Ethereum co-founder Joseph Lubin does not see recent cryptocurrency price slump as a constraint to further growth, says bubbles make the ecosystem stronger
Nobel Prize winning economist Paul Krugman writes in the New York Times that cryptocurrencies will most likely be worthless due to their high transaction costs and an “absence of tethering”
Yukio Noguchi, a famous economist in Japan and an advisor to Waseda University’s Business and Finance Research Center argues we can’t expect Bitcoin’s prices to rapidly surge again. In his books and in recent articles, Noguchi makes his case eloquently. He wrote a recent article in Diamond Weekly clarifying his position but has been making his case since January of this year and published a book last December.
“Because It’s Now Possible to Trade on Bitcoin Futures You’ll Never See a Rapid Surge Again”
Noguchi points out that the price of BTC is now almost a third of what it was in December of last year. He believes that because it’s now possible to trade on Bitcoin futures people will never see a rapid surge again.
On one hand, he says that because the price of bitcoin has gone down, the costs of sending bitcoin are now back to a level that makes it cheaper than doing bank transactions and this is welcome.
He argues that the introduction of the futures market has driven down the price considerably. This year in January he persuasively argued that the cause of Bitcoin price collapse was the start of the selling of bitcoin futures. “Bitcoin prices were a bubble, to begin with, and now we’re seeing a return to normal values. The San Francisco Federal Bank, in a report, also suggested that the introduction of Bitcoin futures trading caused a price drop.
Additionally, the market is heading towards a situation in which it will be possible to short-sell bitcoin futures and that will also contribute to keeping the prices down.
Noguchi points to a paper published on May 7 by the Federal Reserve Bank of San Francisco, “How Futures Trading Changed Bitcoin Prices“, authored by Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak, and Patrick Shultz. Here is the key passage:
“From Bitcoin’s inception in 2009 through mid-2017, its price remained under US$4,000. In the second half of 2017, it climbed dramatically to nearly US $20,000, but descended rapidly starting in mid-December. The peak price coincided with the introduction of bitcoin futures trading on the Chicago Mercantile Exchange. The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence. Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”
Noguchi insists that actually, the majority of investors are predicting that prices of bitcoin will continue to fall, especially when some are able to make money from short-selling the cryptocurrency.
He also feels that allowing cryptocurrency to branch off, it makes people feel like they can get new cryptocurrency for free and that also drives down price.
Does he see that as resulting in a decline in the popularity of Bitcoin?
Surprisingly, Noguchi believes it’s a good thing. As the price of bitcoin drops, it becomes a more attractive means of sending money. He calculated that at current prices, if you had to use Mitsubishi UFJ Bank to send money, it costs you 432 yen for any amount above 30,000 yen. But with the current value of Bitcoin, it’s cheaper to send via a regular bank transfer than BTC, unless the value of BTC falls to 675,000 yen. When BTC returns to that level, it will finally be trading at what should be a normal value.
On December 20th last year, Noguchi’s book, “An Introduction To Bitcoin And Blockchain” was published and received rave reviews.
What do you think of Prof. Noguchi’s analysis on Bitcoin surge? Let us know in the comments section below.
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The post Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely appeared first on Bitcoin News.
Among the interesting stories featured in today’s edition of Bitcoin in Brief are the new crypto tokens added by Pornhub, Fcoin founder’s defense of the controversial trans-fee mining practice and an update on the upcoming launch of Coinbase Pro.
Bigwigs Talking Bitcoin vs Blockchain
A few well known people who don’t routinely speak about Bitcoin and blockchain technology have recently shared their opinions about the subjects. Jack Ma, the Chinese billionaire behind Alibaba Group, opined that “Blockchain technology could change our world more than people imagine. Bitcoin, however, could be a bubble.” And he added that “traditional financial institutions serve 20 percent of people and make 80 percent of profits. New financial institutions should service 80 percent of people, and make 20 percent of profit.”
Steve Wozniak, the Bitcoin-loving co-founder of Apple, has on the other hand said he feels that all the current hype around blockchain technology is just a bubble akin to the Dot Com one. “If you look now you say all that internet stuff happened, we got it, it just took a while,” Wozniak explained. “It doesn’t change in a day, a lot of the blockchain ideas that are really good by coming out early they can burn themselves out by not being prepared to be stable in the long run.”
And Professor Robert Shiller, who received the 2013 Nobel prize in economics, thinks that Bitcoin is a generational social movement, that might be in a speculative price bubble but it does not mean it is going away any time soon. He said in an interview that: “The East Coast is less into it than the West Coast. Silicon Valley is really into it. It’s a social movement. It’s an epidemic of enthusiasm. It is a speculative bubble. That doesn’t mean that it will go to zero.”
EOS to Get a Makeover?
After coming under a lot of criticism lately over centralization, freezing accounts and other issues, EOS might soon get a serious makeover. Daniel Larimer, the creator of EOS, has proposed a major revision to the way its constitution works. He explains that this is because, he just now learned that, “if you give people arbitrary power to resolve arbitrary disputes then everything becomes a dispute and the decisions made are arbitrary. The more power the arbiter has, the more vicious and petty the disputes become and the less predictable the outcome.” Better late than never.
Pornhub Adds New Tokens
Adult entertainment video portal, Pornhub, has announced it will accept two new cryptocurrencies, Tron and Zen Cash. As you may recall, a couple of months ago Verge has made a big deal about the site accepting its token. There is no explanation on the way Pornhub selected the few tokens it did, but at least in the case of Verge it is reported it just got paid 75 million XVG for doing so.
“Here at Pornhub, as one of the most viewed websites in the world with over 90 million daily visitors, it’s important that we continue to expand our crypto payment options to align with our community’s growing payment preferences. Decentralized payment systems have continued to grow in popularity, and cryptocurrency adoption is exploding across a broad economic spectrum. Today, cryptocurrencies are especially viable in the adult entertainment industry because they are privacy-centric and incorporate more anonymity tools than traditional tender,” said Corey Price, VP of Pornhub.
Fcoin Founder Defends Trans-Fee Mining
In an interview released in China yesterday, Jian Zhang, founder of Fcoin, faced challenging questions regarding his business and controversial business model of “trans-fee mining.” As we previously reported, the practice of rewarding users with exchange issued tokens for generating transactions was called an over-priced backdoor ICO ripe for manipulation by critics including Binance CEO Changpeng Zhao.
Zhang said: “With respect to the accusations of pyramid selling, currency manipulation, and being a stock maker – I won’t be answering these questions directly. You can refer to the notion and history of Bitcoin, and see how many people have been wronged this way. Are there still people who think Bitcoin is pyramid selling? If so, you are not rejecting Fcoin, you are actually denying the economic value of the cryptocurrency in general.”
“The accusation of an expensive ICO is the most funny and ridiculous. First of all, Binance grew from an ICO, some people must be out of their mind when criticizing the ICO of others while raising no money by themselves. Second of all, it’s wrong in the first place for some people to calculate our market value using the total amount of Fcoin token yet to be issued by us. Those unissued FT [Fcoin token] cannot be regarded as transaction, nor can they be a part of any distribution of dividend. They actually don’t exist until after issued. Therefore, the miscalculation is just wrong. In no cryptocurrency exchange is market value calculated this way. Lastly, our valuation is actually very low, given our transaction amount, dividend ratio, number of active traders and growth rate.”
Coinbase Switches to Pro
If you are a GDAX user, this is a kindly reminder that the platform will be switching over to Coinbase Pro tomorrow, Friday June 29, and you will not be able to access the old domain anymore. According to the developers, the redesigned platform is meant to make the trading experience easier and more intuitive, with a simplified deposit and withdrawal processes, improved charts that will allow customers to easily scroll and access historical data and a new consolidated portfolio view called “My Wallets” that lets customers see an overview of their account orders and balances.
What do you think about today’s news tidbits? Share your thoughts in the comments section below.
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The post The Daily: Pornhub Adds New Tokens, Fcoin Defends Trans-Fee, Coinbase Goes Pro appeared first on Bitcoin News.
According to Apple co-founder Steve Wozniak, blockchain is a bubble that will produce good ideas only in the future
Nobel economics prize winner Robert Shiller says that Bitcoin is a “social movement,” whose popularity is not reducible to “a rational response to new information”
Mike Butcher talks to Cointelegraph about the future of the crypto industry, Sci-Fi global currencies and how (not) to pitch at conferences
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The head Binance Labs suggests that the ICO bubble needs to burst to clear a path for truly valuable products
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The anonymous philanthropist behind the all-Bitcoin charity Pineapple Fund has announced that all funds have been successfully donated
Warren Buffet, Charlie Munger slam Bitcoin again. "Someone else is trading turds and you decide I can't be left out," Munger said about Bitcoin trading
Economist Nouriel Roubini criticized crypto at the Milken Institute Global Conference yesterday, saying, “Talk Of Decentralization Is Bulls**t”
While Bitcoin may be a “bubble,” it may not “burst” and be gone “forever,” says Nobel Prize winning economist Robert Shiller. #NEWS
Bitcoin’s price rise and fall is compared yet again to the Dutch tulip craze, resulting in an untrue claim that BTC is the “greatest bubble in history.” #NEWS
Report: US investment fund headed by George Soros prepares to trade crypto, despite earlier criticism #NEWS
Forget crypto bubble, Bitcoin will pop the bubble of central banks, says Jon Matonis. #NEWS
Opinion: There are lessons to be learned from the past. #OP-ED