8.00am MORNING HEADLINES
Good morning, and welcome to our rolling coverage of all things cryptocurrency, including price, regulation, innovation and financial crime.
Bitcoin is up slightly on the day so far at $6,761, with Ethereum at $542 and Ripple at $0.54.
As prices flatten out, one expert suggested today that bitcoin’s decrease in volatility is a signal that the bottoming process has already begun — but it may still have a way to fall.
Speaking to CNBC, Bill Baruch, President of Blue Line Futures, claimed that bitcoin’s rolling 30-day annualised volatility is down to around 61 percent compared to last year’s highs of nearly 150 percent.
So far in June, Bitcoin’s volatility was down all the way to 50 percent.
Mr Baruch, says that this could yet signal the beginning of another fall.
He said: “Ultimately, after its volatility has become this depressed and the cryptocurrency has lost as much as 70 percent from its December peak, I believe the selling has become exhausted, and a bottoming process can begin.”
According to Baruch,the “bottoming process” has begun, he said: “I like to say that a bottom is a process, not a price. Now that the price and volatility have come back down to Earth, this bottoming process can begin. I see significant upside from here in the long-term.”
But how low will this process take the price?
He said: “A bottom would occur more quickly and more constructively if the recent low of $6,000 per coin holds.
“However, the 100-week moving average is down near $4,550, so traders will be watching that level.”
Got something to add? Send your reaction / thoughts / analysis / price predictions over to @DavidGDawkins.
Updates below throughout the day….
9.21am – Bitcoin not ‘done’ yet
Robinhood co-CEO Vlad Tenev said at CB Insights’ Future of Fintech conference on Wednesday that BTC, “has staying power, significant staying power.”
Coindesk report that Mr Tenev said: “It’s very foolish to say bitcoin is done.”
10.00am – Bitcoin falls
BTC has lost $32 on the day so far.
10.50am – Why a 19th century equation is guiding cryptocurrency valuations
Stephen Young, Co-founder of Coindirect told Express.co.uk that existing valuation frameworks that use discounted future cash flows are simply not suited to the valuation of cryptocurrencies.
However, he said, “the Quantity theory of money and the Fisher equation shows promise as a way to reason about the value of a cryptographic token.”
He said: “Whilst it’s true that crypto has struggled to provide credible valuation frameworks and lots of critics say the valuation is purely based on how much other people will pay, I don’t agree.
“There are two components to a cryptocurrency valuation. There is the fair value which, in traditional stocks, is determined through fundamental analysis of the business and doing a projected discounted future cash flow. Then there is speculative value, which is based mainly on people’s opinions.
“The Fisher equation offers a way to approximate the fair value of a token so investors can make more informed decisions. When designing crypto economic systems, the equation also helps you think about the forces that apply to your token so you can find ways to ensure the long term viability of your project.
“This equation remains the most promising method to evaluate token valuations and it is essential that investors are aware of this model when looking to begin their investment journey.”