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Bitcoins correlation with gold has just hit its highest level in the last 12 months this week, as investors have been lured by a strong dollar amid rising interest rates.

While Bitcoin has long been hailed as a digital gold and a hedge against inflation, like the yellow metal, it appears that investors disagree.

Over the past few months, as inflation soared, both Bitcoin and gold have seen big drops in value, leading to a year-high correlation of +0.4, according to Kaiko Research.

A correlation of +1.0 means two assets move in perfect synchrony in the same direction. Bitcoin and golds correlation has mostly sat between -0.2 and +0.2 over the last year, meaning that they have been largely uncorrelated.

For context, Bitcoin and the S&P 500 have a correlation of around +0.61, as crypto is often traded with other risky assets, according to data from CoinMetrics as of September 30.

Still, over the past 90 days, Bitcoin has risen 3% while the S&P 500 dropped 1%.

It is too soon to declare an official de-coupling between Bitcoin and equities, although Bitcoin's rising correlation with gold suggests a slight shift in market structure, Kaiko Research told Decrypt.

After rallying as a safe haven on the heels of the Russia-Ukraine conflict in February this year, gold has now lost all its gains and is down 10% year to date.

The precious metal is highly sensitive to rising U.S. interest rates, as it is priced in and backed by dollars. Higher rates increase the opportunity cost of holding metal that doesnt produce returns, as that money could be used to buy government bonds that now pay higher rates of return, for example.

Gold and the other semi-investment metals like silver and platinum will likely continue to remain under pressure until the market reaches peak hawkishness, said Ole Hansen, head of commodity strategy at Saxo Bank, in a note.

Bitcoin has also suffered the effects of rising interest rates instituted by central banks across the globe, which has made institutional investors less keen to throw money at unstable cryptocurrencies.

The worlds largest cryptocurrency is sitting at just under $20,000, a far cry from its all-time high of $68,000.

In addition, a worsening economy and rising consumer prices also left many retail investors with less money to park in volatile investments like Bitcoin and other cryptocurrencies.

However, there are hopes that central banks might reverse course soon and turn back to quantitative easing.

The Bank of Japan and the Bank of England both injected capital into the economy in September. If the Federal Reserve joined in, it would be likely to depress the dollar and would likely make other assets more appealing again.

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Investors Flee Gold and Bitcoin, Pushing Correlation to New 12-Month High - Decrypt

The European Union (EU) doubled down on previous sanctions against Russia which limited bitcoin and cryptocurrency transactions resulting in an outright ban against all transactions, per a statement from the European Commission.

The Commission welcomes the Council's adoption of an eighth package of hard-hitting sanctions against Russia for its aggression against Ukraine, reads the statement.

All bitcoin and cryptocurrency wallets, accounts and custody services in Russia are hereby banned. Previously, transactions were limited to 10,000 ($9,900).

The ban comes on the heels of recent news from Russia, where its Ministry of Finance announced the countrys intentions to allow any industry to accept bitcoin and cryptocurrency for international trade. Last month, Russian Deputy Finance Minister Alexei Moiseev stated that "there is no way to do without cross-border settlements in cryptocurrency."

Russias need to transact in bitcoin and cryptocurrency has stemmed from a continuing dialogue between the Russian central bank and its Ministry of Finance as the two regulators determine how best to introduce this ability to the economy.

But while the two regulators debate on how to accomplish the task, the EU has stepped in prohibiting any and all cryptocurrency transactions and services with its most recent ban.

The new sanctions extend beyond cryptocurrency to also include restrictions on individuals and entities in the Donetsk, Luhansk, Kherson and Zaporizhzhia regions. Each sanctioned individual is believed to be involved in the Russian occupation, illegal annexation and sham referenda in the previously mentioned territories.

Furthermore, export sanctions aiming at Russian military, industrial and technological access, as well as at its defense sector, were introduced. The EU also imposed a 7 billion import restriction and oil price caps.

Read the original here:
EU Issues Bitcoin, Crypto Ban On Russia With New Sanctions - Bitcoin Magazine

IANS

New Delhi, October 6

More than 51 per cent of the total Bitcoin trading volume on various crypto exchanges this year is fake amid volatile global economic conditions, a new report has claimed.

Bitcoin is the blue chip of cryptocurrency and represents 40 per cent of the total crypto assets outstanding in the new and volatile crypto markets. Its market cap is currently at 382.25 billion.

According to data provided by niche news publisher BanklessTimes.com, the majority of this fake Bitcoin volume is due to wash trading.

Wash trading is illegal, where an asset is bought and sold simultaneously on the same platform to create false liquidity. This is often done by bots or spoofing orders.

"It's difficult to talk about cryptocurrency without talking about Bitcoin. Yet, there is a concern that a large part of the daily traded volume of Bitcoin is fake. This puts into question the legitimacy of exchanges and the reliability of data," said Jonathan Merry, CEO of BanklessTimes.

Another factor contributing to the fake volume is stablecoins such as Tether (USDT).A Tether pairs very well with Bitcoin and is often used to buy and sell Bitcoin on exchanges.

"This results in much volume being generated without any actual Bitcoin changing hands," said the report.

According to the report, faking trading volume can be a way for exchanges to attract new customers.

By appearing to be more popular than they actually are, exchanges can trick investors into thinking there is more activity and liquidity on their platform.

Another reason people might engage in wash trading is to prop up the price of a particular asset, according to the report.

By buying and selling the asset simultaneously, they can create the illusion of demand and drive up the price. This can be done for personal gain or artificially inflate an asset's price before selling it.

"Investors should be wary of exchanges that report false figures. You must do your research and only use exchanges you trust," the report suggested.

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51 per cent of daily Bitcoin volume on crypto exchanges fake: Report - The Tribune India

Diwali is a time of celebration for the entire country. What also makes IT unique is that it is quite interestingly a time when the countrys material aspirations are most visible.

This can be seen in two ways: one, Diwali season has slowly become the de facto shopping fiesta for the country with incredible deals across online and offline platforms leading to crazy levels of shopping and two, we can see a fascinating array of religious activities that are geared towards building wealth creation.

One among them is Lakshmi Puja, a special ceremony to invite Goddess Lakshmi, the goddess of wealth and prosperity into their homes. This is done in the hopes that they will be blessed with prosperity.

This fascinating connection between Diwali and wealth has also seemed to be an auspicious time to acquire new assets and make new investments. And, what better asset for wealth creation during this auspicious time than the best-performing one over the last decade - Bitcoin?

After all, for a generation of Indians that are growing up as natives in a digital-first world, Bitcoin is an obvious choice. Several see Bitcoin as digital gold, a superior store of value and investment than gold and thus, an ideal investment choice to fund the future during the auspicious time of Diwali.

With the price of Bitcoin now a long way from its all-time highs, this also represents a wonderful time to be investing in the asset - whether it is for the first time or to start a systematic investment plan where every week or month, a certain amount is invested into it. A lot of Indian crypto exchanges come up with interesting offers during the Diwali period to entice first-time investors.

Choosing the perfect Diwali gift can be a daunting task for many. Gifting Bitcoin is not only efficient and super convenient, but it is probably among the few gifts that have the potential to go up in value.

For newcomers into the space, this is an ideal time to buy or probably receive Bitcoin as a gift from their friends or relatives. They could then use this opportunity to learn about Bitcoin and its potential, before making large investments in the sector.

However, while investing in Bitcoin, especially for the first time, it is important not to be swept away by price speculation and greed. In fact, just like Indian households view gold as a long-term asset, Bitcoin too presents wonderful opportunities for wealth creation, but only if the investor is willing to adopt a long-term mindset and stay invested for the long term.

If you are looking to invite Goddess Lakshmi into your home this Diwali, think no further than adding Bitcoin to your portfolio and benefiting from diversification.

(Mohammed Roshan, CEO & Co-founder of GoSats)

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How to use Bitcoin to diversify your wealth during Diwali - Economic Times

Cryptocurrency exchange Binance has agreed to support Kazakhstan in ensuring the safe development of the countrys crypto market. The trading platform and Kazakhstans financial regulators intend to inform each other about cases involving the use of digital assets for illicit purposes.

The worlds leading coin trading platform, Binance, and Kazakhstans Financial Monitoring Agency have recently signed a Memorandum of Understanding expressing their mutual interest in the safe development of the Central Asian nations virtual assets market.

An announcement explained that the agreement will govern joint efforts to fight crimes involving digital assets. The crypto exchange and the regulatory body plan to share data that can be used to identify and block crypto holdings obtained by criminal means as well as those employed in the laundering of proceeds from crime and the financing of terrorism.

According to Tigran Gambaryan, global head of intelligence and investigations at Binance, the company has the most robust compliance program in the industry, incorporating the principles of anti-money laundering and sanctions compliance as well as tools to detect suspicious accounts and fraudulent activity.

During the meeting, Gambaryan and Chagri Poyraz, who heads Binances global sanctions department, presented reports devoted to investigations in the crypto space and suppression of illegal activities leading to sanctions evasion using cryptocurrencies.

The signing was also attended by the Chairman of the Financial Monitoring Agency of the Republic of Kazakhstan Zhanat Elimanov, executives and employees of the regulatory body, and other representatives of the Binance ecosystem, the exchange noted in a press release.

The memorandum is part of Binances global training program for representatives of regulatory and law enforcement agencies. Its main purpose is to develop cooperation with local and international authorities in the fight against cyber and financial crimes. The initiative has already been implemented in France, Germany, Italy, the U.K., Norway, Canada, Brazil, Paraguay, and Israel.

The agreement follows the signing of another Memorandum of Understanding with Kazakhstans Ministry of Digital Development and Innovation in May, under which Binance will advise the government in Nur-Sultan on crypto regulations. In August, the exchange was granted preliminary approval to provide trading and custody services for digital assets in Kazakhstan, a major crypto mining hub.

Do you expect Kazakhstan to seek assistance from other global crypto companies as it tries to regulate its digital asset economy? Tell us in the comments section below.

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchenss quote: Being a writer is what I am, rather than what I do. Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Binance

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Binance and Kazakhstan to Share Information About Crypto-Related Crime Exchanges Bitcoin News - Bitcoin News