This week on Planet Bitcoin - 15 May 2015

Friday 15 May 2015

Weekly market report and news from Dynacoins, first community-supervised mutual bitcoin fund.

The pattern which we have become used to over the past few weeks continues. This week has seen reasonable stability just above the $240 mark, the price deviating only a dollar or two here and there, but for the large market buys and sells that push it up and down more in a few minutes than it would otherwise move in an entire week. One occurred last Friday, taking the price from a flat starting point at $237 up into the high $240s; another one, this time a large sell order of around 8,000 coins, moved the market down from its relative stability in the mid-$240s back into the $230s.

Weekly chart

This is not normal trading activity. This is large holders intentionally trying to jump-start the market, either into panic-buying or panic-selling. Whilst this has often worked in the past, it seems that the markets are becoming more jaded, or perhaps just cautious. The sharp moves up and down have enticed a few smaller traders to follow them, but the fact that the market doesn’t do much on its own terms in between these suggests that we’re still in a rather uncertain phase. It simply absorbs these volumes of buys and sells and barely reacts otherwise. The market remains in a no-man’s land, with traders unsure of whether the downtrend is properly over or not. Whilst in the long term this doesn’t pose much of an issue, in the short term traders may get burned by a high-volume spike up or down (or equally, profit substantially).

Zooming out, bitcoin’s price is where it was a week ago, or just over a month ago, or three months ago. There is no discernible trend.

Around the bitverse

Elsewhere in Bitcoinland it has been a relatively quiet week. A few large organisations have made promising noises about blockchain technology, whilst falling short of showing a direct interest in bitcoin itself or other specific cryptocurrencies. The Nasdaq has been experimenting with the idea of using the public ledger to record stock trades, and the Euro Banking Association has likewise expressed its interest in the underlying protocol, due to the potential it offers for faster, lower-risk transactions.

21, the secretive bitcoin company that recently secured record levels of VC funding, is slowly leaking more details about its activities. A few weeks ago it emerged that 21 intended to embed ASIC chips in ordinary household appliances, mining coins to share between the company and the owner and storing them on a dedicated hardware wallet (though it seems that some of the information presented may have been out of date, such as the average cost of mining a coin – a little over $7). Now, new plans have come to light that 21 wants to use bitcoin as part of a marketplace for bandwidth. They have also floated the idea of a social network centred around their bitcoin activities. Customers will be able to spend the coins earned by their appliances (such as USB hubs and phone chargers) on various related applications.

Greece has been making the news again for the wrong reasons. The country managed to pay the $837 million loan instalment due to the IMF with hours to spare, but only by raiding its reserve account with the IMF (which it will have to replenish). The outlook for Greece looks increasingly precarious as political deadlock within Europe prevents a mutually-palatable solution to its inability to pay its debts. Further IMF and public sector payments this month and next may simply prove impossible. Amid fears of a ‘Grexit’, talk of a bitcoin-like solution to Greece’s financial problems has been raised and discussed on CNBC. The intriguing drachmae project will use blockchain technology to monetise Greece’s valuable but illiquid assets.

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