gold

Coingecko Publishes Q3 Crypto Report — BTC Outperformed Every Major Asset Class, Altcoins Decouple

15/10/2021 by Idelto Editor

On Thursday, the crypto asset aggregation portal Coingecko published the firm’s 2021 third-quarter report which shows a number of different findings. According to the study, for the most part, the crypto economy recovered from the market downturn in May as the top 30 market caps grew by 31% in Q3. The report shows that altcoins continue to decouple (specifically those from alternative chains) and the leading stablecoin tether has been losing its share “as the preferred stablecoin.”

2021 Q3 Cryptocurrency Report Observes the Crypto Landscape and Bitcoin’s Third-Quarter Market Performance

This week Coingecko’s analysts and founders’ Bobby Ong and TM Lee published the firm’s 2021 Q3 Cryptocurrency Report which observes the crypto economy’s third quarter. The study delves into a myriad of subjects including decentralized finance (defi), non-fungible token (NFT) assets, and Q3 crypto market performances. In the founder’s note section of the report, Ong and Lee explain that “NFTs are redefining value and culture.”

“NFTs are here to stay and have proven themselves to be the gateway drug for mainstream adoption. We have been big fans of NFTs since learning about them in 2016,” the Coingecko founders detail.

Furthermore, the report discusses bitcoin (BTC) at great length and notes that the leading crypto asset saw an increased Q3 price return of around 25%. “Bitcoin ended Q3 2021 at $43,859, a 25% increase quarter-on-quarter and had consolidated since its retracement from Q3’s peak,” the report details. However, at the same time, the Coingecko research finds there was an increase in altcoin dominance.

“Altcoins’ dominance [continued] to outperform Bitcoin’s which declined by as much as 4.5%, signifying the growing sentiment that altcoins are decoupling from Bitcoin. The exceptions, however, are Cardano and Tether. Tether marked the biggest decline with a 15.7% drop,” the researchers add. Stablecoins that increased in dominance include USDC, BUSD, DAI, and UST.

Strong Hashrate Recovery, Bitcoin Outperforms Traditional Assets and Indices

The 40-page report explains that the BTC hashrate increased 54% in the third quarter and the research emphasizes the bitcoin mining crackdown that took place in China. “The strong hashrate recovery may be linked to the great miner migration from China to the rest of the world,” Coingecko’s report details.

The report coincides with new data from Cambridge University’s Bitcoin Electricity Consumption Index (CBECI) project, which shows that a great number of mining operations now reside in the U.S. During the third quarter, Coingecko researchers note that bitcoin (BTC) has “climbed 25% and outperformed all other major asset classes.” “All major asset classes and indices performed worse in Q3 2021 relative to Q3 2020 except for DXY and the Nasdaq index,” the study’s researchers noted.

The research dives into other metrics as well, and in Q3 2021, public companies controlled around 1.11% of the entire BTC supply. Additionally, the report notes that BTC’s market valuation is 13.5X away from surpassing gold’s overall market capitalization.

Since Coingecko’s Q3 2021 report was published, bitcoin (BTC) has increased a great deal in value. For instance, the day before the report was published BTC was swapping for $54,887 per unit and today the crypto asset is exchanging hands for above $61.2K per BTC. That’s an increase of 11.59% during the last two days.

What do you think about Coingecko’s 2021 third quarter crypto-asset report? Let us know what you think about this subject in the comments section below.

Bitcoin Is Now World’s 8th Most Valuable Asset — BTC Now Targets Silver’s $1.31T Market Cap

15/10/2021 by Idelto Editor

The price of bitcoin had crossed the $60K zone at 1:30 a.m. (EST) early Friday morning. The leading crypto asset’s latest price jump has made it so bitcoin’s overall market valuation of $1.119 trillion has surpassed Facebook’s market capitalization. The digital asset is also nearing the entire net worth of all the silver in the world as bitcoin is 17.3% away from surpassing the precious metal’s overall capitalization.

Bitcoin Surpasses Facebook’s Overall Worth, Needs to Gain More Than 17.33% to Exceed Silver

Bitcoin is currently the eighth-most valuable asset in the world just above the market valuation of the corporate entity Facebook’s market cap. Today, statistics from the website companiesmarketcap.com indicate that BTC’s market cap is $1.119 trillion and Facebook’s market valuation is $926.27 billion. It’s not the first time bitcoin (BTC) surpassed the social media company’s entire value, as Bitcoin.com News reported that BTC grew larger than Facebook during the first week of January this year.

Interestingly, at that time, BTC was only changing hands for $41,462 per unit while Facebook’s market cap was $758 billion. Today, both BTC’s and Facebook’s market caps are higher and Facebook is valued at $926.27 billion. Alongside this, in January 2021, BTC still had yet to surpass Tesla, but today’s market valuations show BTC is two spots ahead of the electric car manufacturer. BTC is also ahead of Berkshire Hathaway (BRK-A) as the overall worth of BRK-A shares is $636.97 billion on Friday.

The next asset BTC needs to surpass is silver (Ag) as all the silver in the world today is estimated to be worth $1.313 trillion. BTC’s $1.119 trillion valuation needs to exceed 17.33% in order to get past the overall net worth of the global silver supply. In addition to silver, gold (Au), Apple, Microsoft, Saudi Aramco, Alphabet (Google), and Amazon are ahead of BTC as well. BTC has a long way to go to outpace the top precious metal, Au, as it must gain more than 905% just to outperform gold’s global worth.

Bitcoin Needs 112% Gains to Beat Apple — If Bitcoin Surpasses Apple Satoshi Will Be the World’s Wealthiest Individual

In order to beat the second most valuable global asset, Apple (AAPL), the leading crypto-asset must exceed gains of more than 112.3%. At that point, BTC would be the second-most valuable asset worldwide. In order for BTC to overtake AAPL’s overall market valuation, the crypto would need to be valued at $125,257 per unit. Of course, that $125K estimate is based on the number of BTC in circulation today and by then more bitcoins will be issued which means the $125K estimate would likely be lower.

With Friday’s current 18,844,512 circulating supply of BTC in existence, in order to beat gold, each bitcoin would have to be worth $619,500. Another interesting fact is that if BTC ever surpasses Apple and comes close to the overall market valuation of gold, Bitcoin’s unknown inventor will be the world’s richest person (or group).

What do you think about bitcoin as the world’s eighth most valuable asset and how the crypto recently surpassed social media giant, Facebook? Let us know what you think about this subject in the comments section below.

Bitcoin Vs. Digital Fool’s Gold

14/10/2021 by Idelto Editor

While alternative cryptocurrencies may on the outside be shiny and attractive, they lack the fundamental aspects that give bitcoin value.

“There’s a lady who’s sure all that glitters is gold

And she’s buying a stairway to heaven”

Robert Plant and Jimmy Page – Led Zeppelin – Stairway To Heaven

“Fool’s gold” is a common nickname for pyrite. It got this nickname because it’s practically worthless, but it has a look that deceives people into believing it’s real gold. With a little practice, there are many easy tests anyone can use to quickly tell the difference between pyrite and gold. The nickname “fool’s gold” has long been used by gold buyers and prospectors who were amused by enthusiastic fools who thought they had found gold. The ignorance of these fools caused many of them to lose their savings and fall into poverty.

Does it sound familiar? Well, if bitcoin is digital gold, it’s only natural that there is also a digital version of fool’s gold — that is, shitcoins.

Gold And Pyrite

Gold is found in nature mainly as nuggets in some river sediments or, to a lesser extent, embedded in rocks. Its name comes from the Latin aurum, which means brilliant. It is a dense, malleable, ductile, bright yellow metal that does not react with other chemicals or oxidize (it does not rust).

Due to these characteristics of brightness and no chemical change, gold has always been considered precious by humans, being used to mint coins by major cultures. As it is a soft metal, it must be hardened to be used and is often mixed with silver and copper to form stronger metal alloys. The fact that gold is malleable allows it to be used for jewelry, as it is possible to mold it without breaking it. Gold is also used in the electronics industry and as a store of value. Gold is scarce, which contributes to its high valuesince humanity values scarcity.

Gold nugget. (source: Wikipedia with modified background)

Fool’s gold, as pyrite is informally known, does not have any of gold’ main characteristics other than the bright yellow color. Pyrite is not composed of any precious metal, but rather is a mixture of iron and sulfur, forming an iron sulfide. The color and brightness of pyrite resembles that of gold and can deceive beginners and the most naive, but the similarities stop there. Unlike gold, pyrite has square or hexagonal features and reacts with other chemical elements or when heated, usually giving off a characteristic sulfur dioxide smell (rotten eggs). Pyrite, despite its similar coloring to gold, cannot be used for jewelry, as it is not malleable like gold, but rather brittle. Pyrite is also an abundant mineral and was first called fool’s gold in the California gold rush, when less-experienced miners believed this yellowish, shiny material was real gold.

In the mining industry there are two categories of minerals: ores, which are the material of economic interest, and gangue mineral, which is material with no commercial value that needs to be separated from the ore. By definition, gold is an ore while pyrite is a gangue mineral. In this way, it is dangerous to believe that “all that glitters is gold,” like the lady in “Stairway to Heaven.”

Bitcoin And Shitcoins

Bitcoin is popularly known as digital gold because of one of its main characteristics: scarcity. Bitcoin is scarcer than gold itself, as its offer is inelastic. In addition to absolute scarcity, Bitcoin also has several characteristics that are irreplicable by other cryptocurrencies, such as being the only truly decentralized blockchain (and therefore the only censorship-resistant blockchain), being by far the network with the most computational power and having an immaculate design (without pre-mined tokens and no advantages for the “king’s friends”), besides having a gigantic network effect.

Alternative cryptocurrencies, also known as altcoins or shitcoins, have none of these characteristics. Like pyrite, shitcoins are not scarce and there is an unlimited supply of similar and generic projects. Shitcoins aren’t decentralized either. Clear examples of this are the participation of Vitalik Buterin in Ethereum and Charles Hoskinson in Cardano. Or more generally: any coin that has a known founding team is not decentralized enough, as these coins are not immune to enforcement and blackmail, meaning they can be turned off, for example, if someone threatens family members of key participants of those teams.

Decentralization doesn’t just mean running on an independent network, but also means that ordinary users should be able to validate the network themselves. In Bitcoin this is possible and the cost to run a full node is low (less than $200 in total). On the Ethereum network nodes can be run on Amazon Web Services (a centralized company) and the cost is around $175 monthly ($0.243/hour). In Ethereum 2.0 (a major update that might come off the paper someday), users will need to have at least 32 ETH to be able to run a validator node, which at current prices means almost $110,000 to be able to validate the Ethereum network.

The computational power of blockchains is also a relevant factor to guarantee the security of cryptocurrencies, and as seen in the comparison above, there is only one blockchain with relevant computational power: Bitcoin.

The Race For Digital Gold

As with the California gold rush, there are now thousands of coins trying to attract the most naive. These are people who still don’t understand the irreplicable characteristics of Bitcoin and naively seek to find “the next Bitcoin.” After all, “it’s easier for this shitcoin to go from $1 to $2 than for bitcoin to go from $50,000 to $100,000,” or so their flawed thinking goes.

And just as with physical fool’s gold, this misunderstanding of the qualities that make digital gold truly valuable does and will continue to cause people to lose their savings.

But then, how do you know if a particular cryptocurrency is a digital fool’s gold?

Ask yourself:

Are there any known founders?
Is there a marketing team trying to sell this coin?
Is it possible to run your own node at low costvalue or can only the very rich can validate this blockchain?
Are there coins that were pre-mined and distributed to founders or early investors?
Are there people with privileges on the network who can validate transactions for the simple reason that they have more of the cryptocurrency than others (or, in other words, whoever has more can do more)?

If the answer to any of these characteristics is yes, beware: this coin is not digital gold.

As with gold, Bitcoin’s characteristics are also irreplicable. There will never be another cryptocurrency with the same network effect, computational processing capacity, resistance to censorship derived from true decentralization and all starting from an immaculate conception.

But some fools haven’t figured it out yet, which makes them an easy target for shitcoin scammers.

This is a guest post by Pudim. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

How Henry Ford Envisaged Bitcoin 100 Years Ago — A Unique ‘Energy Currency’ That Could ‘Stop Wars’

11/10/2021 by Idelto Editor

55 days from now will be the hundred-year anniversary of when the American industrialist and business magnate Henry Ford talked about a unique “energy currency” that could “stop wars.” The well known founder of the Ford Motor Company suggested that a currency could be backed by energy in kilowatt-hours (kWh) in a similar fashion to the way energy is leveraged to mine bitcoin.

New York Tribune, December 4, 1921: ‘Ford Would Replace Gold With Energy Currency and Stop Wars’

Close to 100 years ago on December 4, 1921, Henry Ford discussed an idea he conceived in the New York Tribune. The title of the published article was called “Ford Would Replace Gold With Energy Currency and Stop Wars.”

Ford is well known for developing the assembly line technique and creating one of the first mass-produced American-built automobiles. Ford’s energy currency concept describes a digital currency much like Satoshi Nakamoto’s Bitcoin and one that is also scarce.

Not only would Ford’s energy currency be backed by energy measured in kilowatt-hours (kWh) he also discussed with the Tribune that the currency would “be issued only to a certain definite amount and for a specific purpose.”

It has always been understood that Henry Ford was well ahead of his time, but he also thought about a concept that is very similar to what’s described in the Bitcoin white paper. Ford even had a location planned to kick start the idea at Muscle Shoals Dam. The treacherous and wild Muscle Shoals section of the Tennessee River produces a lot of energy as the dam provides electrical power, flood control, and a water supply.

Ford even took shots at the banking cartel in 1921, which are basically the same financial institutions and family members running the world’s finances today. “It’s simply a case of thinking and calculating in terms different from those laid down to us by the international banking group to which we have grown so accustomed that we think there is no other desirable standard,” Ford stressed.

While the cypherpunks like Timothy May and Eric Hughes wrote about concepts that looked closer to today’s cryptocurrency, many others had visions similar to Henry Ford’s energy currency concept. The Nobel laureate and Austrian economist Friedrick Hayek discussed the idea of a free market currency.

“I don’t believe we shall ever have good money again before we take the thing out of the hands of [the] government,” Hayek stressed. “That is, we can’t take it violently out of the hands of [the] government, all we can do is by some sly roundabout way [to] introduce something that they can’t stop.”

In addition to Hayek, Milton Friedman discussed the idea of a cryptocurrency in 1999. “I think that the Internet is going to be one of the major forces for reducing the role of government,” Friedman said during his interview that went viral in 2014. “The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A,” the economist added.

Henry Ford: ‘It Would Mean Changes in World Finance — Bankers Always Oppose Changes’

Ford’s energy currency editorial in the New York Tribune not only takes aim at the bankers but blames gold as well. “It’s very simple when you analyze it,” Ford emphasized. “The cause of all wars is gold. We shall demonstrate to the world two things, first, the practicability, second, the desirability of displacing gold as the basis of currency and substituting in its place the world’s imperishable natural wealth.” Ford continued:

Almost everybody in the world, except the newspapers and bankers recognizes that civilization has entered on a new era. The newspapers don’t see it and the international bankers don’t want to see it — It would mean changes in world finance and bankers always oppose changes.

It could be said that the trend in America has already entered a realm of digital currency which is done mostly by the banking system’s databases. In many respects, Ford got his way because the powers that be essentially replaced gold with unbacked fiat. However, fiat is a far cry from a scarce and energy-backed currency Ford dreamt up long ago.

The banking cartel moving off the gold standard has pushed a “desirability of displacing gold” from both sides of the spectrum. Decentralized crypto assets like bitcoin (BTC) are indeed displacing gold even if the measurement of displacement is still quite small.

These days people use cryptocurrencies as a hedge against fiat and the central banks’ massive monetary expansions just like precious metal (PM) collectors and ‘gold bugs.’ In this line of thinking there is also a “desirability of displacing gold” forming among the masses as digital currencies offer benefits that PMs like gold cannot provide.

According to assetdash.com bitcoin (BTC) is the sixth top asset by market cap. The web portal companiesmarketcap.com says bitcoin (BTC) is positioned in the eighth spot. The top position held by Gold is an $11.161 trillion market valuation, while BTC’s is roughly $1.041 trillion, according to the website’s metrics. Gold’s valuation is 972% larger than BTC’s as the crypto asset has a long way to go to catch up if it wants to displace gold.

What do you think about Henry Ford predicting a currency similar to bitcoin close to 100 years ago? Let us know what you think about this subject in the comments section below.

Bitcoin Decoupling And ETFs

08/10/2021 by Idelto Editor

In the last few days, bitcoin has shown the beginnings of a long-awaited decoupling point.

The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

After a year of strongly correlated moves with the S&P 500 Index corrections, in the last few days bitcoin has shown the beginnings of a long-awaited decoupling point during an increasingly uncertain macro environment. Over the last few weeks, bitcoin has rallied 34.86% while gold, the S&P 500 and the market-weighted index of the U.S. Treasury debt with remaining maturities of 20 years or more (TLT) were all in negative territory.

Although one data point doesn’t give us statistical evidence that this narrative is now the new normal, every critic in the market will be watching today, as bitcoin shows life as an asset that can gain momentum when there’s growing concerns and volatility in the markets.

During a period of great macroeconomic uncertainty, the price action of bitcoin is notable to say the least, with a very clear vertical accumulation taking place in spot markets.

What makes the bitcoin price action even more impressive is that it’s occurring at the same time as a downgrade of forecasted Gross Domestic Product output happening around the world. Using the Atlanta Federal Reserve as an example, their 2021Q3 GDP estimate has declined from over 6.3% to 1.3% in just 70 days. The monetary and fiscal policy economic fuel provided to the market doesn’t seem to be having the same stimulative effects.

This is not a United States-specific problem. For China, “Goldman Sachs has cut China’s economic growth forecast for 2021 to 7.8%, from 8.2%, as energy shortages and deep industrial output cuts add “significant downside pressures.”

While it is true that bitcoin remains mostly an uncorrelated asset, during periods of risk off, bitcoin historically has not been immune as U.S. dollar strength means weakness for the BTC/USD pair, which is why the recent developments are so bullish.