This week on Planet Bitcoin - 19 February 2016
Friday 19 February 2016
TL;DR: Corrections all round
Once again it’s been a week of full-on action across all the markets, global and crypto. Each has corrected in its own entirely normal, predictable and, in most cases, overcooked way.
A quick look at the conventional markets, first, just for a change. After heavy falls on concerns of global economic slowdown, falling oil prices and negative interest rates, major markets have leapt up several percent. This is partly due to news that oil-producing nations have come back to the table to do something (price-fixing, by any other name) about the cost of a barrel of black gunk. Partly they were oversold and speculators rushed back in with the kind of FOMO you’d expect of a teenage boy trading bitcoin on Gox from his mom’s basement. Wider concerns about the global economy remain, and many pundits warn we haven’t seen the bottom yet. Business as usual.
Against this backdrop, bitcoin has also lifted somewhat from its two-month lows. It’s now back up well above $400 and showing no signs of retreating. $50 in the space of a week is a pretty nice bump for those who picked up in the consolidation that took place around $360-370.
Why the rise? Well, that’s the big question, but it doesn’t seem to be driven by China this time. So here’s a theory:
Ethereum did what it was always going to and corrected - downwards, in this case. The bubble burst from a top around 0.018 BTC, crashing to below half that in less than a week, before re-correcting up a little to back over 0.01. We’ve previously noted that Ethereum is extremely liquid, and a lot of trade happens against BTC on Poloniex, amongst others. Ethereum sellers have therefore created a large demand for bitcoin, something that has probably been chased by buyers on other exchanges not wanting to miss out.
At the same time, the alts adjusted too. Several had been caught up in the general mania around ETH’s rise, and a sell-off was overdue. Then, what often happens when bitcoin goes up naturally followed - alt holders sold for bitcoin. All in, there have been some deep fallers amongst the alts the past few days, though most remain up on the week before. The markets are all unusually volatile at the moment.
Around the bitverse
Taking in some other bitcoin-related news, it seems that Classic is continuing to gain acceptance despite scepticism from some of the big players. At the present count, there are 1,002 Classic nodes, vs 4,780 1 MB nodes - around 17%. A blip in the graph suggests that 400 Classic nodes came on overnight then disappeared. However, Classic nodes between them have mined only 0.3% of blocks, showing that not much hashpower has yet been thrown behind it.
On a lighter note, the US’s favourite capitalist, Martin Shkreli, claims to have lost $15 million in a bitcoin-related fraud. Enjoy the idea for just a moment, before realising that the man clearly has no clue about how bitcoin works (he claims to have contacted ‘Sitoshi’ and got his money back). It’s all a weird publicity stunt, meaning the man who tops the Most Deserving Person To Lose $15m list probably has not. In a final, beautiful twist, though, it has been reported that someone grabbed his credit card details after an unguarded moment on a follow-up video, and had a very large consignment of water-based lubricant delivered to his home.
You've got to love the internet.
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