FOREX-Dollar, yen in retreat as risk sentiment revives, Musk lifts bitcoin

After recovering from multi-month highs, the safe-harbor U.S. dollar (yen) and yen were on the back foot Thursday. This was despite a recovery of risk appetite due to strong earnings that lifted Wall Street stocks.

After Tesla Inc TSLA, cryptocurrencies rallied. CEO Elon Musk stated that the company would most likely resume accepting bitcoin payments.

After a 3 1/2 month high of 93.194, the dollar index =USD, which measures currency against six major peers, fell to 92.810 on Wednesday.

The yen traded at 130.045 for euro EURJPY=EBS after a nearly four-month high of 128.610 earlier in the week and at 81.00 to Australia’s dollar AUDJPY=EBS after a five-month peak of 79.55.

Tapas Strickland, a National Australia Bank analyst, wrote that strong earnings had swept away Delta concerns from the U.S.

He stated that the consensus was that the Delta strain does not pose an immediate threat to recovery. This delay will be for three months, as countries increase vaccinations in response.

Sterling GBP=D3 traded for $1.3708, after recovering from a 5 1/2 month trough of $1.35725 on Tuesday. This was despite rising Delta variants cases in Britain, and confusion over the lifting of restrictions in England.

The Aussie AUD=D3 traded at $0.7350 after falling to $0.72895 eight months ago. This was despite half of Australia being under lockdown.

The euro EUR=EBS was at $1.1789. This is an increase from Wednesday’s 3 1/2-month low of $1.1752, ahead of the closely watched European Central Bank policy announcement later in the day.

The first changes in strategy will be made by policymakers. They are likely to promise a longer period of stimulus to fulfill their commitment to increase inflation.

Analysts believe that ECB dovishness will weaken the euro in the medium-term.

In a research note, Carol Kong and Kim Mundy, strategists at Commonwealth Bank of Australia, wrote that ‘on balance, the ECB’s new inflation target suggests monetary policies will remain ultra-accommodative over an even longer time’. This will be a headwind to the euro.

“Indeed we expect that the ECB is one of the last central bank under our coverage to tighten its policy.”

Bitcoin BTC=BTSP posted Wednesday’s 7.9% spike – the largest since June – to trade at $32,200.

After a 12% rise, Rival ether ETH=BTSP traded below $2,000

Are Bitcoin Prices Heading For Intense Volatility?

Bitcoin prices have been in a severe slump lately. They trade within a narrow range for many weeks.

The digital currency has remained between $30,000 to $42,000 since May end, coinDesk figures reveal.

Despite this, market observers believe that the digital currency could not only break out of its current range but also experience significant upside.

[Ed Note: Investing cryptocoins and tokens is highly risky as the market is not regulated. It is possible to lose all of your investment.

Oliver von Landsberg–Sadie, CEO of the payments company BCB Group recently spoke out.

He stated that all the analysis on-chain suggests that we are at the end of a slingshot. CoinDesk.

“It’s quiet right now, but don’t confuse that with lack of interest.”

Potentially Exorbitant Gains

Scott Melker, a crypto analyst and investor, was kind enough to share his thoughts.

He noted that the Bitcoin price had been steadily consolidating between 42K to 30K for more than 8 weeks with decreasing volume, volatility and liquidity.

The expected growth in volume and volatility when an asset’s price consolidates is greater the longer it takes. This has been proven numerous times with Bitcoin so we expect that the next move is explosive,” said Melker.

“On-chain analysis shows that supply is being transferred between impatient speculators and Bitcoin whales with large bitcoin wallets, with new wallets sold and older, larger wallets bought.”

“This theory suggests that smart money is building wealth ahead of the next big move to the upside.”

Jake Wujastyk (chief market analyst at TrendSpider) offered a different point of view. He stated that:

“I disagree in the short term. I believe the tension is to the downside right now, as Bitcoin holders need to surrender to reset the price.

“The anchored VWAP at the covid lows points towards a level of $27k above to be watched out for the short-term.

He said, “Based on historical seasonality, next month will be one of the most difficult months in the year with only 20% of August’s win rate over the past 5 years,”

Calculating Probabilities

Jeff Dorman, chief investor officer at asset manager Arca offered a third perspective.

“Bitcoin” is a binary option. He stated that it is either worth $0 or worth $10 trillion, which would translate to roughly $500k/BTC.

“Everything in-between is just a path function that depends on the probability and timing of hitting one of these extremes.”

Dorman stated that earlier this year, these probabilities rose as inflation talk increased, corporate treasurers bought, and Elon Musk gave confidence to retail traders’.

He stated that “Over the past three month, these probabilities fell as Elon pulled away, ESG fear sprang up and China cracked down.”

“Traders have the freedom to use whatever mumbo-jumbo about ‘tension’ or ‘breakouts they like, but it doesn’t really matter compared with how you evaluate probabilities.

The Inevitability Of Bitcoin Supremacy

Bitcoin has emerged from the dead so many that it makes Lazarus look lazy. But its critics persist: “Bitcoin,” they claim, is a “bubble”, a “risky speculation with very little chance of ever becoming an established money form.”

However, Bitcoin’s obituarists don’t just make mistakes. They are cast iron, copper-bottomed and 180 degrees wrong. Bitcoin’s success can be considered a certainty, as it isn’t speculation. It’s as certain as any thing in finance.

Why is this so important? As any Bitcoin supporter, my belief in the brilliance of Bitcoin at the technical level is the same as the others. I believe that bitcoin has fundamental value for financial sovereignty. Its ability to transfer wealth over time is what I believe. It is, perhaps most importantly, the best way to survive the current tectonic economic shifts. We are not the only ones who believe in Bitcoin. Everybody, from governments and institutions to ordinary savers to individuals, is now accepting Bitcoin. Despite all the attention being paid to price, Bitcoin continues its rapid and easy adoption of cultural and structural milestones.

There is plenty of evidence to support Bitcoin’s rise as a reserve currency. You just need to look.

The Orange Standard

There are plenty of disquisitions about Bitcoin’s technical brilliance and theoretical genius. You don’t need to look far. I’ll be brief.

Half a century ago, fiat replaced the gold standard. The world’s central bankers and bankers discovered many ways to debase the currency. The latest example of paper money’s flexibility is President Biden’s 3 trillion splurge. As more people are realizing, Bitcoin cannot be inflated. There is a hard limit of 21 million coins. It is impossible to create or print more Bitcoins from thin air.

Other advantages of Bitcoin include the fact that it is digital and does not require any physical infrastructure. There are no vaults, there are no highly-guarded aeroplanes or vans and no Fort Knox. In just a few clicks, you can transfer billions of dollars. The fact that Bitcoin isn’t controlled by a central authority has made any attacks (which have been many) ineffective.

This is the reason why Bitcoin should be the world’s reserve money. Let’s now see why.

The Road to Reserve Currency

It’s already happening so we don’t have to speculate on Bitcoin’s rise as a reserve currency. It is not yet being purchased by governments or issued bonds in BTC. Who says that you have to get approval from the government before you can put funds in a safe place?

Many large public companies have started to convert their fiat funds into bitcoin. Why wouldn’t they? Microstrategy CEO Michael Saylor said that holding cash is similar to sitting on an ice cube. We are already on the way to reserve currency status with businesses like Tesla, J.P. Morgan, and Goldman Sachs opening trading desks and buying large amounts of Bitcoin.

There won’t be a big “Aha!” moment. There will be no big ‘Aha!’ moment when the Fed admits that fiat is a mistake and converts to bitcoin. There doesn’t have to be. Everything will be a lot easier when Bitcoin is adopted by private companies, corporate treasures, and everyday citizens.

Another key driver for adoption is often overlooked. It is often forgotten that politicians can also be people. If they are smart, their financial advisors will urge them to protect themselves against the coming one-world currency, one-world tax system and ever-surveilled economy with bitcoin. As governments continue to condemn bitcoin, while its members own holdings of the cryptocurrency, it will be more obvious that they are hypocrites.

Transition Management

This is not meant to suggest that Bitcoin will be following a single path to hegemony. Our community is divided on how to develop the Bitcoin network: some believe it’s already perfect, while others feel it needs more work on UX, infrastructure, and blockchain-based financial service. The same goes for regulation. Opinions are divided about whether or not bitcoin should be regulated.

All these perspectives are wise. However, bitcoin will continue to develop and it is certain that any attempts to stop it will fail. India and Pakistan tried to ban bitcoin transactions, but were defeated by the courts or by technical difficulties.

Regulators are inevitable, in my opinion. Preemptively aiming for industry-led and sensible frameworks is the best way to go. I hope governments will have constructive conversations with people who are familiar with Bitcoin’s financial and technological characteristics. We cannot delay the inevitable, but we can create a new economy that is compatible with our digitally connected lives by engaging and cooperating.

Regulating Bitcoin is slow and often tedious. We can deliver solutions that work for everyone if we get clarity on how governments will view Bitcoin. Along with other financial experts, we are always ready to interact with regulators and governments so that the inevitable can be achieved.

Bitcoin vs. Ethereum: Which One Is the Right Investment for You?

(Bitcoin CRYPTO.BTC()Ethereum CRYPTO:ETHThe past year has been a rollercoaster ride for cryptocurrencies. The price of Bitcoin has risen by almost 300% over the past 12 months. Ethereum’s value has risen by more than 90% despite the huge downturns they both have experienced in the past few weeks.

It’s a good idea to “buy the dip” and invest in Bitcoin and Ethereum now that they are less expensive. What cryptocurrency can you use to get more for your investment dollars if you don’t have enough funds? Here are the facts.

Bitcoin: The case

Bitcoin is one the earliest cryptocurrencies and has the best name recognition.

Any cryptocurrency that is going to be successful will need to gain widespread acceptance among sellers. Bitcoin is already the most widely recognized cryptocurrency so it has an advantage in this area. Fundera estimates that Bitcoin is accepted by more than 15,000 businesses worldwide as a method of payment. The greater the acceptance of Bitcoin by merchants, the better the chance of it becoming a common form of payment.

Bitcoin is also known to be a deflationary cryptocurrency, which means it should only rise in value over time. This could give Bitcoin an advantage over fiat currencies, such as the U.S. Dollar, that are subject to inflation.

These are the major risks

There is a high risk of any cryptocurrency being speculative. Although thousands of businesses accept Bitcoin, most sellers aren’t yet onboard with cryptocurrency. It’s not clear at this point if Bitcoin will ever be widely accepted. It could even become unrecognized.

The energy consumption is another downside to Bitcoin. Bitcoin mining requires a lot of computing power. This is an extremely energy-intensive process. According to a University of Cambridge study, Bitcoin transactions consume more energy than Venezuela’s entire population.

Regulators and investors are already concerned about the rising energy consumption.TeslaRecently, the company announced that it would suspend Bitcoin as a payment method due to its energy consumption.

The case for Ethereum

Ethereum hosts Ether, a native cryptocurrency. Ethereum is the most prominent blockchain technology, with many projects hosted on it.

Decentralized Finance uses the Ethereum blockchain. Non-fungible tokens also use the Ethereum blockchain. Ethereum is an open-source technology which allows developers all over the globe to create new applications on blockchain. If any of those projects succeed, Ethereum and Ether will also benefit.

Developers have the ability to create smart contracts on the network. These allow users to make safe and reliable transactions without the assistance of a lawyer. Smart contracts can revolutionize many industries and give Ethereum an edge over its rivals.

Developers are currently working on an upgrade to the Ethereum blockchain in order to make it more efficient. The Ethereum 2.0 technology will be available later in the year. It is expected to consume 99.95% less electricity than current technology.

These are the major risks

Ethereum and Ether are both highly speculative cryptocurrencies. Ethereum isn’t as well-known as Bitcoin. Therefore, merchants may not accept Ether if they only accept Bitcoin.

The same goes for blockchain. There are no guarantees that it will be as revolutionary or as useful as many people believe. Ethereum’s greatest advantages are in its blockchain technology. If blockchain fails to pan out, Ethereum could be hurt.

Which should you choose?

Cryptocurrency is generally a high-risk investment. Before you decide to invest, ensure you are willing to accept high levels of volatility and risk.

Although neither one of these cryptocurrencies are necessarily safe investments, Bitcoin is more risky than Ethereum due to its longer track record and higher name recognition. Ethereum could have greater growth potential over time.

Whatever option you choose to go with, ensure you have done your research thoroughly and are comfortable taking on risk. Although cryptocurrency may not be right for everyone, it can help you get the most out of your investment.

EXCLUSIVE | Bitcoin Has Not Just Failed, It’s Failed Miserably: Valuation Guru Aswath Damodaran

Professor Aswath Damodaran doesn’t like bitcoin. He believes that it is not a good measure of a currency. It can be used to purchase coffee, houses, or cars.

Damodaran, one the most respected minds in valuation and markets, spoke out on cryptocurrency during the 10th episode Moneycontrol Masterclass.

“If bitcoin is a great currency, I wonder why not more people are using it for transactions. When I meet bitcoin enthusiasts, they push the notion that bitcoin is a great cryptocurrency because they have made a lot of cash on it. He said that this was not his measure of a currency.

He said that a good currency is one that can be used to purchase things.

He stated that he believes bitcoin is a good currency because it can be used to buy coffee, purchase a house, or buy a car. However, the latter has failed and failed miserably.

Damodaran also dismissed cryptocurrencies as an investment class. He said that an asset class requires cash flows. Damodaran stated that Bitcoin did not act as a hedge like gold in one’s portfolio.

“Gold’s greatest claim to fame is its ability to hold its value even when stocks fall. I used the same test to determine bitcoin’s behavior and I looked at 2020. Bitcoin behaved like a collectible. It was a very risky stock. He stated that adding bitcoin to a stock portfolio is just adding another risky asset.

Damodaran’s comments are made at a time of great regulatory uncertainty in India regarding cryptocurrencies.

About 1.5 crore Indians have made investments in cryptocurrency, which amounts to Rs 15,000 crore. There are 350 blockchain- and crypto-focused startups.

The government is planning to introduce a bill this year to regulate cryptocurrency trading. However, the RBI has warned investors repeatedly about the high risks involved in crypto trading.