Week 7 - 2020 News Recap
Bitcoin is Having a Third-Best Month in History of BTC
The analyst behind stock-to-flow model, PlanB, tweeted that many people are ignoring the fact on how well Bitcoin is doing in February, 2020. PlanB is at the same time forecasting 100,000$ per one BTC unit in 2021, predicting a major riser in the price of BTC. For now, Bitcoin is having the third-best month in history of BTC price momentum, while Bitcoin also managed to rise by 40% during the course of a year, counting from February 2019 to February 2020. Bitcoin should have its third-strongest month in case the crypto manages to close on similar levels at 10,200$ in the course of the next two weeks.
According to PlanB, only December of 2017 and June 2019, seen higher monthly closing prices by far. In accordance with stock-to-flow model, Bitcoin should see its price at 8,600 up until the upcoming halving scheduled by automation in May 2020 when Bitcoin rewards for miners will be halved. The mentioned price is 19% lower than the present value of BTC in the market. PlanB claims that Bitcoin should reach the value of 100,000$ between the period of the upcoming halving in May 2020, and the next halving in 2024. As Bitcoin’s total supply is limited and can’t be manipulated, the demand for BTC should increase with the decline of mining rewards, while BTC is considered to be “digital gold”, especially when compared to fiat currencies.
Halving Could Mean Rising Costs for Bitcoin Miners
While predictions for the price of Bitcoin are more than enthusiastic with the forecasts related to the upcoming Bitcoin halving arriving by automation in May 2020, for Bitcoin miners who need to operate in an environment driven by Proof-of-Work protocol, halving could mean doubling costs for the process of mining regarding the utilized computational power. TradeBlock, a company with a focus on cryptocurrency-related research, released the latest report where it is stated that the cost for mining a single Bitcoin could top 12,500$ - Bitcoin is presently trading at a lower price, which means that miners would be losing money through the process of BTC mining once mining rewards are halved.
If the market prices don’t follow up with a significant rise, the situation of the upcoming halving could turn the crypto mining industry upside-down, meddling with profit making. The process of halving is designed as an automated process that can’t be stopped or manipulated, all with the idea of preventing inflation and regulating the value of Bitcoin, which is a true contract to the way banks are issuing money – fiat currencies can be printed by a decision made by human factor, risking inflation, unlike it is the case with cryptocurrencies such as Bitcoin. Major mining companies that operate with Bitcoin validations and block creation are preparing ahead of the halving by upgrading their computational power and looking for energy-efficient processor chips that will pose as faster and cost-effective solutions.
TON Developers and Investors Join the Fight Between Telegram and SEC
While the Securities and Exchange Commission is pushing their lawsuit against Telegram and the company’s decision to issue TON digital assets, the community of developers and investors of Telegram’s blockchain-based projects went forward with forming a non-profit for community governance. One of the first attempts of the TON Community Foundation was to help Telegram win the case by filing a court brief in the US District Court of the Southern District of New York.
The mentioned court brief discloses information about the active community behind TON with claims of counting around 2,000 participants, adding that the TON blockchain could be launched within 5 seconds and is completely operations. Previously, the official launch of the platform was halted by the SEC filing a lawsuit against Telegram, preventing users and investors from accessing Telegram’s blockchain and taking advantage of its operational power. The foundation should further have validators, investors, developers and other participants of the project, educating the public on the Telegram project, promoting decentralization.
FATF Travel Rule is Gaining Global Traction Across Governments
The Financial Action Task Force rules issued to provide traditional banking regulations for the sector of cryptocurrencies has its one-year deadline approaching in a bit over four months, which means that the governments should provide their directives by the time June 2020 approaches. FATF is tasked as an intergovernmental organization in charge of battling money laundering on the global level, and as such is expecting global governments to respond to their rules regarding the crypto sector that calls for regulations. The directive issued by the FATF, placed the organization in the center of controversy, as FATF decided to merge their crypto directive with the existing banking policy – that way, the directive is requiring firms that are operating with cryptocurrencies to comply with the same directives traditional financial institutions and banks are in compliance with.
The travel rule is among the most notable directives issued by FATF, applying on VASPs – virtual asset service providers, which consequently includes wallet providers with custody and cryptocurrency exchanges. The travel rule requires VASPs to disclose information of their customers and clients in case there is a trade of 1,000$ and higher. This information disclosed by the service providers should include the sender’s and recipient’s name, account details and their physical and geographical address. FATF’s observation dictates that there is a threat of criminal and terrorist “misuse of virtual assets”, while giving 12 months to 37 members to comply. In the meantime, Switzerland has already adopted the travel rule and the United States is ahead of the curve with their Anti Money Laundering directive.
US National Intelligence Office is Funding Research on US Dollar’s Status
The US Office of the Director of National Intelligence – ODNI – published a call out for applicants based in the US with a background in economics with the idea of funding research on the potential effects on the economy in case the US dollar would lose its status as the world’s reserve currency. This, first of its kind, study would help the US government prepare for “black swan” events that could pose a threat to the dominance of the US national currency – as this potential case would have severe consequences, the US Intelligence official are interested in preparing themselves for the potential side effects that could threat the dominance of USD.
The Intelligence officials stated that the potential initiation of this trend is not contributed to any specific factor, however, the study requirements mention the effects that the rising economies of India and China could leave on the US dollar, together with citing cryptocurrency enthusiasts and the effects a national digital currency and digital assets could leave on the US dollar. Chosen researchers should have undisputed background in economy and should receive sponsorship, funding and access to equipment that includes advanced computing, cooperation with officials and availability of the US Intelligence resources. The researchers should develop potential “black swan” events that could jeopardize economic hegemony of the US dollar while using AI, statistics and deep learning.