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A misguided euphoria rising from the phase one deal between the US and China could help bitcoin becoming one of the most profitable investments in 2020.

The offbeat asset has been pursuing a flat trajectory ever since Washington and Beijing reached an initial agreement. It spent its entire December in a tight range defined by $7,000 and $7,600, barring a short-term dump-and-pump action that took the price below $6,500.

Price has been fluctuating in an 8% range all December | Source: TradingView.com

The bitcoins price sideways action came against the backdrop of a cheerful equity market. Global stocks hit their historic highs on the news of a positive mini-deal with the US benchmark S&P 500 reaching its highest level since 2013.

The initial agreement between the US and China appeared modest, for Beijingpromised to address two of the major concerns raised by President Donald Trump. First, they increased imports of certain US goods, including energy and agricultural products; and second, they agreed to take a tougher stance on intellectual property rights.

In return, Washington suspended December tariffs on Chinese goods. It decorated the deal further with a partial rollback of the September tariffs.

The huge upside moves in the equity market that followed the phase one deal showed investors faith in a long-term positive outlook. But so it appears, the agreement between the two global superpowers is no less than a soft landing.

Gregory Draco, the chief US economist at Oxford Economics, believes that both the US and Chinas efforts cannot compensate for the damages that have been done to the economy in the past 18 months.

He wrote that removing US tariffs on Chinese goods would boost growth only by small margins anywhere between 0.2 percent to 0.4 percent.The thinktank further noted that Chinas decision to avoid extra stimulus programs will limit its growth rate to about 6 percent.

Financial trend reader Nordea Markets also iterated the same in its latest analysis, noting that the phase one deal could at best minimize downside risks. Excerpts from their investor note:

The most important outcome of the deal is that both sides promised not to raise tariffs further, as was initially planned. This clearly removes one downside risk in the global economy for 2020, although Chinas unwillingness to move forward with structural reforms implies that its challenges with trade relations will continue.

The risks attached with a positively perceived mini-deal was also visible in the recent gains of a so-called benchmark haven.

Gold surprised traders in the past weeks after rising in tandem with equity markets. According toRBC Wealth Management managing director George Gero, the yellow metals surge is a reminder of investors huge appetite for hedging assets.

You had creeping up interest rates, record stock markets and the dollar index trading close to 97. When gold is not responding to the usual headwinds, it is a positive sign for the price, Gero told Kitko News. Its a hedge against a possibility of surprising negative news. By ignoring negativity in technicals, gold has turned somewhat positive.

The phase one deal has not minimized prevalent market risks. That means bitcoin could still gain a small piece as capital starts shifting from overbought equities to hedging assets like Gold.

The money does not have to come from institutional investors. Speculation within the industry alone could drive money into the bitcoin markets. That includes capital coming from neighboring, overhyped alternative cryptocurrencies (or altcoins).

The bitcoins 200 percent price rally during the 2019s second quarter has shown the cryptocurrencys capability as an asset that can behave as a hedge against the trade war. And it is not ending soon, as long as the US and China fight with each other for the top global positioning in the economy, politics, and technology.

Overall, it is one of the best recipes for making bitcoin more bullish. Even halving cannot promise that.

Read more:
Bitcoin to Benefit More from Trade War in 2020 than Halving - newsBTC

With 2019 ending in a number of hours, here is a look at the positive performance for Bitcoin (BTC) across several network and market parameters.

At press time, the Bitcoin price is up by about 95% year-to-date (YTD). After a difficult 2018 that saw the top-ranked crypto drop 72%, BTC began the year slowly before entering a massive bull phase in Q2 2019.

This bullish run saw Bitcoin surpass $13,000 in late June 2019 for the first time since January 2018. BTC would, however, fail to maintain these heights as the expected Summer decline interrupted the developing parabolic advance, with Bitcoin unable to sustain a push beyond the $10,000 price mark.

Despite the bearish market conditions of 2018, network fundamentals were on the up until a Bitcoin Cash civil war triggered a hash rate death spiral that saw many mining nodes capitulating.

12 months on from that period and the picture is significantly different, with the BTC network hash rate growing by more than 120% throughout 2019. As previously reported by Bitcoinist, the network hash rate was approaching 120 million TH/s.

This rapid increase in hash rate continued unabated even during periods of price slumps in the Bitcoin spot price. On the layer 2 side of things, Lightning Network (LN) capacity grew from 515 BTC to 850 BTC.

The argument for LN as Bitcoins optimum scaling solution also gained more ground in 2019 with further increases in public nodes from 4,800 to 10,900. LN public channels also more than doubled in 2019 from 16,000 to 35,000.

LN also saw adoption on Blockstreams Liquid via the c-lightning implementation back in July 2019.

On the institutional side, CME Bitcoin Futures set numerous records in 2019, even as Cboe discontinued its BTC Futures offering. After navigating regulatory hurdles, Bakkt finally launched its physically-settled Bitcoin Futures in late September 2019.

Despite a slow start, Bakkts BTC derivatives product did eventually begin to post record numbers with the exchange announcing plans to roll out Bitcoin options. However, as reported by Bitcoinist, the hope that Bakkts physical BTC delivery would lead to more institutional Bitcoin ownership hasnt exactly panned out.

In its 2019 market report, Santiment a crypto data tracking and analysis firm revealed that the number of Bitcoin daily active addresses (DAA) increased by about 7% in 2019. The report also stated that more than 60% of the BTC circulating supply remained inactive during the year as against 54% in 2018.

These figures may indicate more Bitcoin hodling or an increase in the number of lost BTC. Earlier in the year, Bitcoinist reported that whale wallets were seeing more inflows than outflows, suggesting a deliberate hodling trend.

While Bitcoin enjoyed a stellar 2019, the same cannot be said for the altcoin market. Apart from exceptions like Tezos (XTZ), Chainlink (LINK) and Binance Coin (BNB), the bulk of the altcoin market saw further declines in 2019.

Will Bitcoins 2020 performance surpass all the growth figures seen in 2019? Let us know in the comments below.

Images via Shutterstock, Tradingview, Blockchain.com, and Santiment.

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Bitcoin in 2019: Positive BTC Performance Across the Board - Bitcoinist

Both Ethereum and XRP, the two biggest alternative cryptocurrencies, are about to end 2019 in the red zone.

Amsterdam-based cryptocurrency trader Michaelvan de Poppe believes that 2020 could start on a high note for alternative cryptocurrencies that have been struggling throughout the previous year.

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Van de Poppe points to the fact that Ethereum historically tends to rally at the beginning of the year. For instance, the ETH price skyrocketed by more than 52 percent in February while Bitcoin was in limbo.

Hence, there is every reason to believe that Ethereum could continue its Q1 winning streak in 2020. Other top altcoins might piggyback off Ether's strength and post significant gains.

As reported by U.Today, XRP and Stellar (XLM) turned out to be the worst-performing coins of2019, shedding 39 percent and 50 percent of their value respectively.

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The trader also states that the dominance of altcoins usually bottoms in Q1. That means that Bitcoin could cede ground to smaller cryptocurrencies.

At press time, BTC is changing hands at$7,215 with its dominance index hovering just above the 68 percent mark, CoinStats data shows.For comparison, the leading cryptocurrency was responsible for only 52 percent of the total market capitalization at the beginning of 2019.

However, Wall Street vet Tone Vays is certain that the dominance of Bitcoin could reach up to 98 percent.

The rest is here:
This Bitcoin Halvening Could Be Drastically Different, According to Bloomberg Analyst - U.Today

The last five years have been a test phase for bitcoin derivatives, which began tentatively when Bitmex eased into life in 2014. Now, as the cryptoconomy prepares to enter a new decade, derivatives products will play a pivotal role in price discovery. 2020 will be a big year for bitcoin and for the futures markets where billions of dollars will be won and lost, and the next bull market will begin.

Also read: South Korea Imposes $69M Tax Obligation on Crypto Exchange Bithumb

In 2019, crypto futures volumes approached those of spot trading. In 2020, futures are on course to blow right past spot levels and keep on trucking. The success of derivatives platforms Binance Futures and Bitmex, as well as new products from the likes of FTX, Dydx, and Synthetix, has convinced many that 2020 could be the Year of Derivatives. And U.S. regulators are lending credence to the notion: Commodities and Futures Trading Commission (CFTC), the independent regulator that governs the countrys futures and options markets, recently hinted that it could approve a new crypto-based derivative product backed by Ethereum in the course of 2020.

Out-of-the-box products serve to attract new players and new capital to the crypto derivatives market. But will the spate of novel products capture sufficient volume and play a role in shaping bitcoins price action in the coming year? And if so, who stands to benefit most?

Singapore exchange Bybit is planning to move into Thai, Turkish, Vietnamese and Spanish markets, Okexs new USDT-margined Perpetual Swap Trading is likely to gain traction, and decentralized derivatives products are expected to see broader usage as defi adoption continues. Synthetix the second largest defi app in the Ethereum ecosystem has just announced a partnership with Chainlink, meaning it no longer needs to rely on centralized price feeds for its derivatives trading mechanism.

Todays traders are now spoilt for choice, with bitcoin futures trading platforms feeding their appetite for high leverage on an array of digital assets. Traders arent limited to BTC and ETH, either: they can long or short altcoins such as cardano, enjin, tomo, and stellar if theyre feeling bold.

Improved fiat-crypto gateways such as Plutus virtual bank account and debit card have also increased the appeal of derivatives exchanges to retail investors, who are no longer locked into tether (USDT). Enhanced crypto-fiat conversion means traders can spend or reinvest their profits without needing to jump through multiple hoops. Services like Plutus enable crypto and fiat to be changed within a single app, forming the launchpad and off-ramp for traders seeking exposure to the broader cryptoconomy. Better fiat connections are often overlooked when assessing the health of derivatives markets, but these gateways are vital in driving capital in-flows.

In terms of institutional interest in bitcoin futures, the U.S., where much of the innovation is happening, will dictate matters. One platform seeking to play a major role is Bakkt, which launched bitcoin options and cash-settled futures in the U.S. at the tail-end of 2019. While the former is the first regulated bitcoin futures contract rubber-stamped by the CFTC, the latter will initially be available via the ICE Futures Singapore exchange. In December, open interest on Bakkt bitcoin futures reached an all-time high of $6.5 million and with the ascension of CEO Kelly Loeffler to the U.S. Senate, the next 12 months are shaping up to be interesting.

Bakkt isnt the only platform contributing to a market that has evolved greatly since traders first sought to profit from falling prices during the 2018 downturn. Binances bitcoin derivatives surpassed the volumes of its spot offering at various times in 2019, leading the juggernaut to invest an undisclosed sum in derivatives platform FTX. This after it had already acquired spot and derivatives exchange JEX, a move which enabled Binance to add options and futures to its platform.

Speaking of bitcoin derivatives, CME Groups Tim McCourt recently celebrated the two-year anniversary of the exchanges operations in this field. In a short article noting the markets forward curve, he revealed that CME had traded over 2.4 million contracts with a notional value exceeding $92 billion from 12.5 million BTC. Some speculate that the growing interest of trading exchanges like Bakkt and CME stems from reduced BTC volatility in comparison to previous years. In any case, the preponderance of such platforms gives derivatives traders plenty of options.

As derivatives players vie for market share, battlegrounds are coming into clearer focus. Blade, the San Francisco-based exchange supported by Silicon Valley venture capitalists, just announced its commitment to zero-fee trading a flagrant affront to perpetual swap titan Bitmex. UMAs Bitdex specification also presents a possible route to non-custodial perpetual swaps, though more work is required to develop this concept.

So what does all this surging activity mean for bitcoins price? According to Meltem Demirors, chief strategy officer of Coinshares, the growth of the crypto derivatives market means that bitcoins price is becoming less relevant which will keep it in check even after the halving. Demirors believes that bitcoins evolution into an investable asset will, in effect, decouple its price from both its value and supply and demand. With the crypto derivatives market coming to wider attention, a greater number of investors may also choose to hedge their positions via derivatives to manage price risk, leading to less volatility.

All told, the bitcoin derivatives market looks to be in rude health, even if it remains small when compared to other commodities markets. For one thing, traditional investors are likely to be enticed into crypto as a consequence of their familiarity, since derivatives are routinely used in regular financial markets. In fact, a great many institutional traders have thus far been reluctant to engage with crypto due to a paucity of tools to hedge trades and manage risk. 2020, then, and the decade it heads should bring greater leverage for crypto derivatives, including those in the defi ecosystem, greater liquidity, and greater competition from players old and new.

Do you think derivatives markets will dictate bitcoins price action in 2020? Let us know in the comments section below.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He's previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

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Bitcoin's Next Decade Will Be Shaped by Derivatives - Bitcoin News

The Mythbuster Series will be an ongoing project where topics of mass confusion are highlighted, broken down and explained in laymans terms. If you have a Bitcoin topic you would like clarified, send me a direct message on twitter or telegram @kurtwuckertjr, and I will add it to my own personal mempool.

Is BSV the real Bitcoin?

The problem with the establishment of real is the need for a fundamental understanding of facts and truths. Industries and governments create standards organizations or regulatory bodies to establish what is real, while churches form governance organizations and hold theological councils. Groups of artistic fandoms form social groups to discuss and maintain the canon of things like books, comics and movies, but in Bitcoin, there is a malaise of conflicting views on the establishment of standards for defining the precepts of Bitcoin. The problem is that if Bitcoin is not defined by foundational principles, then it is completely beholden to an ever-changing social narrativedefined by the The Hegelian Dialectic.

Foundational definitions of Bitcoin start with the Bitcoin whitepaper as the source of truth, but the whitepaper does not specify a number of crucial basicsfor example, the 21 million unit supply cap or the block size limit. The hard coded supply of Bitcoin was first given to the world in the original implementation of the mining software, which had no block size limit at all! The original implementation gave us Satoshis practical guidance on the whitepaper and the nuances of Bitcoins unique economic model. Between the whitepaper and the first implementation, most questions are actually answered, including how to define Bitcoin in the event of two competing chains:

The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. Bitcoin: A Peer to Peer Electronic Cash System. Section 4.

However, we are given no guidance on what happens when dishonest nodes stage a coup dtat to control the longest chain while honest nodes scramble to defend the rules of Bitcoin. In August 2017, honest nodes split the UTXO set with replay protection to protect Bitcoin from what I call The Raspberry Revolt, and Bitcoin has been in uncharted and contested waters ever since.

When there are two or more valid versions of Bitcoin that cant directly orphan and reorganize one another, how do we define anything? Do we default to foundational principles? Do we look at who has the most proof of work? Do we follow the longest chain? What if the most proof of work removed the supply cap of Bitcoin?

There are so many variables, that it might make sense not to ask whether BSV is Bitcoin, because of the lack of understanding about governing authority, but rather to take a step back and consider an analogy.

Wheres the beef?

Let us reframe the debate to a theoretical shakeup in the McDonalds fast food corporation, for a less contentious example.

Imagine McDonalds started refusing to build big enough stores to suit their volume. What if they eliminated drive-through windows, and decided to cook everything from scratch using a completely new service model and supply chain? To mitigate the problems created by their inefficient practices, assume they also decided to use third-party delivery drivers (still in beta) and not let anyone in the store who cannot afford to spend a mandated minimum. They do this to avoid wasting time on customers who take up valuable dining space only to use the dollar menu. Then, McDonalds traffic drops, but the company begins to praise low congestion because they are excited not to be stressing existing infrastructure.

Out of the ensuing chaos, a bunch of former store managers, business partners, the former head chef, some longtime customers, and fans of the McDonalds brand decide to return to the original path, keep the successful recipes and follow the time-tested business model that made them successful in the first place. They make a company called McDonalds Classic Vision and advertise that there is still somewhere you can get a real Big Mac for fast and cheap in accordance with the original vision of McDonalds.

McDonalds Inc gets really mad and starts calling McDonalds Classic Vision a scam because they are not the real McDonalds. They begin clamoring that McDonalds Classic Vision is confusing people, and making people think there is something wrong with their new McDonalds which retains the oldest brand name and history of corporate documentation. Tired of the confusion, some customers move to Burger King and Wendys who basically just forked the McDonalds business model and changed a couple of superfluous things to start up competing burger chains.

McDonalds Classic Vision continues to follow the original recipes with simple, scalable business practices even though they are the smaller competitor. While the shakeup caused a lot of issues, and gave other competitors some opportunities to rise up, a significant number of people still just want the original Big Mac for fast and cheap. In the short term, most people trust that all of the changes that McDonalds Inc has made are ultimately for the best in the long run because it is easier to open new franchises as long as infrastructural requirements stay low. But dominance is starting to shift over to McDonalds Classic Vision because people are realizing that a complete reengineering of what made McDonalds great in the first place is irresponsible and unnecessary.

Conclusion

Which one is the real McDonalds? The one that keeps the old logo? Or the one that keeps the old recipes, supply chains and business model?

The fact is that the conversation is complex, and there are lots of variables to consider, but establishing your presuppositions is a crucial starting point. You must decide which points are up for debate, and which points you believe fundamentally define bitcoin, and then act accordingly.

Have it your way

The Genesis protocol upgrade on February 4, 2020 is a monumental step in the history of Bitcoin, and will see BSV returned as close as possible to the original protocol as envisioned by Satoshi Nakamoto. Visit theGenesis Hard Fork pageto learn more.

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Is BSV the real Bitcoin? - CoinGeek