Bitcoin, after storming through much of October, has somewhat come off the boil with the bitcoin price falling back from highs of around $67,000.
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The bitcoin price has doubled since its summer lows, while ethereum, the second-largest cryptocurrency after bitcoin, has added around 140%—hitting an all-time high last week.
Despite the huge gains made by bitcoin and ethereum already this year, many investors expect prices to continue to climb, with one crypto executive predicting the bitcoin price will hit $100,000 before the end of 2021.
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The bitcoin price has been outpaced by ethereum this year, with the ethereum price adding 1,000% … [+]
“Most of the folks at CoinList will bet that we’re at $100,000 by the end of the year,” CoinList chief executive Graham Jenkin told CNBC. “It’s getting pretty tight so I’m not sure that we’re going to make it there, but that’s what we’re predicting toward the start of the year.”
The bitcoin price rocketed into 2021, soaring to around $65,000 per bitcoin before crashing back to $30,000 in July. Since then, bitcoin has roared back, topping $67,000 in October thanks to hype surrounding long-awaited bitcoin acceptance on Wall Street and growing belief the original cryptocurrency could replace gold as a digital store of value and inflation hedge.
“We are dealing with a bullish consolidation before another assault on bitcoin, which promises to make the year-end an extravaganza for the first cryptocurrency with a run to new all-time highs,” Alex Kuptsikevch, senior financial analyst at FxPro, said in emailed comments, giving bitcoin a price target of “just above $90K, where [bitcoin] could be this month.”
Alongside bitcoin’s rally, ethereum has also charged higher, surging amid widespread adoption of ethereum-based decentralized finance (DeFi) and the ongoing craze for non-fungible tokens (NFTs). DeFi—the idea that much of traditional finance can be recreated on the blockchain without the need for banks—and NFTs—a way to tokenize digital media and assets on the blockchain—have found huge new markets over the last year as people flock to digital assets.
Ethereum’s growing list of use-cases, combined with a hotly-anticipated upgrade that is reducing supply and that developers hope will improve efficiency and scalability, has sparked predictions it will continue to outperform bitcoin. The ethereum price has added 1,000% since this time last year, compared to bitcoin’s 4,00% rally.
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The bitcoin price has added almost 400% since this time last year, rocketing into 2021. However, … [+]
“[Bitcoin] just doesn’t have the network intensity that ethereum does,” former Goldman Sachs GS executive, crypto investor and founder of digital media company Real Vision, Raoul Pal, told his subscribers on YouTube. “Bitcoin has nothing like that going on.”
Pal revealed he’s “probably 85%” invested in ethereum, pointing to ethereum’s “restricted supply” thanks to its transition to ethereum 2.0, and “about $100 billion locked up in DeFi, NFTs and all of that.”
“Ether has seen a contraction in supply since last week, which plays in favour of the upside, especially attracting the attention of investors concerned about the abundant supply of money in the developed world and the huge debt load,” added Kuptsikevch.
Last month, a panel of 50 bitcoin, ethereum and cryptocurrency experts predicted the ethereum price could top $5,000 per ether before the end of 2021—and rocket to over $50,000 by 2030.
NFTs and DeFi overturn a banker's generational curse of poverty in 2 years – Cointelegraph
Here's Why I Still Won't Buy Bitcoin, and You Shouldn't, Either – The Motley Fool
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In less than a week, investors can pop the champagne corks and celebrate another successful year. Through Dec. 22, the widely followed S&P 500 was higher by 25%, which more than doubles up its average annual total return of around 11%, including dividends, since the beginning of 1980.
But it’s the cryptocurrency space that’s delivered the juiciest gains of all. Since the year began, the aggregate value of all digital currencies came close to tripling. Not surprisingly, Bitcoin (CRYPTO:BTC) has been one of the biggest contributors to this nominal value increase, with a year-to-date gain of 67%. It accounts for 40.5% of the entire $2.27 trillion cryptocurrency market.
Image source: Getty Images.
Bitcoin’s gains, which recently reached as high as 8,000,000,000% from where it began trading in early July 2010, have come on the heels of numerous catalysts.
To begin with, Bitcoin’s first-mover advantage has made it the most-popular cryptocurrency with retailers. As of late 2020, small-business financing platform Fundera estimated that 15,174 businesses worldwide accepted Bitcoin as payment — and this figure has assuredly grown since.
To build on the above point, Bitcoin was also recognized by El Salvador as legal tender in September. It’s the first country to allow Bitcoin to be used as accepted currency, and could pave a path for other nations to follow.
The world’s most valuable digital currency has benefited from rapidly rising inflation in the U.S. and abroad as well. Since Bitcoin has a perceived cap of 21 million tokens, it’s viewed as an inflationary hedge against a rapidly growing U.S. money supply and price hikes. In November, the Consumer Price Index for All Urban Consumers jumped 6.8% in the U.S., marking the biggest year-over-year jump in 39 years.
Investors look to be clearly excited about the upgrade potential for Bitcoin, too. In November, the long-awaited Taproot upgrade took effect. Taproot allows for smart-contract transactions to occur on the network, which opens the door for a broader use of the Bitcoin blockchain. Smart contracts are protocols that help to verify, enforce, and facilitate a contract between two parties.
Lastly, even the fear of missing out (or FOMO) has played a role. After watching Bitcoin gain 8 billion percent, crypto investors appear to be more than willing to overlook any threat of a reversion.
Image source: Getty Images.
Although Bitcoin has proved me wrong over the past year, I still wouldn’t buy the most-popular digital currency on the planet with free money — and I’d suggest others avoid it, too. Below are some of the reasons I simply can’t buy into the hype surrounding Bitcoin.
For starters, it isn’t the scarce token it’s made out to be. Take gold as a comparison. Since we can’t use alchemy to make any additional gold, what remains in the ground and what’s been already mined is all there will ever be. In terms of physical scarcity, that’s a true line in the sand. As for Bitcoin, lines of code are what limit its “cap” of 21 million coins. Even though consensus is unlikely to increase the number of outstanding tokens above 21 million, it’s not impossible that it happens. Thus, Bitcoin only offers the perception of scarcity and not true scarcity.
Another big issue for Bitcoin is dilution. But I’m not talking about the modest coin inflation that comes with cryptocurrency mining. Rather, I’m alluding to Bitcoin being a first-generation blockchain network that’s being left in the dust by third-generation blockchain innovation. There’s absolutely no reason for Bitcoin to be worth $913 billion when blockchain projects at a fraction of its value can scale better, process faster, and handle far more complex transactions. Bitcoin may be benefiting from a first-mover advantage, but the first to the foray is rarely the victor.
Image source: Getty Images.
History provides yet another reason I want nothing to do with Bitcoin. Major price swings are somewhat commonplace in the crypto space, and reversions following huge gains happen often. Bitcoin was up 8 billion percent at one point since July 2010 and has yet to demonstrate that it truly has staying power. Since it’s been unable to decouple from the stock market, I would be betting on a significant reversion following its pandemic-low bounce.
To build on this previous point, there now are considerably more avenues to bet against Bitcoin than there have ever been. The rise of Bitcoin-focused exchange-traded funds and Bitcoin futures offers a safer way for big-money players to bet on downside in the world’s most-popular crypto. In other words, Bitcoin becoming more mainstream as an investment will hurt more than help.
And finally, history also tells us that investors have a really poor track record of estimating the adoption of next-big-thing technologies. Looking back on the internet, business-to-business commerce, genomics, 3D printing, and so many next-big-thing advancements reveals that their adoption took far longer than expected. This isn’t to say that blockchain can’t become a mainstream technology in payment and nonfinancial applications at some point in the future. But it’s important to recognize that businesses aren’t willing to jump at the chance to use blockchain until it’s been thoroughly vetted in the real world. We’re just not anywhere close to that yet.
There are plenty of cryptocurrency projects that are really intriguing and could change the course of payment processing or supply chain management. Bitcoin just isn’t one of them.
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Media in the Metaverse: NYT's Kevin Roose on the Future of Crypto – Coindesk
Entering the metaverse as our new “online selves.”
Michael J. Casey
This episode is sponsored by Quantstamp and Nexo.io.
“I don’t think we should feel like this is going to be entirely a good thing … if Web 3 is becoming more like the offline world, in the sense of being exclusive and gate-kept in the ways that our physical world has been for so long.”
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Web 3, the metaverse and non-fungible tokens (NFTs) have potential to be a force for good in the world, to improve decentralization, raise underrepresented voices and empower creators. But with a digital land grab for virtual real estate growing fast, will people soon find themselves locked out of the metaverse?
Joining “Money Reimagined” hosts Michael Casey and Sheila Warren is Kevin Roose, New York Times tech columnist and author of “Futureproof,” a cautiously optimistic look into an automated, AI-filled and algorithmically driven future. Roose has also delved into the world of crypto: In March of 2021, he wrote a column explaining NFTs, and then sold that column as an NFT for 350 ETH ($1.14 million at current prices).
The future is rapidly approaching, and the crypto industry is determined to establish its place in it. Web 3 is shaping up in opposition to the current Web 2, moving away from the centralized, data-driven approach of today’s internet. Alongside Web 3 is the metaverse, where individuals can fragment themselves into two parts: their physical self and their digital persona.
Before Web 3 and the metaverse take hold, important discussions should be had now about the opportunities and obstacles abound in a crypto future. What is the role of media in Web 3? What responsibilities do journalists in the crypto sector have today? Is it possible to remain hopeful and yet cautious of crypto’s role in shaping the coming years?
See also: Who Writes the Story of the Metaverse
This episode was produced and edited by Michele Musso with announcements by Adam B. Levine and additional production support by Eleanor Pahl. Our theme song is “Shepard.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
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