This week on Planet Bitcoin - 24 July 2015

Friday 24 July 2015

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

After the excitement of last week, it’s been a sedate few days, with bitcoin tracking along in the mid-to-high $270s. We saw that the recent high was unsustainable, the market rejecting prices above $300 after just a few frantic hours of trading, crashing back down to a point a little above the previous level that had been established. The sharp swings up and down haven’t returned since, with movements of only a few dollars either way. Prices have been confined to a narrow band that hasn’t dropped below $275 for any appreciable time, and hasn’t risen above $280 for more than an hour or two either.


It’s hardly surprising that the market needs to pause and gather its breath after the panicked buys and sells of the previous week. Traders are no longer second-guessing what other traders might do in response to the Greek situation, the Litecoin bubble has well and truly burst and China, though the outlook for its stock market is gloomy, isn’t pulling any strings in the crypto markets right now. At the same time, there’s no immediate desire to return to pre-crisis levels, down in the $240s, and the current level is a happy medium between the over-optimistic prices above $300 and the floor the market put in around the low $200s a while back. Barring the latest dip, we’re still at a higher level than at any point in the last four months. The top alts have also seen a lot more stability than the previous week, along with lower volumes.

Elsewhere in cryptoland

It’s been a quieter week in the news, too, though there have been a handful of interesting stories and developments. A survey found that the majority (62%) of bitcoin enthusiasts think the currency will end 2015 below $500; by far the most thought it would end the year at somewhere between $300 and $400. These kinds of surveys are never good trading advice, for any number of reasons, but it’s an interesting snapshot of quietly-growing confidence.

In a cautionary tale over increasing regulation, two men have been arrested in Florida for running an illegal bitcoin exchange that has done more than $1 million of business. The two were charged with running an unlicensed money transmission business and with facilitating money laundering.

There have been stories of declining merchant payments in bitcoin, particularly from travel company Expedia, who have reported a 40% fall in demand. However, the comparison is partly explained by bitcoin’s fall in price over that period, since merchant adoption itself continues to grow (albeit at a slower pace).

Lastly, Coinffeine – billing itself as the first decentralised peer-to-peer exchange – opened in 70 countries on Tuesday. The concept is that it is like ‘BitTorrent for bitcoin’ and requires very little KYC to trade directly with users. It also offers far better anonymity than traditional centralised exchanges, though currently the only fiat payment option is OKPAY. Like BitTorrent, it is a piece of software that users download. Users link Coinffeine to their bitcoin wallet and OKPAY account, meaning that Coinffeine itself never deals with funds (and therefore doesn’t have to worry about KYC regulations). Coinffeine’s ‘zero trust exchange algorithm’ uses micro-transactions to minimise risk, by splitting large sums into lots of smaller amounts and sending them alternately until the transaction is complete.

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