Bitcoin is Dead as a Doornail – All Crypto Will Soon Go to Zero and Beyond?

• ·    “Bitcoin is dead” again amongst a record number of new user wallets, institutional investors preparing to enter the market, and substantial price appreciation.
• ·    BTC/USD on the uptrend despite $40 million Binance hack.
• ·    Fidelity Digital Assets announces it will enter the crypto market in the coming weeks.

Here’s a fun fact: Try typing “Bitcoin is” into Google and see what comes up.

The top suggestion by Google to fill in this blank? You guessed it.

Bitcoin is dead.

It’s May of 2019. Already, Bitcoin has been declared dead at least 17 times this year, and at least 355 since its inception in 2009.

Some news outlets claim that just because the Baakt BTC futures platform has been delayed multiple times due to regulatory concerns that the entire cryptocurrency sector is in decline. Nothing could be further from the truth.

While Baakt gets delayed, other parts of the Crypto community continue to see explosive growth. Kraken, one of the world’s oldest and largest cryptocurrency exchanges, is in the middle of a hiring spree with dozens of jobs available. 

It’s true that many other crypto companies have been laying off staff during the last six to nine months.

But does that indicate a declining crypto economy or simply an overzealousness by some select organizations?

There are many indications that institutional investment in crypto is at hand, even though Baakt is waiting on further regulatory clarity before proceeding with its physical-settlement BTC futures.  

And to be clear, the fact that some large institutions are awaiting guidance from regulatory bodies says nothing of the value of bitcoin or the future of cryptocurrency and blockchain. It just means that regulators are late to the game and continue to drag their feet.

BTC Seeing Record Adoption Rates

The rise and fall of the BTC/USD price aren’t the most important part of the story. Just look at the steady rise of new bitcoin user wallets created during the last several years:

This indicates that crypto is catching on despite so much fake news claiming the contrary. Bitcoin is not dead.

One thing that mainstream critics love to cling to when it comes to hating on crypto is high-profile hacks, even if those attacks amount to little in the grand scheme of things.

Binance Hack

This May, it was announced that Binance got hacked and lost $40 worth of BTC as a result. Poor Binance.

Fortunately for Binance wallet holders who made the unwise decision to hold their private keys on an exchange, Binance has a fund that will compensate such users for their losses.

And even without such a fund, the exchange will make the equivalent amount in profit in about six weeks.

NewsBTC reports:

Binance, one of the largest cryptocurrency exchanges by trading volume and one of the most trusted and respected names throughout the industry, is now also among the largest cryptocurrency exchange hacks to ever hit the crypto industry since the inception of Bitcoin.

The “security breach” as Binance is referring to it as, resulted in 7,000 BTC being stolen from the exchange using advanced methods that helped the hackers remain undetected. The stolen Bitcoin at today’s prices, brings the total loss at the hands of hackers to roughly $41 million dollars – an amount Binance will be able to recoup completely in just 47 days, according to one crypto analyst.
  

Despite this terrible news, the price of BTC/USD continued to rally beyond $6,000.

How can this be? Shouldn’t the sky be falling all over the place? If bitcoin is dead, red candlesticks ought to be on every BTC chart in the world.

Something else must be going on, of course. While a $40 million hack makes for some great doom and gloom headlines, it pales in comparison to the potential market impact of institutional investors entering the crypto space.

One of the biggest institutional names in the crypto game is Fidelity Investments.

Fidelity Announces Intent to Buy and Sell Digital Assets

After much fanfare, Fidelity has finally announced that it will indeed be getting into the digital asset space.

Fidelity Digital Assets promises to lead the way in terms of institutional investors in the cryptocurrency sector. This is only the start of what is to come.

Institutional engagement in #digitalassets is here.
https://t.co/3Lq5h5ITbT pic.twitter.com/g29gcu7i5w

— Fidelity Digital Assets (@DigitalAssets) May 7, 2019

Bitcoin has reached a market cap of over $100 billion without any big-name players or “smart money” being in the market. What might happen once the flood gates are opened?

Fidelity Crypto Exchange Focuses on Security

Perhaps the biggest reason institutional investors have so far been hesitant to enter the cryptocurrency space has to do with their uncertainty with regard to cybersecurity.

Having worked in the crypto space developing advanced trading and custody solutions since 2013, it’s clear to our COO @WhiteAdamL that ironclad infrastructure and a security-first mindset are fundamental to storing digital assets https://t.co/FivUb8bZtw

— Bakkt (@Bakkt) April 29, 2019

There have been many high-profile hacks of large cryptocurrency exchanges that have resulted in over $1.6 billion worth of coins being lost, according to Coinbase’s State of the Blockchain report for Q2 2018. [This data is about a year old now and doesn't include the Binance hack of 2019.]

Fidelity, however, has a lot of experience with these kinds of security concerns.

The company has a proven track record of dealing with enterprise security and public/private key cryptography. Fidelity plans on incorporating their knowledge and existing practices already used in other parts of their business into their new digital asset custody platform.

They will use offline cold storage for the bulk of their digital assets, as many existing exchanges do. This is the safest method when it comes to crypto custody. And while it’s possible for any individual to do the same with their own private keys, most people don’t know how to do it.

That’s why institutional investors have already begun to accept the idea of a Fidelity crypto exchange.

Institutional Investors Already Piling into Funds Like the Fidelity Crypto Exchange

Companies like Goldman Sachs Group Inc. and Northern Trust Corp. have also announced their interest in creating crypto custody services.

TD Ameritrade, E*TRADE and TradeStation expressed a desire to create something like what Fidelity has done, but so far haven’t made any bold moves.

While the above companies failed to act, some people have not. David Swensen, who manages Yale University’s endowment, for example, invested in two large cryptocurrency funds. Swensen is widely considered one of the world’s top money managers.

Bitcoin is Dead – PERIOD!

All things considered, bitcoin is dead. Definitely dead.

With the rise in new user wallets, the rise in price, and the adoption from institutional investors, you can stick a fork in this asset class. 

Bitcoin is like a cross between a phoenix and a jellyfish. When jellyfish are faced with death, they expel all of their reproductive fluids, leading to the creation of tons of new jellyfish.

Each time Bitcoin dies, it comes back stronger, like a phoenix rising from the ashes. It also brings more investors, more innovators, and more altcoins. Jellyfish.

Three of the Best Crypto Exchanges

When it comes to selecting the best crypto exchange, the options are seemingly endless. But not all crypto exchanges are created equal.

In addition, the process can be somewhat intimidating for newcomers. While most traditional investment avenues involve third-parties like brokers, cryptocurrency exchanges are decentralized and have no intermediary.

Avesta will be available to trade on exchanges as early as Q4 2018. Using account numbers rather than tokenized addresses will make the experience of using Avesta more user-friendly than that of other cryptocurrencies. We expect the result to be increased adoption of crypto and crypto exchanges.

The Two Types of Crypto Exchanges

When talking about the best crypto exchange, it’s important to differentiate between the two types of exchanges. There are crypto exchanges that only deal in crypto-to-crypto trades and those who deal in fiat-to-crypto trades.

Poloniex and Binance are pure crypto exchanges – they allow users to trade different cryptocurrency pairs.

Coinbase allows users to link a bank account and convert fiat currency to a Bitcoin or a handful of large-market cap altcoins.

Poloniex

Poloniex is one of the oldest and most reliant crypto exchanges out there. It advertises itself as “one of the largest most active cryptocurrency exchanges in the world.”

Founded in 2014, Poloniex supports many of the largest coins by market cap including DASH, DOGE, NEO, Stellar, BitShares, Ethereum, Litecoin, and many more.

Poloniex lost many customers after struggling to accommodate a surge of new users during the early-2017 crypto rush. Since then, they have been acquired by Circle and Goldman Sachs. Many people believe that this acquisition will only improve their services.

Binance

Binance is the largest crypto exchange by trading volume. They even have their own cryptocurrency – Binance Coin.

As the largest crypto exchange in the world, Binance supports many different languages including French, Russian, Chinese, Japanese Korean, French, and English.

Binance does not support some smaller coins like DOGE, for example. But they do have a very large selection and support many of the largest coins by market cap.

Coinbase and Coinbase Pro

These two are listed as one because they are two sides of the same company.

Coinbase is the largest U.S.-based fiat on-ramp for cryptocurrency.

Most Americans (and citizens of many other countries as well) get their first Bitcoin, Litecoin, Ethereum, or Bitcoin Cash through Coinbase. Coinbase also plans to introduce a fifth crypto – Ethereum Classic – in the near future.

We are pleased to announce our intention to add support for Ethereum Classic (ETC) on Coinbase in the coming months. Coinbase (@coinbase)

Coinbase provides a simple, user-friendly interface and is the best option for those who are new to cryptocurrency.  

Coinbase Pro (formerly known as GDAX) is for institutional investors and big-time day-traders. The minimum account requirement is a whopping $10,000 USD.

Notes About the Best Crypto Exchanges

It’s important to note that it’s not safe to keep large amounts of coin on any exchange. While held in an exchange’s wallet, the private keys to your coins are not your own. If the exchange gets hacked or doesn’t have the liquidity to cover your balance, you lose your funds and have no recourse.

Many early bitcoin enthusiasts learned this lesson the hard way in 2013 when Mt. Gox went belly up.

For long-term holdings, cold storage is the only option. You can invest in any number of quality hardware wallets available on the market today. This is the only way to be in control of your keys and store your coins in a manner that is nearly impossible to compromise.

In the end, the best crypto exchange for one person may not be the best crypto exchange for another. It depends on your personal preferences and circumstances. Poloniex, Binance, and Coinbase/Coinbase Pro are three of the best crypto exchanges. Most users will find at least one of them to be useful.

Africa Leads the Way in Crypto Finance and Regulation

Bitcoin was created in response to the financial crisis of 2008 and aimed to create a new, freer, less restricted financial system. In its early days, Bitcoin was intended to provide the “unbanked,” those without access to traditional banking services, with the tools they needed to exchange value and engage in commerce. Specifically, Bitcoin was supposed to serve parts of Africa that were as of yet left behind by the banking system.

Reality Not Always Conducive to Crypto Finance

But this principle had trouble making its way into practice. The combination of high transaction fees and low exchange liquidity for converting bitcoin into local fiat currency put the brakes on crypto’s high hopes. 

Existing services like WorldRemit are cheaper under current circumstances. In addition, using bitcoin for payment doesn’t make a whole lot of sense for the average African citizen.

Digitization, if harnessed by both the private and public sectors, can allow Africa to position itself as a leading developing economy.

The CEO of KureCoin @KureTega spoke at the conference on the need for FinTech to adopt the Blockchain technology. #kurecoin @KureCoinHub pic.twitter.com/k3d1Buuh2z

— Crypto Satoshi (@CryptoSatoshiyh) June 20, 2018

But this is only the beginning of the story. Despite the initial bleak outlook for crypto finance in Africa, many nations in the world’s second-largest continent (by both size and population) lie at the heart of blockchain adoption and regulation.

Ghana, Kenya, Nigeria, and South Africa, in particular, are some of the largest bitcoin economies in Africa. This is due in large part to the fact that these countries have the highest levels of internet usage combined with the largest economies.

African Startups Focusing on Crypto Finance

One of Africa’s most notable crypto startups is BitPesa. Based in Nairobi, BitPesa provides a way for people to exchange value with people in other countries without having to make FOREX transactions first. For example, someone in South Africa would typically have to sell their South African Rands for US Dollars before transacting with someone in America.

BitPesa cuts out the middleman and allows for an individual or organization to quickly and affordably conduct cross-border transactions. Of course, for reasons cited earlier, BitPesa has moved its business model from individual banking to international business-to-business transfers.

We have previously covered the Sun Exchange (SUNEX), another notable South African startup. SUNEX will create a marriage between renewable solar energy (a large untapped African resource) and crypto finance. 

SUNEX Users will be able to earn dividends by purchasing parts of solar panels. Nothing like this has ever been conceived of before. And it’s already happening in Africa.

Crypto Finance and Regulation in Africa

The regulatory attitude toward crypto finance in Africa varies from country to country. This is no different than in other parts of the world. There does seem to be a strong polarization, however.

The South African Reserve Bank has been open to crypto finance, leading many bitcoin startups to call South Africa their home.

However, other nations have not been so kind to crypto finance. Egypt, for example, has outright banned bitcoin and all other cryptocurrencies. Namibian has done so as well, and Algeria has announced its intention to do the same in 2018.

 In the majority of African nations, there has been no forward guidance from regulators regarding crypto finance, so most Africans have the legal right to buy, sell, and transaction in crypto.

Avesta Africa Sarl

Just as Africa has adopted smartphone technology with ease, Avesta Africa will ensure that Guinea will adopt an automated system for crypto payments that surpasses the less efficient methods used elsewhere.

Even now, Avesta has made deals with the government of Guinea to implement a new tax system for foreign investors. Via a decentralized system, we will offer tax-incentivized deals for B2B and B2C transactions in Guinea. This establishes trust and will create great business opportunities within the country.

We believe that GUINEA will become the most advanced autonomous administrative and economically attractive zone for new and existing businesses and immigration from other countries after this implementation