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Its a common question: Is bitcoin (BTC) a store of value? While proponents say, Yes without hesitation, skeptics note its historically large drawdowns. And thats fair. Not long ago, in November 2021, bitcoin reached nearly $70,000 but is now around $20,000. That said, BTC also used to trade below 1 cent so, using just prices, the answer to the initial question is, Its hard to tell.

For an asset in its speculative, price-discovery phase, volatility should be expected. New opportunities and technologies often capture the attention of speculators and traders, often resulting in wild fluctuations as participants seek to determine true value.

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Pair growing interest with the skepticism, controversy and industry speed bumps experienced thus far, and the roller coaster of highs and lows makes sense at just 14 years of age.

While the asset exhibits qualities of sound money (its durable, portable, scarce, uniform and divisible), acceptance is the final uncertainty.

Through the following on-chain metrics, I aim to prove that bitcoins users believe its a store of value (SoV), despite the volatility.

Realized capitalization

One measure of bitcoins use as an SoV is its realized capitalization. Different from traditional market cap, this alternative considers the last transfer price of each bitcoin rather than the current market price.

In doing so, realized capitalization is an aggregate cost basis of bitcoins on-chain users. The total realized cap is the amount of money that has been stored in the network over time.

To me, this is a proxy for inflows. Realized capitalization rises when transfers are made at higher prices than before and declines when transfers are made at lower prices.

Story continues

According to Glassnode data, bitcoin stores a total of about $380 billion in value, down from a peak of $460 billion. But, importantly, this is four times more than in December 2017 when bitcoin was priced around where it is today. So, money has flowed into the network to store value.

(Joe Orsini, Glassnode)

Holding trends

Not only that, but bitcoins users also are holding the asset for longer and longer. Just last week, the percentage of supply that has been held for long periods has hit all-time highs despite the drop in prices since late 2021. As of March 7, according to Glassnode data:

% Supply Held for 1+ Years: 67.7%

% Supply Held for 2+ Years: 51.4%

% Supply Held for 3+ Years: 39.2%

% Supply Held for 5+ Years: 28.3%

(Joe Orsini, Glassnode)

Conclusion

There is a saying that perception is reality. Remember, bitcoin has essentially been willed into existence. Despite the noise and skepticism, money continues to flow into the network and its users are holding their assets for longer periods of time.

The next time somebody questions bitcoins use as a store of value, show them these charts. As Satoshi Nakamoto wrote, If enough people think the same way, that becomes a self-fulfilling prophecy.

Read the original here:

Evaluating Bitcoin as a Store of Value - Yahoo Finance

Bitcoin's Return to January Days

Bitcoin returned to January levels on Thursday, plunging below $20,000.

The largest cryptocurrency by market capitalization was recently trading at $20,067, down 7.7% over the past 24 hours as nervous investors stewed over ongoing inflationary pressure, fallout from the implosion of crypto-friendly Silvergate Bank and, most recently, a New York state lawsuit that alleges ether and other cryptos are securities. BTC has now erased about half its gains from a vibrant first six weeks of the year when hopeful investors sent the crypto up about 40% and past $25,000 in mid-February.

"There's a lot of people that are scared that maybe the domino effect is just starting," Eddy Gifford, a wealth adviser for investment adviser Tactive. "There's FTX, now Silvergate, who's next? We also had news out of the Fed where [Federal Reserve Chair Jerome] Powell was very hawkish on raising interest rates likely higher than anyone wanted to even expect and potentially keeping those rates higher for longer. In those situations, risk assets in general tend to decline, because valuations are a function of the ability to meet estimates and interest rate environment."

He added: "So if the interest rate environment remains elevated for longer, that's going to push prices down."

Ether roughly matched bitcoin's plunge to change hands at about $1,430, its lowest level since mid-January. Other major cryptocurrencies were firmly in the red with CRO, the token of exchange Crypto.com, off 7.6% and popular meme coins DOGE and SHIB both dropping more than 8%. The CoinDesk Market Index, a measure of the broader crypto market's performance, was down 7.5%.

The sour mood in crypto markets also manifested itself in crypto traders' some $307 million in liquidations over the past 24 hours, according to Coinglass data. Bitcoin (BTC) traders suffered the heaviest losses, some $112 million, while ether (ETH) liquidations surpassed $73 million. Of the liquidated trading positions, some $282 million were longs, betting on higher prices.

Meanwhile, equity markets stumbled amid a massive sell-off of bank stocks that sent JPMorgan Chase and Bank of America down more than 5% and 6%, respectively. The tech-focused Nasdaq tumbled 2.1%, while the S&P 500 and Dow Jones Industrial Average (DJIA) fell 1.8% and 1.7%, respectively. The downturn came even as jobless claims ticked up slightly, a mildly encouraging sign given the tight job market that has pressured prices upward.

Tactive's Gifford said that if bitcoin breaks with $20,000, "we could get to $15,000 pretty fast," and if we break through $15,000 we go to $10,000 fast. But he noted bitcoin's staying power and halving next year. "That typically has been a spark for bull markets in bitcoin," he said.

He added: "We'll see a few more companies fall, but that's just going to make the ones that are left on the back end that much stronger. And I think that builds a case for we start actually seeing some more widespread adoption of digital assets in general."

Futures Contract Holders Remain Unbowed

The average funding rate for perpetual futures contracts in both bitcoin and ether remains positive, despite recent concerns of turmoil in markets. Funding rates are set by exchanges and regulate the price of futures contracts relative to the market value of the asset.

Positive funding rates indicate bullish sentiment, as holders of long positions are paying shorts. The opposite is the case when funding rates are negative.

Funding rates for BTC have been positive since Feb. 13, with the exception of a negative dip on March 5.

Crypto-friendly Silvergate Bank will "voluntarily liquidate" its assets and wind down operations, its holding company, Silvergate Capital Corp., said Wednesday. Bianco Research, LLC President and macro strategist Jim Bianco and Opimas, LLC CEO and founder Octavio Marenzi weighed in on the latest developments. Plus, "Crypto Critics' Corner" co-host Bennett Tomlin discussed the recent Wall Street Journal report that the company behind the world's largest stablecoin accessed bank accounts by way of falsified documents and intermediaries.

Link:

First Mover Asia: Bitcoin Plunges to Mid-January Levels - CoinDesk

Alex Dovbnya

BlackRock CEO Larry Fink has suggested that the next big trend in the crypto industry could be tokenization

Read U.TODAY on

Google News

BlackRockCEO Larry Fink's annual letter to investors suggests that tokenization might be the next big trend in crypto.

According to the head of the $10 trillion asset management behemoth, Bitcoin has caught headlines as a mere distraction, with the media's "obsession" obscuring other interesting developments happening in the cryptocurrencyspace.

Fink draws attention to the dramatic advances in digital payments taking place in emerging markets such asBraziland parts of Africa. Hecontrasts them with the sluggish pace of innovation in developed markets like the US, where the cost of payments remains high.

In his view, the fragmentation of asset categories into tokens presents a highly encouraging prospect.

He has confirmedthat Blackrock is actively delving into the realm of digital assets with an emphasis on permissionedblockchains and the conversion of stocks and bonds into tokens.

However, Fink acknowledges that while the industry is maturing, there is still no regulatory clarity.He hasassuredinvestors that they will apply the same standards and controls to cryptothat they do across their business.

As reported by U.Today,Fink predicted that most cryptocurrency companies would failduring his recent appearance at a summit. The BlackRock bossalso revealed that BlackRock put $24 million into the defunctFTX exchange, but it was then forced to mark thatsum down to zero.

Read the rest here:

Forget Bitcoin: BlackRock CEO Touts Next Big Thing in Crypto - U.Today

Use of emerging alternative payment platforms, such as Apple Pay or Bitcoin or other cryptocurrencies, can alter consumer credit card behavior and consequently impact our interchange fee income.

So says Horizon Bancorp which provides a broad range of banking services through its bank subsidiary, Horizon Bank.

They have $7.9 billion in assets and $5.9 billion in deposits with this regional bank being the first to explicitly state that bitcoin is a risk to their profits.

The increasing use of Bitcoin and other crypto currencies and/or stable coin and the possible impact these alternative currencies may have on deposit disintermediation and income derived from payment systems, is one of the risks, uncertainties, and factors that could cause Horizons actual results to vary materially, the bank says, as well as:

Potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms (e.g., Apple Pay or Bitcoin) take a greater market share of the payment systems.

Of course the banks loss is the publics gain as they benefit from lower fees or from diversifying deposit risks, but allegedly some regulators are intervening against this market competition and innovation which benefits the taxpayer.

Barney Frank, the former congressman and architect of the landmark Dodd-Frank banking regulations who also sits on the board of Signature bank, which was closed last week by the Department of Financial Services in New York (DFS), accuses the latter of closing the bank for no good reason as it was not insolvent, but to send a crypto message.

Why did they react so harshly to what they said was our inability to give them the sufficient data? I believe it was probably to send the message that even though we were doing crypto stuff responsibly, they dont want banks doing crypto.

DFS has denied the accusation, claiming there was a crisis of confidence in the banks leadership, but if the bank was indeed solvent, closing in does raise questions.

In addition the admission by Horizon bank now finally provides evidence of bias, which law makers and the elected will hopefully bear in mind when they are lobbied, both through the media and in private, against what they see as their competitor: crypto.

Where bankers as individuals are concerned however the story has been changing and considerably, with many of them embracing the new frontier.

Yet some bankers, like Jamie Dimon or Warren Buffet, remain viciously biased towards the entire crypto space with some regulators too often not bothering to hide their bias.

A bias no different than Blockbusters towards Netflix, with here too lower fees, diversification of risk and other features, including ease of global access, benefiting the public.

Read the original post:

Bitcoin a Risk to Profits Says Bank - Trustnodes

(Kitco News) - The U.S. is the undisputed leader when it comes to the number of Bitcoin automated teller machines (ATMs), with 32,591 machines installed throughout the country, but a recent study conducted by Tradingbrowser indicates that cryptocurrency and Bitcoin ATM adoption is highest in countries that lack a developed financial infrastructure.

Countries that have high rates of unbanked populations also have higher rates of cryptocurrency adoption due to high cash payments and Bitcoin ATMs, Daniel Larsson, senior editor at Tradingbrowser, wrote. If the projection of installed Bitcoin ATMs continues, these unbanked countries could see exponential growth in adoption.

A total of 14 countries were included in the study, which gathered information related to the number of Bitcoin ATMs installed, cash payments, unbaked population, cryptocurrency ownership, cryptocurrency ownership percentage, and the total population in order to compare adoption rates.

It all boils down to how the population is connected to cash payments and bank accounts, Larsson said.

The countries that were found to have the highest rate of crypto adoption had the highest rates of unbanked populations and were also the most promising locations to install ATMs and promote adoption.

Countries with a high rate of cash payments and unbanked population. Source: Tradingbrowser

Out of the countries surveyed, Mexico had the largest percentage of its population unbanked at 60%, and it also ranks third in terms of the number of Bitcoin ATMs installed, with 46. Only Romania and Hong Kong currently host more ATMs than Mexico. A total of 3.4% of Mexican citizens currently own cryptocurrency, which is nearly triple the adoption rate of more advanced nations like Norway and Denmark.

In South Africa, 31% of the population is unbanked, the country has 21 Bitcoin ATMs, and 10% of its population owns some form of cryptocurrency.

When those numbers are compared to countries whose unbanked population is smaller, the differences become clear.

Countries with a low rate of cash payments and unbanked population. Source: Tradingbrowser

The differences are especially stark in nordic countries like Sweden, Denmark, and Finland, which have the lowest percentage of cash payments (1-2%) while nearly 100% of their populations are connected to the traditional banking system.

Countries where cash payments range from 1-2% and unbanked populations from 0% to 1% including Sweden, Denmark, Norway, and New Zealand have no Bitcoin ATMs installed. These countries also have a much lower adoption rate, Larsson observed.

We can draw many conclusions based on these findings but the most significant driver for the high adoption rates in highly unbanked nations is the number of Bitcoin ATMs that have been installed, Larsson said. In many cases, cryptocurrency is proving to be a viable option where Bitcoin ATMs have been installed.

In areas with no established banking infrastructure, the ability to use ATMs to trade cryptocurrency for cash, or from cash to cryptocurrency, is a feature that is impossible without access to traditional banking or credit cards.

Based on these findings, Larsson speculates that the reason crypto ownership is lower in countries with an established financial infrastructure has to do with the fact that there is no need for the population in these countries to use cryptocurrencies.

The one exception in the study was Hong Kong, which has a highly developed financial system and is considered to be a financial hub and testing ground for Chinese policymakers. Hong Kong ranked second overall in the number of Bitcoin ATMs installed, with 147, while Romania came in first with 156.

The high rate of cash payments and Bitcoin ATMs in developing countries shows a growth of alternative financing solutions such as Bitcoin which provides a fast, secure, and efficient way to transact outside the traditional banking system, Larsson said. Its safe to say that more Bitcoin ATMs are likely going to be installed in highly unbanked countries as the positive trend toward cryptocurrencies continues.

While Bitcoin ATMs are not solely responsible for driving adoption in unbanked regions of the world, there is clearly a correlation, Larsson said. The study shows that cash and Bitcoin ATMs are the two main factors driving the adoption of cryptocurrencies right now and its obvious which parts of the world are in the drivers seat.

It remains to be seen how the trend will progress moving forward, especially amid the spreading banking contagion that is now hitting banks in Europe, including Credit Suisse.

Only time will tell whether the trend of these ATMs and the adoption of cryptocurrency will continue in countries where cash is currently king, Larsson said. Until then, we can not look past the obvious which is that right now, unbanked countries are beating cashless countries in the race to full cryptocurrency adoption.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Crypto and Bitcoin ATM adoption is highest in countries with large ... - Kitco NEWS