In my opinion, the recent push towards centralization and censorship is the most important news to watch for in 2017. We are moving towards a world where the majority of private keys will reside with a few large players, and the government is one of them. Bitcoin is the only currency that can be used to avoid censorship by simply not being tied to a bank. The government will use their power and access to information to take down and control the market.
There have been many events that have shaken the cryptocurrency market, including the August 1st SEC announcement to regulate virtual currencies and the government’s ongoing investigation of Mt Gox. On top of the real-world events, Bitcoin is constantly facing attacks from startups that wish to disrupt Bitcoin’s leading role in the crypto market. With the combination of all these events and more, the future of Bitcoin is anything but certain.
If the U.S. government were to take control of Bitcoin, it would not be the financial system’s end. It would, however, be a massive disruption of both the financial system and the broader economy.. Read more about bitcoin news today and let us know what you think.The seventh. In June, a US government special operations team seized more than $2 million worth of bitcoin (BTC) for ransom following an attack on the Colonial Pipeline system. A warrant filed in the U.S. District Court for the Northern District of California shows that authorities seized 63.7 BTC. As news of the refund spread through the media, some publications suggested that the US government had hacked into the Bitcoin address to extract the money. For example, Justin Wolfers, a professor at the University of Michigan and contributor to the New York Times, tweeted: News that the government has figured out how to steal bitcoins from cybercriminals’ online wallets further diminishes bitcoin’s potential. – Justin Wolfers (@JustinWolfers) 8. June 2021 This has sparked a debate about whether the organization is capable of cracking the SHA-256 code, and if so, why it is using that ability to unlock a bitcoin wallet with only $2 million. The same type of cryptography is used by the National Security Agency, banks, foreign government agencies, cloud storage systems, and most electronic devices such as smartphones and communications apps. If governments want to cause chaos in the cryptocurrency market in the short term, they would have to make significant sales to negatively impact the price. However, there are probably at least three signs that this particular scenario is unfolding.
Open interest in future CME BTC increases
The most likely way for government agencies to go short is to trade bitcoin futures on the CME. In addition to price pressure, analysts should get confirmation of a significant increase in open interest, or the number of contracts in circulation. Unfortunately, the CME does not provide real-time data on this measure. CME bitcoin futures settlement data. Source: GCE As mentioned above, each CME bitcoin futures contract represents 5 BTC, so 7,572 open shares equals 37,860 BTC. These contracts are financial settlements, meaning the winner receives a payment in dollars. Although the current open interest of $1.25 billion doesn’t seem big enough to cause a shock, it reached $3.3 billion in February when bitcoin was trading at $58,000. A significant and rapid increase in open interest rates is therefore a potential indicator of government-related activity.
Termination premium must be negative
A large seller of a futures contract will cause a short-term disruption in the futures premium. Unlike perpetual futures contracts, these fixed-term futures contracts have no refinancing rate, so their price will be very different from that of traditional spot futures. By measuring the price difference between futures contracts and the regular cash market, a trader can determine the degree of bullish sentiment in the market. When sellers are very active, the two-month futures contract trades at a discount of 1% or more. premium/discount on CME July bitcoin futures vs Coinbase, May 2021. Source: TradingView Note that CME July futures contracts typically trade at a 0.5-1.5% discount to regular cash trading. During the collapse of the 19. However, aggressive selling of futures in May resulted in a 2.5% drop in price against Coinbase. This movement can occur through liquidation orders or when large players decide to go short in the market using derivatives.
Exchange infrastructure under threat
Although most cryptocurrency exchanges have hosted their servers in remote locations, governments may attempt to seize physical servers or web domains. Investors who have been following the cryptocurrency sector since 2017 will remember that Alex Winnick, the founder of BTC-e, was arrested in July 2017 and the website was hacked by the US government. In November 2020, Cointelegraph published an excellent article explaining how, according to the US Department of Justice system, a cryptocurrency transaction could be enough to affect financial, data storage or other computer systems in the US to trigger enforcement action. Any coordinated effort by governments to tackle cryptocurrencies is likely to include a massive crackdown on money laundering on exchanges, especially those offering derivatives to retail investors. So as long as these three signs are not present, there is no reason to believe that a massive government campaign to destroy the industry is underway. The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research before making a decision.Bitcoin has been a controversial topic for quite a while, and the debate about the security and regulation of bitcoin has only increased since the US has regulated bitcoin as a currency. Governments have always had to follow rules, and that is why they exist. The question is whether or not the US government will regulate bitcoin this time around. If they start to manage and regulate bitcoin, it will certainly have an impact on the price and value of bitcoin, and their actions would also affect the future of bitcoin.. Read more about how much are bitcoins worth and let us know what you think.
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