1. Bitcoin Price Sees Largest Daily Loss in 10 Months
Bitcoin ended Thursday down 13%, posting its largest daily drop since the market crash of March 2020.
The leading cryptocurrency’s drop is “probably just a dip,” according to Techemy Capital trader Josh Olszewicz, who is not expecting a prolonged correction.
Bloomberg analyst Mike McGlone agreed, telling CoinDesk he could see bitcoin (BTC, -11.17%) “probing for support and resistance within a mostly $30,000 to $40,000 range for awhile until embarking on the next leg of the stair-step rally.”
But Guggenheim’s CIO Scott Minerd thinks bitcoin maybe have topped temporarily, saying that a retrace to $20,000 is possible.
Significant selling over the past week on U.S.-based exchange Coinbase signals profit-taking by investors, per CoinDesk’s prior reporting, after bitcoin nearly tapped $42,000 earlier in January.
Leading alternate cryptocurrencies (altcoins) like ether (ETH, -13.58%) and chainlink (LINK, -10.73%) also recorded double-digit percentage losses.
Thursday’s drop helped erase most of bitcoin’s yearly gains, with the cryptocurrency now up only 6% in 2021.
2. Why Everyone From Square to Facebook Is Now Hosting the Bitcoin White Paper
Some of the Bitcoin community’s most prominent voices (and also Facebook subsidiary Novi) are now hosting the Bitcoin white paper.
The move follows legal threats from nChain Chief Scientist Craig Wright levied against the nonprofit that has long hosted crypto’s foundational document.
“Yesterday, both Bitcoin.org and Bitcoincore.org received allegations of copyright infringement of the Bitcoin white paper by lawyers representing Craig Steven Wright,” the nonprofit wrote Thursday morning.
Bitcoin was created by the pseudonymous Satoshi Nakamoto, who has yet to be conclusively identified. Wright has repeatedly made claims that he is Satoshi.
3. Minority Mining Pools Threaten to Collude Against Contentious Ethereum Update
Ethereum miners have formed a cartel of sorts to thwart the implementation of a now contentious proposal — one they say cuts into their bottom line unfairly.
Eight Ethereum mining pools amounting to around 30% of the network’s hash power have cast their support behind tiny mining pool Flexpool’s stance against Ethereum Improvement Proposal (EIP) 1559.
The small pool — which only mined 10 blocks among 48 miners in December — is now calling on Ethereum miners to jump ship from major mining pools that support the update such as Sparkpool (24% network hash power) and F2Pool (11%).
4. Bitcoin Breaks Below $30K, Erasing Almost All of 2021’s Gains
Bitcoin dropped below $30,000, pushing this week’s losses briefly over 17% amid continued profit-taking.
Per CoinDesk’s prior reporting, the recent drop in bitcoin (BTC, -11.21%)’s price is likely due to widespread profit-taking by U.S. and European investors, according to trading activity on leading cryptocurrency exchange Coinbase.
Bitcoin dropped to $29,112 on Coinbase at 0:30 UTC on Thursday, a level reached on Jan. 4 when the leading cryptocurrency started rallying hard to an all-time high of just below $42,000 on Jan. 8.
At press time, the price of bitcoin was $30,025, down about 15% over the last 24 hours.
Guggenheim’s CIO Scott Minerd, who has said bitcoin should be worth $400,000, said yesterday he thinks bitcoin maybe have topped temporarily, saying that a retrace to $20,000 is possible.
The continued selling has pushed bitcoin’s year-to-date gains below 1%.
Bulls may be able to pare losses though, according to Bloomberg analyst Mike McGlone who told CoinDesk, “Bitcoin appears similar to May-June 2017 price range of $3000-$2000 before breaking out higher.”
5. Signature Bank Crosses $10B in Deposits From Crypto Customers
Deposits from digital currency customers now make up nearly 16% of total deposits at New York’s Signature Bank.
In an earnings call Thursday, Signature revealed that deposits from customers in the crypto industry now total $10 billion — twice that of California rival Silvergate Bank.
“We’ve clearly become the preeminent player in that space,” said Eric Howell, the company’s executive vice president of corporate and business development. “It’s obvious that digital assets and cryptocurrencies are not going away.”
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January 22, 2021