- Bitcoin could rise to $10,500 in the next 24 hours or so, as the 4-hour chart is looking more bullish.
- A break above $11,120 is needed to revive the short-term bullish outlook, though.
- Some expert believe the just-announced U.S. Fed interest rate cut could bode well for BTC in the long-run.
Bitcoin (BTC) has eked out moderate gains amid the U.S. Federal Reserve’s announcement of its first rate cut in over a decade.
The top cryptocurrency by market value is currently trading at $9,950 on Bitstamp, representing a 2 percent gain on a 24-hour basis.
The Federal Reserve (Fed) on Wednesday said it will lower interest rates by 0.25 percent to cushion the economy from a global slowdown and trade tensions. That was the first U.S. interest rate cut since the great financial crisis of 2008, and indeed since the creation of bitcoin in 2009.
BTC rose by over $200 to $10,000 in the three hours leading up to the Fed’s announcement at 18:00 UTC. More importantly, the cryptocurrency remained bid in the following hours and hit a high of $10,172, according to Bitstamp data.
The price action seems to have convinced investors that BTC picked up a bid due to Fed’s rate cut.
Boon for bitcoin?
Some observers believe rate cuts by the Fed bode well for BTC.
This is because an interest rate cut reduces the yield on a currency. Further, the liquidity added to the economy via rate cuts often leads to inflation and loss of purchasing power of the currency.
Put simply, falling interest rates mean fewer reasons to hold U.S. dollars, as pointed out by Alan Silbert, executive managing director at INX Trading Platform.
Silbert believes the Fed will deliver more rate cuts in the near future. The central bank, however, refrained from signaled further easing yesterday.
The Fed has cut rates less than 12 months away from bitcoin’s mining reward halving – a process aimed at curbing inflation by reducing reward for mining on the blockchain by 50 percent every four years.
Essentially, BTC’s monetary policy is on a preset path – its supply is halved every four years.
The monetary policy divergence would widen further if the Fed embarks on a full-blown easing cycle, as anticipated by Silbert. That would further strengthen bitcoin’s appeal as store of value and may bolster the bull market.
As for the next 24 hours, bitcoin looks set to test key average located at $10,500.
BTC rose above $10,000 yesterday, validating the seller exhaustion signaled by the long-tailed doji created on the 4-hour chart on July 28.
That bullish doji reversal indicates that the sell-off from recent highs above $13,000 has ended and the path of least resistance is to the higher side. The descending triangle breakout confirmed yesterday also indicates a bull reversal.
Notably, buying volumes picked up following the price breakout. The green volume bar created in the four hours to 16:00 UTC yesterday was the highest since July 19.
Hence, the cryptocurrency may rise toward $10,500 (50-day moving average) over the next day or two. However, the outlook as per the daily chart would turn bullish only if and when BTC invalidates the bearish lower-highs pattern with a move above $11,120.
The case for a rise to the 50-day MA in the next 24 hours would weaken if prices find acceptance below yesterday’s low of $9,574, although that looks unlikely.
Lightning-centric bitcoin wallets are gaining traction in 2019 and making small transactions affordable by reducing network fees.
The bootstrapped Spanish startup Bluewallet garnered 35,000 downloads so far this year, according to co-founder Nuno Coelho, a significant jump from the 5,000 users it had in 2018.
Coelho told CoinDesk the wallet’s built-in lightning marketplace, offering connections to external services like the crypto exchange ZigZag, the blog Yalls and games like Lightning Roulette, facilitates nearly 10,000 referrals a month. So far, BlueWallet users have completed more than 100,000 lightning transactions.
“The things we are working on now are to prepare the wallet for the next bull run,” Coelho said. “To allow users to have more control over the fees when the market will be with higher fees.”
After a year of operations, Bluewallet is currently raising its first round of venture capital. It is hardly alone. Competition across the marketplace is ramping up with a crop of new wallets seeking funding to support lightning development, sources told CoinDesk.
The price of bitcoin over the last 30 days via CoinDesk data.
In June, the Lightning Labs wallet launched and attracted 2,000 downloads within the first 24 hours. That same month, the bitcoin wallet provider Samourai Wallet announced a partnership with the French lightning node-maker Nodl to make the mobile wallet lightning-compatible.
At the same time, Zap wallet creator Jack Mallers told CoinDesk that 500 Android users downloaded Zap since early June. This summer could be described as a lightning boom for product development.
Plus, Mallers added, Zap now has more than 25,000 desktop downloads and 1,000 active TestFlight users on iOS.
“Not only are they downloading it, but the applications are actually checking assets because they’re using it and the wallets are open,” Mallers said. “On average, we get thousands of asset downloads a day. That means we have thousands of active users.”
According to Google’s analytics, Mallers said, only 33 percent of those users are located in the United States. While Bluewallet has far more American users, Coelho said his company’s wallet also appears to be gaining traction in Indonesia, the Philippines and Japan, based on App Store data and the times that users interact with the product.
Across the board, all of these apps share a common trait: They lack a clear business model.
However, for some, that process might be seen as a feature, not a bug.
“It’s not our main priority to focus on a business model at the moment,” Coelho said. “It’s our priority to … put product out there and talk to users.”
Like Coelho, Mallers said he is not in a rush to profit from this wallet because playing the long game means focusing on users for now. Lightning Labs developers told CoinDesk the startup will offer premium services for wallet users in the future, but collecting fees from users isn’t a priority for their team either.
“It wasn’t very clear how a lightning wallet would make money. A lightning wallet’s point is to help with scaling,” Mallers said.
Most mainstream wallets like Jaxx and Bread earn revenue by taking a percentage of transaction fees. They also rely on other revenue models like fundraising tokens (Bread) or integration partnerships (Jaxx). Meanwhile, open-source wallets like Bluewallet and Zap de-prioritize the business model as they seek to stabilize the product with the help of volunteer contributors.
“You cannot accelerate the development of bitcoin,” Coelho said. “We see this as a long-term project, from 5–10 years.”
So far, most of these wallet apps rely on an autopilot setting rather than making users manage channels and independent nodes. Coelho said those options for experts will come with time, considering that the LND beta version many such wallets are experimenting with is just one year old.
As such, Coelho concluded:
“Our goal was just to show this is what lightning could be in the future.”
Bitcoin futures platform Bakkt is gearing up to launch soon, the head of its parent firm said Thursday, although he did not set a firm timeline.
Intercontinental Exchange (ICE) CEO Jeffrey Sprecher, speaking during a quarterly earnings call, said Bakkt is “working to develop a regulated ecosystem that services the evolving needs of [participants] around the world,” adding:
“Subject to final regulatory approvals, we plan to launch our physically settled bitcoin futures in the very near future.”
Sprecher did not provide a specific timeline.
Bitcoin prices over the last seven days via CoinDesk data.
ICE first announced Bakkt in August, unveiling an ambitious plan to offer physically-settled bitcoin futures contracts and additional work with Microsoft, Starbucks and BCG Consulting.
While the company initially planned to launch the platform in December 2018, Bakkt was delayed a number of times, and does not currently have a firm launch date.
Bakkt initially intended to have the Commodity Futures Trading Commission (CFTC), which oversees derivative products in the U.S., approve its futures contracts, but ultimately self-certified.
The company is now waiting on a trust charter from the New York Department of Financial Services. Once NYDFS approves Bakkt’s warehouse, the company will be able to launch its new product.
The company is facing competition, however: TD Ameritrade-backed ErisX is also planning to launch physically-settled bitcoin futures contracts, and LedgerX announced Wednesday that it had already gone live with a product.
Bakkt aside, ICE generated $1.3 billion in revenue across the second quarter, according to a release.
ICE chief financial officer Scott Hill said ICE intends to launch its ETF Hub, a single portal for traders to take part in the exchange-traded fund market, in the coming months. The company believes the ETF market might double in the next few years.
Payments company Square reported its second-quarter earnings Thursday, revealing $125 million in bitcoin sales through its Cash App, nearly doubling a record first quarter.
“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin, and generated $2 million of gross profit,” the earnings report explains.
Founded by Twitter co-founder Jack Dorsey, Square reported that bitcoin represented very nearly half of the total revenue on its Cash App, at $260 million, for the second quarter of 2019. Bitcoin costs, however, are listed at $122.9 million in the unaudited quarterly report, yielding the aforementioned $2 million in profit.
On an investor call Thursday afternoon announcing the numbers, Dorsey said:
“We love you, bitcoin.”
The first quarter of 2019 was Square’s best quarter for bitcoin at the time, with $65.5 million in revenue and $832,000 in profit. Clocking $125 million in sales in the second quarter, however, represents significant growth and a new record for the company. For comparison, the company reported $166 million in bitcoin sales in all of 2018.
With a net loss for the quarter of $6.7 million on $1.17 billion in total revenue, bitcoin remains a long way away from the center of Square’s overall strategy. Transaction-based revenue in Q2 topped $775 million, according to the report.
The company sells bitcoin to users through its Cash App, a service that expanded to all 50 U.S. states in August 2018.
Earlier this week, the company clarified the role of Square Crypto, a project within the company created to make open-source contributions to the bitcoin protocol and ecosystem.
A senior research director at market intelligence firm CB Insights told CoinDesk he believes adding bitcoin is helping Square drive more usage from its customers.
“They don’t really make a lot of money on it, but it is driving engagement,” Chris Brendler said.
Canada’s transcontinental railway, Canadian Pacific (CP), has joined the Blockchain in Transport Alliance (BiTA). CP announced its new membership in an official press release on July 31.
According to the announcement, CP is looking to support improvements in supply chain technology through blockchain technology. BiTA says that by joining the group, CP is helping them to drive global supply chain interoperability.
BiTA president Patrick Duffy also commented on the potential benefits of blockchain in the transportation sector, saying that the new tech “has the potential to smooth the transactions that occur between shippers and carriers, but it requires the active participation of transportation leaders like CP.”
The Blockchain in Transport Alliance
According to the announcement, BiTA has nearly 500 member organizations in the freight, transportation, logistics and affiliated industries. Members reportedly share a common goal of facilitating the adoption of new technology in these sectors, and work to both establish industry standards and provide education on blockchain solutions and distributed ledger technology.
As per a report by the Canadian Broadcast Corporation, Duffy expounded on the issue of transportation currently requiring multiple tracking systems, saying that more systems means more room for human error:
“When you order a pair of shoes and they’re manufactured in Vietnam, currently the information you put into the website where you order those shoes goes from a website into an ERP [a type of business management software] that’s transmitted to a manufacturer’s system … the possibilities of the number of people involved and the number of technology systems involved, it grows exponentially […] At each one of those steps there’s an opportunity for human-induced error.”
The blockchain-based decentralized internet browser Brave now allows Twitter users to tip content creators with its native Basic Attention Tokens (BAT).
Brave discussed the public launch of its token tipping service in an announcement on Aug. 1, wherein users can reportedly specify the amount they wish to tip a given Twitter account, and the recipient will receive their tip in BAT directly.
The announcement also lists a number of features associated with the tipping service, including setting up regularly recurring tips as well as a mechanism for Tweeting at a tipped creator to tell them how to claim their donation.
Brave began testing its Twitter tipping service in May on its testing and development browser version called Brave Nightly.
As detailed in the announcement, the new feature comes as new in-browser offering via Brave Rewards. Users who have opted into Brave Rewards will now see a tip option on Twitter posts when viewing Twitter through their Brave desktop browser. Brave Rewards also supports tipping on YouTube and Twitch, and will reportedly be coming to Reddit, GitHub and Vimeo.
Brave Rewards users can also earn the token by watching privacy-preserving ads or through traditional purchases.
At press time, BAT has a market capitalization of over $302 million and is trading at $0.237, down 3.4% on the day, according to data from CoinMarketCap.