The reasons behind bitcoin price soaring

Source: OKCoin BTC/USD chart

Bitcoin price is at $ 535 at press time, which is the highest level since August 2014. What is the explanation for such a strong upwards movement?

There are lots of reasons that drive the price of bitcoin upwards and downwards, which makes it wrong to pick a single reason for the price movement.

The halving of bitcoin reward (12.5 btc, instead of current 25 btc for a mined block) is an event expected to happen in July. It will diminish the inflation of bitcoin supply, which is considered a bullish event for its price. As this information is abundant, the current price of bitcoin already reflects it, according to the efficient-market hypothesis (at least its weak-form). The resistance level of $ 460 had been holding the price from going upwards, but it eventually surrendered after some simultaneous events this week:

• competing crypto currencies showed signs of flaws;
• economic movements on crypto currencies and crypto assets generated demand for bitcoins.

At the Prague Conference, Sergey Primachik (representative of 7Elephant, Russia) presented his vision of advantages and disadvantages of Ethereum, which was considered negative for Ethereum’s intrinsic value proposition, since his speech showed how far Ethereum is from achieving its very goal.

The DAO, which collected nearly $ 130 million worth of Ether and is the first significant initiative on the Ethereum network, had its governance algorithm strikingly criticized on Friday.

Such events generated massive sales of Ether, which dropped nearly 25%. When Ether is sold, it is usually converted into bitcoins, which, as a result, generates buying pressure.

Along with these reasons, the Chinese Yuan devaluation generated more bitcoin buying pressure in China, where the conversion of Yuans into Dollars has been recently made more difficult by the government.

When everything is put together at a certain moment, along with other minor drivers of value, the bitcoin price soars, and it is nearly impossible to predict how far it will go.

Who is the biggest holder of Ether?

Have you ever wondered who the biggest individual holder of Ether is? How much does he/she/it hold? Just out of curiosity, we bring you the answers:

The biggest Ether wallet of the world is more than 10 times bigger than the second one. Thus, although there are several other huge wallets, none of them compares to this one. The wallet is 0xb794F5eA0ba39494cE839613fffBA74279579268.

Who does it belong to? This is the Poloniex ColdWallet. Poloniex is the biggest Ether exchange of the world. Actually, Poloniex is only holding those Ethers (or, at least, the majority of them) on behalf of its clients, even though they are not legal owners of those Ethers (or, at least, the majority of them).

As of April 4th, 2016, 11.155 million Ethers were deposited on Poloniex Cold Wallet. Other 86.6 thousand Ethers were held on Poloniex Wallet. That was almost 15% of all Ether of the world.

For the sake of comparison, Kraken’s and Bitfinex’s revealed wallets did not reach 1 million Ethers on the same day, even though the volume on Poloniex had only been nearly 50% higher than the combined volume of Kraken and Bitfinex on the same day. Last, but not least, the amount of Ether held on 0xb794F5eA0ba39494cE839613fffBA74279579268 were worth nearly USD 125 million on that same day.

Thanks to www.bctransfers.com for the information.

 

Source: http://www.bctransfers.com/#!Who-is-the-biggest-holder-of-Ether-in-the-world/w3syh/

BCTransfers.com – Send money at low costs

Remittances are usually a bit expensive, especially when comparing to money transfers within a country. Some worldwide money transfer operatiors (MTO), such as Western Union and MoneyGram, charge around 6% when we consider fees and FX markup (which means the currency rate causes a loss for the clients).

Online MTOs are generally using some interesting technologies. Some of them are breakthrough technologies. Comparing different MTOs, we came to the conclusion that the ones we read the most are usually a bit more expensive than the others.

For instance, BCTransfers applies blockchain technologies to reduce transaction costs, therefore offering its remittance service at a 2.38% fee, totally free of FX markup (using the official the exchange rate). We tested their service for both small and large amounts. It was very fast, smooth and simple, without any delay on the service.

Mining Bitcoin – Results

So far, the results are as follows:

 

Considering the Bitcoin price has been quite flat during these days (currently near the $415 level), And considering the investment was only a little above $100, the result has been amazing so far, BUT the slope has been decreasing. It is easily seen at the above chart that the rate was nearly 0.83 dollars / day, because every 6 days the output used to climb $5.00 (horizontal lines), which was not the case since the 20th of march.

I will keep this chart updated for us to see what the trend really is.

First week – Results

After one week mining Ether and Bitcoin at Genesis Mining, I have reached the first results:

– Investment for 1 year contract:

A) 0.740 BTC invested on Ethereum cloud mining – dagger-hashimoto- 7.5 MH/s

B) 0.272 BTC invested on Bitcoin cloud mining – X11- 5 MH/s (this one was started one day after)

 

– Output A (1 week, ended on March 4th):

Ether: 1.46303362 ETH

Market value of 1.46303362 ETH (@ 0.03 BTC per Ether) = 0.0438910086 BTC = 5.93% of the invested capital.

 

If this output and this price remained constant for the next 51 weeks, the return would be 208.4% p.a. The same holds if the reward retreats at the same pace the price goes up.

Please note that the Ether price has doubled since the investment was made, so the return is sensitive to that. If the price didn’t go up, I still would have faced a solid return, (nearly 50% p.a. under the same premises)

 

– Output B (1 week, ended on March 5th):

Bitcoin: 0.01525829 = 5.61% of the invested capital.

If this output remained constant for the next 51 weeks, the return would be 191.7% p.a.

 

 

Graphics showing trends will be posted in the next weekend, showing the 14-days trend and math/stat functions that may try to predict what to expect from mining for the next months.

Is mining Ether (Ethereum) profitable?

Many people struggle when they try to make money through mining using their own computers for this task. Mining in a efficient way requires much more than that. Specific GPUs are optimal, but setting it up and paying the maintenance and energy costs may prove to be a bad financial decision.

On ther other hand, one can always choose to cloud mine. What does it mean? It means someone (a company) sets up a huge mining hardware (datacenters), choosing the most efficient equipment in terms of mining productivity, places them in cheap energy countries and charges some money for people who want to use this mining capacity. This process generates scale economies that may ensure a good profitability for the company who sells this service.

But what about the clients? Do they get a share of the profit? Or will it end up being a bad investment decision?

After some research, I started cloud mining Ether at Genesis Mining today. I am going to keep you informed about the results I achieve. My idea is to weekly:

1. Calculate the output of Ether
2. Calculate revenue
3. Calculate net income
4. Calculate the Internal Rate of Return (IRR) of the investment and compare it with other alternatives
5. Do some inference about its trend.

Please come back to see the results. If you have any other question or are curious about anything else, let me know!