Bitcoin edges lower for its worst weekly performance in over a month as as cryptocurrencies struggle to recover from heavy sell-off

Representations of virtual currency bitcoin are placed on US dollar banknotes taken May 26, 2020.
Representations of virtual currency bitcoin are placed on US dollar banknotes taken May 26, 2020.

Bitcoin slipped Friday to clock worst weekly performance in more than a month as the world’s largest cryptocurrency by market cap inches closer to a key support level of $30,000.

Bitcoin on Friday morning was trading at $31,363 as of 8:30 a.m. ET, according to data from CoinMarketCap.

An eventual break below this level will be crucial, Julius de Kempenaer, senior technical analyst at StockCharts.com, told Insider.

“If and when this happens, $20,000 is on the cards as the next level of support to watch,” said.

The selling pressures began on Thursday when the digital asset suffered its biggest drop in about 10 days. Bitcoin in the past month has been trading in a range at just around half its April peak price of nearly $65,000.

Alongside bitcoin, other cryptocurrencies have slid in the last 24 hours:

Cryptocurrencies have struggled to rebound from a massive crash in May when the value of the total market dropped by nearly half in just seven days.

A number of headwinds have been blowing against the crypto market since the brutal sell-off.

Federal Reserve Chair Jerome Powell on Thursday told the Senate Banking Committee that cryptocurrencies have failed to become a viable payment method. A day earlier, he also said the US won’t need stablecoins and cryptocurrencies if the central bank were to issue its own digital currency.

There have also been problems plaguing the the world’s largest cryptocurrency exchange, Binance, which is weathering an intensifying regulatory crackdown. Italy most recently joined a growing list of nations to issue a warning against the exchange, saying it is not authorized to do business in the country.

Bitcoin is also under increasing fire for its impact on the environment from critics who points to the heavy energy consumption of bitcoin mining.

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Billionaire Mike Novogratz compares XRP fans to Trump supporters, warns against buying dogecoin, and calls bitcoin ‘insurance’ in a new interview. Here are the 10 best quotes.

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Mike Novogratz.

Billionaire Mike Novogratz blasted Ripple’s XRP and advised against buying dogecoin in a recent “Earn Your Leisure” interview with hosts Rashad Bilal and Troy Millings.

The CEO of crypto merchant bank Galaxy Digital said he isn’t worried about bitcoin’s long-term health because institutions like Goldman Sachs and JPMorgan are entering the space.

He predicted crypto investments will make up 2% of global wealth within two to three years, up from its current slice of half a percent.

Here are Novogratz’ 10 best quotes from the interview, lightly edited and condensed for clarity:

1. “Over the years, the XRP army has built up a real community of people that really want to believe it. It reminds me a little bit of Trump supporters, they’ll believe you stole the election. You could tell them anything. It’s like 9/11 conspiracy theories. There’s a little bit of that in crypto. They just don’t look at the truth sometimes.” – On why Ripple’s XRP has been on a tear.

2. “I’ve never liked the XRP token because you’ve got one group that owns so much of it. Let alone you’ve got the SEC breathing down the necks of the CEO, the founder, and the company.” – On Ripple’s token being a ‘painful trade.’

3. “No, you shouldn’t buy dogecoin. You should sell dogecoin probably now that it’s gone up to 42 cents. But there’s a lot of uneducated investors that feel the energy of this moment and want to participate.” – On people asking for advice about buying the meme-based currency.

4. “I think crypto returns will beat the crap out of stocks, but not forever. They will hit an equilibrium, there’s no free lunch in the world. Right now, it feels like there’s a free lunch because the government’s losing everything.” – On crypto’s potential as a new asset class.

5. “People want insurance. Bitcoin is insurance, and the governments know that.” – On the potential debasement of the US dollar.

6. “What bitcoin is telling governments is ‘dude you guys are doing such a sh–ty job with your budget deficits. You are printing money.’ My mother used to say ‘money doesn’t grow on trees.’ Right now, money is growing on trees.” – On the long-term negative effects of massive US stimulus spending.

7. “I’m long Facebook stock. One of my favorite trades this year is that I sold a shack-load of call options on GameStop because the vol (volume) was so stupid, and I bought Facebook stock and Facebook calls. I bought it, because I know sometime in this next half year, they’re going to come out with this crypto wallet called Novi – unfortunately not named after me.”

“And so, Facebook’s going from $300 to $400. I think, I hope.” – On digital wallets expected to replace bank accounts.

8. “Ethereum is most likely the winner of the decentralized supercomputer that powers all these new businesses, all these new ecosystems.” – On which among the ‘hot’ cryptocurrencies are rationally solid.

9. “The only thing Republicans and Democrats agreed on is that they hated Mark Zuckerberg.” – On Facebook’s CEO defending his company’s proposed stablecoin, Diem, against privacy concerns.

10. “The macro markets have never been more interesting and crypto is macro on steroids right now. And so it’s a fascinating time to be a trader, it’s really volatile.” – On the explosion of interest in crypto ecosystems.

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Bitcoin must move away from its core proof-of-work technology to remain a dominant cryptocurrency, Ripple’s co-founder says

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Ripple co-founder, Chris Larsen.

  • Ripple’s cofounder thinks bitcoin developers should be concerned about its proof-of-work technology.
  • He suggested shifting to a more carbon-neutral method like proof-of-stake or federated consensus.
  • “Such a change is critically important for bitcoin to remain the world’s dominant cryptocurrency.”
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The conversation around bitcoin’s environmental threat seems to be escalating as more people call out its impact on the climate.

Chris Larsen, Ripple’s co-founder, has suggested bitcoin should surrender its core proof-of-work (PoW) technology that is used in the mining process. He said it should instead use other methods such as proof-of-stake (PoS), federated consensus, or another technology that is yet to be developed.

PoW is an algorithm in the blockchain technology used to confirm bitcoin transactions and produce new blocks on the chain. It is an energy-intensive process, and even a few transactions on the network can have as much of a carbon footprint as driving a gas-powered sedan for 1,000 kilometers.

Bitcoin running on the PoW algorithm has led it to consume an average of 113.8 terawatts per hour, roughly equivalent to energy consumed by 12 million US homes, and release an estimated 63 million tons of CO2 annually, Larsen said in a blog post this week.

The PoS network, that Ethereum 2.0 runs on, is more energy-efficient as it uses less computing power to secure the blockchain. Larsen thinks Binance Coin and Ethereum, which both operate on PoS, should be commended for their efforts on sustainability.

“I know this is a bold proposal, but it is worth a serious discussion given what the world looks like today (in comparison to when Bitcoin was launched in 2009),” Larsen said. “While there are passionate debates about PoW versus other validation methods, we now have almost a decade of data to review.”

Ripple’s XRP has been using federated consensus, which allows multiple entities to take charge of the network, for nine years. Larsen said that is indicative of a carbon-neutral network, equivalent to the energy consumption of only 50 US homes per year.

“Today, non-PoW-based coins (including Ethereum’s anticipated switch) make up 43% of all cryptocurrencies by market cap, and the majority of new cryptocurrencies introduced today choose to eschew PoW. It’s clear which way the trend is moving.”

“I would argue that such a change is critically important for Bitcoin to remain the world’s dominant cryptocurrency.”

Larsen warned that while bitcoin gains institutional and retail prominence, many of its advocates are turning a blind eye or attempt to greenwash its problem.

He also said Tesla’s $1.5 billion investment in bitcoin goes against its purpose of being an electric-vehicle maker. The purchase wiped out the automaker’s entire annual C02 savings, he said.

“As companies begin to understand this troubling connection, they would rightfully have concerns investing. Bitcoin advocates should see this as a significant threat.”

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Crypto network Ripple gets a foothold in Asia with its 40% stake in cross-border payment firm Tranglo

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Bitcoin’s meteoric rise has boosted crypto hedge funds

  • Ripple is set to take 40% stakes of Tranglo, a global cross-border payment hub focused on APAC markets.
  • This will support rising customer demand in Asia and RippleNet’s On-Demand Liquidity service according to Ripple’s statement.
  • Initially, new payment corridors will be set up in Southeast Asia and On-Demand Liquidity will become available in the Philippines.
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Crypto network Ripple Labs said on Tuesday it will acquire a 40% stake in cross-border payment hub Tranglo in an effort to strengthen its market presence in the Asia-Pacific region.

Tranglo’s infrastructure will support existing payment corridors, as well as enable RippleNet customers in additional countries to use the firm’s On-Demand Liquidity service. “RippleNet customers using ODL will also be able to leverage Ripple’s Line of Credit to free up working capital and scale cross-border payments into more markets than ever before” the company said in a statement.

Cross-border payment processing firm Tranglo will support the expansion of the offer in Southeast Asia, starting with the Philippines and then rolling out to other countries, the company said, adding it also offers credit lines to users.

RippleNet uses blockchain technology to make cross-border transactions easier. The XRP token, which runs on Ripple’s network, is one of the most widely traded, alongside bitcoin and Ethereum’s ether.

The digital asset market has been gaining momentum in Asia, despite India’s recent ban on bitcoin. Over 30% of cryptocurrency transactions between mid 2019 and mid 2020 took place in Asia, according to a Chainalysis report.

“Tranglo’s robust payments infrastructure coupled with their unparalleled customer service and quality makes them an ideal partner to support our expansion of On-Demand Liquidity starting with the Southeast Asia region.” Asheesh Birla, general manager of RippleNet, said.

Ripple is currently dealing with legal issues in the US due to its use of the XRP token. The Securities and Exchange Commission said the company had raised $1.3 billion worth of unregistered securities in the form of XRP, which the regulator believes is a security and not a cryptocurrency. Ripple has repeatedly disagreed.

This story has been corrected to reflect that Ripple does not operate or control XRP.

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Ripple faces a SEC lawsuit for breaking investor-protection laws when selling its XRP cryptocurrency

In this photo illustration of the ripple cryptocurrency 'altcoin' sits arranged for a photograph on April 25, 2018 in London, England. Cryptocurrency markets began to recover this month following a massive crash during the first quarter of 2018, seeing more than $550 billion wiped from the total market capitalisation. (Photo by )

  • Ripple plans to defend itself against an expected SEC lawsuit over allegedly breaking investor-protection laws while selling its cryptocurrency, XRP.
  • In a series of tweets, Ripple CEO Brad Garlinghouse blasted the SEC’s decision to sue his firm right before the holidays.
  • “Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability and energy efficiency,” he said.
  • The lawsuit would come after years of debate about whether XRP is a security, or a cryptocurrency outside regulatory scope.
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Cryptocurrency firm Ripple is facing a lawsuit by the Securities and Exchange Commission for allegedly violating investor-protection laws by selling its XRP token, a security the regulator considers as unlicensed.

Ripple’s CEO Brad Garlinghouse tweeted that the SEC is unjustifiably attacking crypto and blasted chairman Jay Clayton’s decision to sue his firm right before the holidays.

“Jay Clayton is taking notes from the Grinch this holiday season, leaving the actual legal work to the next administration,” Garlinghouse said, referring to the chairman’s departure at the end of Trump’s presidential tenure. 

The lawsuit hasn’t been filed yet, but Ripple is aware of the regulator’s impending action. The fact that the crypto firm disclosed that it’s about to be sued is uncommon, highlighting its intention to defend itself against legal action.

“We know crypto and blockchain technologies aren’t going anywhere,” Garlinghouse said. “Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability and energy efficiency. It’s traded on 200+ exchanges globally and will continue to thrive.”

Read More: Investing veteran Barry Norris is beating 95% of his peers by betting against the market’s riskiest companies. He warns investors against the ‘siren call’ to own value stocks – and explains why he’s now bearish on Rolls-Royce.

Garlinghouse went on to say that the regulator isn’t in line with the rest of the US government, and shouldn’t limit innovation especially if its decision “directly benefits China.”

Over the past years, the SEC has filed, and mostly won, civil lawsuits against startups that breached securities laws when raising money via cryptocurrency sales. But none of those firms are as big as Ripple. XRP’s current market cap stands at about $22 billion, and it is the third-largest cryptocurrency after Bitcoin and Ethereum, according to data from Coin Gecko.

The lawsuit would come after years of debate between both sides about whether XRP is a security, or a currency that exists beyond the SEC’s scope of regulation.

The SEC did not immediately respond to Business Insider’s request for comment.

Read More: Bank of America unveils its top stock pick in each of the 11 S&P 500 sectors and explains why they’re poised to dominate in the year ahead

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