This week on Planet Bitcoin - 22 May 2015

Friday 22 May 2015

Most of the last week was spent moving sideways. A sharp crash down from the low $240s ten days ago continued the recent pattern we’ve been seeing for the last few weeks, of little or no movement punctuated by a frenzy of buying or selling – specifically, single traders picking up or dropping large volumes of coins in very short periods of time, ostensibly to kick the market out of its malaise. It rarely works for more than a few hours at most, and this time was no exception: on falling to $236, that’s where we stayed for the next five days, plus or minus no more than a couple of dollars. A little more activity occurred afterwards, but even then the drop was no more than four or five USD and the market never dipped below $230. After a couple of days of faltering upwards, we’re back to where we started a week ago, in the mid-$230s.

Weekly chart

It seems that this is a rare period of stability for bitcoin, with unusually low volumes overall – though the profusion of exchanges means that it’s harder to gain a unified picture than it would have been a year or two back, when there were few places that bitcoins were traded in any reasonable number. Uncertainty is still the order of the day, although it’s fair to say that it’s gradually turning into a different kind of uncertainty. Previously, the question was whether the long bear market had ended. The market’s ambivalence reflected traders’ wariness that a move up was as likely as a move down. Now, the uncertainty is more of a short-term concern; few traders seem worried that we will revisit January’s lows (or even sub-$200), or hopeful of a move to $300; the interest is in whether anything will happen on a day-to-day basis. We have seen a high-volume crash to the $150s, followed by an oscillation between the low $200s and the $300 level. Now it’s smaller, more faltering movements as the market inches this way and that. Bold moves of any kind are few and far between.

Out and about in Bitcoinville

Bitcoin continues to pick up mainstream media interest, with the New York Stock Exchange adding a bitcoin index to its list of trackers. NYSE President Thomas Farley commented, ‘Bitcoin values are quickly becoming a data point that our customers want to follow as they consider transacting, trading or investing with this emerging asset class.’ Benjamin Lawsky, architect of the controversial BitLicense, is stepping down from his role as New York’s regulator-in-chief to start his own company. What this means for bitcoin is unclear, since the BitLicense now provides the chief framework for cryptocurrency businesses, regardless of who replaces him. The Drachmae project – an initiative that explores the potential for using blockchain technology to monetise Greece’s considerable but illiquid state-owned assets to use as a secondary currency and save it from default – is also gaining interest, with an online conference to bring together some of the great and the good from the cryptosphere.

Finally, more details are emerging about 21’s plans to embed mining chips in everyday electrical items – and why. In a recent blog post, CEO Balaji Srinivasan discussed the potential for on-boarding regular consumers without the hassle of going through exchanges, and some of the potential use cases. These include offsetting some of the costs of online services and making micropayments. The blog appears to be more of an exercise in blue-sky thinking than company strategy, but its overall approach is clear: ‘bitcoin generated by embedded mining is more convenient –  and hence more valuable –  than bitcoin bought at market price and manually moved over to the site of utility.’ Whilst 21 is still keeping its cards close to its chest, it’s certainly one to watch.

Brandon Hurst

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