Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion
The crypto markets took a steep downward turn on Friday, with more than 90 of the top 100 cryptocurrencies posting single-day price declines. The bitcoin price dropped nearly $400 after challenging the $4,000 level earlier in the week, while the ethereum price slipped below $260.
Chart from CoinMarketCap
The total cryptocurrency market cap–the combined value of all cryptocurrencies–dropped more than $10 billion for the day. After beginning the day at about $133 billion, the crypto market cap quickly dropped below the $130 billion threshold, where it languished leading into Friday morning. At present, the total crypto market cap is about $122 billion.
Chart from CoinMarketCap
Bitcoin Price Dips Toward $3,500
Bitcoin was at the head of the retreat, dipping nearly $400 from its Thursday morning mark of $3,900. Market manipulation or not, the bitcoin price has tapered quite a bit since its early-week recovery. In the past day alone, it has dipped 6%, despite the fact that a prominent industry figure said a trusted source had told him that China will not extend its bitcoin crackdown to mining. At present, the bitcoin price is trading at a global average of $3,564, which translates into a $59.1 billion market cap.
Bitcoin Price Chart from CoinMarketCap
Meanwhile, JP Morgan CEO Jamie Dimon has taken another potshot at bitcoin, claiming that it’s “worth nothing” just a week after calling it a fraud.
Ethereum Price Dips Another 6%
The ethereum price mirrored bitcoin’s decline, dipping 6% for the day. After entering the day above $270, the ethereum price struggled to hold above that mark. Ultimately, it dove through the $260 level, too, bringing it to a current price of $257. Ethereum now has a market cap of $24.4 billion.
Ethereum Price Chart from CoinMarketCap
Bitcoin Cash Posts Double-Digit Decline
The bitcoin cash price careened downward on Friday, posting the worst single-day performance of any top 15 coin. Within the past 24 hours, the bitcoin cash price has fallen by more than $50–a 10% drop. At present, bitcoin cash is trading at $407 and has a market cap of just $6.8 billion.
Bitcoin Cash Price Chart from CoinMarketCap
Altcoins Trend Down
The altcoin markets joined in the retreat, with nearly every top 100 cryptocurrency declining for the day. Fourth-ranked Ripple saw its price fall 5% to $0.17, while Dash slid 3% to $337.
Altcoin Price Chart from CoinMarketCap
The litecoin price fell 8% to just under $46. The 6th-ranked coin now sits at just 50% of the $92 record it set on September 2.
Litecoin Price Chart from CoinMarketCap
NEM–whose single-day trading volume is just $3 million–declined 6% to $0.204, while IOTA dropped 5% to $0.484. Monero, whose price approached $150 less than a month ago, is now trading at just $85 following Friday’s 7% skid. Ethereum classic rounds out the top 10 with an 8% decline that forced its market cap below $1 billion.
Standpoint Founder – Bitcoin Asset Class Will Grow Into $2 Trillion Market
At a time when many are making short-term bets on the price of bitcoin and other cryptocurrencies, one bitcoin bull is going a step further. Ronnie Moas, founder of Standpoint Research, is making the case cryptocurrencies will not only be a decade-long trend, but a viable asset class.
In fact, he's going so far as to call for a massive rise in the market cap of cryptocurrencies. His prediction? The total value of all cryptographic assets, today valued at $150 billion, will soar to $2 trillion over the next 10 years.
And in a new interview, Moas walked CoinDesk through his forecast, explaining how it stems from his fundamental analysis of the capital markets and the broader macroeconomic trends he now sees in place.
The Standpoint founder's view stands in stark contrast to the highly bearish analysis of Peter Schiff, who called cryptocurrency a bubble, a speculative frenzy and a natural Ponzi scheme driven by "just plain greed" last week.
In the broadest sense, Moas sees the current state of the cryptocurrency market as a direct parallel to Silicon Valley during the 1990s, when a massive surge of innovation created new technologies that transformed the way we work and live and ushered in a period of massive wealth creation.
"I am not any more concerned with bitcoin being at a record high than Amazon or Google investors were concerned when those share prices jumped hundreds of percent and hit $100 and $200 many years ago. Today, both of those stocks are above $900. The question is not where we are at – it is where are we going? I do not think we are in a bubble."
Roadmap to $2 trillion
How does Moas get to the $2 trillion market cap for cryptocurrency in his forecast?
He begins by looking at the $200 trillion that is currently invested in global capital markets today, including all major asset classes: cash, stocks, bonds and gold. Moas, who also does traditional equity analysis, begins his market breakdown with stocks, which he believes are currently overvalued.
According to Moas, three-quarters of the names in the S&P 500 are trading at least 18 times earnings, which is higher than his value threshold of 12 times earnings. He also adds that we haven't had a stock market correction in 20 months.
On the currency front, the U.S. dollar is currently losing 1 to 2 percent per year due to inflation. Moas also points out that the dollar has lost half its value since he was in high school 35 years ago.
From a global perspective, where most people don't have access to U.S. dollars, Moas believes the case for cryptocurrency is even more compelling:
"Now, imagine what they think of their own local currencies elsewhere in the world. Imagine you live in Venezuela and you're keeping your money under the mattress. Would you rather leave it there in Venezuelan bolivar or would you rather put it in bitcoin? It's not going to take you very long to make that decision."
Breaking his thesis down further, Moas believes that a conservative estimate is that at least 1 percent of the $200 trillion now tied up in stocks, cash, gold and bonds will migrate into cryptocurrencies over the next decade.
In that case, he says, "Bitcoin could end up with a market capitalization that is more than Amazon and Apple combined."
Under this scenario, that would mean that the current market capitalization of all cryptocurrencies would naturally grow.
And if Moas's market capitalization targets are correct, investors would then receive a 1,250 percent return on their cryptocurrency investments made today.
But he adds one major caveat to that prediction. Simply, "You've got to be in the right names."
Assuming you accept Moas's basic bull market thesis for cryptocurrencies, how do you know if you are invested in the right "names" in the cryptocurrency space? And, if the market boom in cryptocurrency is analogous to the roaring years of the 1990s tech boom, how can you avoid investing in the next Pets.com?
As Moas frames it:
"A lot of people say there is a bubble out there. I see a bubble when you get down below the top 50 cryptocurrencies. There are more than 800 names right now. In my view, what happens outside the top 50 is irrelevant."
Moas goes on to point out that 91 percent of the nearly $150 billion market cap is invested in the top 20 names and 70 percent is invested in bitcoin and ether alone.
He recommends, for the purposes of portfolio diversification, retail investors should hedge their bets and invest across the top 10 or 20 cryptocurrencies.
In Moas's view, the 800 cryptocurrencies that are now trading are analogous to the 800 stocks that were available on the Nasdaq at the height of the dot-com bubble nearly 20 years ago. While Amazon and Apple and Microsoft emerged to become among the most valuable companies of all time, there were many companies from that time period that died slow and painful deaths.
Or, as Moas more colorfully puts it: "Back then, there were hundreds of pump-and-dump, small-cap junk names just as there are in crypto today. Today, the crypto market is giving you the same signals with names like dash, ripple, litecoin, monero, bitcoin, ethereum, neo, nem, iota and others."
He went on to add that while there are certainly risks involved in investing in cryptocurrency, those risks are, in his view, outweighed by the possibility of 10-to-one or 20-to-one payout to the upside experienced by tech stocks.
The bull case
Of all the major cryptocurrencies, though, Moas seems especially bullish in his view of bitcoin. Unless there is a major shakeup in the underlying confidence, he believes that investors are going to want to buy-and-hold for their portfolios for 10 years or more.
Moas points out that there are currently only about 16 million bitcoins that have been issued of a possible total 21 million coins that will be created.
In his analysis, this could lead to tens of millions of people trying to get their hands on just a few million coins.
When asked for a specific price target, Moas summed up as follows:
"At the beginning of July, bitcoin was trading at $2,500. I believe in the next three years you will probably see $15,000 to $20,000 for bitcoin. It could double twice from here in the next 36 months."
Fidelity now allows clients to see digital currencies on its website
Fidelity Investments has started allowing clients to use its website to view their holdings of bitcoin and other cryptocurrencies held through digital wallet provider Coinbase.
Fidelity Investments has started allowing clients to use its website to view their holdings of bitcoin and other cryptocurrencies held through digital wallet provider Coinbase, the company said on Wednesday.
The initiative, previously tested with the Boston-based money manager's employees, is a rare example of an established financial services company warming up to cryptocurrencies.
Starting Wednesday, most Fidelity clients will be able to authorize Coinbase, one of the largest crypto-currency exchanges in the United States, to provide the fund manager with data on their holdings.
Through the experiment, the company said it aims to learn more about digital currencies, which have been proliferating since the creation of Bitcoin, the oldest and most valuable of these assets.
Coinbase enables users to buy and trade Bitcoin as well as competitor virtual currencies Ethereum and Litecoin.
"This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them," Hadley Stern, senior vice president and managing director at Fidelity Labs, the company's innovation unit, said in an interview.
Bitcoin hit a record high on Tuesday, with one unit of bitcoin trading at above $3,400 on Coinbase.
The currency's rise in value is not a driving force behind the initiative, Stern said, noting that the integration is part of Fidelity's wider efforts around cryptocurrencies and their underlying technology blockchain.
Many large financial institutions around the world have been investing in blockchain over the past two years, in the hopes that it can help them slash costs and simplify some processes. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet rather than a central authority.
However, most established financial firms have shied away from associating themselves with bitcoin and cryptocurrencies, because the sector remains largely unregulated.
Fidelity's Chief Executive Officer Abigail Johnson announced the company's intention to launch the Coinbase integration at an industry conference in May.
At the time Johnson also revealed that Fidelity had been accepting bitcoin payments in its cafeteria, but said the experiment had highlighted the technology's flaws as a means of payments.
"But I am still a believer – and it's no accident that I'm one of the few standing before you today from a large financial services firm that hasn't given up on digital currencies," Johnson said at the time.