Bitcoin Price Might Not Be Boosted By The Halving

Bitcoin’s halving is perhaps one of the most widely discussed upcoming events in the cryptocurrency community. Since it will slash the block reward in half, the supply of freshly minted bitcoins on the market will be substantially reduced. This causes a lot of people to believe that the event will have a positive effect on Bitcoin’s price.

Meltem Demirors, CSO at CoinShares, however, isn’t particularly thrilled about the notion. “There is a very real possibility that the price of bitcoin does not go up after halving.” – she said in a recent Twitter thread.

The main reason for this is the growing influence and impact of the Bitcoin derivatives market. According to Demirors, most of the firms are looking to trade derivatives, rather than the underlying asset.

She also drew a comparison between Bitcoin and traditional markets such as oil. She explained that derivatives are dominating the trading, and most firms use paper contracts to speculate on the price of oil, hence making the entire market driven by speculation.

Building up to the point, she explained that the more Bitcoin becomes an investable asset, “the more it’s price becomes decoupled from its value and its supply and demand.”

The Merit In Her Point

There’s a lot of merit in Demirors’ point. Bitcoin derivatives, those that are settled in cash in particular, represent an option for investors to receive exposure to its price without having to own Bitcoin. They don’t have to worry about storage and safekeeping.

This, however, diminishes the demand. Because people can trade it without owning it, they don’t have to buy actual bitcoins, which might render the principles of basic supply and demand obsolete.

But it’s also worth noting that we’ve already seen strides in physical delivery of bitcoins as well. Bakkt was the first major venue to do so in a regulated way, allowing investors to work with physically-delivered Bitcoin futures. Of course, the volume on those contracts is practically non-existent compared to the volume of cash-settled Bitcoin futures on exchanges such as CME, BitMEX, Binance, OKEx, and so forth.

But There’s Another Side To It

While all of the above is undoubtedly a legitimate point to consider, it’s also worth noting Bitcoin’s scarcity. Indeed, derivatives trading halts the effects of the supply and demand, but there’s more to Bitcoin than just that.

For once, hoarding physical commodities such as oil and gold is expensive in terms of redelivery, insurance, and storage. The cost of holding Bitcoin or other digital commodities, for that matter, is almost non-existent. As such, as BTC’s demand grows, investors would have to go through barriers that are considerably lower to acquire and safe-keep it.

Bitcoin’s finite supply is also something to be considered. It’s the world’s first scarce digital object, and this has to be accounted for. After all, there are more than ten cities in the world where if one person wanted to own a whole bitcoin, he wouldn’t be able to because the population of those cities is higher than the number of bitcoins that would ever be in existence.

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The World Largest Cryptocurrency Exchange by volume, Binance, announced yesterday its strategic investment in the crypto derivatives exchange FTX.

According to an official blog post by Binance. It has invested an undisclosed amount in the fast-rising crypto derivative platform FTX, Binance has taken a long-term position in the FTX Token, while the derivatives exchange returns the favor by helping to build out the liquidity and institutional product offerings.

Binance’s CEO, CZ said that he believes this partnership will help both companies and that FTX is on its way to becoming a larger player in the cryptocurrency derivatives market:

The FTX team has built an innovative crypto trading platform with stunning growth. With their backgrounds as professional traders, we see quite a bit ourselves in the FTX team and believe in their potential in becoming a major player in the crypto derivatives markets. We are pleased to have an excellent partner joining the Binance ecosystem and aim to grow the crypto market together. – Said CZ.

 FTX Founded in 2019, By Sam Bankman-Fried, FTX is the brainchild of Alameda Research, a digital asset research firm. Situated in the Caribbean islands of Antigua and Barbuda, FTX provides four different types of trading. futures ,OTC, spot trading, indexes and . According to reports, the exchange has a daily trade volume of about $1.5 billion.

The firm will help in creating products, especially for Binance.com, also developing Binance over-the-counter (OTC) trading desk.

As a result of this partnership, FTX is sure to enjoy a boost in growth and also widespread adoption. Though Binance only made a minor investment on FTX, it, however, has a long term hold on its native token FTT.

CZ also praised the unique talent and professionalism of the FTX expert team of traders. The exchange is more than confident that it is on the right path.

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Just recently, Bitcoinbch.com CEO Hayden Otto published a video that shows how easy it is to double spend BTC In it, he described how double-spending can easily take place using bitcoin. However, several bitcoin supporters allege that BCH is susceptible to the same type of attack. Even though the BCH network does not make use of the Replace-by-Fee (RBF) protocol.

Ironically, BCH’s attempt to debase Bitcoin turned out to be dubiously successful. Shortly after the video went live, TravelbyBit decided to get rid of both BTC and BCH.

In an interview with Micky.com, Travelbybit CEO Caleb Yeoh disclosed that his company will be “dropping both Bitcoin and Bitcoin Cash from the POS (Point of Sale).”

Also adding that ” both Bitcoin and Bitcoin Cash are not satisfactory enough for retail POS transactions. As they have many “trade-offs between user experience vs security.”

As a result of this decision, about 400 Australian traders will no longer be able to use BTC and BCH on the platform.

The controversial protocol

The Replace-by-Fee (RBF) protocol has attracted a lot of controversy since its inception. It is basically a protocol that allows users to replace a transaction with a completely different one. RBF launch resulted in a lot of disagreements. It negates one of Bitcoin’s founding principles which is irreversibility. Vinny Lingham, former CEO of Gyft disclosed how bad RBF was for his business in 2018.  He said: “We processed over 100,000 transactions with amounts from $5-2000/transaction with no double spends.” Also adding that: “Over $25m in sales and the first time we got a double-spend attack was after RBF was introduced.”

In January 2019 Ethereum Classic also experienced double-spending attacks resulting in a loss of about $500,000.

BCH doesn’t care

Otto appears unperturbed about the delisting. He also added that “BCH alone accounts for over 93% of Australia’s crypto retail expenditure.” Pointing out that all this economic activity occurs outside the TravelByBit network. Hence “BCH adoption in Australia is unaffected.”

Source (Credit): AltCoinBuzz

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According, to the CoinFloor Blog Post on 17, Dec 2019 it has announced that it will no longer support Ethereum in 2020. Coinfloor will also be delisting Bitcoin Cash (BCH) on January 3, 2020. The exchange plans to retain the only Bitcoin on its platform.

Post Words…”We are excited to announce that Coinfloor will focus on providing Bitcoin only services from the 3rd of January 2020, on the 11th anniversary of Bitcoin’s launch The decision will allow Coinfloor to provide a richer set of services for the world’s leading cryptocurrency while maintaining focus on simplicity. Over the short-term, the business’s aim is to strengthen its position as the UK’s number one Bitcoin exchange “Continue on Post…

CEO of Coinfloor said: “No other cryptocurrency currently comes close to Bitcoin’s track record, industry support, or brand recognition, so focusing on Bitcoin made perfect sense. Bitcoin is the dominant decentralized, value-driven, and inflation-proof cryptocurrency, which gives it the potential to become the best form of money the world has ever seen”

On 3rd of January 2020, CoinFloor Users Will Not Able to Buy/Sell, BCH and ETH. However, Ethereum custody and withdrawals will continue Supported until 3rd Jan. But will incur an increased administrative fee.

Bitcoin is way ahead of everyone else

The blogpost also disclosed that Ethereum technology has yet to be proven. Thus, it has to find solutions to several pending issues on its network. Including its proposed transition from Ethereum 1.0 to Ethereum 2.0.

At the same, according to the exchange, bitcoin is already bringing solutions to real-life issues,. Nwosu stated that: “People are looking at improving Bitcoin, […]but Bitcoin is already a good solution to the problem. Everything else is cream on top of the coffee. It is already solving the problem today.”

The exchange however disclosed that it might relist Ethereum. 

To add, Coinfloor is the first crypto exchange to become crypto monogamous. It claims that this is because it realized that Bitcoin is “way ahead of everyone else.” Nwosu also added that he hopes more exchanges will follow its decision in the near future.