mark cuban bitcoin

When mainstream investors and analysts discuss bitcoin investing, their answers are often so divergent that one could question whether they are even talking about the same asset.

This contentious debate has heightened in recent months, as the bitcoin price has repeatedly shattered records and carried the markets to fresh all-time highs. That trend continued on Saturday, as the bitcoin price rode a post-Thanksgiving wave of euphoria to a new high-water mark of $8,754 on bitcoin exchange Bitfinex.

bitcoin price
Bitcoin Price Chart | Source: BitcoinWisdom

The bears have been out in full force. JPMorgan CEO Jamie Dimon says bitcoin is a “fraud,” even though his firm might help clients trade bitcoin futures, and other entrenched financiers have issued similar condemnations.

That said, the list of bulls is steadily growing, with market observers such as billionaire hedge fund manager Mike Novogratz beginning to realize that it is a revolutionary technology.

Mark Cuban, a long-time cryptocurrency skeptic, has softened his stance in recent months, but he still believes cryptocurrency is “more religion than asset” and that bitcoin investing is a longshot — but one that aggressive investors should consider taking.

In a recent interview with Vanity Fair, the dotcom billionaire and Dallas Mavericks owner advised prospective investors to take a conservative approach, allocating the majority of their assets to a simple S&P 500 index fund. However, he added that “true adventurers” should place as much as 10 percent of their savings into bitcoin and ethereum.

“If you’re a true adventurer, and you really want to throw the Hail Mary, you might take 10 percent [of your investment capital] and put it in bitcoin or ethereum,” he said.

Now, very few Hail Mary attempts succeed, and Cuban cautions those willing to take the chance that they should be prepared to lose all of their money.

Nevertheless, those true adventurers who did take the plunge into bitcoin investing on Cuban’s advice have already been richly rewarded. Since Cuban issued this suggestion on October 18, the bitcoin price has already risen by 60 percent, increasing the value of a hypothetical $10,000 investment to $16,000.

Counting the value of any coins derived from Bitcoin Gold, an altcoin that forked away from the main bitcoin blockchain in late October and airdropped coins to anyone holding bitcoin funds at the date of the fork, the present value of that initial investment rises to nearly $17,000.

if this trend continues, it won’t be long before Cuban’s bitcoin Hail Mary begins to look more like an extra point attempt.

Featured Image from ABC News

square cash

Financial services giant Credit Suisse says that bitcoin integration “confers legitimacy” on bitcoin and will prove to be a financial boom for payment processing startup Square.

Credit Suisse Bullish on Square’s Bitcoin Play

Credit Suisse is not known for being bullish on bitcoin. Tidjane Thiam, the firm’s CEO, has called bitcoin the very definition of the bubble, and the company has not shown an interest in directly engaging with the crypto markets. That said, Credit Suisse is very optimistic about Square’s recent decision to test bitcoin sales within its popular Square Cash app.

As reported by CNBC, Credit Suisse analyst Paul Condra predicts that Square will attract or convert 10 million users into bitcoin buyers within two years, leading to an incremental $30 million in annual revenue. This estimate is based on the assumption that users will spend $200 per year — leading to $2 billion in annual volume — and Square will charge a modest 1.5 percent transaction fee. In response to the announcement, Condra raised his price target for Square shares to $37 from $31.

Square Cash ‘Confers Legitimacy’ on Bitcoin

In a note to Credit Suisse clients, Condra went a step further, forecasting that bitcoin integration will “confe[r] legitimacy” on bitcoin and lead other mainstream businesses to feel comfortable adding support for digital currencies.

From the note:

“While we are positive on Square’s strategy, to the extent it confers legitimacy on Bitcoin and prompts adoption by other providers (i.e., PayPal) the biggest beneficiary may be the crypto-asset industry,” Condra reportedly wrote.

The bitcoin price has risen considerably since Square began its bitcoin trial, in part based on speculation that Square will eventually enable merchants to accept bitcoin through its payment processing platform. On Monday, the bitcoin price rose to a new all-time high, peaking at $8,315 on bitcoin exchange Bitfinex.

Not lucky enough to be able to participate in Square Cash’s bitcoin trial? You can buy bitcoin using a credit card through Block Explorer using USD or EUR.

lightning network

The lightning network has successfully processed a cross-blockchain atomic swap, marking another milestone for bitcoin scalability, privacy, and infrastructure.

Developers at Lightning Labs successfully used a lightning network channel to trade testnet bitcoin for testnet litecoin. The transaction was completed off-chain, meaning that they were able to trade the coins without recording a transaction on either the bitcoin or litecoin blockchain and without using a trusted third party such as a cryptocurrency exchange.

Here’s why that’s significant.

For years, the bitcoin community has wrestled with the question of how to scale the network to accommodate more users without sacrificing security or decentralization. Some developers — particularly those who believe bitcoin’s chief utility lies in its use as a currency — argue that the network should scale through blocksize increases. Others support a broader approach that relies on so-called second-layer solutions — such as the lightning network — that build on top of the bitcoin network and protocol but operate off-chain, so to speak.

This debate reached a head in 2017 when bitcoin’s meteoric price rise had a corresponding effect on transaction fees. Second-layer solutions remained in development with no set release date, and the currency-first crowd largely cast their lot with bitcoin cash, a cryptocurrency that was created through a hard fork of the bitcoin blockchain and relies on on-chain scaling to keep transaction fees low.

However, lightning advocates continue to believe that off-chain transactions — processed through second-layer payment channels at virtually no cost — are the future of everyday bitcoin payments and transfers. In addition to reducing transaction fees, they will conceal payments from the blockchain — ensuring user privacy — without sacrificing the trustlessness of bitcoin’s blockchain. And with full-featured support for atomic swaps, users will be able to trade coins across blockchains, eliminating the need for centralized order-book exchanges.

With the successful sandbox demonstration that off-chain atomic swaps are possible, that latter goal is one step closer to becoming a reality once the lightning network is deployed on top of the main bitcoin blockchain.

For a more detailed explanation of how lightning-based atomic swaps function, read this blog post published by Lightning Labs.

bitcoin civil war

An executive at a prominent cryptocurrency investment firm says that he doubts that bitcoin and bitcoin cash will be able to avoid the so-called bitcoin civil war as long as they maintain the same mining algorithm.

Since bitcoin cash launched in August, its advocates have made a concerted push to brand it as the true heir to bitcoin’s original vision as a peer-to-peer electronic cash system. Following the cancellation of SegWit2x last week, the bitcoin cash price surged to an all-time high while bitcoin entered a steep decline, shocking the community into the realization that bitcoin cash’s claims have some teeth.

Many influential figures, including both Andreas Antonopoulos and Jihan Wu, have cautioned the community to stray from framing the scaling debate as a civil war. They argue that the two cryptocurrencies have fundamentally different use cases and visions and can consequently coexist peacefully — just as bitcoin has with the legions of other altcoins that have launched over the years.

However, Ari Paul, chief investment officer at crypto-focused firm BlockTower Capital, stated on Twitter that he does not anticipate that bitcoin and bitcoin cash will be able to coexist as “friendly differentiated currencies” as long as they are fighting a zero-sum battle for a limited resource such as hashpower.

“The idea that BTC and BCH can be friendly differentiated currencies is nonsense,” he wrote. “PoW mining is one of the key underpinnings of ‘trustless digital scarcity’, and it breaks if miners can attack a chain and retain economic value of their hardware.”

Currently, bitcoin and bitcoin cash share the same proof-of-work (PoW) SHA-256 hashing algorithm, meaning that miners can easily switch back and forth between networks to mine whichever blockchain is the most profitable at any given time. Paul says that this necessarily renders one of the blockchains fundamentally insecure, preventing the two cryptocurrencies from ever reaching an armistice.

“As long as BTC and BCH are on same PoW algo, (at least) one is fundamentally insecure,” he explained. “We can have ceasefires amidst a longer ‘war’, but we’re in a state of disequilibrium. I expect the disequilibrium to persist for a while and cause a lot of drama before ultimate PoW fork.”

Technically, this is true of all altcoins that share a hashing algorithm with bitcoin, but no other mining-compatible coin poses as serious a threat to bitcoin’s viability. Paul warns that although they may currently coexist fine, the chain with more ideological support from miners could eventually mount an attack against the lesser one, meaning that its apparent security is merely a facade.

“You can leave a door unlocked for a year without a robbery,” he concluded, but it “doesn’t prove security.”

Featured Image from Zooey / Flickr

bitcoin price

Hedge fund legend Mike Novogratz used last weekend’s bitcoin price decline as an opportunity to deepen his BTC position by $15 million to $20 million.

Speaking at the Reuters Global Investment 2018 Outlook Summit Novogratz — a billionaire macro trader and former principal at Fortress Investment Group — explained that he sees the recent bitcoin price decline as a buying opportunity, not a cause for concern.

After peaking above $7,700 on November 8, the bitcoin price crashed in the aftermath of the indefinite suspension of bitcoin scaling proposal SegWit2x, which had been scheduled to activate this week. The global average bitcoin price tumbled approximately $2,200, eventually reaching a November low of $5,519 on November 12, according to CoinMarketcap.

bitcoin price
Source: BitcoinWisdom

This unexpected bearish turn left many investors panicking, but Novogratz says that he bought between $15 million and $20 million worth of bitcoin during the dip. Despite the weekend pullback, he believes the bitcoin price will reach $10,000 by March on the heels of increased attention from institutional investors. He says the herd will arrive once a mainstream firm begins offering crypto assets as investment options.

“When it’s that easy, the price of bitcoin or ethereum is going to go much higher. And that is a lot closer than people think,” he said, adding that it could happen within the next six months.

Novogratz recently announced the creation of Galaxy Investment Partners, a blockchain-focused hedge fund whose largest single position is in bitcoin. He has invested approximately $100 million of his own capital in the fund, and he intends to raise $500 million, which will make Galaxy the largest fund of its kind.

March is still four months away — an eternity in the crypto economy — so it remains to be seen whether Novogratz’s price target will be realized. However, his bullish bet is already paying off. The bitcoin price has already recovered by more than $1,000 since Sunday. Depending on when he placed his buy orders, the value of his weekend purchases may have already increased by several million dollars.