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The Crypto Update for Week 51: The digital flagship currency Bitcoin, Ethereum, and also Tezos are back.
Crypto Update: Bitcoin Fluctuates
Volatility is back in the crypto space and a fast-paced week is coming to an end. Bitcoin remains the focus of investors. After a weak start to the week, BTC is making a comeback and breaking through the CHF 7,000 mark again. The weekly low of around CHF 6,387 initially indicated a bear market, and there were several reasons for this. Supposed scams like PlusToken were able to accumulate huge coin holdings in the past, which are now being sold off bit by bit. These horrendous sales throttle the Bitcoin price and make a price breakout more difficult. In addition, another phenomenon could be putting the brakes on, the so-called tax loss harvesting. Companies and private individuals are trying to reduce their tax burden. The extent to which this method affects the price has been controversial for years. Exact values cannot be determined.
Bitcoin Halving Event Already Priced in?
In addition to the Libra launch, it is considered the most important crypto event in 2020: The Bitcoin Halving Event. The upcoming Bitcoin Halving is currently scheduled for May 14, 2020. This means that the third halving in the history of the No. 1 cryptocurrency is just around the corner. The coin rewards for the miners will be reduced from 12.5 Bitcoin per mined block to 6.25 Bitcoin per block. As a result, the inflation rate falls to a value of less than 2 percent. Previous halvings had a direct impact on the BTC price. Many experts believe that this influence will have an effect on the price several months before the actual halving. Whether this is already the case remains unclear for the time being. However, it is likely that the focus in the coming months will be clearly on Bitcoin. This focus can be verified by the Bitcoin Dominance Index.
Bitcoin Dominance Index at Record Level
The Bitcoin Dominance Index is currently at 68.3 percent. Approx. CHF 128 billion (market capitalization Bitcoin) of CHF 187 billion (total market capitalization crypto market) are in Bitcoin. The dominance index is considered a strong indicator to determine in which market phase the cryptos are currently in. A value of over 60% also explains another behavior, the trend charts of the altcoins.
Crypto Update: Altcoins Follow Bitcoin
The year 2019 is not in the sign of altcoins. These have been following Bitcoin every step of the way for months. Exceptions are a real rarity these days. This week, only Tezos was able to free itself from this spell with positive news. After Binance and Coinbase announced the implementation of the Tezos Staking Program weeks ago, Kraken has now also decided to adopt it. Users who store their XTZ on the popular exchange can expect an annual return of approximately 6 percent in the future. The news quickly manifested itself in the price and Tezos made the leap into the top 10.
Concerns about Ethereum
Ethereum is currently at a price of CHF 126.32 and a year-end in the double-digit price range is becoming increasingly likely these days. The release of Ethereum 2.0 is currently considered the greatest glimmer of hope. The update is intended to implement the long-awaited switch from Proof of Work to Proof of Stake. In addition, a higher scalability is hoped for. To date, ETH has moved about 90 percent away from its all-time high in January 2018.
After the Crypto Update: Even more crypto news
