.17 to about $1.95.

However, the steady decline in the prices of cryptocurrencies has seen the company’s shares tumble by more than 75 percent to $0.51. According to the company, its cryptocurrency venture is yet to bear fruit. Notwithstanding, Online Blockchain doesn’t seem to be slowing down in its efforts. The company recently acquired Eucryptid Gaming Inc – a cryptocurrency startup that specializes in game development.

For Blockchain Worldwide, it rebranded itself from Stapleton Capital in September 2017. At the time of the announcement, its shares soared almost 50 percent. However, an inability to achieve any tangible result in the industry has seen its valuation take a significant nosedive. The company’s shares now stand at $0.06 which is materially much lower than its share price before it made the transition to cryptocurrency.

Do you the good times will return for these companies? Keep the conversation going in the comment section below.

Images courtesy of The London Stock Exchange Group, Shutterstock

The post UK Cryptocurrency Startups Suffer Dwindling Fortunes Amidst Market Decline appeared first on Bitcoinist.com.

Venezuela: Inflation Tops 100,000 Percent, Bitcoin Costs 60M Bolivars


Venezuela’s currency the Bolivar Fuerte jumped to 9.2 million per dollar and almost 60 million per bitcoin August 18, just two days before a major redenomination cuts five zeros off its value.

Redenomination Looms

As reported by cryptocurrency commentators including Purse.io support head Eduardo Gomez, the bolivar traded unofficially at around 6.7 million VEF per 1 USD August 17, before suddenly depreciating rapidly to 9.2 million.

“Yesterday 1 bitcoin was worth 44 billion bolivars, now it’s at 59 billion,” he noted.

Venezuela: Record Bitcoin Buying Spree Continues Amid Hyperinflation

As Bitcoinist recently reported, August saw the bolivar, which is the world’s least-valued currency, extend its increasingly troubled history. Combined with current behavior on Bitcoin markets, the price 00 of the largest cryptocurrency in VEF terms is now doubling every 18 days.

According to Bloomberg’s Cafe Con Leche Index, which tracks the rate of inflation in Venezuela in lieu of official government statistics, a hypothetical coffee now costs 2.5 million VEF – the highest price ever recorded.

This, Bloomberg suggests, puts the annual rate of inflation above 100,000 percent.

Calls To Educate Citizens In Bitcoin Use

Corresponding to the devaluation of the bolivar, Bitcoin trading activity in Venezuela is meanwhile setting new records on a weekly basis.

Data from Coin Dance shows that for the seven days ending August 11, P2P trading platform Localbitcoins handled over 20 trillion VEF in volume.

Despite the growth, however, difficulties in educating and allowing Venezuelan nationals access to free trading of cryptocurrency remains a problem. Responding to Gomez, Locha.io developer Randy Brito urged support for his project, which aims to spark “hyperbitcoinization” in Venezuela through a bounty scheme.

In addition, Brito advocated his nonprofit operation Bitcoin Venezuela, which provides remote education and support to Venezuelans wanting to leverage the cryptocurrency’s benefits.

As of press time Saturday, Bitcoin Venezuela gave the price of 1 BTC as around 54 billion VEF.

What do you think about Venezuela’s inflation? Let us know in the comments below!

Images courtesy of Shutterstock, Twitter

The post Venezuela: Inflation Tops 100,000 Percent, Bitcoin Costs 60M Bolivars appeared first on Bitcoinist.com.

Cryptocurrency Miners Ignore the Bitcoin Price Fall, Focus on Expansion Instead

Former Alcoa Smelting Factory Turns To Crypto Mining In Upstate NY

The recent decline in cryptocurrency prices has cast a shadow on several aspects of the digital currencies space. However, one area where this bearish outlook has not extended to is cryptocurrency mining. 

The Hash Factor is an Indicator

According to a report from Bloomberg, bitcoin mining has remained profitable for some miners who have improved their investments and efficiencies in the space — even against the continued bitcoin price drops.

One of the indicators of this has been the increased hashrate, which is the computing ability for mining bitcoin measured on the Bitcoin network. The increased hashrate corresponds with additional investments made by miners into computing power.

At the start of August 2018, Bitcoinist reported that the Bitcoin network’s hashrate had recorded an all-time high of 52 quintillion hashes per second. This ties in with a hashrate growth that started in late 2017 and has extended into 2018. During this period, some of the larger players in the mining space strengthened their positions by investing in better hardware and setting up operations in countries like Georgia — which offer competitive advantages in the cost of power.

These efforts have translated into efficiencies that have made mining activities viable for some operators — even as prices remain subdued.

Chinese Authorities Seize 600+ Computers Used for Bitcoin Mining

Miners Dig Deep for Efficiencies in Expansion

To ensure viability, most cryptocurrency miners are now expanding their capacities — and the industry could see increased investments which help them operate close to a breakeven point.

Operators in the industry like Marco Streng, the CEO of Genesis Mining, have shared this sentiment. Streng was quoted as having said in an interview:

There are still major expansions happening, especially from more efficient miners. The expansion is so big that it compensated for the drop-out of not-so-efficient miners.

Another effect of any expansion in capacity will be the increased hashrate signifying some form of long-term commitment as miners dig in their heels even with low bitcoin prices.

Speaking on this issue, David Sapper, the CEO of Blockbid Pty Ltd. — a cryptocurrency exchange in Melbourne, Australia — said:

 The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss.

Do you think miners can continue to bet against price volatility using production efficiency? Let us know in the comments below.

Image courtesy of Shutterstock.

The post Cryptocurrency Miners Ignore the Bitcoin Price Fall, Focus on Expansion Instead appeared first on Bitcoinist.com.