On November 26, the price of bitcoin surpassed the $9,000 mark for the first time in the digital currency’s brief history, signaling it may hit the $10,000 milestone, that many experts have predicted, before year end. The key driver of bitcoin’s new all-time high is that bitcoin is (finally) becoming mainstream as an investment asset class.
Several investment houses, including Old Mutual Global Investors and TOBAM, have declared that they will enter the cryptocurrency space while the Chicago Mercantile Exchange (CME) is preparing to launch bitcoin futures in a few weeks time.
Even JPMorgan, run by bitcoin opponent Jamie Dimon, announced that it “is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit.”
The altcoin market has also benefitted from bitcoin’s rally for the second week in a row. Several leading altcoins including ether (ETH), DASH (DASH), and monero (XMR) all hit new all-time highs against the US dollar in the past week. Ethereum’s ether peaked at $485, while DASH hit $656, and monero peaked at $165.
This week’s review is compiled from contributions by Alexander Lielacher, Jamie Holmes, Joseph Young, Priyeshu Garg, and Robert DeVoe.
2017 may go down as the year of the eight times return bitcoin has delivered, but it will also likely be remembered as the year of the hard fork. First, we had Bitcoin Cash, then Bitcoin Gold, and even Bitcoin Clashic – but the forks are not quite finished yet. Say hello to Bitcoin Diamond.
Bitcoin Diamond (BTCD) is quite odd, to say the least. On the technical side, the official website for BTCD claims that it is a proof of work X13 GPU mined currency, and it has a supply of 210 million units or exactly ten times that of Bitcoin. It uses an 8MB block size and has blocks every 10 minutes.
The website for BTCD also mentions encryption and privacy features, but details are scant. The chain went live at the Bitcoin block height of 495866 which was sometime in November 2017. Since the supply is exactly ten times that of Bitcoin, owners of BTC would have ten times the amount of Bitcoin Diamond if they are to claim it.
Despite the harsh criticism of bitcoin by JPMorgan CEO Jamie Dimon and his previous threats to fire anyone within the company who initiates in bitcoin trading, the firm’s traders will begin trading bitcoin futures by as early as December 2017.
In a recent piece by the Wall Street Journal, news of the investment firm looking to take advantage of digital investments read as follows: “J.P. Morgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit.”
JPMorgan Securities Ltd. has already been trading bitcoin through custodian accounts in Sweden since September. The company bought and sold bitcoin using Sweden’s Nordic Nasdaq stock market, using bitcoin exchange-traded note (ETN) provided by XBT Provider.
Asset management giant Old Mutual Global Investors has announced its decision to start investing in bitcoin and other cryptocurrencies by way of its Gold and Silver Fund.
The announcement was made by the fund manager Ned Naylor-Leyland in an interview with Bloomberg on November 16. Naylor-Leyland explained that the idea was to take gains made from the rising value of cryptocurrencies and reinvest them into gold and silver assets. The fund has plans to allocate up to five percent of its portfolio into cryptocurrencies.
This move comes after the number of hedge funds investing in cryptocurrencies are at an all-time high with the numbers steadily rising as the value of cryptocurrencies has skyrocketed this year. Traditional hedge funds are also starting to pay attention to the cryptocurrency space but are – for the most part – still proceeding with cautious interest.
TOBAM, the Paris-based investment firm with over $8.8 billion assets under management, has launched the TOBAM Bitcoin Fund, as a part of a broader initiative to diversify its assets across a wider range of markets.
Christophe Roehri, Head of Business Development at TOBAM, explained that in the short-term, the company would finalize on the platform it will use to trade bitcoin. Given that multi-billion dollar investment firms are required to invest a minimum of hundreds of millions of dollars in a particular asset, the company will need to find a platform that can handle institutional money and large investments.
Ethereum’s ether has surpassed the previous all-time high at $404.99 to reach $420 on November 23, opening the door to $651.62. The bullish trend follows on from Devcon three and the release of the code for Casper. The Fibonacci extension level at $651.62 now serves as a target for buyers, with the break of the fractal resistance at $404.99 expected to lead to an influx of buyers. Therefore, we anticipate a drift toward $650 in the upcoming weeks, as the market continues the long-term uptrend. ETH-USD hit a high of $487 so far this week and, at the time of publication, currently trades at $466.22 on the Kraken exchange.
The release of an open letter published on the SegWit2X mailing list announced the cancellation of the SegWit2X hard fork. The mailing list included BitGo CEO Mike Belshe, ShapeShift CEO Erik Voorhees, Xapo CEO Wences Casares, Blockchain CEO Peter Smith, Bitmain founder Jihan Wu, and SegWit2X lead developer Jeff Garzik.
Before the termination of SegWit2X by the project’s lead developers and primary supporters, some miners were still running the software. As such, Bitcoin Core developer Peter Todd wrote, “not a guarantee that SegWit2X won’t happen […].” As Todd predicted, several miners still ran the software after the project’s lead developer had already abandoned the project.
According to highly regarded bitcoin developer and Paxos principal architect Jimmy Song, two critical bugs were found in the codebase. One was immediately obvious and another that was not as noticeable but, with rigorous testing, would have been. He explained that,
“There were a limited number of differences in the btc1 codebase, compared to Bitcoin Core. In total, there were about 500 lines of changes, most of which weren’t consensus-critical. Yet, there were at least two bugs in the 100 or so changed lines to support a hard fork at block 494,784.”
China’s Bitcoin mining industry is teetering on the edge of the abyss as miners fear the government’s crackdown will strike them next. Despite China not having expressed such intentions explicitly, the atmosphere in the industry remains tense. With many believing that it is simply a matter of time before their operations are forcefully halted, they are exploring their options abroad.
The five prospective countries that appear on their collective lists are the United States, Vietnam, Thailand, Russia, and Laos, in no particular order.
As it appears, the widespread unease was sparked in the second week of November as a document imposing mining restrictions was circulated. The source was not the government itself in this case, but instead a subsidiary of the State Grid Corporation. In this decree, the country’s ability to sustain Bitcoin mining operations is uncertain and brought into question.