Winklevoss Archives

Bitcoin Price Analysis: End of the Sideway Movement and Bitcoin All Set for the Next Big Launch

Posted on April 7, 2017 | by [email protected]

Anyone who has followed the Bitcoin price closely in recently would see a pattern Bitcoin prices have been following. From the second half of 2016, the month over month price of Bitcoin has been increasing steadily, irrespective of the type of negative fundamentals the currency had to deal with. Momentary price dips have been countered effectively to keep the Bull Run going up until the start of the New Year. However, the scenario changed from the start of 2017 with Bitcoin prices remaining predominantly sideways in between the $1000-$1250 range. Irrespective of the fundamental reasons, Bitcoin has consolidated enough in terms of volumes to prepare for a good run. Let’s look into how fundamentally and technically Bitcoin stands in terms of an impending run.

Fundamental Analysis

Bitcoin has been contained between $1000-$1250 by various fundamental factors which include the consecutive ETF rejection and the scalability debate. Now that the Bitcoin community seems to have come to some kind of compromise over the block size, the prices have stabilized. More importantly, the block size increase would now accelerate the transactions and increase the Bitcoin’s utility by a great margin. Things look more favorable now for a Bitcoin bull run owing to the dynamics in Japan and Mexico. Japan has legalized Bitcoin as a digital asset and a valid way of transfer starting from April 1^st. With 260,000 Japanese vendors all set to accept the digital currency, things are looking very bullish for Bitcoin.

In the western part of the world, Mexico has introduced a bill to legalize Bitcoin which would in turn fire up the remittance market and increase cross-border Bitcoin transactions. With strong adoptive fundamental factors driving the prices, Bitcoin looks charged up for the run.

Technical Analysis:

Technically, Bitcoin has been in a trend and has fallen into a temporary sideways pattern. While the market players are testing the $1200 psychological barrier (at the time of writing this article), the Bollinger bands suggest that a breakout can be expected, and, given the trend it can very well be in an upward direction. While the market still has the potential to drop till $1,100 before making a final launch, it would be wise not to short in such a market. Even the RSI Indicator is in the mid region showing that there is still buying potential in the market and it’s not advisable to short recklessly in the market.

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SEC Denies SolidX for Bitcoin ETF Listing, Bitcoin Prices Unaffected

Posted on March 28, 2017 | by [email protected]

The second week of March witnessed heavy drama in terms of Bitcoin price, swaying fundamentals thanks to the pending approval of Winklevoss ETF. The SEC set the date of verdict on 10th March, before Bitcoin prices rallied anticipating the ETF approval. Nevertheless, Securities and Exchanges Commission decided to reject the proposal, causing a drop in prices and heavy market volatility. Last week of March has seen another Bitcoin ETF proposal being rejected but the markets remained unscathed due to this decision. SolidX was planning to launch their Bitcoin ETF(Electronic Traded Fund) on the New York Stock Exchange. Let’s look into the reasons SEC gave for the rejection of the proposed ETF:

Reasons for Rejection

With SEC ruling out the Winklevoss ETF, speculators were sure that since Bitcoin is relatively new and not well regulated, SEC would cite the same reason for rejecting SolidX’s ETF listing. This turned out to be true and as in the case of Winklevoss ETF, SEC listed the following reasons for rejecting Solidx’s claim:

“The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.”

What this means to Bitcoin

The main reason why SEC cited for the rejection was that Bitcoin markets are unregulated. With Bitcoin transfers being instant and decentralized, monitoring and regulating the Bitcoin markets is a herculean task. Very recently Node40 has launched software to monitor Bitcoin transactions and calculate the taxes for Bitcoin gains and losses. With good time, we can surely expect methods to regulate Bitcoin markets to effectively come up with a regulatory framework that is easy to operate. An ETF would surely take Bitcoin towards mainstream adoption on par with different investable asset classes. But by the SEC’s standards Bitcoin is not ready for an ETF yet as it would require a well-regulated ecosystem.

Price goes unaffected

After the much hyped Winklevoss ETF decision affected the Bitcoin markets, with a lot of wagering over the Bitcoin prices, people have chosen to ignore the effects of SolidX EFT decision. The Bitcoin market prices were steady and went up by $35 after the decision was made public. This shows the growing immunity Bitcoin has been amassing to mainstream cryptocurrency fundamentals. Such character has been displayed even while Chinese Exchanges decided to ban withdrawals which had a very acceptable impact on prices.

Post ETF rejection, Bitcoin price bounces back; Winklevoss brothers to remain persistent

Posted on March 13, 2017 | by [email protected]

Whenever Bitcoin has set out to breach the market highs from the start of 2017, negative fundamentals surface that stagger the price. It first happened with Chinese authorities looking into Bitcoin exchanges in January, when the market took the first run at the prices. Later when the Bitcoin was stuck sideways between $1000-$1,100, Chinese exchanges stopped withdrawals from the exchange, the prize crashed back to $900 and sprung back up again. Just when the market has consistently traded over $1,100 and was building up organically, the speculation regarding the Winklevoss ETF pushed the prices higher and the speculative volumes pulled out immediately once the ETF was rejected. Let’s dive deep into the dynamics of the ETF rejection and the after effects:

The bets that raged the market:

Market players were betting heavily on the possibility of the approval of the ETF as it would be the first of its kind in USA. With Needham’s report estimating a 25% chance of approval, people were even more interested in the wager. On the off chance that the ETF gets approved, it would attract good investments in the cryptocurrency and push the prices higher. The market was lined up for the chance as we see good amount of investments flowing into the currency and pushing it over the all-time high just before the judgement day.

SEC’s decision and reasons for rejection:

On Friday, March 10^th the Securities and Exchange Commission rejected the Bats BZX Exchange’s proposed rule change to list and trade Coin ETF. The SEC explained that the proposed rule change was disapproved because it was not consistent with “Section 6(b)(5) of the Exchange Act. The Act stipulates that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

This would mean in order to be consistent with the Exchange Act, the Batz BZX exchange should have surveillance sharing agreements with related markets for Bitcoin or its derivatives trading. Additionally the Bitcoin markets have to be regulated consistently for the ETF to qualify.

Winklevoss brothers will keep trying:

After having a rough day on Friday, Bitcoin did bounce back over the weekend by touching $1,243, a solid 18% increase post the ETF rejection. On a positive side, Winklevoss brothers have announced that they wouldn’t stop pursuing the ETF. They are hopeful that the SEC would come around to working with them in bringing the ETF to the market. They feel that the SEC’s oversight and regulation are critical to the health of the marketplace and hope that the commission would accommodate the ETF in a convenient manner. There are operational Bitcoin ETFs in Gibraltar and Europe that have been profitable for the profile of the currency. An ETF on American soil would tip the scales in the favor of mainstream adoption and give the boost the currency requires for healthy sustenance.

What is happening with the Winklevoss’s Bitcoin ETF?

Posted on October 28, 2016 | by [email protected]

Winklevoss brothers are successful American rowers and Internet entrepreneurs. After their networking site ConnectU, they went to become venture capitalists for digital currencies. They raised the seed funding for bitcoin payment processor ‘BitInstant’ and claim to own 1% of Bitcoin in existence. Right from the onset, the brothers have always regarded Bitcoin as an equivalent to Gold. They have made conscious attempts to level Bitcoin Trading grounds by launching features that are prevalent in general asset trading. One such attempt recently is the launch of an ETF that has been doing rounds. Let’s look into the details of how this journey progressed and how is the ETF being handled.

Launch of Gemini Exchange:

The twins launched Gemini Exchange with safety and legality as flagship selling points. It was the world’s first fully regulated exchange based out of New York operating throughout North America, Asia and Europe. The exchange was few of the first to receive BitLicencse from city of New York making it completely legal. It later expanded the operations to Asia and Europe making it a successful venture across the globe.

Launch of Daily Auctions:

In an attempt to level the playing ground for Bitcoin and get it closer to adoption, they have planned to launch Bitcoin Auctions. Beginning at 5pm ET every day, Gemini will begin accepting two-sided bids in BTC/USD for the next day’s auction. After 22 hours and 50 minutes of bidding, Gemini will begin publishing “indicative auction prices” every minute. This gives the bidders a chance to pull out their bids until 3:59pm ET, after which the final bid closes. The closing price is the price at which the greatest aggregate buy and sell demand meets.

This methodology is generally present in currency and commodities market to determine closing and bidding prices. This is a conscious effort to bring Bitcoin to mainstream adoption.

Launch of the ETF:

The Brothers had moved for the request to launch an ETF and list it on Nasdaq in 2013. After number of trials, the US Securities and Exchange Commission (SEC) has put the request for review. SEC is seeking additional public feedback as it weighs whether to approve the bid to launch the bitcoin ETF. The brothers have later moved to make amends their proposed ETF. They are now backing ‘State Street’ as administrator, according to a filing with the Securities and Exchange Commission. Gemini’s daily auction price at 4 p.m. EDT will be the price the NAV of the ETF. While investors are backing the ETF, how SEC would approve this game changing move is yet to be seen.

Bitcoin Price Analysis: Could rising interest rates threaten the uptrend?

Posted on October 3, 2016 | by [email protected]

After riding high on fundamentals during September, Bitcoin has had a positive start for October. The price remained fairly over $600 in September with the fag end of the month testing heavy support around $595. After the rebound from $595, the price has now rallied to over $610 over the weekend. While the setup looks bullish, let’s look into the price analysis for October:

Fundamental Key Points:

The adoption of the cryptocurrency and its underlying technology has always been the fundamental positive for the Bitcoin ecosystem. Here are few highlights of the past month fundamentals that might continue to have a prolonged effect on the prices:

Blockchain Firms Axoni and R3CEV’s Data Management Trial for 6 Major Financial Institutions
Winklevoss Bros’ introduction of daily Bitcoin auctions and Gemini’s expansion to Hong Kong and Singapore
US Congress calling for a legislation to regulate Bitcoin and Blockchain Technology
Deloitte coming into the Bitcoin scene with the launch of a Bitcoin ATM
UK to amend laws to accommodate Digital Currency Exchanges

Any continued activity pertaining to the above key points is sure to have an impact on the prices. Adding to the above, from a macro perspective, rise in interest rates might boost the prices of Bitcoin. Nevertheless it would also depend on the timing of the news release and the trading prices at that point.

Technical Analysis:

Long Term Trades:

The Long Term prices have been in an uptrend from the start of this year, with the 200 SMA (in Yellow) getting breached only once during this duration. The $595 level has been a good buy zone and can slowly become the change point for a long term trend. With previous swing lows at $560 as a stop, one can enter into a long term trade at $595. The previous swing high at $778.71 can be a target.

If the market is unable to breach the 100 SMA on the upside at $620, the market can turn bearish. It can crash back all the way to the 200 SMA breaking the support at $560. For this to happen there has to be a strong fundamental factor driving the prices down.

Short Term Trades:

On a daily chart, the Bollinger bands are narrowed out and expanding indicating an impending break out. Given the technical setup, a break out on the bullish side looks more feasible. There is a zone of heavy support around $600, with the middle Bolligner band, 9,13 and 34 SMAs supporting the prices. Good short term trades would be to take positions targeting the 100 SMA.

To get apt entry positions, let’s look into lower time frame:

On shorter time frame (4 Hrs), the setup is trending with parallel Bollinger bands indicating the trend. 34 SMA has been the line of constant support after the test of the support zone. Entering into short term trades at 34 SMA targeting higher Bollinger band can turn out to be profitable. With the setup being bullish, short term trades from the bearish side might be a risky affair.

While taking long term positions, factoring in the news pertaining to US movement for legislation and Fed announcements would be advisable.

Bitcoin Exchange Gemini to Launch Daily Auctions

Posted on September 23, 2016 | by [email protected]

Bitcoin has seen a significant shift in price level going into the last week of September. Breaking the support at $600, the prices rammed into its support around $595 and rebounded back to higher level. While the support at $595 looks strong, whether the prices will bounce back above $600 again depends on the fundamentals. While currently there are no strong fundamentals to direct the price, let’s look into the latest developments in the market:

Winklevoss Bitcoin Exchange Gemini to Launch Daily Auctions:

Gemini Trading, the bitcoin and ethereum exchange, founded by Winklevoss brothers, is all set to host daily bitcoin auctions. Such auctions are common for New York Stock Exchange or Nasdaq to determine more accurate closing prices for the day. However Gemini is positioning the auction as more than a first for its exchange.

Tyler Winklevoss stated:

“It’s the first ever end-of-day auction on a bitcoin exchange. It’s a pretty standard feature on traditional exchanges that didn’t exist on a bitcoin exchange until now.”

The launch represents the effort by the Winklevoss brothers to create investment mechanisms for mainstream investors. Beginning at 5pm ET every day, Gemini will begin accepting two-sided bids in BTC/USD for the next day’s auction. By concentrating liquidity at a single moment each day, Winklevoss says the auction will increase liquidity. At the same time, this will minimize “slippage” that results from large investors who affect the price with their purchases. After 22 hours and 50 minutes of bidding, Gemini will begin publishing “indicative auction prices” every minute. This gives the bidders a chance to pull out their bids until 3:59pm ET, after which the final bid closes. The closing price is the price at which the greatest aggregate buy and sell demand meets.

Accenture and Microsoft reveal Blockchain plans:

Last week, an executive from Accenture described Bitcoin’s immutability as a weakness. Now, the company has designed a distributed ledger platform to address this alleged fault. Accenture says data is viable for edits on this blockchain, but only under “extraordinary circumstances.” The prototype according to Accenture is immutable to its user base but, if necessary, designated administrators can “edit, rewrite, and remove blocks of information.” The company claims it enables this feature with a new function called “chameleon.”

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While Accenture is ready with a prototype, Microsoft announced the updates on “Bletchley Blockchain Project” during Blockchain week in Shangai. Project Bletchley aims to harness the power of consortium-based blockchains. Bletchley creates a template that enables customers to “spin up” a consortium network using a permissioned version of Ethereum. The Azure initiative also introduces Cryptlets, a primer for “next generation” blockchain applications. Similar to the Hyperledger Project, Bletchley aims to deliver a blockchain application fabric. Microsoft says this initiative will allow enterprises to collaborate with operations differently. With the template and Cryptlets, developers can get the foundations for building distributed ledger apps.

Five Reasons to Invest in Bitcoin

Posted on August 2, 2016 | by [email protected]

There are many reasons to invest in Bitcoin, for some time the digital currency has attracted a lot of attention in the world of alternative asset classes. Many analysts believe it has the ability to surpass the market cap and usage statistics of fiat currencies, owing to its versatile method of payment. It’s growing adoption, limited supply and low cost transactions have made it a lucrative investment opportunity for traders. Even those on Wall Street have taken note.

In 2015, the New York Stock Exchange launched a Bitcoin index, NYXBT. The Winklevoss twins launched Gemini, a fully licensed and regulated Bitcoin exchange. There is also a Bitcoin ETF, which could appeal to institutions, pension plans and 401(k)s that might want exposure to Bitcoin.

Despite all this activity, Bitcoin, still in its nascent stages has some way to go before winning over the skeptics critical about investing in it. In this article we compiled some reasons to invest in Bitcoin as we believe it makes sound financial sense to board the Bitcoin train for the long run.

Fixed Supply:

One factor that makes Bitcoin valuable over the long term is the supply cap in place. Once it reaches the magic figure of 21 million (expected to happen around 2140), the value of Bitcoin will stabilize over higher belts. It would be an extremely profitable investment to hold.

Adoption increases the value:

It has been observed that, as more and more merchants and companies adopt Bitcoin, it is proving out to be a Bitcoin price booster. As the technology evolves, Bitcoin is expected to serve a crucial role in the transactions of the future. This would certainly add credibility and value to Bitcoin over time.

Positive approach from most Governments towards adoption:

The digital currency businesses and consumers are aware about how Bitcoin is defined and regulated at most places. For example, the IRS (Internal Revenue Service) treats Bitcoin as property, while the CFTC (Commodities Futures Trading Commission) treats it as a commodity. With the EU clearing the VAT on Bitcoin trades, and the commencement of an ETF in South Korea, the global scenario looks positive.

While Bitcoin is Digital Gold, it is still undervalued:

The closest analogy to Bitcoin is Gold in all the right measures. It is scarce, has a finite supply, highly divisibility and cannot be counterfeited. However, one aspect where Bitcoin outshines gold is utility. Gold is only good for jewelry and in industrial production processes. Once it becomes costly, it becomes less useful for both. Bitcoin on the other hand, becomes more useful as a currency in both the scenarios.

Heavy players using it as portfolio diversification tool:

There has been a fundamental shift in the types of investors interested in Bitcoin. What started off as a mere speculative investment opportunity, has now transformed into a full scale investment play. This can clearly be seen in terms of volume flowing into Bitcoin during global economic uncertainty (read Bitcoin and Brexit). Major financial institutions being a part of this change is what makes investing in Bitcoin assuring.

Thus, based on these reasons, it is safe to say that Bitcoin is a game changing investment. Its disruptive nature and ability to revolutionize global trade are just a few of the reasons to invest in bitcoin.