Bitcoin has seen two straight weeks of outflows, while investors have poured money into ether for a third week ahead of a key network upgrade: CoinShares

Ethereum and bitcoin
Ethereum and bitcoin

Investors pulled their money from bitcoin products for a second straight week in the seven days to July 16, with many likely booking profits on long-held positions, while pouring money into ether for a third week, according to data from CoinShares.

Bitcoin assets saw flows drop 10.4% over the week, while ether saw flows rise 11.7%, according to the company’s most recent weekly flows report released on Tuesday.

Bitcoin lost around 7% in value in the week to July 16, when it fell below $32,000. Since then, it has fallen another 6.5% to around $29,720, driven by rising investor risk aversion over the surge in cases of COVID-19 that has battered global markets this week.

Since the currency peaked in April at almost $64,000, it has lost more 50%, although it is still up by over 200% over the last year. CoinShares investment strategist James Butterfill told Insider he believed a portion of the bitcoin outflows were down to longer-standing investors taking profit now in case of a steeper slide over the coming months.

CoinShares graph
CoinShares

“Most of our funds were launched in 2015 and we saw profit-taking earlier this year and not now. So the outflows we are seeing in some funds is simply due to when individuals first invested, rather than negative sentiment towards bitcoin,” he said.

In 2015, bitcoin traded between lows of around $110 and a high of close to $500. It’s risen by almost 30,000% since then.

“People that are seeking out, might not necessarily be doing so for bearish reasons, but instead their deciding to profit now, perhaps their line of thinking is that ‘I should have sold at $55,000, but it’s fallen down to $30,000, so I’ll just take profits here because my worry is that the BTC price is not going to do much over the summer,” Butterfill said.

Meanwhile, over the last 7 days ethereum’s ether token has fallen by around 13% to $1,748.85, Coinmarket cap data shows. After peaking in May above $4,300, much like bitcoin, it’s also lost around 50% in value. Over the last 12 months, however, it’s up by more than 600%.

Investors are hoping to profit from the upcoming upgrade to the ethereum network. Ethereum 2.0 is scheduled to roll out on August 4 and some investors may be buying, given that the shift will result in supply reduction and the price potentially rising sharply.

Bitcoin products were the only ones that saw outflows in the latest week. The smaller altcoins, together with ether, all registered modest inflows. According to the CoinShares data, which is an accumulation of global flows, XRP and dot saw a 0.3% rise in inflows, while ada saw an increase of 0.4%.

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Bitcoin sinks 8% as crypto market volatility again rears its head

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  • Bitcoin falls more than 8% Friday as part of a wider slump in the cryptocurrency market.
  • South Korea is reportedly set to levy a 20% tax on crypto transactions starting next year.
  • The value of the global cryptocurrency market has slid to $1.6 trillion during May.
  • See more stories on Insider’s business page.

Bitcoin dropped by more than 8% to trade under $36,000 during Friday’s session, slumping alongside other cryptocurrencies as the market starts wrapping up a month rocked by regulatory threats and Tesla’s about-face on accepting bitcoin as payment.

The world’s largest cryptocurrency lost as much as 8.5% at $35,178 but trimmed the loss to 7.5%. It again lost grip of the $40,000 level it had reached on Thursday. Meanwhile, ether, the token of the Ethereum blockchain, fell nearly 7%, Binance Coin lost 8%, as did Cardano-ADA, and Dogecoin moved 6% lower.

Volatility in the crypto market was showing signs of a pickup on Friday. The Crypto Volatility Index climbed above 133 after falling to roughly 127. The CVI has soared from the 80 level at the start of May, but is off its recent high close to 183.

Downbeat crypto news flowed through the market Friday, led by South Korea moving ahead with its plan to impose a 20% levy on cryptocurrency transactions beginning in 2022, Yonhap News Agency reported. Gains from virtual assets will need to be reported when filing for general income taxes in May 2023, the report said.

Meanwhile, Bank of Japan Governor Haruhiko Kuroda criticized bitcoin during an interview with Bloomberg. “Most of the trading is speculative and volatility is extraordinarily high,” he said. “It’s barely used as a means of settlement.”

For the month as a whole, bitcoin is facing a loss of roughly 38% after taking a number of blows, including China reiterating its call to restrict mining and trading activities surrounding bitcoin and Tesla saying it would stop taking bitcoin as payment because of the “insane” amount of energy needed to create new coins and secure the network.

But bitcoin’s price is poised to regain upward momentum, said Peter Jensen, CEO of RocketFuel Blockchain, in a note.

“BTC always recovers from past dips and surpasses the previous upper boundary/ceiling price,” he wrote. “We could see a similar upward trend in the coming months due to the Robinhood IPO and release of Central Bank Digital Currencies from various countries, which is expected to cement crypto as the future medium for trade and settlement.”

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Cryptocurrency rally cools off as tighter regulations loom, leaving bitcoin heading for its biggest monthly drop since November 2018

The photo shows physical imitations of cryptocurrency

The recovery in the cryptocurrency market ran out of steam on Thursday, with traders cashing in on the rally that began earlier this week, as regulators and governments honed in on the sector, with Iran implementing a temporary ban on mining for digital assets the previous day.

Coins across the board stumbled in the 24 hours to Thursday in the Europe morning, with many major cryptocurrencies falling by around 5% based on Coingecko data. Bitcoin fell 4.9% in the 24 hours to 04:15 E.T., when it was trading at $38,336.14. Bitcoin had reached record highs in April, but has since lost over 40% of its value based on its Thursday valuation.

The world’s biggest cryptocurrency is on track to reach its largest monthly drop since November 2018 this month. Since the start of the month, bitcoin has declined by almost 34%, almost matching the 37% decline of November 2018.

The second largest cryptocurrency ether was down by 4% in the 24 hours to Thursday midday in Europe and was valued at $2,738.64. It reached record highs earlier this month and has lost 37.5% in the past two weeks alone.

Smaller coins followed suit as binance’s BNB token was down 5.3%, XRP lost 4.9% and dogecoin dipped by 6.3% in the 24 hours to 04:15 E.T. on Thursday.

The cryptocurrency market has been cooling off in recent weeks as an increasing number of governments and regulators have indicated that tighter restrictions and rules could be imminent, which has rattled crypto investors.

Most recently, Iran had banned crypto mining for the upcoming summer months over fears of electricity shortages. Several blackouts had occurred in recent weeks as the country’s electricity network became overloaded.

China has been leading the crackdown on crypto mining and trading, which caused several crypto firms to halt operations in the region earlier this week. In the US, SEC Chairman Gary Gensler reiterated the authority would be prepared to fight bad actors in the crypto industry. Security and environmental concerns as well as investor protection have been cited as reasons for the increased regulatory attention.

Environmental concerns also caused Elon Musk’s Tesla to halt bitcoin payments this month after pioneering the use of cryptocurrencies as a form of payment for goods and services.

Despite these headwinds, the crypto market may be on the road to recovery.

“Overall, the crypto markets look to cap off a busy and volatile month next week and potentially leave behind the bearish price action seen with it. After all, despite the high volatility, Bitcoin’s sentiment among traders appears largely unfazed, with many calling it a “buy the dip” opportunity,” Thomas Westwater, analyst for DailyFX.com, said about the future of crypto.

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The founder of news site TechCrunch is using an NFT auction to sell an apartment

  • TechCrunch founder Michael Arrington is selling an apartment via an NFT auction.
  • Propy, a blockchain-based real estate platform, is running the auction with bidding starting at $20,000.
  • The winner of the NFT will also win the property rights to the studio apartment in Kiev.
  • See more stories on Insider’s business page.

TechCrunch founder and crypto investor Michael Arrington is selling an apartment in Ukraine through an NFT in a transaction being billed as the world’s first real estate sale via a non-fungible token.

Propy, a blockchain-based real estate platform, is running an auction for the studio apartment as a real estate-backed NFT and bidding starts at $20,000. The apartment was purchased in 2017 by Arrington, founder of online publisher TechCrunch, through Propy.

NFTs are digital assets such as video, images or audio that are tied to a blockchain. The assets can usually be viewed online but just one person can own them and the market for such collectibles has boomed recently.

The apartment is located in the Svyatoshino neighborhood in Kiev. Following the auction, the winner will become the owner of the NFT and the property itself. If the NFT is resold, the property rights are attached. Bidding begins June 8.

“Real estate is the world’s largest asset class and the most significant financial investment for most families. The intersection [between] Humanity and Big Capital is key to changing the old industry,” wrote Natalia Karayaneva, the CEO of Propy, in a Tuesday post on Twitter.

Arrington bought the apartment for $60,000 and the residential property transaction was recorded on the Ethereum blockchain network and settled using smart contracts. Michael Arrington served as an advisor to Propy, according to a 2017 press release announcing Arrington’s purchase of the Kiev apartment.

Propy’s Karayaneva, a software engineer and former real estate developer, is an advisor to Arrington XRP Capital, a hedge fund denominated in XRP, the digital asset used in Ripple Labs’ payment network.

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Mike Novogratz compared this bitcoin crash to late 2017, when the market plunged into a ‘winter’ lasting years

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Mike Novogratz is one of the most high-profile bitcoin and crypto investors.

  • Crypto billionaire Mike Novogratz compared the current state of the crypto market to late 2017.
  • At the time, bitcoin plunged into a “winter” lasting years as buyers lost interest following a rally.
  • Novogratz said the proliferation of other coins was overwhelming the crypto market.
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Leading crypto investor Mike Novogratz has compared bitcoin’s dramatic price crash to late 2017, when a boom in interest in digital tokens presaged a market collapse into a “winter” that lasted years.

Novogratz said that the widespread creation and adoption of alternative cryptocurrencies was overwhelming the market and meaning investors’ cash was spread too thin. Investors have recently pumped up bitcoin alternatives like ether, XRP and dogecoin, and turned to new creations like safemoon.

“The proliferation of cryptos is a supply response that overwhelms demand,” he wrote on Twitter. “Same happened in 2017.”

Novogratz said he was confident that “the best projects with utility and community will survive and thrive,” just as bitcoin eventually skyrocketed again in late 2020.

Novogratz is not the first to make the comparison between the current state of the bitcoin market and the situation in late 2017, when a sharp rally to record highs was followed by a collapse in prices.

On Wednesday, bitcoin crashed as much as 30% to $30,000 before rebounding to around $40,000, more than 38% off its April all-time high of close to $65,000.

The drop was triggered by China signalling it would crack down on the use of cryptocurrencies for payments, but the multi-day slide began last week when Elon Musk said Tesla would stop accepting bitcoin as payment for cars due to the network’s huge energy use.

It started a debate in the crypto community about whether this was the start of another bitcoin “winter” – a period in which the price drops sharply and stays low for years.

The last such winter began at the end of 2017, when bitcoin slid from a high of around $20,000 to a low of below $4,000 at the start of 2019.

Novogratz was replying to a tweet from Guggenheim chief investment officer Scott Minerd, who said the crypto market looks like the Tulipmania bubble of 17th-century Netherlands.

“As prices rise, tulip bulbs and #crypto currencies multiply until supply swamps demand,” he said.

Pankaj Balani, chief executive of crypto derivatives exchange Delta, told Insider he also saw parallels with 2017 and the rise of bitcoin alternatives.

He said money has been “rotating” into coins such as ether, XRP, and dogecoin, which is a “typical sign of retail exuberance.”

Bitcoin’s dominant share of the crypto market has been waning steadily since the start of the year, when it accounted for around 70% of total market capitalization. That share has now fallen to just over 40%, based on data from Coinmarketcap.com. This is around its lowest in two years.

But Balani said the money has been coming from investors chasing quick gains and is not “sticky capital” that will stay in the market when prices start to fall.

Analysts have also compared the $100 billion listing of crypto exchange Coinbase in April to the listing of bitcoin derivatives by CME Group in late 2017, which came just before prices plunged sharply.

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Dogecoin slumps 20% after Tesla’s bitcoin shock – while other tokens like Ethereum’s ether and litecoin also slide

Dogecoin icon on phone

Dogecoin and other cryptocurrencies sank on Thursday after Elon Musk suspended bitcoin payments for Tesla cars.

The meme-inspired digital asset tumbled 20% to trade around 40 cents. Litecoin fell 14%, while Ripple’s XRP and Ethereum’s ether lost 11% – having each dropped more than 20% from their peaks.

Bitcoin dropped as much as 15% on Thursday, prompting a knock-on effect for other digital currencies, as the entire crypto market value wiped off as much as $365 billion at one point.

The sell-off is being driven by a number of factors, according to Simon Peters, a crypto-asset analyst at investment platform eToro.

“Valuations were at or near all-time highs earlier this month, so there will naturally be some profit-taking, while we are also seeing a general sell-off among risk assets – such as technology stocks – as economies start to unlock post the pandemic and investors fret over potential rate rises and higher inflation,” he said.

But he expects buyers to return to cryptocurrencies in the coming weeks to take advantage of lower prices.

An overall drop in the crypto market saw “#cryptocurrencies” trending on Twitter with many users reacting to the sudden surprise that Musk delivered.

Musk, who has regularly tweeted about dogecoin, said he was concerned about “rapidly increasing use of fossil fuels for bitcoin mining and transactions.” Only earlier this week, he teased that Tesla could accept payments in dogecoin.

But dogecoin was already suffering a bad week after Musk’s “Saturday Night Live” appearance, at which he called it a “hustle.” The digital asset is down 32% this week so far.

“Bitcoin will not last as a financial instrument with the underlying climate damage it causes through carbon emissions,” Jeff Schumacher, CEO and founder of New Asset Exchange, said.

“In a post COVID-19 world, as the focus of companies shifts back to climate concerns, bitcoin’s poor environmental credentials – the CO2 production it is responsible for – will make companies and governments unwilling to use it as they attempt to green their image and push towards a net-zero world.”

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Bitcoin plunges as much as 15% after Elon Musk halts Tesla payments – calling the token’s energy use ‘insane’

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Elon Musk has been one of the major drivers of the cryptocurrency boom.

Bitcoin tumbled as much as 15% after Tesla boss Elon Musk said on Wednesday night that the car company would stop accepting payments in the cryptocurrency because of concerns about its environmental impact.

Musk later doubled down on his major U-turn, tweeting a chart showing bitcoin’s energy use and calling it “insane.”

The world’s most-traded cryptocurrency then pared some of its gains and was down 8.7% to $49,758 at 9.30 a.m. ET. Bitcoin remained around 70% higher for the year, but was 22% lower than a record high of close to $65,000 touched in April.

Musk’s announcement shocked the cryptocurrency world. The Tesla founder and chief executive has been one of the biggest advocates of cryptocurrencies, and has previously appeared to dismiss concerns about their energy use.

The revelation that Tesla had bought $1.5 billion of bitcoin and would start accepting payment in the token sent the price soaring 16% in a single day in February and added legitimacy to the asset class.

Yet Musk appeared to have had a change of heart, tweeting a statement on Wednesday night saying: “Tesla has suspended vehicle purchases using Bitcoin.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

Critics have long attacked bitcoin for its energy use. Bitcoin “mining” – the process of securing the network and creating coins using vast amounts of computing power – uses more energy each year than Sweden, according to Cambridge University researchers.

A Bank of America report estimated 73% of bitcoin mining takes place in China, where the majority of energy is generated by coal power.

Musk’s announcement sent other cryptocurrencies tumbling, too. Ether, the second-biggest coin by market size, was down 10.7% in the 24 hours to 9.30 a.m. ET. Dogecoin, XRP and Binance Coin all tumbled.

“Tesla accepting transactions bitcoin was viewed as a major step for the crypto market,” Daniel Ives, an analyst at Wedbush, said in a note.

“Now Tesla’s/Musk reversal will have a short-term negative impact on bitcoin and the crypto landscape as the market digests this confusing news from one of its biggest supporters.”

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Bitcoin plunges as much as 15% after Elon Musk halts Tesla payments, citing climate damage in major U-turn

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Elon Musk has been a key driver of the cryptocurrency boom.

Bitcoin tumbled as much as 15% on Wednesday night after Elon Musk said his electric car company Tesla would stop accepting payments in the cryptocurrency because of concerns about its environmental impact.

The world’s most-traded cryptocurrency then pared some of its gains and was down 7.3% to $50,534 at 4.20 a.m. ET. Bitcoin remained around 72% higher for the year, but was 22% lower than a record high of close to $65,000 touched in April.

Musk’s announcement shocked the cryptocurrency world. The Tesla founder and chief executive has been one of the biggest advocates of cryptocurrencies, and has previously appeared to dismiss concerns about their energy use.

The revelation that Tesla had bought $1.5 billion of bitcoin and would start accepting payment in the token sent the price soaring 16% in a single day in February and added legitimacy to the asset class.

Yet Musk appeared to have had a change of heart, tweeting a statement on Wednesday night saying: “Tesla has suspended vehicle purchases using Bitcoin.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

Critics have long attacked bitcoin for its energy use. Bitcoin “mining” – the process of securing the network and creating coins using vast amounts of computing power – uses more energy each year than Sweden, according to Cambridge University researchers.

A Bank of America report estimated 73% of bitcoin mining takes place in China, where the majority of energy is generated by coal power.

Musk’s announcement sent other cryptocurrencies tumbling, too. Ether, the second-biggest coin by market size, was down 8.4% in the 24 hours to 4.10 a.m. ET. Dogecoin, XRP and Binance Coin all tumbled.

“For an asset whose price is driven mostly by psychological sentiment and momentum, bitcoin could have a hard time recovering from this and may never revisit [its] recent highs again,” Jesse Cohen, senior analyst at financial platform Investing.com, said.

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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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Billionaire Mike Novogratz says cryptocurrencies face a ‘washout’ after the Coinbase listing frenzy

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Michael Novogratz is the founder and chief executive of Galaxy Digital.

  • Mike Novogratz said cryptocurrencies were likely to see a “washout” in the short term.
  • The billionaire investor predicted it would be a volatile week after Coinbase’s direct listing.
  • Yet he remains bullish, seeing bitcoin at $100,000 by the end of the year.

The cryptocurrency market is probably in store for a “washout,” billionaire investor Mike Novogratz has said, after the Coinbase listing created a frenzy that drove up bitcoin and the likes of Dogecoin and XRP.

Novogratz, the founder and chief executive of crypto-focused investment company Galaxy Digital, told MarketWatch in a virtual event: “I’ve seen a lot of weird coins like dogecoin and even XRP have huge retail spikes, which means there’s a lot of frenzy right now.”

He added: “That never ends well, and so we’ll probably have a washout at one point.”

Novogratz also said: “In the next week, certainly we could have some volatility because of the excitement around Coinbase.”

Cryptocurrency exchange Coinbase went public on Wednesday, closing with a valuation of $65.4 billion, in what analysts have heralded as a coming-of-age moment for the crypto word.

Coinbase’s direct listing to the Nasdaq generated a lot of excitement around cryptocurrencies. It sent bitcoin soaring to an all-time high close to $65,000 and also pushed the ether, XRP and Dogecoin cryptocurrencies to records.

But bitcoin (BTC) has fallen quite sharply since Coinbase’s debut to below $62,959 on Thursday.

Despite his words of warning about the short-term outlook, Novogratz remains highly bullish on bitcoin, saying Coinbase’s IPO is “monumental” for the industry.

He predicted that bitcoin could hit $100,000 by the end of the year and may even be worth $500,000 in three years’ time.

Crypto entrepreneur Bobby Lee, who founded one of the first cryptocurrency exchanges, told Insider in March bitcoin investors should be more aware of the token’s wild bull and bear cycles.

He predicted there will be another “winter” when the currency falls dramatically and stays low for two or three years. But Lee is also bullish over the long term, saying bitcoin could even hit $1 million in future bull runs.

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