Seven months into a severe cryptocurrency market downturn, the bears have finally run out of steam, leaving the bitcoin price primed for a breakout.
That’s according to Barry Silbert, founder of the Digital Currency Group (DCG), perhaps the cryptocurrency industry’s most prolific investment fund.
Speaking with CNBC on Tuesday, Silbert said that the recent surge above $7,000 likely indicates that the bottom is in for the bitcoin price.
“I think the bears just kind of ran out of energy,” he said, noting that “a lot of institutional money” was looking for an opportunity to get in.
Grayscale Investments — the creator of the Bitcoin Investment Trust (OTC: GBTC) and a DCG portfolio company — revealed this week that institutional capital accounts for 56 percent of the more than $248 million that has been invested in GBTC and other Grayscale products during the first half of 2018. By comparison, Silbert said, the fund was onboarding virtually no funds from institutions as recently as one year ago.
The DCG founder, who bought his first BTC when it was trading $10, also said that he took it as a bullish sign that U.S. Federal Reserve Chair Jerome Powell, as well as several billionaire investors, have recently issued public statements criticizing cryptocurrency, yet the bitcoin price has held steady.
Powell, for instance, told Congress yesterday that the nascent asset class raises a number of consumer protection issues for “unsophisticated investors” and that cryptocurrency should not be considered real currency.
“When the chair of the Fed says negative things about bitcoin, and Howard Marks says negative things about bitcoin, and Ken Griffin says negative things about bitcoin, and bitcoin doesn’t move, I think that’s a bullish sign,” Silbert said.
The bitcoin price traded up approximately one-half-of-one percent on Wednesday, reaching a present value of $7,506 on cryptocurrency exchange Bitfinex. Bitcoin now has a market cap of $128.3 billion, which represents a 43.8 percent share of the total value of all cryptocurrencies, which currently stands at $292.7 billion.
BCH Network Spending $1.2 Million Annually on Nodes
The hacker group then estimated that running each of the nodes was costing the Bitcoin Cash network approximately US$100, with the estimated monthly expenditure running to US$100,000. According to Bitpico, the number of all Bitcoin Cash network nodes running on Alibaba’s facilities is 49% (1/2 of 98%).
Further proof of a high level of centralization of the Bitcoin Cash network per Bitpico included a recent move by the network to ban four-fifths of the IP addresses associated with the hacker group and which were being used in stress-testing.
Out status monitoring node was centrally banned again as where a bunch of VPS’s.
Switched to a new IP we are again connected. We are currently monitoring the IP addresses as they seem to be changing into separate network groups, possibly to fake decentralization. #bcash$bch
However, the claims by Bitpico did not go unchallenged with some users posting conflicting statistics. According to bchnodes.online, for instance, Bitcoin Cash nodes are currently active in 48 countries spread around the world. The highest concentration of nodes is in the United States where approximately 28.26% of the nodes are located followed by China with 22.54% of the nodes. Germany comes in third with 10.95% of the nodes.
‘Roger Ver will now Cry’
After emerging from a hiatus that lasted a couple of months, late in June Bitpico announced that they would be launching an attack on the Bitcoin Cash network with the goal of splintering it. As CCN reported then the group promised to inflict grief on BCH evangelist Roger Ver.
“The [Bitcoin Cash] attack has been started; it will continue to run as we work to amplify it over the coming months. We expect to have 5000 Bcash attack nodes in roughly 6 weeks and then we will multi-fork the chain. @rogerkver will now cry,” Bitpico tweeted at the time.
Bitpico members are, however, not alone in accusing the Bitcoin Cash network of lacking decentralization. Last year in December Bitcoin developer Nick Szabo made similar accusations. Earlier in the year, a project manager at the Identity Division of Microsoft alluded to Bitcoin Cash by criticizing blocksize increases as being anti-decentralization. At the time Bitcoin Cash was planning to increase its blocksize fourfold from 8MB to 32MB and this was eventually realized in May.
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