Last Friday the third of August 2018, Bitcoin appeared to rise around 12% according to CoinMarketCap.com, suggesting to many that a price rise was on the cards for the currency. This was met with optimism, given that over the past few days Bitcoin had otherwise fallen in value, bringing us into August with very little optimism.
Now it transpires that actually. Bitcoin didn’t rise at all and actually, what we saw within the markets entirely on Friday, according to CoinMarketCap.com was actually down to a glitch within their website.
According to Coindesk:
“A CoinMarketCap ‘data issue’ caused significant artificial inflation of several coins listed on the platform on Friday, with some prices inflated by nearly 1000 percent. While bitcoin’s price spiked 12 percent on the crypto data site, other coins saw more drastic increases. The site’s exchange tracker feature was also affected, and falsely indicated that bitcoin was trading above $73,000 on some exchanges.”
While crypto Twitter speculated about potential price manipulation, bugs and hacking, CoinMarketCap told CoinDesk that the inflation was caused by a data error.
‘There was a price calculation error on tether which caused any listing with a tether market to become artificially inflated,’ marketing vice president Carylyne Chan said in an email.
Everything is now back to normal and we can confirm that the statistics currently live on CoinMarketCap.com are correct.
What is the real issue here?
We have to look at how this could have impacted buying decisions and could have influenced trader behaviour. The risk here is that, if prices seem to shoot up falsely, they could in turn encourage people to buy and or sell, when they do this, they may see inconsistencies with the rates shown on the statistics website compared to that of the exchanges which in turn, will cause utter chaos.
The only way to avoid this sort of issue, is simply to ensure that as a trader, you are using multiple sources to get live statistics and currency data. By cross checking, you can be sure you aren’t going to be subject to any of the issues caused by falsely presented price data.
Bitcoin’s Mining Costs Will See It Bottom out at $6,000, Traders Argue
Two well-known traders, Brian Stutland and Jim Iuorio, have recently revealed they believe bitcoin has a major support at the $6,000 thanks to its mining costs, which means it may be the bottom of the cryptocurrency’s downtrend.
Speaking to CNBC, the traders noted that while it may be too expensive for the “average person” to start mining the flagship cryptocurrency, some of the miners will find it difficult to mine profitably if the cryptocurrency falls below the $6,000 mark.
Their comments came shortly after bitcoin lost over $1,000 in a 24-hour period, after reports suggested Goldman Sachs had dropped its plans to open a bitcoin trading desk in the near future and a whale moved over $100 million to cryptocurrency exchanges.
Brian Stutland stated:
It’s going to be difficult [to profit] once we get down to this $6,000 level I think that’ll act as some support there. But look, do we really need Goldman Sachs? The point of cryptocurrency was to get people out of the banking system, and bank and transactions offline from that.
Goldman Sachs’ chief financial officer (CFO), as CryptoGlobe covered, later on revealed the reports were false as the company is still working on “setting up a trading desk to make markets in digital currencies such as bitcoin.” It’s moving into the crypto space in “response to client interest in digital currencies.”
Per Stutland’s words, while the drop created “some selloff” the bottom will be reached a $6,000. Jim Iuorio then noted bitcoin price charts point to a potential bounce if the cryptocurrency manages to go through $6,480.
If bitcoin goes through that level, Iuorio said, the cryptocurrency will “come out of that little consolidation it’s been on” and go up to $6,800. If it fails to do so and trades under $6,300, he added, it’ll fall back to $6,000.
At press time, BTC is trading at $6,470 after rising 1.38% in the last 24-hour period, according to CryptoCompare data. The cryptocurrency seemingly started recovering after reports suggested crypto exchange Coinbase was tapping the expertise of $6 trillion asset manager BlackRock to launch a crypto ETF.
As CryptoGlobe covered adoption has been growing, as billionaire Tilman Fertitta, owner of the NBA basketball team Houston Rockets, recently started accepting bitcoin and bitcoin cash in hos Post Oaks Motor Cars dealership.
What are Forks and Airdrop in Cryptocurrency?
The cryptocurrency industry boasts of many technical terms of which most of them need no tedious search to understand them as they are self-explanatory. One of the frequently used terms in the industry is airdrop.
The word combination alone provides a gist of what it really means, however, it may not have a literal meaning as it may be assumed to be. This post identifies and explains two important most-used terms in the industry.
Airdrop does not literally means “drops” fall from the air or the air really drops. It signifies a free distribution of tokens or cryptocurrencies for a specific purpose. In most occasions, cryptocurrency companies decide to reward their early adopters by distributing a proportion of free tokens to them.
In addition, some companies ask interested parties to perform minor tasks, including liking their telegram page, following them on twitter and few other instructions to stand a chance of getting a portion of the distribution.
As this may be a marketing strategy to get more people on board to build a community, this may also be a strategy to evenly distribute tokens in order to avoid market manipulation by large token holders.
Airdrop is very common among the newly introduced coins that need a kind of popularity to rise to the moon.
Fork in cryptocurrency has a general meaning of dividing or introducing an updated version of an existing cryptocurrency. When inventors realize that an existing cryptocurrency falls short of a particular function, a similar but upgraded version is introduced.
A good example is Bitcoin and Bitcoin cash. Bitcoin gave birth to Bitcoin cash in 2017 after inventors announced on a fork that was intended to make the digital world even better.
Forks are categorized into two; Hard folk and Soft Folk. Hard fork has been explained to be a permanent diversion from an existing Blockchain with the nodes of the new Blockchain not interacting with the transactions of the old one.
Soft Node is quite different. Transactions of the non upgraded nodes are recognized by the new upgraded ones; however, when the non upgraded node mines blocks continuously, the new nodes will reject them.
In this case, enough hash power is needed to make it succeed. It is believed that the existence of a fork makes the future of cryptocurrency very bright. Possibility of a fork can address so many problems in the cryptocurrency industry.
What Next For Ethereum (ETH)?
Ethereum (ETH) has had a rough week in the crypto markets. On the 5th of September, right before the whole market lost close to $40 Billion in a day, ETH was valued at $280 and seemed to have considerable support at that level. Then the news hit that Goldman Sachs have decided not to proceed with plans for a Bitcoin (BTC) and Crypto trading desk. The entire market tanked. ETH fell in the markets to current levels of $219 as the news about Goldman Sachs have since been declared as fake news.
Fears of Further Decline and ICO’s Dumping ETH in the Markets
The Ethereum HODLers in the crypto community are concerned that ETH will continue falling to levels well below $200.The last time ETH went below this levels was back in mid September when it was valued briefly at $195.
With the constant rumors that ICOs are selling the ETH they raised last year and early this year to avoid further losses, the concern still lingers of the possibility of the digital asset continuing to depreciate in value. Although this claims have not been confirmed, the theory is plausible given the tonnes of crypto that was poured into ICOs from late last year to date.
Will it Go To Zero?
The extreme side of events is that ETH will plummet to zero as everyone ditches the digital asset for more stabler coins such as Stellar (XLM). There is also the theory that ETH can be replaced as the preferred ‘gas’ payment on the Ethereum network thus making the digital asset obsolete. However, the Ethereum community would not agree to such a radical overhaul of the network’s operations.
A Call for a New Ethereum Network
This then leads to a new discussion that the Ethereum network needs to evolve with the times or risk being obsolete as more efficient networks are created. These include the likes of Tron (TRX), Zilliqa (ZIL) and Neo (NEO). Of particular concern are the security vulnerabilities in Ethereum smart contracts as well as the network having congestion issues that need to be solved by increasing its throughput.
Waiting It Out
The good thing is that ETH still has fans and HODLers who are willing to wait out the current storm in the form of a bear market. There are also high hopes that the scalability issues on the network will be solved very soon further injecting the much needed life into the digital asset.
In conclusion, the digital asset of ETH is facing some trying times in the crypto markets as it has dropped 85% since its peak value of $1,400. With the bear market still in full force at the moment of writing this, there is some fear that its value could drop further. However, the long term future of ETH is still bright if its network can evolve with the times.
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