Bitcoin in the News : 2019-11 More++

In my previous post, Bitcoin in the News : 2019-11 Price, I looked at one burst of bitcoin activity, noted the explanations offered by analysts, and wondered,

Rumors and market manipulation -- why would anyone entrust significant sums to this market?

For this current followup post, when I started to gather news stories from the same month, the first story that popped up multiple times was on the same theme. The first two occurrences were:-

• 2019-11-04: Did Bitcoin Price Manipulation Fuel 2017 Surge? Study Says Yes (bloomberg.com) • 'Academics update paper that alleges manipulation using Tether'
• 2019-11-04: Study: Single anonymous market manipulator pushed bitcoin to $20,000 (cnbc.com) • 'A forensic study on bitcoin’s 2017 boom has found that nearly the entire rise of the digital currency at the time is attributable to “one large player,” although the market manipulator remains unidentified.'

It happens that I had already mentioned that story -- from the same source -- last year in Bitcoin in the News : 2018-06 More++:-

2018-06-13: Much of bitcoin's 2017 boom was market manipulation, research says (cnbc.com) • 'By tracking Bitfinex transactions, which are recorded on a public ledger, [University of Texas finance professor John Griffin] found that another cryptocurrency, tether. was used to buy bitcoin after large price falls.'

What's the difference between the two incarnations of the research? The first identified possible market manipulation; the second attributed it to a single entity. As I understand it, that entity created money by issuing unbacked tether, then used that funny money to buy bitcoin, thereby fueling its dramatic rise in 2017. If so, the possibilities to do the same by other entities are limitless. No printing press required.

As for the burst of bitcoin activity in the '2019-11 Price' post, I also found multiple stories. The first was:-

• 2019-11-22: Stark China Warning Causes Bitcoin To Suddenly Crash 10% As Other Major Cryptos Nosedive (forbes.com) • 'The Shanghai-based central bank also warned against conflating the country's interest in blockchain with bitcoin and crypto. [...] The bitcoin and cryptocurrency industry has been rocked by reports of Chinese police raids on the offices of major bitcoin and crypto exchanges Binance and Bithumb in the country over the last week -- though both have denied the raids took place.'

And if those two stories weren't bad enough, consider this story that appeared multiple times in another of my Google News interests, botnets:-

• 2019-11-27: Stantinko botnet mines Monero using YouTube (finance.yahoo.com)

Money talks and the bad guys are everywhere. I'm holding my nose as I post this.

Bitcoin in the News : 2019-11 Price

In contrast to the first half of 2019, where five out of six monthly bitcoin price charts showed a rising trend, the November chart was the fourth out of five in the second half of the year to show a falling trend. The only exception was last month's Bitcoin in the News : 2019-10 Price.

My usual technique to understand a chart is to identify periods of high volume and find relevant discussions in the bitcoin / cryptocurrency press. What does the November chart say?

Bitcoin (BTC) Price Index

In November there were more than a half-dozen periods showing jumps in volume. The most significant cluster was:-

2019-11-22 0800 (Drop)

Although there was no corresponding discussion in Cointelegraph's Analysis category, the site's Price Analysis tag had a couple of relevant articles.

2019-11-22: Price Analysis 22/11: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX • 'Fear gripped the markets on the news that Chinese authorities had raided the offices of the leading cryptocurrency exchange Binance. This negated all the positive effects that had accrued following President Xi Jinping’s endorsement of blockchain technology. Though Binance denied reports of any raids, price action within the sector has remained subdued.'

So the drop was sparked by a rumor? For more about 'President Xi Jinping’s endorsement', see the '2019-10 Price' post.

2019-11-25: Price Analysis 25/11: BTC, ETH, XRP, [...] • 'We believe that the current dip is showing signs of a bear trap.'

So the drop was another skirmish in the ongoing battle between bulls and bears? Plant a rumor and act on the confusion provoked by that rumor. That sounds like market manipulation. Rumors and market manipulation -- why would anyone entrust significant sums to this market?

Although Binance has been mentioned occasionally on this blog, what is it exactly? Wikipedia's Binance page says,

Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies. Since early 2018, Binance is considered as the biggest cryptocurrency exchange in the world in terms of trading volume. [...] The company was founded in China but moved its servers and headquarters out of China and into Japan in advance of the Chinese government ban on cryptocurrency trading in September 2017. [...] As of January 2018 it was largest cryptocurrency exchange with a Binance coin (BNB) market capitalization of $1.3 billion. [...] On May 7, 2019, Binance revealed that it had been the victim of a “large scale security breach” in which hackers had stolen 7,000 Bitcoin worth around U.S.$40 million at the time.

The relationship between Binance and 'Binance coin (BNB)' isn't clear to me. BNB is one of the coins listed in the Cointelegraph articles I've quoted above, so it must be significant. I'll look at that another time.

Bitcoin in the News : 2019-10 More++

As summer is followed by autumn, so a Bitcoin in the News : 2019-10 Price post is followed by a review of news from the same month. Of the 90 or so bitcoin articles presented by Google News alerts, only 16 made my short list, making it a shorter short list than I can remember. Most of the other articles were about someone predicting a price: bitcoin will go {up / down / sideways}. Since anyone can predict anything about price movement, I tend to ignore these. One prediction that did make the short list was:-

• 2019-09-30: McAfee Explains ‘Rationale’ For Why He Still Sees $1 Million Bitcoin By 2020 (forbes.com)

I've seen this prediction before, but what's behind it? After some estimates about the 'real' number of bitcoins that are available -- "21 million bitcoins, 7 million of which have been lost forever" -- the argument goes like this:-

"In any case, just run some numbers," McAfee said. "If bitcoin gets to be 5% of world financial transactions, which, you all know it will," he said, even mentioning "maybe 10% or 20%," then bitcoin would be worth "$10 million per coin, based on those numbers." • "I’m just a very conservative man," McAfee said with a laugh. "I said one [$1 million] and I’m sticking to one."

'You all know it will.' We do? There are so many assumptions built into that argument -- 5% of financial transactions, the supply isn't expanded, nothing better comes along -- that it's based entirely on faith. By coincidence, another article a week later goes further into potential pitfalls.

• 2019-10-08: Two Bitcoin Developers Explain How The Cryptocurrency Could Still Fail (forbes.com)

The story mentioned a number of risks. The first two have been recognized for some time; the last two are less well known:-

51% attacks; government crackdowns; rules of the Bitcoin network are changed in favor of a more centralized model; an accidental bug

Finding no other stories as compelling as those two, I returned to the '2019-10 Price' post, where I identified two sharp moves and wrote, 'Apparently, no one understands the cause of these sharp movements.' I should know better than to make statements like that. There were three stories from Forbes.com that addressed the causes:-

• 2019-10-25: Bitcoin Has Crashed Again -- What Now? (forbes.com) • 'Bitcoin (BTC) is falling because China is closing with the U.S. on a trade deal.'
• 2019-10-25: Forget China -- Is This The Real Reason Bitcoin, Ethereum, Litecoin, And Ripple’s XRP Bounced? (ditto) • 'Bitcoin has swung wildly this week, as many had expected it to, with it losing $1,000 per bitcoin a few days ago before suddenly shooting back up earlier today. [...] Bitcoin volumes have been struggling recently, leaving the market especially vulnerable to so-called whales placing large orders or liquidating short positions.'
• 2019-10-25: Bitcoin Defies Death Cross, Surging Close To 20% (ditto) • '"China’s endorsement of blockchain technology helped Bitcoin recover, and along the way, a short squeeze helped push prices even higher," said Joe DiPasquale, BitBull Capital’s CEO.'

It's not clear to me why a China / U.S. trade deal is bad for bitcoin, but I'll watch for more clues. As for the other China connection, here's a story from a different source:-

• 2019-10-26: Bitcoin surges to over $10,000 in biggest single day move since April (marketwatch.com) • 'Since a 2017 decision by the People’s Bank of China, cryptocurrencies are banned in the country, although a digital renminbi is being developed by the central bank and likely to launch soon. China was one of the biggest sources of demand for cryptocurrencies during the 2017 bull run.'

Although an endorsement of blockchain technology doesn't necessarily lead to a lifting of a cryptocurrency ban, it's a step in the right direction. The explanation makes more sense than technical jabber like the so-called 'death cross' that pops up in so many negative analyses.

Bitcoin in the News : 2019-10 Price

Just like last month's post, Bitcoin in the News : 2019-09 Price, last month's price chart had two stories. The first story was an observation on the trend for the month: the first time since June when the price increased during the month. The second story was a recurring observation that I've repeated several times this year:-

The market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium.

The chart below shows a heavy volume for the most important move, heavier than I have recorded at any time this year (remembering that the bars in the chart cover a four hour period, if they can be believed at all).

Bitcoin (BTC) Price Index

The starts of the two most pronounced price movements were:-

2019-10-22 0800 (Drop)
2019-10-25 0400 (Jump)

Each movement lasted about a day. Cointelegraph's Analysis category had nothing about the movements, while the site's Price Analysis tag covered both. First, here's an interesting, but misleading, observation from a few days before the drop.

2019-10-21: Price Analysis 21/10: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX • 'While the supply of fiat currencies has been steadily increasing for the past few years, Bitcoin’s (BTC) block rewards has reduced at each halving. The rate of supply will reduce further following the halving in 2020. Previous instances of halving resulted in a sharp price increase and for this reason analysts are anticipating a repeat rally as the 2020 block reward halving approaches.'

If everyone knows when an event will occur and if there is general agreement on the impact of the event, then that information is already baked into the price. There is no 'insider information' in bitcoin, although this isn't necessarily true of all crypto currencies.

2019-10-23: Price Analysis 23/10: BTC, ETH, XRP, [...] • 'Bitcoin’s (BTC) plunged today, dragging the whole crypto space along with it. [...] At the moment, there is not a direct reason that explains today’s strong correction. Some analysts believe that Facebook CEO Mark Zuckerberg’s testimony before the United States Congress on Libra might have triggered the fall.'

A news article on the same day, 3 Likely Reasons Why Bitcoin Price Crashed, offered a few more explanations:-

1. Technicals: support finally gives after 9th try
2. Mr. Zuckerberg goes to Washington
3. Google’s quantum breakthrough spooks Bitcoin investors?

That last explanation deserves a deeper look than I can give it now. For a previous post on this blog concerning quantum computing, see Shor's Algorithm (November 2016). Back to the chart and the associated Cointelegraph analysis, the 2000 point increase was covered a few days after it occurred.

2019-10-28: Price Analysis 28/10: BTC, ETH, XRP, [...] • 'The seesaw price action over the past week has lightened up the crypto space once again. While the aggressive bulls view the sharp upside move as a bottoming signal, the bears consider the rise as a bear market rally that should be sold into.'

That wishy-washy forecast continued for the rest of the article. Apparently, no one understands the cause of these sharp movements. There were two smaller volume spikes starting 2019-10-09, but I have no reason to believe that they would shed new light here.

Bitcoin in the News : 2019-09 More++

In last week's post, Bitcoin in the News : 2019-09 Price, I noted,

September saw two distinct states of equilibrium separated by a sharp drop. The drop started roughly at 2019-09-24 0000, i.e. around midnight on 09-23, and lasted about a day.

An enlightening explanation for the drop was from Cointelegraph.com:-

A few speculators might have built up positions expecting the prices to surge following the launch of Bakkt. However, when that did not play out, they started closing their trades in a hurry. As a result, important support levels cracked and the rest of the traders were forced to close their long positions.

What did other experts have to say about the drop? Just like for previous 'Bitcoin in the News : More++' posts, I isolated all articles from a single source looking for a pattern. The following are all from Forbes.com:-

• 2019-09-23: Bitcoin Market Falls Sharply As Litecoin Suddenly Crashes • I first read that headline as a cause-effect relationship, but the article presents it as a coincidence.
• 2019-09-24: Bitcoin, Ethereum, Ripple’s XRP, And Litecoin In Shock Meltdown • 'The sudden sell-off, which wiped $20 billion from bitcoin's value and a further $5 billion from the combined value of the wider crypto market, was put down to the muted reaction to the launch of the hotly-anticipated Bakkt bitcoin and cryptocurrency platform.'
• 2019-09-24: Wall Street Paves The Way For Bitcoin To Become 'People's Currency' • 'Wall Street is working to ease Bitcoin’s volatility by introducing Bitcoin derivative products. Like the Bakkt Regulated Bitcoin Futures introduced this week.'
• 2019-09-25: ‘Striking’ Bitcoin Market Manipulation Revealed • 'New research has warned of a "striking systematic trend" in bitcoin price movements, with bitcoin falling far further than average ahead of CME's bitcoin futures contracts being settled each month.'
• 2019-09-25: Bitcoin Has Crashed -- What Now? • 'Back the direction you believe is the long-term outcome and buy the dips or don’t play at all.' • Why not go short?
• 2019-09-26: Bitcoin Price Sees Second Sharp Decline This Week, Falling Below $8,000 • 'Following a decline of more than 15% in an hour on Tuesday [09-24], the Bitcoin price fell another 8% Thursday morning [09-26].'
• 2019-09-27: Bitcoin Chaos Continues As Facebook’s Mark Zuckerberg Reveals Libra Woes • 'Facebook chief executive Mark Zuckerberg has revealed his libra cryptocurrency, which is largely credited with sparking bitcoin's bull run earlier this year, may not launch in 2020, as previously expected.'
• 2019-09-29: Bitcoin Mayhem Results In Mixed Messages • 'As bitcoin technical data looks bleak and bitcoin bulls advise traders to "buy bitcoin at every chance"...'
• 2019-09-29: Bitcoin, ETH, XRP, LTC, And XLM Sell-off -- Is It Overdone? • 'The losses spread across the entire market, with only 11 out of the top 100 cryptocurrencies advancing and 89 declining.'

There were other stories in September, but none were as revealing as the Bakkt fiasco. Maybe 'fiasco' is an overstatement. Time will tell.

Bitcoin in the News : 2019-09 Price

Last month's Bitcoin price chart reveals at least two stories. The first story is the third straight month -- encompassing all of Q3 -- when the price declined. Where the first two months of Q3, 2019-07 Price and 2019-08 Price, saw small declines, September's drop was substantial. The second story was a return to the type of chart last seen in 2019-05 Price, where I noted,

For the fourth straight month [...] I can use the same observation: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium.

September saw two distinct states of equilibrium separated by a sharp drop.

Bitcoin (BTC) Price Index

The drop started roughly at

2019-09-24 0000, i.e. around midnight on 09-23

and lasted about a day. As usual, Cointelegraph's Analysis category had nothing to say about the drop, but the service's Price Analysis tag had an article before the move signalling the 'long-awaited launch of Bakkt':-

2019-09-23: Price Analysis 23/09: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, ADA • 'If Bitcoin prices plunge and start a down move, altcoins are unlikely to run in the opposite direction to start a new uptrend. But if Bitcoin remains range-bound or starts a new up-move, then select altcoins are likely to continue their outperformance.'

The next 'Price Analysis' article was after the drop:-

2019-09-25: Price Analysis 25/09: BTC, ETH, XRP, [...] • 'The total cryptocurrency market capitalization had repeatedly taken support close to the $250 billion mark since mid-July of this year. However, the recent collapse in crypto markets led by Bitcoin (BTC) has broken the support and market capitalization has dipped to just under $220 billion. It is difficult to pinpoint the exact reason that started the fall. A few speculators might have built up positions expecting the prices to surge following the launch of Bakkt. However, when that did not play out, they started closing their trades in a hurry. As a result, important support levels cracked and the rest of the traders were forced to close their long positions. Another possibility is that the flight to safety following the news of an impeachment inquiry into United States President Donald Trump might have resulted in the quick drop.'

I don't believe for a second that the Trump impeachment inquiry had any impact on the bitcoin price -- why should it? -- so Bakkt deserves real consideration. Before looking at that, I'll interject the next 'Price Analysis' article, which summarizes the psychology around bitcoin trading:-

2019-09-27: Price Analysis 27/09: BTC, ETH, XRP, [...] • 'When Bitcoin (BTC) rallies sharply it does not leave a chance to buy. Traders then regret missing the bus. They promise themselves that they will buy on the next dip. However, when the prices correct, fear grips the traders and they again miss pulling the trigger. While there will be many reasons for a fall, unless the basic fundamental reason changes, traders should continue to look for buying opportunities.'

That analysis assumes that after a drop the next trigger will signal a rise, but it's more likely a 50-50 chance of a rise or a fall. Anyway, let's get back to Bakkt. This time Cointelegraph's 'Analysis' category had a relevant piece:-

2019-09-27: First Week of Bakkt: Slow Start Unlikely to Dampen Long-Term Prospects • 'After more than a year spent ensuring full compliance with the United States authorities, Bakkt, the first federally regulated platform for Bitcoin (BTC) futures trading, launched on September 23.'

Is that date, September 23, a coincidence? The article's next paragraph explained the Bakkt concept.

Conceived by the global trading giant Intercontinental Exchange (ICE) and counting a solid portfolio of investors from Microsoft’s venture fund M12 to Starbucks as its backers, Bakkt offers institutional traders something brand new. The platform’s value proposition is physically-settled BTC futures contracts, combined with a sound custodial service approved by the Commodity Futures Trading Commission (CFTC).

Unfortunately, 'trading volumes on the platform remain meager', and

Bakkt’s launch coincided with an immense slump in Bitcoin’s market price, leading some analysts to suspect a causal connection between the two.

'Causal connection' or not, the service's web site Bakkt.com ('Building the future of digital asset infrastructure'), points to a Bakkt blog post, We have liftoff: a milestone for the industry (medium.com), signed by its CEO Kelly Loeffler. For more about the service, see What is Bakkt? (coindesk.com).

Bitcoin in the News : 2019-08 More++

After last week's Bitcoin in the News : 2019-08 Price, what other stories are worth a note? In that post I wrote,

Another distinguishing factor in August was the number of volume spikes. I count six, where the top four are shown in the following table.

The first entry in the table was '2019-08-07 12:00', but there was another spike a few days before that wasn't in the table. I found this story;-

• 2019-08-06: Is This The Real Reason Bitcoin Suddenly Soared? (forbes.com) • 'whales moving large volumes of bitcoin at above or below the current market value'

This isn't a new idea. In Bitcoin in the News : 2018-11 Deeper, I quoted the same writer:-

Low trading volumes over the holiday weekend, however, mean the market is more vulnerable to so-called "whales" moving large amounts of bitcoin, ripple (XRP), or ethereum. When a major coin holder sells it can trigger automatic computer controlled sell orders leading to sudden sell-offs.

A few months earlier, in Bitcoin in the News : 2018-10 More++, I quoted another story titled 'Bitcoin whales aren’t responsible for volatility, research firm finds'. Volume spikes and volatility aren't necessarily the same thing, so I'll have to watch this topic. The possibility of market manipulation renders the idea even more critical.

Another topic that made multiple appearances in August was bitcoin as 'safe haven'. Here are two examples:-

• 2019-08-07: Bitcoin climbs above $12,000 as investors treat it like a safe haven amid global recession fears (businessinsider.com)
• 2019-08-24: Bitcoin viewed as safe haven like gold during US-China trade war (ditto)

I counted eight stories on 'safe haven', double the number of any previous month (and following zero stories in July). Considering the price instability inherent to bitcoin, I don't understand how anyone could use it as a safe haven, unless they were particularly desperate.

In past 'More++' posts I've sometimes used a single news source to get an overview of news for the month. For example, last month's Bitcoin in the News : 2019-07 More++ used stories from Forbes. This month I realized that stories from finance.yahoo.com could serve the same purpose. Of 20-or-so Yahoo stories, here are eight that appeared on my short list.

• 2019-08-05: Bitcoin’s Computing Power Sets Record as Over 100K New Miners Go Online
• 2019-08-16: Man Offering Hacking Services for Bitcoin Gets 20-Month Jail Sentence • Elliot Gunton
• 2019-08-19: The Bitcoin bull is causing a spike in Twitter scams
• 2019-08-21: Why Bakkt may be the best news for Bitcoin investors yet
• 2019-08-22: Bitcoin is being used to fund terrorism - report
• 2019-08-27: Bitcoin evangelist Patrick Byrne resigns as Overstock CEO following "deep state" scandal
• 2019-08-29: U.S. government’s blacklisting of Bitcoin addresses is just getting started • 'no U.S. person can conduct business with any of the associated addresses'
• 2019-08-30: Massive bitcoin transactions, but few explanations

That last story is another angle on whales. Are the crypto markets rigged?

Bitcoin in the News : 2019-08 Price

Last month's price chart bears some resemblance to the previous month, as seen in Bitcoin in the News : 2019-07 Price. The trend is strong after the start of the month, declines into mid-month, and flattens in the second half of the month. The monthly high in July was 1000 USD above the high in August, while the monthly lows were about the same.

Bitcoin (BTC) Price Index

Another distinguishing factor in August was the number of volume spikes. I count six, where the top four are shown in the following table. The second and third occurred a half-day apart, so I'll treat them as a single spike.

2019-08-07 12:00
2019-08-14 16:00)
2019-08-15 04:00)
2019-08-28 16:00

As usual, Cointelegraph's Analysis category had nothing to offer on price movements -- either those listed above or any other. In a directionless period, what is there to say?

I also looked at pairs of reports under the site's Price Analysis tag -- one before and one after each of the three distinct volume spikes identified above. There was nothing about the associated price movements. For the first time I noticed that volumes aren't taken into account for the technical analysis used in the reports.

The upshot of all this is that I have nothing special to talk about this month. There was one change worth noting. The price chart for August shows two fewer exchanges than the chart in July: from seven exchanges to five. Binance and Okex are missing.

Bitcoin in the News : 2019-07 More++

Just like last month's Bitcoin in the News : 2019-06 More++, this month's edition is late, although for a different reason. I'll use the same technique as last month, concentrating on stories from Forbes.com, where I found 32 stories in July.

Since this month's price post, Bitcoin in the News : 2019-07 Price, had a focus on regulatory trends, Facebook's Libra in particular, I narrowed the Forbes stories to those centered on regulatory issues. Here I found eight stories.

• 2019-07-02: The Overlooked Reason The United States Would Struggle To Ban Bitcoin • 'free speech'
• 2019-07-07: New ECB Boss Christine Lagarde Made A Serious Bitcoin Warning • 'cryptocurrencies are "shaking the system" -- something that could signal a change in the ECB's approach'
• 2019-07-11: Blow To Bitcoin As Fed Chair Jerome Powell Issues Stark Facebook Warning • 'the Facebook Libra project "cannot go forward" until "serious concerns" are addressed'
• 2019-07-13: Donald Trump Just Made Bitcoin A 2020 Election Issue • 'Trump unleashed a scathing attack on bitcoin and cryptocurrencies, branding them "unregulated crypto assets" and based on "thin air"'
• 2019-07-15: Donald Trump Gave Bitcoin A Boost, But The Presidential Spotlight Could Prove Harsh For Crypto
• 2019-07-16: Why Big Governments And Central Banks Want To Kill Libra And Bitcoin
• 2019-07-21: Bitcoin, XRP, And LTC Prices Recover After Tumbling On Libra Hearings, What's Next?
• 2019-07-29: Australian Draft Bill Illustrates Bullish Case For Bitcoin Price • 'limit tax evasion and general criminal activity'

I hope the 2019-08 'More++' post will be on time.

Bitcoin in the News : 2019-07 Price

July was the first month of 2019's second half and the first down month since January.

Bitcoin (BTC) Price Index

There were several small, sharp drops and jumps during the month, so let's use volume to select periods for further investigation. The three highest volumes of the month were:-

2019-07-10 12:00 -
2019-07-16 16:00 -
2019-07-18 12:00 +

Cointelegraph's Analysis category had commentary related to the second of those surges in volume. This was followed by a second story on the same subject.

2019-07-16: Bitcoin Below $10,000, Down 26.6% in 7 Days: What Caused the Pullback? • 'The change in sentiment around the crypto market following the remarks of President Trump and Secretary Mnuchin, as well as bearish technical indicators, are considered to be the major factors behind Bitcoin’s most recent correction.'

2019-07-18: Trump Tweets Crypto Rant -- What Is the Bitcoin Reference Really About? • 'Many in the crypto community came to suspect that the tweets were not Trump’s own. [...] "This is more likely coming from the Treasury Department -- that’d be Secretary Mnuchin -- and at the behest in particular of the banks."'

One of Trump/Mnuchin's targets was Facebook's forthcoming currency, Libra. Another Cointelegraph article offered a summary of current concerns about Libra.

2019-07-11: Top-6 Issues Experts/Entities Have With Libra | Cointelegraph
- U.S. lawmakers are skeptical of Libra
- History of Facebook scandals
- Libra security risks
- Lack of censorship resistance
- Libra is not a real blockchain
- Libra may not really help the unbanked

Cointelegraph's Price Analysis tag had nothing special to say about the peaks in volume. One report placed Trump's tweet after the slide had started. Two others focused on Libra.

2019-07-12: Price Analysis 12/07: BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, TRX, XLM • 'President Donald Trump bashed both Facebook’s Libra and Bitcoin in a series of tweets on July 11. However, the interesting thing is that unlike the U.S. stock markets, which respond sharply to Trump’s tweets, the crypto universe was unaffected.'

2019-07-17: Price Analysis 17/07: BTC, ETH, XRP, [...] • 'While Libra might dent sentiment in the short term, it is unlikely to change the long-term trend in Bitcoin that is buoyed by fundamentals.'

2019-07-19: Price Analysis 19/07: BTC, ETH, XRP, [...] • 'The bashing of Libra continues, with G7 finance ministers warning that if the project is not regulated tightly, it can upset the global financial system. '

All in all, not a convincing month. We might have to wait until the summer is over to see if the upward trend in the first half will continue.

Bitcoin in the News : 2019-06 More++

Although the past month's chart, Bitcoin in the News : 2019-06 Price, was posted more-or-less on time, this current post is being posted much later. Blame summer vacation.

To make up for lost time, I'll re-use the technique last seen in Bitcoin in the News : 2019-04 More++, where I focused on stories from Forbes.com. For June, I counted 21 Forbes stories, many of them about the impressive rise in price for the month. Of those 21 stories, I selected 10 for this post.

• 2019-05-31: The Bitcoin Price Has Skyrocketed Over The Past Month For These 3 Reasons • '1. China and U.S. Trade War; 2. 2019 Consensus conference; 3. Brokerages Offering Bitcoin to Retail Customers in 2019'
• 2019-06-04: Bitcoin Plunged Below $8,000 -- Did This Cause The Sudden Price Drop? • 'someone dumped 25,000 bitcoin for $215 million and bought it back shortly after for $200 million'
• 2019-06-04: Bitcoin Rallied In May As Tweet Volume Hit 8-Month High
• 2019-06-06: Facebook's Radical Bitcoin-Beating Cryptocurrency Plans Revealed
• 2019-06-11: How Bitcoin Is Taxed
• 2019-06-13: IRS Agent Who Took Down 'Silk Road' Turns His Attention To Recreational Bitcoin Investors
• 2019-06-14: Bitcoin 'Supply Shock' Is Looming, Warns Venture Capitalist • 'heading for a "supply shock" thanks to next year's closely watched bitcoin halvening [halving]'
• 2019-06-17: Bitcoin Prices Have Tripled Since December -- What's Next?
• 2019-06-18: Bitcoin Is Up 145% YTD, What Does This Mean?
• 2019-06-26: Bitcoin Breaks Through $13,000 As Rally Continues

The first story dated 2019-06-04 sounds like market manipulation. The two stories dated 2019-06-17 and 2019-06-18 sound inconsistent until you realize they are measuring the price rise from a different base. The story dated 2019-06-06 mentions a 'Facebook project codenamed Libra'. For a more in-depth look, here are two stories from a stalwart of the monthly 'Price' posts:-

• 2019-06-13: Project Libra: What We Know About Facebook’s Forthcoming Cryptocurrency (cointelegraph.com)
• 2019-06-20: What Is Libra? Breaking Down Facebook’s New Digital Currency (ditto)

As for stories from other sources, there was nothing so compelling that I absolutely had to mention it.

Bitcoin in the News : 2019-06 Price

This month's price chart is more like a typical chart from 2017, like Bitcoin in the News : 2017-05 Price, than the charts in recent months, like last month's Bitcoin in the News : 2019-05 Price.

Bitcoin (BTC) Price Index

The most impressive aspect of an impressive chart is the spike at:-

2019-06-26 16:00

In Cointelegraph's Analysis category, I didn't find any discussion of the spike, but I did find two macro discussions using list structures. Here's a summary of the list bullets:-

2019-06-23: 4 Big Reasons Bitcoin’s Price Will Probably Not Stop at $20K This Time (cointelegraph.com)
- Institutions, not retail, in the driver’s seat
- Network fundamentals better than ever
- Bitcoin reward halving still 11 months away
- The bigger macroeconomic picture

2019-06-26: 6 Surprising Takeaways From Bitcoin’s 2019 Bull Run (cointelegraph.com)
1. Bitcoin Already Quadrupled From its Bear Market 'Floor'
2. $11,000 Per Bitcoin is 'Fairly Valued'
3. Bitcoin and Avocados Soar As Dollar Crashes Under 10,000 Satoshis
4. The 'Kimchi Premium' Is At $13,000 ['South Korean traders pay more for bitcoin']
5. Bitcoin's Hash Rate Is Stronger And More Secure Than Ever
6. Will Bitcoin Continue to Surprise the Market?

Cointelegraph's Price Analysis tag had a closer look at the days before and after the spike:-

2019-06-22: Price Analysis 22/06: BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA (cointelegraph.com, also following links) • 'BTC/USD : The up-move of the past couple of days is reminiscent of the rally during the previous bull market. Bitcoin (BTC) has covered the distance from $10,000 to $11,000 within a day.'

2019-06-24: Price Analysis 24/06: BTC, ETH, XRP, LTC, [etc.] • 'BTC/USD : Bitcoin (BTC) has been holding near $11,000 for the past two days, which is a positive sign. This shows that the bulls expect the rally to continue, hence, they are not booking profits in a hurry.'

2019-06-26: Price Analysis 26/06: BTC, ETH, XRP, BCH, [etc.] • 'Bitcoin (BTC) has continued with its stellar run as no resistance level is being able to hold it back. It easily covered a distance from $10,000 to $13,000 within five days. [...] BTC/USD : Contrary to our assumption, bitcoin easily cleared the $12,000 and $13,000 overhead resistance levels on the same day. Such strong buying near critical resistance levels suggests huge demand.'

2019-06-28: Price Analysis 28/06: BTC, ETH, XRP, BCH, LTC, [etc.] • 'When an asset class jumps 275% within a span of six months, corrections are bound to happen. [...] Bitcoin reversed direction from $13,973.50 on June 26 and plunged to a low of $10,530.70 on June 27. That is a 24.63% fall within a day. The reason for such a sharp fall is that a vertical rally does not form any support levels en route. Hence, when the price starts falling, buyers do not step in until they spot a level that can act as a support.'

Will that spike prove to be another blip on bitcoin's upward march -or- the high point for 2019?

Bitcoin in the News : 2019-05 More++

After documenting last month's price evolution in last week's post Bitcoin in the News : 2019-05 Price, what other news is worth reporting? I ignored all the hand-waving about the continued price recovery (which was nevertheless welcome news), the usual warnings from the gloom-and-doomers (Warren Buffett and Nouriel Roubini both weighed in), and the scams (I counted three). One other story stood out : the Facebook story. In the past year and a half, I've mentioned Mark Zuckerberg's company a number of times. It turns out that those mentions, taken together, make a bigger story.

Bitcoin in the News : 2018-01 More++ • If you were a Facebook user in 2017, you probably noticed the many ICO ads that popped up everywhere, like weeds. That ended at the beginning of 2018.

2018-01-30: Facebook bans all ads for Bitcoin, ICOs, and other cryptocurrency (theverge.com) • 'Facebook is banning all advertisements for cryptocurrency, including Bitcoin and initial coin offerings, as part of an “intentionally broad” policy against deceptive marketers.'

Bitcoin in the News : 2018-03 Price • Facebook wasn't the only company to ban ICO ads.

Cointelegraph's Bitcoin Price Analysis (BPA) • 2018-03-15: Bitcoin++ Price Analysis, March 14: 'Google has followed Facebook in banning cryptocurrency-related advertising. While this is definitely not good news for ICO campaigns that rely heavily on marketing, this is unlikely to hurt the prospects of the coins backed by strong technical fundamentals.

Bitcoin in the News : 2018-04 More++ • Did Facebook have a secondary motive in the ban?

2018-04-24: Let’s destroy Bitcoin (technologyreview.com; MIT) • 'Three ways Bitcoin could be brought down, co-opted, or made irrelevant.' [...] 'Option two: Facebook sneak attack' ['If Facebook could persuade a large enough fraction of Bitcoin users and miners to run its own proprietary version of the Bitcoin software, the company would thereafter control the rules.']

Bitcoin in the News : 2018-12 Price • When did 'Its Own Stablecoin' become public knowledge? How could I have overlooked, even mocked, its importance?

Cointelegraph's Analysis category made no attempt to explain any of those three trends, focusing instead on stories like 'From Blanket Ban to Its Own Stablecoin: How Facebook’s Relationship With Crypto Changed Over 2018', which was the last article in the category for the year 2018.

Bitcoin in the News : 2019-03 More++ • The rumors became official a few months later.

After price, the most frequent bitcoin story in March concerned Facebook. What was that about? • Nytimes.com: 'Facebook and Telegram Are Hoping to Succeed Where Bitcoin Failed ' & Forbes.com: 'Blow To Bitcoin As Mark Zuckerberg Warns Facebook Payments Are Coming'

End-May the story was official. My Google News feed flagged two stories from Forbes:-

• 2019-05-24: Facebook And WhatsApp Break Cover With Bitcoin Rival Plans (forbes.com) • 'Facebook, the social networking giant which owns the popular WhatsApp messaging app and image-based Instagram, is gearing up to launch a rival to bitcoin as soon as next year as it accelerates plans to diversify its revenue away from advertising. The bitcoin-inspired cryptocurrency, reportedly dubbed GlobalCoin, is set to be rolled out for testing by the end of 2018 [2019?], with plans to launch it in 2020 in up to a dozen countries around the world -- potentially sending shockwaves throughout the burgeoning bitcoin and cryptocurrency sector.'
  
  
• 2019-05-27: Facebook's Upcoming 'Cryptocurrency' Has Nothing To Do With Bitcoin (forbes.com) • 'Rumors that Facebook will eventually issue their own cryptocurrency have been swirling for awhile now, but it’s likely that this product will be a "cryptocurrency" in name only and not have anything to do with the utility offered by bitcoin.

The two Forbes stories are by two different writers. Which is it: 'a rival to bitcoin', or '[nothing] to do with the utility offered by bitcoin'? It's probably some third option that is anybody's guess. What is Facebook’s GlobalCoin? (investopedia.com):-

Social media giant Facebook Inc. (FB) may become a formidable player in the rapidly growing markets for digital payments and cryptocurrencies when it enters both arenas early next year. Given its massive estimated base of about 2.375 billion monthly active users (MAU) in virtually every nation worldwide, Facebook could immediately become a major competitor to banks and payments processors such as Mastercard Inc. (MA), Visa Inc. (V), and PayPal Holdings Inc. (PYPL).

My guess is that MA, V, and PYPL have much more to lose from GlobalCoin than bitcoin does.

Bitcoin in the News : 2019-05 Price

For the fourth straight month -- the third was Bitcoin in the News : 2019-04 Price -- I can use the same observation:-

'The individual patterns are all similar: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium. The cycle repeats.'

Nevertheless, it goes without saying that every new month differs from previous months. The most striking aspect of the May chart was the steady rise from 5000 to 7000 (in round numbers) during the first third of the month.

Bitcoin (BTC) Price Index

The subsequent jumps/drops in the 'state of equilibrium' occurred at the following (approximate) times, always confirmed by a surge in volume:-

2019-05-13 0800 +
2019-05-17 0800 -
2019-05-18 2000 +
2019-05-26 1200 +

There was another drop near the end of the month, although its price movement was only about half of the movements I've listed. Cointelegraph's Analysis category served three stories that I found relevant. The first story concerned a small jump early in the month, accompanied by an outsized volume:-.

• 2019-05-04: Bitcoin Surges Past $5,700 in Hours: Experts Explain Factors of Overnight Rally • 'Over several hours on May 3, the price of bitcoin spiked from around $5,300 to over $5,700 in major markets, allowing the crypto market to gain more than $7 billion in a single day. [...] Crypto Rand, a widely recognized cryptocurrency trader and technical analyst, said that the upside movement of bitcoin and the rest of the market may have been simply technical.'

'Crypto Rand' - is that a real name? 'Simply technical' - is that a real reason? My interest in the second story isn't about its title; it's about its trigger:-

• 2019-05-26: Will Bitcoin’s Volatility This Month Hinder the Future of an ETF? • 'On May 17, bitcoin’s (BTC) price experienced a "flash crash," dropping to $6,400 within minutes, which was triggered by a 5,000 BTC sell-off — equivalent to around $35 million at the time.'

A 'flash crash' is caused by automated trading. Note that the drop was deeper than shown in the monthly chart above, because a partial recovery happened almost immediately. The third story is an eye-opener:-

• 2019-05-31: Bitwise Calls Out to SEC: 95% of Bitcoin Trade Volume Is Fake, Real Market Is Organized • 'Bitwise has recently prepared a 104-page white paper. In it, the fund manager argued that the bitcoin market still has inconsistencies regarding trading data, but the legitimate part of the market has a "remarkable efficiency." • Approximately 95% of reported BTC trading volume is fake • Bitwise analyzed trading data of some 83 exchanges. Researchers said they looked at the trade size histograms, volume spike alignment and spread patterns of these exchanges. They concluded that there are only 10 exchanges with 100% real trading volumes, and these 10 exchanges collectively account for 5% of the reported trading volume. • The remaining 5% makes up for a highly regulated and efficient market.

There was more about an ETF, which isn't relevant to understanding sudden price movements. It's the 95%:5% split that is relevant. Automated trading on suspicious data -- isn't that a dangerous combination? Given that bitcoin is traded all over the world, which means that it can escape any sort of regulation, and given that pots of money always attract fraudsters who are only interested in the size of their own bank accounts, why would anyone trust bitcoin? Maybe because it's a fascinating idea.

Bitcoin in the News : 2019-04 More++

In last week's post, Bitcoin in the News : 2019-04 Price, I wrote,

You might have to look twice to see the jump at the beginning of the month, which is partially hidden by the price numbers to the left of the chart. The jump is confirmed by the volumes. After going from 4000 to 5000 (in round numbers) in a few days, the price levelled off and continued in a gentle, upward trend.

What do other news sources say about the jump? The first story I looked at, Bitcoin Price Surges Past 5,000 to Highest Level Since November, was noncommittal:-

Traders struggled to pinpoint reasons for the rally, though some noted a flood fresh interest after Bitcoin breached the $4,200 level. The cryptocurrency briefly topped $5,000 and the value of digital assets tracked by CoinMarketCap.com jumped by about $17 billion in less than an hour.

Sudden swings in Bitcoin are nothing new, but price action had been relatively subdued this year as investors weighed the prospects for mainstream adoption after last year’s 74 percent crash. Market participants say big buy orders in Bitcoin can often lead to outsized moves, in part because volume is spread across dozens of venues. Trend-following individual investors and short covering can also exacerbate volatility.

Discussion of the jump was a recurring theme throughout the month and pushed other crypto-currency topics into the background. To get a handle on the consequences, I fell back on a technique that I used last year (see Bitcoin in the News : 2018-11 More++) in opposite circumstances.

How to explain the drops? In separate 'Bitcoin in the News' posts a few months ago I highlighted two mainstream financial news services [CNBC & Forbes] by showing which stories had been published by the two news services. Let's do the same for November, comparing the stories from both services with the goal of understanding the November price movements. Of course, this isn't a comprehensive look at all of their stories -- it's a list of stories that were flagged by Google News, using whatever its criteria are.

This month, I'll use Forbes again. It has stories from both cheerleaders and gloom-&-doomers, with the central objectivists also represented.

• 2019-04-02: Bitcoin Price Crossed $5,000. What Is Behind The Rally? • 'In summary, the move which we have seen today is mainly due to the strong momentum which has been building up for some.'
• 2019-04-03: Crypto Winter Is Over, Bitcoin Breaks Out
• 2019-04-03: Bitcoin, BlackRock And The Rise Of Alternatives
• 2019-04-04: 95% Of Volume Could Be Wash Trading As Bitcoin Price Surges
• 2019-04-05: The Bitcoin Price Rally Could Be Just Getting Started
• 2019-04-05: The Smart Money Doesn't Believe In Bitcoin's Rally • 'GTI Global Strength Indicator, a technical analysis tool'
• 2019-04-07: The Game Is On For Bitcoin, Ethereum, XRP, And Litecoin • 'The recent surge in Bitcoin has been sparked by a large buy order – rumored to be around $100 million – that sent BTC straight through technical resistance ($4,235) that had been in place since the start of December 2018.'
• 2019-04-10: Coinbase And Visa Are Making Bitcoin, Ethereum, Ripple's XRP And Litecoin Payments A Reality
• 2019-04-12: Bitcoin: Is The Biggest Bull Signal Here? • 'The argument is that the crossover of the 50-day and 100-day SMAs is of critical importance.'
• 2019-04-12: Where Bitcoin Price Is Going After Key $5,000 Level Is Broken
• 2019-04-15: Update: Binance Moves To 'De-list' Controversial Bitcoin Rival
• 2019-04-16: A Trump Policy Could Push People Toward Bitcoin • '[Trump] is weighing a remittance tax on money sent home by people living in the U.S.'
• 2019-04-23: Is This Cryptocurrency The Next Bitcoin? • Binance coin
• 2019-04-24: Bitcoin Soars As Ethereum, Ripple's XRP, Bitcoin Cash, And EOS Fall -- Here's Why
• 2019-04-24: Why Is Bitcoin Outperforming Most Altcoins? • 'Analyst: Bitcoin [Is] Crypto's "Most Important Asset"'
• 2019-04-26: Taking The Noise Out Of Bitcoin's Future • 'Make the time base for each move long. Whereas you might look at 10 minutes segments, 1 hour charts, even tick by tick ones, try making the time base 1 month.'

Many of the titles are self-explanatory, but I've added a comment for those that aren't. Three other stories that have nothing to do with the jump are worth mentioning.

• 2019-04-13: Millions Stolen in Attack on Electrum Bitcoin Wallet Service (crowdfundinsider.com) • 'Hackers have launched a 140 000-machine botnet DoS attack against servers hosting popular Bitcoin wallet service Electrum'
  
  
• 2019-04-19: How Mueller used Bitcoin to catch Russia (cnn.com) • 'Russian operatives used cryptocurrency at almost every stage in their online efforts to interfere in the 2016 U.S. presidential election, according to Special Counsel Robert Mueller's final report on his investigation.'
  
  
• 2019-04-27: Bitcoin Price Reaction to Tether Fiasco May Signal Strong Fundamental Strength (newsbtc.com) • 'Bitfinex sent a whopping $850 million to a company based in Panama that resulted in the exchange losing access to these funds. In response to this, Bitfinex granted itself access to a significant amount of Tether’s cash reserves that are supposed to be used to maintain USDT’s 1:1 USD backing.'

This isn't the first time we've seen Tether associated negatively with bitcoin price moves. Use the search box for previous posts on this blog.

Bitcoin in the News : 2019-04 Price

For the third straight month, I can fall back on the same observation. From Bitcoin in the News : 2019-03 Price:-

In last month's post, Bitcoin in the News : 2019-02 Price, I summarized the month's price chart with:- >>> 'The individual patterns are all similar: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium. The cycle repeats.' <<< Although there were elements of that pattern in March, the chart was more like a steady ascent, punctuated by dips that corrected within a few days.

You might have to look twice to see the jump at the beginning of the month, which is partially hidden by the price numbers to the left of the chart. The jump is confirmed by the volumes. After going from 4000 to 5000 (in round numbers) in a few days, the price levelled off and continued in a gentle, upward trend. Two small drops were accompanied by large increases in volume.

Bitcoin (BTC) Price Index

***

Later: Let's look at the usual sources for an explanation of the big jump. In Cointelegraph's Analysis category, which has not often proved helpful, I found The Burst of the Bitcoin Bubble: An Autopsy by Marcello Minenna, one of those rare bitcoin articles strong on objectivity. The heading 'What is the floor of this incredible descent?' starts,

On the subject, we must consider that bitcoin, its clones and the rest of the digital currencies do not have their own intrinsic value. Prices are simply determined by the intersection of demand and supply on individual exchange markets; these are often highly illiquid prices, differing from each other by hundreds of euros without effective arbitrage between the various markets due to the structural limits of bitcoin and settlement platforms. Therefore, it is very difficult to think of determining what the fair value could be.

That got my attention, as did other observations. Later in the article, the author writes,

In the early months of the year, cryptocurrencies slowly regained value, but the real surprise came on April 2, when, in just one hour, bitcoin spiked by almost $1,000, surpassing $5,000 -- a new resistance that has basically held up over the weeks since.

It is not clear what the reason for this jump was (perhaps an algorithmically generated order or a liquidity squeeze connected to bitcoin derivatives followed by a forced buy-in on market makers’ quotes). After all, recently, various analysts had forecast a surge in the short term, and knowing the trigger event matters little. The real question is whether the market is heading back into bull mode. Multiple factors support an affirmative answer: [...]

In other words, the trigger doesn't matter, but all of the psychological factors in force at the time do matter. That's where technical analysis enters the picture. For this I've found Cointelegraph's Price Analysis tag to be helpful. Two articles discussed the sudden rise.

• Bitcoin, Ethereum, Ripple, Litecoin, EOS, Bitcoin Cash, Binance Coin, Stellar, Cardano, TRON: Price Analysis April 3 • 'Bitcoin showed a glimpse of its former self when it skyrocketed by about 20 percent on April 2. With no specific news responsible for the rise, we can only speculate on what caused the sudden spurt in prices. Many theories have been put forth, one being a large order either by an individual trader or a group of traders that caused the price to break above the overhead resistance, following which the algorithms spotted the breakout and piled on long positions. Many traders who had been short on the digital currency were forced to cover their positions, which may have added fuel to the rally.'
  
  
• Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, EOS, Binance Coin, Stellar, Cardano, TRON: Price Analysis April 5 • 'Google searches for Bitcoin tripled as its price skyrocketed on April 2. This shows that interest in cryptocurrencies is still high. If prices recover, a large number of traders sitting on the sidelines will jump onto the crypto bandwagon. Though the rebound is a bullish sign, for it to be sustainable, Bitcoin needs to gain a wider adoption in day to day transactions.'

We know from the April chart that the price did hold. The crypto market was in a new state of equilibrium.

Bitcoin in the News : 2019-03 More++

Once again, the main news around bitcoin in March was its price. At the start of the month we saw stories like:-

• 2019-03-01: Bitcoin's first monthly gain since July (fortune.com)

Remembering that the story was for the month of February, the full title was 'Bitcoin's First Monthly Gain Since July May Not Mean Too Much'. The month of March ended with reports like:-

• 2019-03-30: Bitcoin (BTC) Price Following Steady Uptrend, Dips Remain Attractive (newsbtc.com) • 'Yesterday, we saw a solid upside break above the $4,000 resistance in bitcoin price against the US Dollar.'

Similar stories started appearing mid-month in other publications, documenting the struggle for the price to stay above the symbolic $4000 level. Looking at the chart from the previous post on this blog, Bitcoin in the News : 2019-03 Price, we know that the struggle was ultimately successful.

If the stories around bitcoin were only about price, the subject in itself would not be especially interesting. We might as well be discussing the price of gold or house prices in Seattle (to pick a random city). Since there is much more to bitcoin than its price, let's look at some other stories. After price, the most frequent bitcoin story in March concerned Facebook. What was that about?

• 2019-02-28: Facebook and Telegram Are Hoping to Succeed Where Bitcoin Failed (nytimes.com; Nathaniel Popper and Mike Isaac) • 'Some of the world’s biggest internet messaging companies are hoping to succeed where cryptocurrency start-ups have failed by introducing mainstream consumers to the alternative world of digital coins. The internet outfits, including Facebook, Telegram and Signal, are planning to roll out new cryptocurrencies over the next year that are meant to allow users to send money to contacts on their messaging systems, like a Venmo or PayPal that can move across international borders. The most anticipated but secretive project is underway at Facebook.'
  
  
• 2019-03-07: Blow To Bitcoin As Mark Zuckerberg Warns Facebook Payments Are Coming (forbes.com; Billy Bambrough) • 'Bitcoin, which has recently attracted the attention of some of the world's biggest technology entrepreneurs, is likely to soon get a major competitor: Mark Zuckerberg's social networking giant Facebook. Facebook, which was last week revealed to be working on its own cryptocurrency to rival bitcoin for the Facebook-owned WhatsApp messaging app, is trying to figure out how it can reposition itself in what Facebook founder and chief executive Mark Zuckerberg called a "privacy-focused" future that will likely weigh on his company's bottom line.'

Great! That's just what Facebook users need: having the non-"privacy-focused" company tracking our spending habits. The bitcoin mantra 'anonymous' might be exaggerated, but Facebook is the opposite of anonymous.

I once wrote a post about Bitcoin Futures (December 2017). Note the date; it coincided with the peak of the bitcoin boom.

• 2019-03-18: Cboe to stop listing bitcoin futures as interest in crypto trading cools (cnbc.com) • 'The move by Cboe highlights cooling enthusiasm for bitcoin after an all-out mania led by retail investors in 2017.'
  
  
• 2019-03-19: A Big Step Backward for Bitcoin (foxbusiness.com) • 'Sixteen months. That's how long the first bitcoin futures product lasted.'

If the introduction of bitcoin futures signalled a market top, does the withdrawal of those futures signal a bottom? The contrarian in me says, 'Yes, of course!' Moving on -- and skipping the ever-present reports about bitcoin horrors, mainly involving criminal activity -- one more story caught my attention:-

• 2019-03-29: Canadian Oil Companies are [Somehow] Mining Bitcoin: the Next Big Trend? (newsbtc.com) • 'The operators of a large oil field in Canada are cashing out on the cryptocurrency phenomenon by using the wasted natural gas that results from mining petroleum to power a Bitcoin mining operation.'

The massive use of electricity to drive bitcoin mining at the expense of more productive uses of the same energy might be considered another horror. Using waste to mine the same bitcoin is a genuinely good idea that should have other applications. Does anyone have an idea how to use the mountains of plastic waste that threaten the planet?

Bitcoin in the News : 2019-03 Price

In last month's post, Bitcoin in the News : 2019-02 Price, I summarized the month's price chart with:-

The individual patterns are all similar: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium. The cycle repeats.

Although there were elements of that pattern in March, the chart was more like a steady ascent, punctuated by dips that corrected within a few days.

Bitcoin (BTC) Price Index

Since there were no dramatic price jumps or drops during the month, let's look at the volumes. I count three periods of heavy volume (each bar covers six hours) and I'll include a fourth near the end of the month to give me one heavy period per week. They occurred at the following (approximate) times:-

2019-03-05 12:00 +
2019-03-16 00:00 +
2019-03-21 12:00 -
2019-03-29 06:00 +

As usual, Cointelegraph's Analysis category provided no insight. The site's Price Analysis tag had nothing special to say, concentrating more on moving averages and resistance / support levels. Several 'Price Analysis' reports mentioned the Bakkt 'institutional trading platform'. Although the name wasn't completely new to me, I haven't mentioned it on this blog. The Bakkt.com home page says,

Bakkt is building an open, seamless global network to enable you to buy, sell, store and spend digital assets simply, safely and efficiently. Backed by Intercontinental Exchange’s proven financial market infrastructure and technology, Bakkt’s secure global platform will connect investors, merchants and consumers, making it easier, faster and more cost-effective to access, trade and use digital assets.

The main entry on Wikipedia is under Intercontinental Exchange ('! : reads like a press release or a news article'), where we learn,

Intercontinental Exchange (ICE) is an American company that owns exchanges for financial and commodity markets, and operates 12 regulated exchanges and marketplaces. This includes ICE futures exchanges in the United States, Canada and Europe...

The section titled 'Bakkt' says,

In August 2018 Intercontinental Exchange announced that it planned to form a new company, Bakkt, which is intended to leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets. The new company will work with a marquee group of organizations [...] to create an integrated platform that enables consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.

The Cointelegraph 'Price Analysis' reports implied that this will be a significant development in the evolution of crypto-currencies. I expect it will be heavily promoted when it's finally available.

Bitcoin in the News : 2019-02 More++

One month does not signal a trend. In last month's 'More++' post, Bitcoin in the News : 2019-01 More++, I wrote,

For the first month in a long time the number of stories about bitcoin price seemed less than the number of other stories. I would 'bet' that's a positive sign. Markets tend to rise gradually when they are out of the spotlight.

This month the price stories were back on top, perhaps because it was an overall positive month for bitcoin. There was a one week period during the month that I described in the 2019-02 Price post as 'jump-flat-jump-drop'. This occurred during the week 2019-02-17 through 2019-02-24. I looked at one reliable source for stories covering that period and found four:-

• 2019-02-19: Bitcoin Price Crosses Key Long-Term Hurdle For First Time in 4 Months (coindesk.com) • 'Bitcoin has passed through the 100-day moving average for the first time in 127 days. ... However, price action has stalled Tuesday, as indecision brings the possibility of a pullback.'
• 2019-02-20: Bitcoin Price Looks North As Trading Volumes Hit 9-Month Highs (ditto) • 'Bitcoin witnessed an inverse head-and-shoulders breakout on Monday and rose to $4,000 yesterday, confirming a bullish reversal on the daily chart. The trend change is backed by a jump in trading volumes to levels last seen in May 2018.'
• 2019-02-25: Bitcoin Shorts Dropped to 11-Month Lows During Sunday's Sell-Off (ditto) • 'The development comes just a week after the total value tied up in all short trades on the exchange reached a six-month low, one of a number of signs that would suggest investors are losing confidence in the idea that bitcoin’s price will further decrease.'
• 2019-02-27: Bitcoin Price On Track to End Six-Month Losing Streak (ditto) • 'Bitcoin appears on track to snap its six-month losing streak and close February in the green for the fifth consecutive year. BTC may remain better bid in March, as the weekly chart is signaling bearish exhaustion.'

Those analyses are all technical and say little about the long term trend. On another of my favorite sources I found an article that gave some fundamental analysis.

• 2019-02-23: Bitcoin Is Rocketing Higher -- Here's Why (forbes.com) • 'Bitcoin has again shot past $4,000 per bitcoin, giving fresh hope to long-suffering investors who have been stuck in a bear market for over a year -- the second weekend in a row the bitcoin price has rallied.'

The analytical points were summarized in a single sentence.

Bitcoin's sudden price leap comes after a week of positive bitcoin news, with the confirmation of Samsung's latest crypto-wallet supporting phone, tech billionaires talking bitcoin up, and approaching network upgrades [Ethereum].

Billionaires can say what they want to serve whatever purpose and network upgrades happen frequently, but that first point might have long-term significance. Here is a more detailed story:-

• 2019-02-21: Don't Underestimate Samsung Galaxy S10's Crypto Offering, Millions Will Be Exposed To Bitcoin (newsbtc.com)

Today the only purpose bitcoin serves is as an unconventional vehicle for speculating. If it could serve a real need, like paying for real stuff, it might acquire real importance.

Bitcoin in the News : 2019-02 Price

In last month's chart, Bitcoin in the News : 2019-01 Price, the pattern for the month was flat-jump-flat-drop-flat. This month's chart shows flat-jump-flat-jump-flat-jump-drop-flat.

Bitcoin (BTC) Price Index

The approximate times of the jumps and drop and the corresponding price movements were something like this:-

2019-02-08 06:00 3400 > 3600 +
2019-02-17 18:00 3600 > 3900 +
2019-02-23 06:00 4000 > 4200 +
2019-02-24 06:00 4200 > 3800 -

The individual patterns are all similar: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium. The cycle repeats. What is happening to provoke the change in the level of equilibrium?

Cointelegraph's Analysis category offered nothing on the subject. The site's Price Analysis tag had one summary that looked like an explanation:-

• 2019-02-25: Bitcoin, Ethereum, Ripple, EOS, Litecoin, Bitcoin Cash, Stellar, Tron, Binance Coin, Cardano: Price Analysis, Feb. 25

The italics are mine:-

A bottom formation after a long bear market is not a linear process. At various intervals, we are likely to witness spurts of buying and selling as the bulls and the bears attempt to establish their supremacy. After a smart recovery from the lows, when it looked like the bears had surrendered, came the plunge on Feb. 24, that wiped off about $15 billion from the total market capitalization within a few minutes.

Such selling is not always based on fundamental news or events. Technical factors like profit booking near a stiff resistance and initiation of short positions by aggressive bears can bring about such a sharp fall.

That analysis describes coordinated actions. How are the actors ('the bulls and the bears') communicating with their like-minded counterparts?

Bitcoin in the News : 2019-01 More++

In the first post this month, Bitcoin in the News : 2019-01 Price, I noted,

Except for that plateau between 5 January and 9 January, the trend for the month was a gentle but steady downward fall.

Looking at that 'plateau' a little closer, I see a steady price around $3800, followed by a sharp jump to $4000 which holds for a few days, followed by a sharp drop to $3600 which is the real start point for the 'steady downward fall'. I found two stories from the same source that bracket the plateau. Here's the first:-

• 2019-01-07: The Bitcoin Price Has Leaped Sharply Higher -- Here's Why (forbes.com) • 'Just ahead of the bitcoin market spike last night a bitcoin whale moved some 2,500 bitcoin (worth just under $10 million) on the Luxembourg-based Bitstamp exchange, according to the Twitter price tracking bot Whale Alert. The move pushed the daily bitcoin volume up to over $5 billion, a 2019 high.'

It's not clear how a 'move' (is that a buy or a sell?) of $10 million results in a total of $5 billion, but I'm here to learn. The other side of the plateau was explained in a second story:-

• 2019-01-10: Bitcoin Falls More Than 10% After Sentiment Turns Negative (ditto) • 'Bitcoin lost more than 10% today, following many digital currencies lower after market research showed a decline in investor sentiment.

So someone published 'market research' about 'a decline in investor sentiment' and everyone rushed for the exit? Later the same story mentioned,

Robust Twitter Activity: Before the widespread declines in digital currency markets, the top digital currencies experienced a greater number of tweets. [...]

Technical Analysis: While analyzing social media activity can help grant insight into the sentiment of traders, it is not the only tool that can be helpful in this respect. Technical analysis can also help shed some light on sentiment by looking at key market activity.

This confirms my current understanding of bitcoin price action. Since the cryptocurrency has no tangible underlying value, its price movement is driven entirely by 'investor' (a better word might be 'speculator') psychology.

[As an aside, the previous story looked like this on my screen...

...The real story occupies less than 25% of the screen space. The large ad in the top half starts to repeat in the lower right (it's in Dutch because I live in the Flemish region of Belgium) and the blue rectangle is a video. When I scroll down, the video switches to the lower left and follows my scrolling while the ad 'Fysiek Goud Kopen' ('Buy Real Gold') slides down the right side of the screen. Quel horreur!]

That little detour gives me an excuse to introduce the next theme: the number of stories that mentioned gold. The number of January bitcoin stories flagged by 'Google News' alerts was more than double the number in December, and more than any previous month. I saw from this little analysis that the bitcoin/gold connection has always been a recurring theme. Here are three stories that made my short list for the month:-

• 2019-01-14: Winklevoss Twins: Bitcoin Can Overtake Gold With the Right Rules (fortune.com; video)
• 2019-01-22: Is There a Gold/Bitcoin Correlation? (thestreet.com)
• 2019-01-29: Here’s why bitcoin isn’t the next gold, in one chart (marketwatch.com)

That third story references the first, making it clear where the theme started. The word 'bet' at the end of the next quote is appropriate:-

At the forefront of the bitcoin vs. gold movement are Cameron and Tyler Winklevoss, the founders of New York-based crypto exchange and custodian of Gemini Trust Co. The twins argue that bitcoin’s fungibility and divisibility -- thanks to its fixed and known supply -- make it a better bet than gold.

One more theme for the month is worth a mention. Three months ago, in Bitcoin in the News : 2018-10 More++ (November 2018), I quoted Reuters: 'Bitcoin ... celebrates its tenth birthday on Wednesday [31 October]'. Now I learn:-

• 2019-01-03: How bitcoin grew up and became big money (theverge.com) • 'Depending on how you count its birth, bitcoin turned 10 years old today.'
• 2019-01-04: Bitcoin turns 10: The obscure technology that became a household name (cnbc.com)

There were other January stories I could flag, but I'll stop here. In fact, for the first month in a long time the number of stories about bitcoin price seemed less than the number of other stories. I would 'bet' that's a positive sign. Markets tend to rise gradually when they are out of the spotlight.

Bitcoin in the News : 2019-01 Price

Last month's post, Bitcoin in the News : 2018-12 Price, displayed the last monthly price chart for 2018. This post shows the first chart for 2019.

Bitcoin (BTC) Price Index (cointelegraph.com)

If last month's chart looked like a roller-coaster, this month's looks more like a carousel. Except for that plateau between 5 January and 9 January, the trend for the month was a gentle but steady downward fall.

As usual, Cointelegraph's Analysis category carried no analysis of the curious pattern. The stories before, during, and after the bump could have appeared on any other day of the month:-

• 2019-01-05: ICO Market 2018 vs 2017: Trends, Capitalization, Localization, Industries, Success Rate
• 2019-01-07: Japanese Banks Launching Digital Currencies Could Inspire the Traditional Cash Society
• 2019-01-09: From Bitconnect to SIM-Swap Swindling: 2018's Biggest Scams

The site's Price Analysis tag likewise offered little explanation:-

• 2019-01-11: Bitcoin, Ripple, Ethereum, Bitcoin Cash, EOS, Stellar, Litecoin, Tron, Bitcoin SV, Cardano: Price Analysis • 'While the most recent fall shows that the sentiment is still fragile, a strong rebound from the current levels would indicate that there is demand on the dips, a markedly bullish sign. However, if the cryptocurrencies instead plummet to new lows, it would be a bearish sign.'

In other words, 'a strong uptrend will be positive, a strong downtrend will be negative'. So what does a gentle downtrend say?

Bitcoin in the News : 2018-12 More++

Just like every month over the past year, a monthly 'More++' post follows a monthly 'Price' post -- in this case, the preceding post was Bitcoin in the News : 2018-12 Price. And just like last year's January post, Bitcoin in the News : 2017-12 More++, I'll summarize all of last year's monthly price charts in a single chart.

I count six different months where the price retreated during the entire month. Good thing I have this yearly price overview to fall back on, because almost all of the bitcoin stories flagged during the month of December were about price. Take the following story, for example, which appeared at the beginning of the month:-

• 2018-12-01: Bitcoin, and Cryptocurrency in General, Had a Terrible November (gizmodo.com) • 'Bitcoin, as well as smaller cryptocurrencies like XRP [Ripple] and ether, had a terrible November that saw $70 billion in value wiped off the market, CNBC reported on Friday. Bitcoin closed at $3,878, well below $6,000, which proponents had long insisted was its "floor" but in retrospect appears to have been a magic number.'

Also in retrospect, I can say that all bitcoin future price projections are based on 'magic numbers'. In 2017, they were fantastic price targets sometimes getting into six figures USD. In 2018, they were floors, always new, always lower. The only real floor is $0.00, about which there were more than a few articles in December. Opinions varied:-

• 2018-12-05: Why bitcoin -- by design -- won’t become worthless, according to this crypto heavyweight (marketwatch.com) • 'Bitcoin protocol is set up to be adjusted as mining conditions worsen, says teaching fellow Andreas Antonopoulos.'
• 2018-12-16: Famed crypto millionaire says Bitcoin is dead (techspot.com) • 'A famous early investor [Erik Finman] who made millions from Bitcoin has warned that the best-known cryptocurrency of them all is "dead."'
• 2018-12-23: A VC Thinks Bitcoin Passed A Major Milestone This Year (forbes.com) • 'Bitcoin has crossed a major milestone this year, with its chances of falling to zero almost non-existent.'
• 2018-12-26: Does Bitcoin Have a Future? (coincentral.com) • 'Whenever a major financial market struggles for survival in a deep, enduring bear market, undertakers with access to the financial press gleefully pronounce its imminent demise. For Bitcoin, such dire pronouncements have been arriving at a steady pace since summer 2018.'

Another recurring theme in December was to mark an ignominious anniversary. Here's an example from one of my favorite writers at Yahoo Finance.

• 2018-12-17: It's been one year since bitcoin was interesting (yahoo.com; Myles Udland) • 'It was exactly one year ago today -- December 17, 2017 -- that the price of bitcoin hit a record high of $20,000 per bitcoin.'

In fact, the peak price was somewhat short of $20,000, but that's little consolation to anyone who actually bought at that price. Finally, let's not forget that this sort of thing has happened before.

• 2018-12-11: The Biggest Rises and Falls of Bitcoin, Explained (cointelegraph.com) • '1. November 2011; 2. November 2013; 3. April 2013; 4. December 2017; 5. November 2018'

Have we seen capitulation in the bitcoin market? I found two definitions on Investopedia.com:-

• What is market capitulation?
• Capitulation

If we have seen capitulation, then we have seen the bottom. We'll find out in a year or so if that was in the case. As for me, I'll continue to do exactly what I always do : watch and learn. I'll learn nothing from capitulation.