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Bitcoin Struggles to Surpass $12.5K: Is a Correction in the Cards for BTC?

While some analysts see the beginning of a bigger bull run for Bitcoin, others believe a pullback is overdue.

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Now that Bitcoin has been dancing between roughly $11,000 and $12,000 for the better part of a month, investors are wondering what’s going to come next.

2020 has been a crazy year in the financial world: the outbreak of COVID-19 has led to unprecedented economic chaos, major changes in monetary policy, and a drastic public reconsideration of what “value” really means.

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Therefore, it seems that Bitcoin–which has been described as inherently non-inflationary–could be gaining a foothold as a so-called “safe-haven asset,” similar to gold. Therefore, this dance between $11k and $12k could be the beginning of a larger trajectory to much higher prices.

However, others believe that Bitcoin is overbought, and imminently due for a market correction. What’s in the cards for BTC?

A bigger bull run?

For some, the fact that Bitcoin has managed to hold a level over $11,000 for several weeks is a sign of a larger bull run to come: some analysts have targeted $25k, $50k, or even $100k within the next two years.

What could be driving the price up?

Investment firm Grayscale recently issued a report saying that Bitcoin’s ability to sustain higher price levels is demonstrative of an increasing number of long-term holders in the space.

In other words, Grayscale believes that there is a higher ratio of people who are buying and holding Bitcoin to day traders and short-term speculators.

In addition, the reported noted a historically low level of BTC on exchange wallets, which could indicate that fewer people are making moves to trade or sell their Bitcoins. However, the report also found that daily active addresses are at their highest level since 2017’s all-time highs, signaling higher-than-usage of Bitcoin

Grayscale believes that this kind of market structure is a positive thing for Bitcoin’s future. In fact, the report drew a parallel between Bitcoin’s current market makeup and the Bitcoin market of early 2016, just “before [Bitcoin] began its historic bull run.”

Therefore, Grayscale has made a prediction that the demand for Bitcoin will continue to grow–and significantly.

”Loose monetary policy” could be a driving force behind Bitcoin’s upward trajectory

According to Grayscale, one of the largest forces at play is the influence of “loose monetary policy” that has influenced markets over “the last half century”, as well as is the ongoing influence of stimulus efforts from the United States Federal Reserve, as well as other financial institutions from around the globe.

“Loose monetary policies resulted in money being funneled into financial assets instead of the general economy or main street as intended, increasing the disconnect between the equity market and the economy,” the report said. As a result, the United States’ ratio of debt to GDP has nearly doubled since 2008.

Therefore, Grayscale–along with many others in the crypto space–seem to believe that Bitcoin is increasingly seen as a sort of “antidote” to inflation: “Because of Bitcoin’s unique qualities – such as its verifiable scarcity and a supply that can’t be controlled by a central authority – we believe it can be leveraged as a store of value and as a way to escape this great monetary inflation,” the report says.

After all, there can only ever be a maximum of 21 million Bitcoins in circulation at any time–many of which have been permanently lost, and many of which have yet to be mined.

Bitcoin may not be the “safe-haven” some seem to think it is

However, not everyone believes that Bitcoin is such a strong hedge against inflation.

For example, during a presentation in May, finance giant Goldman Sachs said in a presentation that “Bitcoin does not show evidence of hedging against inflation.”

Specifically, Goldman said that although Bitcoin itself may be a “scarce resource”, cryptocurrencies as a whole are not a scarce resource: that there are several thousand cryptocurrencies in existence, and more are being created all the time.

Goldman also pointed out that several of the largest cryptocurrencies by market cap were created as “forks” from the Bitcoin blockchain, and are therefore very similar to Bitcoin: specifically, Bitcoin Cash (BCH) and Bitcoin SV (BSV).

Goldman also argued that Bitcoin is “a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it”, and that therefore, Bitcoin “is not a suitable investment.”

Additionally, the firm said that because infrastructure of cryptocurrency is still relatively young, it may be susceptible to hacking or other technical issues that result in financial loss.

Is a market correction overdue?

Additionally, while Bitcoin’s performance has been so positive over the last several months, there are some within the space who believe that a price pullback is imminent.

For example, CoinDesk reported this week that a short-lived jump up to $12,400 on Monday of this week represented a “failed breakout” that could be a sign of “bullish exhaustion”. In other words, the failure to maintain levels above $12,000 could represent a combination of slowing price gains and weakened buying pressure.

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Singapore-based digital economy trading firm QCP Capital also told its Telegram subscribers this week that “Monday’s breakout of $12,000 was almost entirely short-squeeze driven.”

A short squeeze is what happens when the price of an asset suddenly jumps higher, thereby forcing traders who “shorted” the asset, or bet that its price would fall, to buy it in order to prevent greater losses. This kind of activity can artificially prop up the price of an asset for a short time.

Therefore, QCP believes that Bitcoin’s “resultant failure [to breakout] just ahead of larger offers [sell orders] at $12,500 has solidified the price range of $12,000-$12,500 as a key resistance area for an extended period.”

BTC’s future hinges on the dollar’s performance in 2020

QCP also noted that while certain other market indicators could appear bullish at first, it’s possible that the market may be overbought at the moment.

For example, open interest in bitcoin futures on major exchanges rose to record highs of roughly $6 billion on Monday, an increase of 200% from the March low of $1.93 billion, according to data source Skew; additionally, Skew reported on Tuesday that Bitcoin options’ “total open interest [were] sitting at $2bln, up 6x since the start of the year.”

CoinDesk reported that it’s precisely this kind of “bloated bullish positioning” that can lead to “deeper price pullbacks,” particularly in cases where it’s “accompanied by overbought readings on technical indicators,” as it seems to be now.

However, QCP Capital also said that much depends on the continued movements of the dollar, which hit its lowest point in two years earlier this year.

“No doubt the US has a capital leakage problem, evident from all the USD selling we see everyday during US hours,” QCP said. “We therefore look again to the late EU/early US sessions especially into August month-end for clues to the next big move, and whether or not a short squeeze is nigh.”

QCP also noted that there could be quite a bit more movement in the USD throughout the rest of the year due to upcoming political events in the United States: “the prospective catalysts are there for a large squeeze,” QCP said, including “[possible] disappointment over failed fiscal stimulus, democratic/republican conventions,” and more.

Keeping an eye on the $11.6k-$11.7k range

In the short- and medium-term, therefore, the $12,500 resistance level may not be a realistic goal.

Instead, QCP says that “we see this $11.6-11.7k level as the new key short-term pivot to watch,” and that it’s possible to see a “retest” of the $11,000 level.

“Only a break and close under $10.5k will make us change our medium-term bullish bias,” the firm said. $10,500 was the highest that Bitcoin reached earlier this year before the COVID-19 economic crisis caused crypto markets to crash in March.

However, while a retest of the $10,500 level is certainly possible–and may even be necessary to fortify Bitcoin’s price floor in the future–it seems as though BTC may be able to hold steady over $10,000 for the foreseeable future.

It may be too soon to speak–after all, CryptoSlate pointed out that so far, this hold past $10k is only the 4th-longest time that BTC has managed to stay above the $10,000 mark.

Still, though, researchers at Bloomberg said earlier this week that Bitcoin will only lose its value-building momentum if “something unexpected” stops it.

“Something unexpected needs to happen for Bitcoin’s price to stop doing what it’s been doing for most of the past decade: appreciating,” wrote senior strategist Mike Mcglone on Twitter. “Demand and adoption metrics remain favorable vs. the crypto asset’s unique attribute of fixed supply.”

What are your thought’s on Bitcoin’s next moves? Let us know in the comments below.

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Foxmont Capital Releases First PH Venture Capital Report

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Philippine-based venture capital fund Foxmont Capital Partners launched the Philippine Venture Capital Report 2020 on the final day of the Philippine Startup Week virtual conference last November 27, 2020.

The report, which is the first of its kind in the Philippines, is a joint effort between Foxmont Capital Partners, PWC Philippines, QBO Innovation Hub, UBX, and Manila Angel Investors Network. It was formally released to the public during the fund’s conference session entitled “Investor Perspective: Beginner’s Guide to Fundraising and Valuation” presented by Santi Ongsiako, one of Foxmont’s principals.

“It is an honor and a privilege to present the country’s first venture capital report that focuses on investing activity and startup trends in the Philippines,” said Ongsiako, noting that the report details all investor and VC activity made in the Philippines during the first half of 2020 as well as the drivers of the startup scene going into the new year.

The launch of the report coincides with the global pandemic which has affected not only businesses but the way people in general utilize technology in conducting day-to-day activities. This has greatly influenced the growth of the tech industry despite a downturn in most other industries.

Ongsiako added: “Despite the economic burden that the pandemic has placed in this country and all others, we found one thing to be clear: that startup activity in the Philippines has matured significantly in a very short period of time. Over the past three years we’ve seen local conglomerates announce new venture funds, the establishment of venture capital and private equity associates in the Philippines, and the Manila Angel Investors Network—both created to organize and structure the investment side of the industry.”

This statement is in line with the country’s startup ecosystem jumping 17 positions to rank 53rd in Startupblink’s 2020 Global Rankings in a span of three years. On a per-city level, Metro Manila rose 830 positions among the top 1,000 cities in the world for startups, making it into the top 31 to 40 bracket in Startup Genome’s Emerging Ecosystems Ranking for the same period.

Philippine Venture Capital Report highlights

Currently, Metro Manila’s startup ecosystem is valued at USD 1.6 billion in terms of total exit valuations and startup valuations compared to 2018’s recorded USD 378 million. While the startup scene is seeing considerable growth, the Philippines is still lagging behind other Southeast Asian countries such as Singapore and Indonesia in terms of deal volume.

The first half of 2020 recorded USD 51.8 million in venture capital funding at the early-stage level, surpassing the whole of 2019 which recorded only USD 37.9 million. However, this is still nowhere near 2018’s record high of USD 110.2 million in completed early-stage VC deals.

Makati City still remains as the top destination for local startups to establish their roots, accounting for 29 percent of total deal volume in the country. However, the city lags behind neighboring cities in terms of actual deal value.

Although Mandaluyong only accounts for seven percent of total deal volume, the city has a lion’s share of funds raised with 60 percent of total funding raised or about USD 335 million over the past two and a half years, owing largely to Voyager Innovations.

This year alone, Voyager received USD 120 million in private equity funding with notable sources being Chinese conglomerate Tencent Holdings, American private equity firm KKR and Voyager’s parent company PLDT through newly-issued shares.

This maintains fintech as the best funded industry in the Philippines’ startup ecosystem in the last three years, accounting for more than half of the top 20 investment deals and the top three being all fintech.

The second highest valued deal completed in the first half of 2020 is Tonik Finance’s seed stage funding led by Sequoia Capital India and Point72 Ventures worth USD 21 million to launch the digital bank in the Philippines by Q1 of 2021. This is followed by Uploan which raised USD 10.2 million in Series A funding from Infinity Ventures.

According to the Department of Trade and Industry, there are 136 fintech startups in the country as of early 2020 with this number projected to grow annually by 16 percent. The mix of niches are distributed as follows: 29 percent for alternative finance; 22 percent for payments; 19 percent for Blockchain; and 30 percent for remittances, investments and crowdfunding platforms.

Other active sectors in the startup space are information technology and software solutions, and transport and logistics. Sectors on the watchlist are e-commerce and education technology which have seen great adoption primarily due to the pandemic, as well as healthcare and medicine.

Impact of COVID-19 to the tech industry

Many sectors of the Philippine economy have greatly been affected by the pandemic, having been through one of the toughest lockdowns in the world, with most of the country in some form of quarantine since March of this year.

While it has been especially hard on industries such as tourism and hospitality, the technology industry has experienced a significant boom as companies expedite digital transformation strategies and individuals adopt disruptive solutions to adapt to the limitation in movement.

Particular niches that have seen substantial growth are e-commerce and fintech with fintech being forecasted to increase its transaction value by 24 percent at the end of the year according to the Global Startup Ecosystem Report.

The report has identified key milestones that the country has achieved over the year in terms of increasing technological literacy:

  • The adoption of e-learning and non-traditional teaching platforms
  • The prevalence of remote work policies among both large corporations and SMEs
  • The rethinking of operational processes particularly with MSMEs, utilizing digital solutions to improve business resilience
  • The increase of digital-first businesses enabled by e-commerce platforms
  • The transition of traditionally less tech-savvy government agencies to adopting digital solutions to continue providing services to the public
  • The increase in tech literacy for older generations

In this light, particular companies that stood out during the pandemic are: HR and payroll solutions-provider Sprout Solutions; online grocery service MetroMart; on-demand personal services platform MyKuya; and telemedicine platform AIDE.

The full report is available to the public through the Foxmont Capital Partners’ official website.

This article is first published on BitPinas: Foxmont Capital Releases First PH Venture Capital Report

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Source: https://bitpinas.com/business/foxmont-capital-releases-first-ph-venture-capital-report/

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Spotify Looking for Associate Director to Lead Activity on Libra Project, Other Crypto Efforts

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The world’s largest music streaming service is on the hunt for a new associate director to lead its activity within the Libra stablecoin project, recently rebranded to Diem.

According to an announcement, Spotify is looking for an associate director to join its Payment Strategy and Innovation team.

The successful candidate will be responsible for defining the streaming giant’s global payment strategy where they will “assess the payments landscape” and “lead its day-to-day engagement with the Libra Association,” per the announcement.

The candidate will also drive “new opportunities and innovation” in distributed ledger technology, blockchains, cryptocurrencies, stablecoins, central bank digital currencies and other digital assets, per the announcement.

In addition, the person assuming the role will also be responsible for Spotify’s global footprint where it will seek innovation in the payments domain worldwide as well as emerging regulatory and market trends.

Spotify is a member of the 27-strong Diem Association (formerly Libra) and sits alongside big names such as Uber, Coinbase and Shopify.

The hiring plans builds on the company’s foray into the industry stretching as far back as 2017 when the music streaming giant acquired blockchain startup Mediachain Labs enabling creators to attach information to projects.

The role will be based in the streaming giant’s London or Stockholm offices and other company locations “when practical,” per the announcement.

Source: https://www.coindesk.com/spotify-new-role-cryptocurrency-libra

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Hackers Demand 200 Bitcoin Ransomware After Compromising Leading Israeli Insurance Company’s Sensitive Data

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A notorious hackers’ group called The Black Shadow has compromised one of the largest insurance companies in Israel – Shirbit. The attackers have already released sensitive client documents and have demanded a ransom in bitcoin, which could rise to $4 million by the end of the week.

Israeli Insurance Company Hacked

According to a local media outlet, the first confirmation of the hack came on Monday evening. Representatives of The Black Shadow group posted an initial batch of compromised documents on a Telegram channel.

Shirbit had contacted the National Cyber Directorate and Capital Market Authority to open an investigation. Shortly after, the organizations confirmed the breach and indicated that the hackers have also leaked numerous insurance details, alongside the initial documents.

According to the report, Shirbit has many high-profile customers, including government employees. Company CEO Zvi Leibushor said that the safety of its clients is Shirbit’s top priority.

“Shirbit has invested millions of shekels in securing databases and protecting against cyber-attacks and meets all the stringent regulatory requirements in this area.” He added that the firm has invested “all resources and efforts needed for an effective safe and rapid solution to this cyber-attack, whose real goal is to try to harm the Israeli economy.”

Demand Requested In Bitcoin

After releasing a small part of the compromised documents, The Black Shadow reps have contacted the victims to request 50 bitcoins (about $960,000 with today’s prices).

However, in case Shirbit failed to pay the attackers within the first 24 hours, the demand would double to 100 bitcoins. The procedure will repeat and double to 200 bitcoins if another 24 hours pass without payment.

Furthermore, the hackers threatened the insurance company that if it fails to transfer the funds by the end of this week, they will sell all compromised data to other bidders.

It’s worth noting that numerous other Israeli companies and high-profile individuals have recently become victims of similar hacks and demands.

CryptoPotato recently reported that 20 Israeli crypto executives, all clients of the local telecommunications giant Partner, were hacked by stealing their SMS messages.

Another coverage informed that a new type of ransomware attacked called Pay2Key has been executed against several Israeli companies in the second part of 2020. The perpetrators had requested the demand in bitcoins, similarly to the Shirbit hack.

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Source: https://cryptopotato.com/hackers-demand-200-bitcoin-ransomware-after-compromising-leading-israeli-insurance-companys-sensitive-data/

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