Saturday, 7 January 2017


Hope is Priceless: Why Bitcoin’s $1000 Value Matters

With a growing market cap and share, a new trend of higher premiums on lesser-known currencies seeking to buy Bitcoin has emerged of late, though it can’t be said to be a major contributing factor driving the rise in its price.
Hope is Priceless: Why Bitcoin’s $1000 Value Matters

The end of 2016 and the beginning of 2017 was a cause for celebration for Bitcoin users. In January the price went as far as $1,161 surpassing the highs seen in 2013. The euphoria in the Bitcoin community is obvious. However, does this level of $1000 matter?

Does the price of Bitcoin itself have any relevance in the grand scheme of things? Is the rising value of Bitcoin something that can be assigned labels of good or bad?

Recently Jamie Condliffe published an article titled “Why Bitcoin’s $1000 Value Doesn’t Matter?” in the MIT Technology Review. Well, frankly it is time we asked some questions of our own.

Does having a choice matter?

Jamie quotes the Financial Times in his article:

“For context, the Central Intelligence Agency put the planet’s stock of broad money—notes, coins, and various forms of bank account—at $82tn as of the end of 2014. On the CIA figures, the value of Bitcoins hashed into existence is similar to the broad money total for Uzbekistani soms. With apologies to Tashkent, the value of soms and Bitcoins, and the number of people for whom they are relevant pieces of information in the world of modern finance, both round to zero.”

Whether you choose to use Tashkent’s money, Bitcoin or the Saudi Riyal, the fact that Bitcoin even exists is amazing in itself. Bitcoin is an independent currency that has thrived when many had written it off. It has its own following albeit a small number of people who believe in this form of money as fiercely as most people do in any national coin.

Bitcoin offers hope for an alternative economic future in which a new kind of monetary system can exist. So yes, it is a relevant piece of information in the world of modern finance even though Jamie may not think of it as having any relevance above zero.



Speculation is growing that Beijing is behind Bitcoin’s sudden $300 drop Thursday, as an uptick in yuan/ dollar value causes a bubble to burst.


“The Chinese government’s policy is an important factor,” Joseph Yang, a finance worker who owns about $2 million of bitcoins, told Bloomberg Friday. “There may be room for further gains in price, but there’ll be a big pullback soon. It’s hard to sustain such a rapid rise for a long time.”

The rise may yet be further tapered by news that The People’s Bank Of China has spoken with leading Chinese exchange BTCC, telling it to “clean up” itself in a statement issued January 6th.

Commentators from Vinny Lingham to Reggie Middleton meanwhile are suspecting Bitcoin’s recent $1,100+ price to be another form of bubble, with Chinese investors seemingly at the wheel.

China’s weak yuan had been supported by government intervention worth more than half a trillion dollars, data shows, and its increase against the dollar Thursday could well have caused a shift of funds away from Bitcoin.

Chinese movements have affected Bitcoin’s price significantly in the past. The country’s investors are known for their speculation, while in addition, the overwhelming proportion of Bitcoin trading activity occurs there.


Higher Premiums To Buy Bitcoin Can Factor Into Its Rising Price

The founder of BitcoinAverage, Shaun Gilchrist, believes there have been consistently higher premiums in currencies other than USD such as INR, KRW, BRL, MXN and others.

“I've noticed historically that when currencies highly focused on P2P markets and those currencies with lower volume start to run away from our global price, upwards movements are likely incoming,” Gilchrist states in a chat with Cointelegraph.

"The barrier to acquiring Bitcoin in some of these countries is large. It's not a case of simply making a domestic bank transfer for free to an exchange (like is the case with many USD or EUR exchanges) to buy Bitcoin."

Though this means users in these countries have to pay more to acquire Bitcoin, it has not been confirmed to be a major factor driving the rise in the price of the digital currency as experienced at the beginning of 2017, a year when greater adoption of Bitcoin is expected to be seen in emerging markets.

This is despite Gilchrist’s observation paralleling recent reports that Bitcoin has been selling for higher rates in India than what is obtainable in other parts of the world, due to the announcement of the country’s demonetization process.


Fintech Startup LendingRobot Uses Blockchain To Launch Automated Hedge Fund

A Bellevue, Washington-based startup has launched an automated hedge fund to buy credits from online lenders using blockchain technology, according to The Wall Street Journal. Algorithmic Inc., which does business as LendingRobot, is targeting a return of 7.5% net of defaults.

The service began in 2012 automating retail investors’ purchases of loans from LendingClub Corp. and other online lenders. The service now has more than 6,000 clients with over $110 million in assets.

Algorithms Rebalance Funds

LendingRobot algorithms will automatically move investor funds among four options based on risk tolerance and investment horizon, the way “robo advisers” like Betterment LLC rebalance portfolios in exchange traded funds.

Data on options will record on the blockchain.

Emmanuel Marot, LendingRobot chief executive, who previously co-founded a mobile search engine company and sold it to Microsoft Corp., said he hopes keeping the data on a shared ledger will reassure investors since it is designed to be tamper-proof.