This week on Planet Bitcoin - 19 August 2016

Friday 19 August 2016

TL;DR Wavering but stable for now

It’s not been the best week for bitcoin. After a promising run at the $600 line last week, which just didn’t quite work out, the market has stumbled and traders lost confidence. A few minutes over $600 was all that could be sustained, after which we saw falls - first back to the $580s, where things had settled after the Bitfinex hack, and then down to the $560 and below.

Chart

Things have improved somewhat since then, and we’re now oscillating in the $565-580 band. Confidence has clearly been shaken by the thought of so many stolen coins waiting to be sold. Moreover, Bitfinex was one of the largest and most active exchanges - and now many traders are giving it a wide berth, for obvious reasons. Unfortunately, there are few other exchanges that reliably (and credibly) offer the liquidity and margin-trading that Bitfinex does, so many traders are reluctant to risk going elsewhere. Bitfinex is back up and running again, and currently doing $3 million a day in volume.

In the alt world, both Ethereum and Ethereum Classic have seen falls, though there’s no sign that ETC is either gaining on its parent crypto or going out of fashion. It still has around 15% of the hashrate and market cap of ETH. Stratis launched its network and soon appeared on exchanges, and has seen 400% appreciation from its ICO price - its relatively small market cap putting it in a good place to reward investors when open trading began.

There was good news in the form of Russia’s apparent decision to end its ban on trading cryptocurrencies; signals are mixed, but the country’s tax agency has put out a statement saying that bitcoin sales should be reported as currency transactions for the purpose of tax - essentially acknowledging its legitimacy in the process. A bitcoin exchange service opened shortly after the news, operating a physical counter for bitcoin sales in Moscow.

More mixed was the news that the NSA has apparently been hacked, and its cyber-warfare secrets auctioned for bitcoin. More accurately, an organisation seemingly hired by the NSA to create hacking tools - quite possibly including the Stuxnet virus that was designed to take Iranian nuclear facilities offline - was compromised and the files offered to the highest bidder. The group responsible, the Shadow Brokers, say they will release the code at the time of their choosing if a suitable bid is made - or to the public if a total of 1 million bitcoins are pledged. Wikileaks has also said they have the files and will release them in due course. It seems likely that if the NSA hasn’t already taken much of an interest in bitcoin, it will now.


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