Will the price of Bitcoin go up? Betting on the World Cup; Robinhood vs. Coinbase.


The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.

For the intro to this weekly series, please go here.

Story 1: Bitcoin Prices Continued Downward Trend This Week

Decrypted: In 2017, Bitcoin had a strong rally peaking at $20k, before correcting and dropping as much as 70%.

Media affects Bitcoin. When there is good or bad news about Bitcoin, there are more people buying or selling Bitcoin. Recent news about the hack on a major South Korean exchange, as well as a new study suggesting it’s 2017 highs were artificially inflated, are some of the most recent stories that affected Bitcoin’s price.

At the same time we read statements from different experts making price predictions or analyzing charts to explain why and when it will go up again.

But the reality is that none of this matters. I am not here to make bold price predictions, but I am certain of a few things:

Will Bitcoin go up? Yes, it will. How much? Investors and almost everyone in the crypto expected the price to continue to rise in 2018, yet it didn’t. No one knows or can predict if will be 25,000 or a million. Also, many have their own agenda when they make predictions about ups and downs. Why will it go up? Because regulation is coming that will make people feel safe, and because new tech is coming, like Lightning, that will make it faster and cheaper to transact.

Our take: As I am writing this, on late Sunday afternoon, the price of Bitcoin on Coinmarketcap.com is $6,374.74.

Lately, we’ve seen plenty of predictions about what the price will be. Here’s a few:

  • “I’m thinking $250,000 a bitcoin by 2022, in California. Believe it, it’s going to happen. They’re going to think you’re crazy but believe it, it’s happening, it’s going to be awesome”, Tim Draper, Founder of DFJ & Draper University.
  • “Bitcoin is a great store of value. and will be worth more than $20,000 by the end of 2018”, Tom Lee, Managing Partner of Fundstrat Global Advisors.
  • “If we see over $10,000 by the end of August, we can see the $20,000, then the press, the media is going to come in, and we can still see the $60,000 this year,” Julian Hosp, co-founder of TenX
  • “Bitcoin is likely to hit $50k mark by end of 2018,” Anthony Pompliano, Investor.
  • “The price of Bitcoin will hit the $75k mark by this year end,” John Pfeffer, Institutional investor.
  • “Bitcoin will hit $100k within this year,” Kay-van Petersen, an analyst at Saxo Bank.

Bitcoin has come a long way since 2009. It has emerged as a popular alternative to fiat currency in certain parts of the world where fiat currency has lost value or where banks are few and far between.

About the price predictions, I don’t care when they come true. Already half way through the year, its difficult to say what will happen. For a big price shift to occur, something massive would have to happen.

Things like Lightning will make the difference. The use of Lightning Network with real Bitcoins, started in 2018. Currently the network has 2,700 nodes, 9,000 channels with a total capacity of 63 BTC. Its only suitable for small payments, ranging from $0.001 to $50. Lightning is important, but adoption will be gradual and while the price of BTC will rise because of it, it will happen at a steady pace over time.

Bitcoin will go up, the only question is when. One thing is for sure, this is definitely a good time to buy Bitcoin and other cryptocurrencies.

Story 2: Betting on the World Cup Final… with Ethereum

Decrypted: On Sunday, an estimated audience of around 4 billion people around the world watched as France beat Croatia in the 2018 World Cup final.

During big sporting competitions, such as the World Cup, even more money is spent gambling than usual. Over the 2018 World Cup, bookmakers estimated to make a profit of US$36.4 billion.

Our take: In the four years since the last world cup, cryptocurrency has grown incredibly and cryptocurrency developers went to great lengths to build applications to capitalize on the football fever. It shouldn’t come as a surprise that blockchain games were created specifically for this year’s World Cup.

According to a report on Forbes, the World Cup 2018 witnessed several blockchain-based betting games built to incentivize football speculators with ether and other crypto.

CryptoCup is a World Cup prediction game, that leveraged blockchain technology. The platform is a decentralized application, that allowed users to build their own ERC 721 tokens to represent the teams they thought would win the World Cup tournaments. Players built their own tokens by setting their own predictions. Each token was customizable and unique and held the player’s choices. To win, contestants would have to predict the outcome of football matches and the ones with more points were rewarded by redeeming their prize from a smart contract.

FanDuel launched of World Soccer Pick’em, presented by GameCredits. Foorball fans would have access to a wide range of fantasy contests for the World Cup, including a free-to-enter game and paid daily fantasy contests. Throughout the World Cup, users would be able to submit daily predictions to FanDuel for a chance to win GameCredits and cash.

EtherCup.io is an Ethereum game, in which each of the 32 teams were available for sale and resale from the start of the World Cup. Each time a team earned a victory, its owner on EtherCup would win a number of free players. Throughout the course of the World Cup, participants could offer to rebuy teams at a premium.

Soccer Manager Crypto, is another decentralized football management massively multiplayer game. They developed their football management game onto Chimaera blockchain technology supporting thousands of leagues and players.

NitrogenSports.eu, hosted an exclusive competition for World Cup 2018. During the World Cup, each bet placed on the site would earn users a flag. By collecting 32 flags, players would be eligible for the World Cup prize pool.

During the last World Cup, before the concern over the regulation of Bitcoin, a number of online cryptocurrency driven sites offered betting services. Betting on the 2014 cup in Brazil was openly advertised on the internet and sites like BitKup offered all levels of wagering action, including VIP Rooms and free to enter pools with a grand prize of one hundred BTC.

This year, gambling hubs made a lot of money off this World Cup and police cracked down on some of them. Chinese officials busted a World Cup gambling ring that took in over 10 billion yuan (nearly $1.5 billion) in cryptocurrency bets, as part of an anti-gambling operation run by Chinese police, during the 2018 FIFA World Cup.

The blockchain and smart contracts represent a huge step forward for the gambling industry and can provide a new level of trust. By the time the next World Cup rolls around, we can expect far more service providers to actively use and accept cryptocurrencies as a payment method.

Story 3: Litecoin, Bitcoin Cash Are Latest Crypto Additions to Robinhood Investing App

Decrypted: Robinhood is expanding its cryptocurrency trading product, with two new coin listings. Users can now trade Litecoin and Bitcoin Cash from the Robinhood app.

The company first announced it was entering crypto trading, with a new brokerage offering earlier this year. Robinhood Crypto, was launched in February and is currently available in 17 U.S. states.

While the most popular place to trade Bitcoin in the U.S. is Coinbase, which boasts more than 20 million customers, Robinhood Crypto is differentiating itself with zero-fee transactions, with the ultimate goal of doing away with the concept of trading fees in the market altogether.

Our take:  Robinhood is a stock trading app that caused a big splash when it hit the market a few years ago. Available to citizens and residents of the United States, as well as to citizens of China that have access to an American bank account, Robinhood was revolutionary because it allowed for users to buy and sell stocks for absolutely no commissions in either direction.

Robinhood lets people buy and sell cryptocurrency without added fees, while exchanges like Coinbase charge 1.5 to 4 percent fees in the United States.

In February, Robinhood surprised the cryptocurrency community when it announced that it was entering cryptocurrency market. Since then, over 3 million users have registered with another 140,000 new users each month.

The three-year-old Robinhood started off as a simple stock trading application. Since then, the company has grown rapidly, overtaking incumbents in one of the oldest Wall Street industries. In just last year, the number of company’s brokerage accounts doubled to 4 million, while the company is valued at $5.6 billion.

While Robinhood continues to expand its cryptocurrency coverage and offerings by adding new coins, it has some everyone wondering if this brokerage app might even be able to rival Coinbase, one of the largest and most popular digital currency exchanges around the world.

The big difference between Robinhood and Coinbase, besides the fees, is that Coinbase allows you to export your coins, while Robinhood does not. Today, the Robinhood app can only be used for buying and selling four cryptocurrencies within the app itself only. This means that users cannot use Robinhood as a cryptocurrency wallet. They cannot make deposits, nor can they withdraw cryptocurrencies from it. Basically speaking, any crypto bought within the app, stays in the app forever

Robinhood is using free cryptocurrency trading, as a way to bring in new customers and  introduce them to traditional stock investing. Indeed, its from stock trading where they intend to make their profits . Essentially using crypto trading as a loss leader, instead of its primary business like Coinbase, Robinhood could substantially expand its user base. Also by combining it with traditional stock, ETF, and option trading in a single app, Robinhood could further legitimize the cryptocurrency craze. The two trading worlds could cross-pollinate, dragging even more people into the crypto scene.

The looming Robinhood vs. Coinbase battle puts a new light on the crypto trend. Volatile prices and regulatory uncertainty may be big question marks. But speculating in these markets is already very popular. A whole generation of investors is being shaped by it and it’s one way to attract people to a consumer-facing financial services platform.

If Robinhood can offer cryptocurrency deposits and withdrawals, its crypto service may begin to encroach on current market leaders. Recently, Coinbase reached its six-year anniversary, becoming one of the oldest institutions in the cryptocurrency industry. Robinhood obviously has a step up against Coinbase’s fee structure, but if Robinhood wants to overtake Coinbase, it will need to offer a variety of other cryptocurrency services. Both, Robinhood and Coinbase, have things in common, as well as things unique to their service, that give them an advantage. Time will tell which servicee the average crypto trader will choose.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing each Monday.

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