The leading top 50 cryptocurrency assets have been showing strong growth in recent weeks, which could be the beginning for a repetition of the powerful upward rally that many traders remember in the fall and winter of 2017. For the “to the moon” to take off, about which investors already spoke so much in the past year, demand from “big capital” is necessary. We’ve reviewed the main news of this year and how they can affect the future rates of digital assets.
The First Block of Bitcoin and the First Crypto Tweet Are Celebrating Their 10-Year Anniversaries
Ten years have passed since the first block on the Bitcoin network was mined, for which a reward of 50 units of the cryptocurrency was granted. Indeed, despite the fact that Satoshi Nakamoto published the official white paper of Bitcoin on October 31, 2008, it took some more time for the official launch of the first cryptocurrency. A week later, on January 10, the supporter of the cypherpunk movement, Hal Finney, decided to share his success in mining the block by posting it on Twitter. Over the next day, Finney received 10 Bitcoins from Satoshi, because this was the first social network post about cryptocurrencies. It will be interesting to observe the path that the crypto community will take in the next ten years.
Cryptocurrencies Are Becoming More Accessible Thanks to Crypto ATMs
The modern world in 2019 is already more adapted for crypto enthusiasts. Mining is no longer the only way of getting cryptocurrencies. Now one can buy them on one of the exchanges, although this will require going through a complicated KYC identity verification procedure that exists on many centralized sites, or creating a wallet in advance and replenishing it in one of 4,165 specialized machines worldwide (as of January 2019). At the end of 2018, there was an almost twofold increase in the number of crypto ATMs, where users can convert fiat into cryptocurrency. At the same time, on average, six new crypto ATMs appear every day. And the turnover of this market is snowballing, because cheap crypto assets attract those who want to buy them. According to experts, by 2023, the cumulative turnover of the crypto ATMs market will reach $145 million.
One should also note the continuing growth in the number of transactions on the Bitcoin network. This indicator confidently moves to the levels of December 2017, when the absolute record was set at 460,400 transactions, and the current value is 327,300, as can be seen in the graph below. At first glance, the insignificant statistics confirm the assumption that “big capital” (holders of the largest wallets from the Bitcoin Rich List) are continuing to buy assets using the most profitable rates, and then simply transfer them to cold wallets in anticipation of their appreciation. Ordinary investors should also carefully consider this data and think about the possibility of buying Bitcoin and its “colleagues,” which will be described in more detail below.
Passions around Bitcoin ETF Continue to Heat Up, and the SEC Pauses
One of the most relevant topics for the crypto community is the launch of a Bitcoin ETF. After a number of failures and delays, we can expect the final decision to be made by the SEC regulator by February 27, 2019, since by this date, according to the law, the maximum time interval allowed for this will have expired. The Winklevoss brothers and representatives of the combined application Cboe, VanEck, and SolidX, who have the highest chances of success, again declared their readiness to fight for the possibility of launching an ETF. If approval is received, this year, a simple tool can be created for investing in cryptocurrencies for millions of state-licensed investors, and the Bitcoin rate will skyrocket on this news.
Central Banks in the World of Cryptocurrencies
Another no less interesting question about cryptocurrency state recognition is the readiness of the world’s leading central banks to examine the blockchain for its use in the economy, fighting corruption and money laundering, as well as storing transaction data. All these issues were discussed at the G20’s March meeting in Buenos Aires. But few of the state-owned banks, at least at the official level, have declared their readiness to accept payments in crypto or to take part in their development at the national level. Such theoretical studies with the aim of avoiding the use of paper money, however, are already underway. This is mostly due to the prohibition at the legislative level because, in world legal practice, there is still no mention of the possibility of launching a digital medium of exchange on par with fiat money. By the way, in Europe, this situation may soon change, because the financial regulator ESMA (European Securities and Markets Authority) is ready to consider the regulation of the crypto market and taxation, as well as issues related to making profit from participating in the IPO, taking into account the existing practice turnover of financial instruments MiFID. Also, in November, the IMF proposed all countries to attend to the issue of the recognition and use of cryptocurrencies.
Considering the current situation from the point of view of centralized cryptocurrencies, it is worth noting the five best examples. For example, in recent years, the central banks of Norway and Sweden have been pursuing a policy on waiver of cash (as of 2018, in Sweden, cash accounted for less than 2% of the total turnover of funds) at the state level in order to reduce the number of bank robberies and gradually transfer the population to the e-krona. Uruguay, which in the spring of 2018 successfully tested the e-peso project, is proceeding in a similar way, although so far, there has been no news about its further use in settlements between citizens and banking organizations of this country. And only the creation of electronic money for Venezuela and Iran has become a question of the possibility of further settlement with international counterparties after the introduction of sanctions by the U.S. Treasury. Now, in these countries, there are, respectively, a crypto bolivar (the Petro), tied to the explored volumes of oil in the country, and a crypto real that will go into circulation after the final testing by the central bank of Iran.
Technical Analysis of Cryptocurrencies
Bitcoin continues to show a steadily growing trend, which began after the establishment of multi-year lows in the region of $3,300, and at the moment, the first cryptocurrency by capitalization is trying to break away from this value and is starting to grow. The key level remains at the value of $4,000, with the overcoming of which, growth will begin toward the boundaries of important consolidation and the next goal at levels of $4,150–$4,500 as part of the implementation of the double bottom figure. Traders are beginning to step out of the “bear trap” and place more and more buy orders, which have already reached a five-month high. In the coming months, we can expect growth in the cluster area of $5,280–$6,000 rather than a new collapse to support in the area of $2,950–$3,200.
Ether and Altcoins
After rebound from a critical area, $76.40–$80, Ether is trying to gain strength and gain a foothold above the value of $130. Its breakthrough will lead to re-testing the value of $160 with the prospect of leaving to $180 and $216 in the upcoming weeks. After the formation of support in the area of $24, Litecoin rushed upward and also tried to consolidate above the significant levels of $30 and $33.60, where the level of local extremes currently passes. Overcoming it will provide an opportunity to take profits at $40 and $43.50 levels within the next weeks.
The most important events for the crypto market in January 2019:
The Constantinople hard fork of Ethereum is scheduled for the period from January 14 to January 18, 2019, when block 7,080,000 will be mined. Because of this event, the rate of the cryptocurrency and the capitalization of the entire market as part of Friday morning trading have already declined, and only after its completion, we expect some new growing movements.
The expiration of futures contracts for Bitcoin on the Chicago Cboe stock exchange is scheduled for January 16.
The expected launch date of the Bakkt platform was scheduled for January 24, 2019, but the developers have already announced their intention to postpone this event indefinitely due to disagreements with the CFTC regulator.