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Yellen says cryptocurrencies such as bitcoin lack stability and are not efficient for payments

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Janet Yellen rued the fact that cryptos such as Bitcoins could not yet be used for everyday transactions as they lacked stable source value.

Janet Yellen, as the former head of the United States central bank, the Federal Reserve, rued the fact that cryptos such as Bitcoins could not yet be used for everyday transactions as they lacked stable source value and were largely inefficient in processing payments.

Additionally, she overruled the poor stock market performance in October and instead forecast that the present conditions were “excellently, excellent” quoting the 3.7% unemployment rate in 50 years as the cause for such confidence in the current market forces.

 

In an interview with a Canadian fin tech event, the former Fed Reserve head stated,

“I think strong growth in the United States is supporting the global economy, although perhaps the global economy, the emerging markets, is beginning to feel some pressures.” 

 

Strong fundamentals in US markets

The underlying facts which Yellen appeared to communicate regarding US market performance were all positive – highlighting strong labor market of 2%, 3% gross domestic products.

Madam Yellen was referring to the latest gross domestic product which beat market expectation and also posted a resounding and unexpected growth of 3.5%.

Though inherent risks were part of the outlook, she reiterated that there were sharp elements of balance as well.

The ex-financial regulator concluded that the results coming in on the economic indicators are a fact of 2019 as a strong year.

 

Concerned about Monetary Policy

The reason to worry, if ever about US market conditions is the latest monetary policy – on a rate above 2%, a strong labor market, and 3% growth in the gross domestic product.

“I think strong growth in the United States is supporting the global economy, although perhaps the global economy, the emerging markets, is beginning to feel some pressures,” 

Fed Reserve policies are a far cry from the no-change days with Yellen at the helm. In less than a year after her exit, the Fed has apparently tweaked prices by over three times, including a fourth hike likely to be announced in December, Yellen proposed.

 

The former Fed chairperson added that,

Nothing should ever be locked in stone, and things can happen. My presumption going into December is that a rate increase is appropriate, but I would watch very carefully and maintain an open mind.”

 

However, the risks that Yellen has identified are – deflating current economic expansion – financial imbalances, errors in federal policies stating that,

“Economic expansions don’t die of old age, and there are two things that tend to kill them off: one is the Fed, and the second is financial imbalances.” 

 

Future is well scoped

If there was one point which Yellen did not tire from reiterating was the tariffs by President Trump on China. Yellen categorically dismissed the move by the businessman-President, dismissing the move as short of foresight and will not be sufficient to recreate or bring back jobs which may of the local citizens failed to hold down.

The former fiat-currency custodian did indicate disappointment that cryptocurrencies such as bitcoin are yet to stabilize.

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Donald Trump policies push Mexico to Bitcoin

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Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse.

Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse that remittance payments of Mexican migrants in the United States of America will potentially be the target of new restrictions essentially ending the possibility of Mexican migrant workers to be able to cheaply send money back home to their families.

 

Mexico adopting Bitcoin:

Mexico has been experiencing a massive increase in the number of transactions on localbitcoins. Mexican migrant workers are believed to be exploited by the remittance companies which are charging around 10% fees. What is essentially being discussed here by the Trump Whitehouse is a new tax on these migrant workers. The number that they are currently floating around is a 3% tax on the remittances going from the USA to Mexico. This may not seem super crazy but considering the $33.4 billion which were sent to Mexico in 2018 alone, that extra 3% could mean $1 billion more per year for the United States government.

 

98% of the transactions that were sent during the last year, were sent via electronic means which means that there is actually a very strong remittance route that is ready for mass disruption going from the United States to Mexico and Bitcoin could be the perfect answer. However, the average size of a remittance payment from the United States to Mexico is $322 last year and the problem is that if the fees rise again exponentially on bitcoin, then bitcoin might not be the ideal cryptocurrency for these kinds of smaller remittance payments. Maybe we are going to see some other cryptocurrency being adopted in that situation. But regardless of which cryptocurrency is used, we can see that there is a clear need for disruption as government policies again seeks to impede or overly exploit the free float of money.

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Bitcoin Crashes Downwards: Is BTC Going to Fall Back to $4000?

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Bitcoin fell down to test the $5000 support level. If the current support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels.

Bitcoin fell down to test the $5000 support level which is the most crucial level for BTC currently. The downward correction started after bitcoin tested the $5500 resistance level yesterday at around 18:00 UTC.

 

The resistance around $5500 proved very strong and pushed the price downwards sharply. The sharp declining pattern attracted a lot of sellers which even pushed the price below $5200 support level and BTC tested the $5000 support reaching up to $5018.

BTCUSD Price Chart- Coinbase

BTCUSD Price Chart- Coinbase

Bitcoin is currently trading around $5070 (at the time of publication) showcasing a bearish pattern.

 

Bitcoin Price Drop:

The sudden price drop has led to people speculating that BTC might soon crash back to the $4000 range. Earlier, analysts were also predicting the sudden rise of bitcoin to be a conspiracy. Also, Bloomberg had also called the sudden rise a Blip. If BTC had successfully crossed over the $5500 range, the next major resistance was around $5800, however, BTC fell sharply losing more than $400 in value over the last 24 hours.

 

The bearish move does not clearly indicate a crash towards $4500 and $4000 range, however, if the current major support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels. With the price of bitcoin falling, other major altcoins are also in the red zone today with Ethereum falling more than 8% in the last 24 hours, XRP falling more than 6% and Litecoin falling around 12% in the last 24 hours.

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China to completely ban crypto mining: Bitcoin about to Crash Hard?

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As reported by Bloomberg, China is moving towards putting a complete ban on mining bitcoin and other crypto as it causes serious wasatage of resources.

As reported by Bloomberg, China is moving towards putting a complete ban on mining cryptocurrencies such as bitcoin. In accordance to a document posted by the National Department and Reform Commission of China, the mining of cryptocurrencies should be completely banned as it causes serious wasatage of resources.

 

China is known to be the largest hub of cryptocurrency mining with huge mining rigs been set up in the country. Earlier, China has also banned small investors to invest in security token offerings or STOs and only large investors with more than $1 million funds are allowed to invest in such projects. Now, the country is planning to take strict action against cryptocurrency miners in the country.

 

Cryptocurrency miners were earlier attracted to China due to their cheap electricity rates and subsidies in the country, however, due to the strict actions being taken by the government with the guidelines of the NDRC which has disincentivized cryptocurrency mining, a lot of miners have shut down their operations or moved to other nations.

 

Largest Mining Pools in China:

China has been a hub for some of the largest cryptocurrency mining polls. Even though the mining pools have been shifting to other countries, there has been some effect of the ban on the market for bitcoin and other cryptocurrencies as the mining is a major part of the overall working of cryptocurrencies.

 

How do you think the complete ban on cryptocurrency mining in China will effect the bitcoin price? Tell us in the comments section below.

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