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Two years ago last week, Bitcoin peaked at $19,783, after starting 2017 at about $1,000. Since then, prices have fluctuated wildly, falling 73% in 2018 and rising 85% this yearbut they have not come close to retesting previous highs. Recently, Bitcoin was trading near $7,000.

An investor who bought early in 2017 would still be up more than 500%. But thats not the whole story. Dan Wiener, chairman of Adviser Investments and founder of the Independent Adviser for Vanguard Investors, analyzed Bitcoin price movements since the start of 2017 and found that the average five-day rolling return was 1.5%. But the range of five-day gains and losses was enormous, with a high of 47% and a low of minus 29%. And investors lost money 45% of the time when they held Bitcoin for 10 days, he calculated.

Beyond the price action, the biggest change since 2017 is Bitcoins rising competition. Two years ago, the market was awash in initial coin offerings for currencies expected to challenge Bitcoins dominance. But Bitcoin still accounts for 67% of the market value of cryptocurrencies, according to Coinmarketcap.com. Bitcoins real competition now comes from companies looking to use blockchain technology to create currencies, and governments that want to produce digital coins backed by their treasuries. Will the dominant coin be decentralized like Bitcoin, corporate-backed, or government-controlled?

Facebooks Libra project has run into regulatory issues, but could launch as soon as next year. China has been working on digital currencies since 2014 and has reportedly accelerated efforts this year.

The Census Bureau reports new-home sales data for November. Consensus estimates are for a seasonally adjusted annual rate of 730,000 new homes sold, roughly even with Octobers figure. That estimate would be about an 11% increase from November 2018s 657,000 rate. In October, the average price for a new house was $383,300 while the median price was $316,700.

The Federal Reserve Bank of Chicago releases its National Activity Index for November. Economists forecast a negative 0.1 reading, similar to the October data. The index has had a negative reading every month this year except for June and August, after having three negative reading in 2018. This indicates that the economy, while still growing, is decelerating.

The Census Bureau releases its Durable Goods report for November. New orders for durable manufactured goods are expected to jump 1.6% after a 0.5% rise in October. Excluding transportation, new orders are seen edging up 0.2%. This compares with a 0.5% gain in October, as well.

Trading ends early, at 1 p.m., on the New York Stock Exchange and Nasdaq Composite for Christmas Eve. The bond market closes at 2 p.m.

The Bank of Japan releases minutes from its monetary-policy meeting at the end of October.

The Federal Reserve Bank of Richmond releases its Fifth District Survey of Manufacturing for December. Expectations are for a 3.0 reading, up from Novembers minus 1.

Markets all over the world, including in the U.S., are closed in observance of Christmas Day.

China hosts a trilateral summit with Japan and South Korea in the southern city of Chengdu. The two-day confab convenes on Dec. 24. and concludes on Dec. 25. Chinese Premier Li Keqiang, Japanese Prime Minister Shinzo Abe, and South Korean President Moon Jae-in are scheduled to attend. The denuclearization of North Korea and ongoing trade war between Japan and South Korea will be among the topics for discussion. In August, Japan removed South Korea from its list of trusted trade partners. Seoul followed suit the next month. The root of the disagreement is over Japans compensation of forced Korean laborers during World War II.

Many bourses, including those in Canada, England, and Hong Kong, are closed in observance of Boxing Day.

The Department of Labor reports initial jobless claims for the week ending on Dec. 21. The four-week moving average of claims is 225,500.

Pivotal Software holds a special shareholder meeting in San Francisco to seek approval for a proposed merger with VMware. In August, VMware announced a cash and stock offer for Pivotal Software valued at $2.7 billion.

The U.S. Energy Information Administration releases its Petroleum Status report for the week ending on Dec. 20.

Write to Avi Salzman at avi.salzman@barrons.com

Original post:
Bitcoin Hit Its All-Time High in 2017. Here Comes New Competition. - Barron's

According to recent estimates, bitcoin mining in 2020 is expected to take off at an explosive pace. Miners are predicted to mine around $3 billion worth of BTC as per the coins current price.

Bitcoin mining has always been a crucial part of the BTC network. Mining involves validating transactions, adding blocks to the blockchain, which leads to the production of new BTC adding to bitcoins total supply

It has been growing at a pretty steady rate over the years, and as more people became interested, bitcoin mining difficulty continued to appreciate. Meanwhile, two subsequent BTC halvings led to an increase in the bitcoin price due to reduced supply and increased demand.

Bitcoins infamous price volatility has both been rewarding and besetting for all market participants. BTC miners especially have had a tough time navigating through this volatility, as it affected the coins value, and therefore their earnings. The extreme bitcoin price movement in 2018 led to many unplugging their mining gear and leaving the industry, as the cost of producing BTC exceeded the profits.

Recent reports, however, indicate that bitcoin miners are in for some respite. As per South China Morning Post, Nasdaq listed bitcoin mining equipment manufacturer Canaan has partnered with Hong-Kong based digital asset liquidity providers and market makers to offer risk management products and methods to their clients in order to protect them from volatility in bitcoin prices.

Canaans strategic Interhash will be offered customized financial instruments such as swaps and collars by GSR. These will help them skirt losses and expedite returns on available inventory. These risk hedging alternatives are pretty crucial in the bitcoin mining business. According to the manager of Canaans blockchain division, Kevin Shao, there arent any hedging instruments that match a miners production costs and production cycle.

Experts predict that 2020 will be a very successful year for the bitcoin mining industry. GSR predicts that around $3 billion worth of BTC will be mined globally next year (at current prices). The estimate is made with the assumption that Bitcoins blockchain will produce around 1,800 coins per day. But the numbers may appreciate after the halving in May 2020, since production will reduce to 50% (900 coins per day).

New BTC mining operations will come up across the world in different geographies such as Russia, Canada, and the US, which may reduce Chinas monopoly and truly decentralize the bitcoin mining ecosystem.

Financial products such as hash rate futures will help bitcoin miners hedge themselves against the fluctuating BTC hash rate, as was reported by Reuters, a few days back. This might lead to an overall strengthening of confidence in bitcoin mining and the attraction of participants in droves to contribute their available power.

What are your thoughts on the state of the bitcoin mining industry? Do you expect new miners to arrive in 2020? Let us know your thoughts in the comments below.

Image via Shutterstock

See the original post:
Bitcoin Worth $3 Billion Expected to be Mined in 2020 - Bitcoinist

I am pretty confident we are the new wealthy elite, gentlemen, even with a sum as small as 10 bitcoins The world just isnt going to be the same and we have been blessed as the pioneers. When these remarks were made in June of 2011, they seemed hopeful to the point of delirium. Commencing a thread on the Bitcointalk forum, the declaration triggered a wide-ranging discussion about Bitcoins potential in the years to come, with the thread eventually topping out at 232 pages. Opinion was divided, but looking back, that anonymous posters prediction was prescient.

Also read: Bitcoin History Part 21: Miners Pour One out for Satoshi

When the original poster wrote The world just isnt going to be the same, he wasnt talking about politics, war or ever more powerful AI systems: he was forecasting a time when cryptocurrency powers the global economy, with bitcoins price steadily rising in line with demand. In an attempt to inspire some smug bonhomie about this notion, the poster proclaimed We have been blessed as the pioneers before asking what the others were going to do with their Bitcoin wealth once your coins hit upwards of $10,000 a pop.

As we know, that prediction was accurate: bitcoin hit its all-time high of $20k on December 18, 2017, just six-and-a-half years after the post, at which time a single BTC cost a mere $22.59. That figure might seem insignificant now, but context is required: bitcoin failed to exceed a dollar the year before (2010), its highest price being just $0.39. Bitcoins rise above $20 was aided by a Gawker story published on June 1, which cited the cryptos popularity on Silk Road. Perhaps it was this rapid growth that convinced our would-be clairvoyant that the era of a new wealthy elite was on the horizon.

As is often the case with old Bitcointalk threads, reading the posts can be an amusing and instructive exercise. To think that not so long ago I was paid 50 BTC for two hours of work, mused one poster, JamezQ. Another, billyjoeallen, pledged his commitment to the cause, sounding for all the world like a broken hero on a last chance power drive: I dont care about the busts. Im riding this pig wherever it takes me. If it tanks, Ill have a helluva story to tell. Im sick of half measures. Im swinging for the fences and if I strike out, so be it. I wont be some mediocre drone living a life of quiet desperation. I believe in bitcoin and Im going for broke, knowing the risks.

Of course, there were a few people predicting crazy bitcoin growth in those heady days. One of them was self-professed philosopher and investor Trace Mayer, who had been recommending his followers buy bitcoin since it was $0.25. Mayers giddy predictions were just too much for some people to stomach, motivating an outraged riposte from one triggered Reddit user. Another vocal proselytizer was Bruce Wagner, host of The Bitcoin Show, who told wired.com, I knew bitcoin wasnt a stock and wouldnt go up and down. This was something that was going to go up, up, up.

The bitcoin phenomenon had gone overground in 2011: in August, the first Bitcoin World Conference and Expo got underway in east Midtown, and The New Yorker sought to scrutinize the landscape with a satirical eye, publishing a piece that fall called The Crypto-Currency. It concludes with an amusing story about an eager bitcoin miner named Kevin Groce, who referred to mining as the new moonshining and liked to walk around in a t-shirt emblazoned with the words Bitcoin Millionaire.

Presumably at the time, readers were compelled to chuckle at the dreamer with a wanderlust glint in his eye. But Groces conviction, like the clairvoyant on Bitcointalk, was unshakeable: My fiance keeps saying shed rather I was just a regular old millionaire. But maybe I will be someday, if these rigs keep working for me.

Outlandish predictions of wealth for bitcoin holders would become the norm in the years that followed that historic Bitcointalk post. At the time of writing, John McAfee reckons bitcoin will hit $2 million per coin by the end of 2020, an increase on his $1 million prediction in 2017. Bayern LB, one of the top German banks, is a little less audacious, predicting that bitcoin will reach $90,000 come May. Whatever the case, the idea of a new wealthy elite is no longer a pipe dream for those with the perspicacity to have gotten in on the investment of the decade.

Bitcoin History is a multipart series from news.Bitcoin.com charting pivotal moments in the evolution of the worlds first cryptocurrency. Read part 21 here.

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 History Part 22: The New Wealthy Elite - Bitcoin News