Bitcoin Spikes After BoJ's Kuroda Praises Cryptocurrencies

Following the 'good' news that G-20 will not be cracking down on cryptos, removing the FUD from the weekend, Bitcoin and its peers are extending gains after Bank of Japan's Governor Haruhiko Kuroda told reporters in Buenos Aires at the G-20 meeting of central bankers and finance ministers that "cryptocurrencies can be a plus for the financial system."

 

From Friday's close, Bitcoin is now green...

Additionally, Japanese interest in Bitcoin has been soaring. As Morgan Stanley notes, since 2013 there have been three major funding currencies for bitcoin – USD, CNY and
JPY.

The dataset of bitcoin prices from over 350 markets (exchanges or versus different trading currencies) largely covers fiat currencies. Only 10% of the markets are trading bitcoin versus other cryptocurrencies

However, in the past month, half of bitcoin trading on exchanges has been done versus the Japanese yen (JPY), with volumes much higher than those versus the US dollar (USD).

The Japanese retail community have long been active participants in the foreign exchange market, particularly via margin accounts. They tend to sell JPY and buy foreign currencies with high yields, leveraged up to 25x. Bitflyer, the largest bitcoin exchange in Japan, offers its clients up to 15x leverage but with volatility that is 10x that of USDJPY. Bitcoin trading volumes versus JPY in January were only around 2% of the margin FX trading account volumes. An appreciating JPY (as we expect) could move some of this margin trading volume onto cryptocurrencies. One risk to watch out for is if the Japanese financial regulator confirms that it will lower the FX trading leverage cap to 10x.

As a reminder, in case you were wondering,  here is why Kuroda wants a strong Bitcoin.

In December, BOJ governor Haruhiko Kuroda once again refused to slam the cryptocurrency as fraud, as so many of his peers have done, and instead merely expressed an opinion that current Bitcoin market movements were the result of speculative trading. He also commented that price movements were abnormal, even if clearly beneficial as the below analysis reveals.

In January, when Nomura analyst Yoshiyuki Suimon went the extra step of trying to quantify the actual profits, whether paper or realized, earned by Japan's Mr. Watanabe et al. This is what he found:

Figure 3 shows Bitcoin market cap and market cap divided by the weighting of yen-based trades. Assuming that the weighting of yen-based trades is equivalent to Bitcoin holdings by Japanese people, we estimate that Japanese people hold Bitcoin with a market cap of about ¥5.1trn. Assuming that the bulk of this ¥5.1trn belongs to Japanese investors, the scale of this increase in assets can hardly be ignored.

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According to a 27 December 2017 Nikkei article, the number of Japanese people holding Bitcoin has reached 1mn, and assuming average holdings of 3-4 Bitcoin per person, this is broadly consistent with our estimate.

Meanwhile, the Bitcoin price rose by around ¥866,000 between Apr-Jun 2017 and Oct- Dec 2017, on which basis we estimate unrealized gains on Bitcoin held by Japanese people of roughly ¥3.2trn (3.7mn × ¥866,000).

This brings us to the next logical step, the one we have hinted repeatedly is what one or more central banks may well be after, namely the "wealth effect" generated by bitcoin appreciation, and the resultant boost to consumer spending, and therefore GDP, which a global cryptocurrency bubble would enable.

And we suspect, in that case, that Kuroda would be very pleased if Fundstrat’s Tom Lee's forecast that Bitcoin’s price will reach $91,000 by March 2020, comes true. (via CoinTelegraph.com)

Lee and Fundstrat used an average of the percentage gained in price after each dip to arrive at the 2020 figure.

The Forbes piece notes that because the chart is based on a logarithmic scale as opposed to the traditional linear-based graph, BTC’s highs and lows are not as distinct.

image courtesy of CoinTelegraph

Lee has been predicting high prices for BTC since its price was below $3,000. In July 2017 Lee had already stated that Bitcoin would hit $55,000 by 2022. More recently, in January of this year, Lee said that BTC would hit $25,000 by the end of 2018.

Lee and Fundstrat also recently released the “Bitcoin Misery Index” in early March, which is described as a “contrarian index’ that lets investors know how “miserable” BTC holders are at the current price.

Comments

lester1 Mon, 03/19/2018 - 10:04 Permalink

Bitcoin and these cryptos are nothing but pump and dump ponzi schemes!

 

Plus the wild price fluctuations makes it too unstable to ever be widely accepted as a payment method by businesses. Sorry to bring you crypto freaks back to reality. By all means keep maxing out your credit cards to buy it. Lol

 

Vote me down if I hurt your feelings..

Mementoil Spaced Out Mon, 03/19/2018 - 10:27 Permalink

I have been trashing Crypto-currencies when they went up, and I'm trashing them on the way down.
I think that ultimately they are toxic waste, regardless of the short term price action.

And I think it's kind of ironic for "central-bank buster" crypto-currencies to rally on praise from a Central bank chairman.
He may like the idea of Crypro-currencies, but not the ones that are currently on the market. He is probably referring to the one he intends to issue himself, once private crypto-currencies are outlawed.

In reply to by Spaced Out

DillyDilly Exponere Mendaces Mon, 03/19/2018 - 11:11 Permalink

lester is always the first one to pounce on crypto threads (he's even more punctual than the high school dropout who shows up in the high school parking lot every day EXACTLY when the 2:30 bell rings and school lets out).

 

What's in it for you lester?

 

You're either right or you're wrong.

 

If you're right, so the fuck what? Do you think you're gonna become anybody's HERO?

If you're wrong, you'll end up looking like more of an ass than you do already.

In reply to by Exponere Mendaces

DillyDilly Mementoil Mon, 03/19/2018 - 11:31 Permalink

I'll jump in on that.

 

It's well known, by now, that banks & trading platforms (CBOE, & Goldman Sachs), have tossed their hat into the ring with regards to cryptos.

 

CBOE now has a bitcoin futures market, and Goldman, by proxy, now owns the Poloniex exchange. There's only one reason for these investments to be made and that's because they see potential profits.

 

I laugh when I hear about people talking about 'bubbles' & 'ponzi' when they refer to cryptos... Maybe so ~ but there have always been bubbles and ponzis...

 

Did the dot.com bubble stop anyone from pumping the NASDAQ in the 90's? (giving the middle finger to funny mentals)

When that blew, did it stop the sub prime housing market from going bubble?

Then the banks were bailed out, but did that stop the S&P from going bubble? (which seems to have run its course)

Bond markets? aren't they a bubble?

 

& you're gonna tell me that cryptos (which, yesterday had an entire market cap of $275B, or, 1/3rd of MC of Apple alone), are in a bubble?

 

You wanted to own NASDAQ in 1985, not 2000

You wanted to buy a house in 2000, not 2008

You wanted to buy the S&P in 2009, not now

 

So basically, talk to me again in 8-10 years.

In reply to by Mementoil

GooseShtepping Moron Mementoil Mon, 03/19/2018 - 11:16 Permalink

Exactly, Mementoil.

What do all you dumb-shit, faggoty-ass Shitcoiners with your thumb drives up your asses have to say now? You dumb fucks don't know whether to run with the fox or hunt with the hounds.

It used to be, after exhaling a bong hit, you were like, "Yeah man, I'm a libertardian bad-ass and I don't take shit off nobody. I'm all about muh freedums, dude. I even floss my teeth with one of Murray Rothbard's short-and-curlies. We're taking down the central banks, man, with our revolutionary blockchain maff. We're like, the only ones actually making a difference, homes. The governement is freaked out by our decentralized, open-source ledgers and they're trying to suppress us, trying to take us down. It's just like freakin' feudalism, man. Fuck that shit! I'm such a libertardian bad-ass that I don't need no fuckin' government, man. I'm stackin' and packin', buddy. Let those Deep State goons come to my door and I'll show 'em what's up."

And now Kuroda mumbles something complimentary about cryptos and all you faggots do is buy more of the shit, as if none of your previous rationale was ever uttered.

In reply to by Mementoil

Mementoil DillyDilly Mon, 03/19/2018 - 11:33 Permalink

I'll tell you why I don't like Bitcoin - because I see it as a "bait and switch".
Libertarian people figured out correctly that paper currencies are in trouble, and that the world is headed towards either a huge debt deflation, or a global hyper-inflation. And the obvious solutions were gold and silver.
But then out of nowhere comes this "virtual gold", this made up construct which very comfortably (for central banks) draws attention away from gold and silver and steals their thunder. And nobody knows who invented it, because he is anonymous.

Excuse me, but I don't buy this story.

In reply to by DillyDilly

DillyDilly Mementoil Mon, 03/19/2018 - 12:00 Permalink

I don't care who 'invented it'. I did at first because I originally believed it was something 'made up' at the beginning.

 

Then I looked in to it a little more and I see all these companies adopting the technologies & platforms that are based on blockchain and other hybrids. They're not just investing in, building out, and putting into play these platforms to market some coin and get rich. They're using it to streamline business, save on costs, & market better to their targets.

 

It VERY MUCH reminds me of the internet in the early days. I was somewhat of an early adopter and was using e-mail and trying to interest people in doing commercial web pages, etc as early as 1993... Mostly all I got were funny looks... I mean seriously, this was 2 years before Windows 95... Alta Vista was the main search engine... Nobody had even heard of My Space yet cause even that wasn't invented, Netscape browsers, 386 processors, and it would be 13 years before Apple even came out with iPhone...

 

Look at the internet today. It's not going anywhere (and frankly, EVERYONE uses it anymore in one way or another whether they like it or not).

In reply to by Mementoil

DillyDilly manofthenorth Mon, 03/19/2018 - 13:27 Permalink

Yeah, well, it didn't. & gold rose from about 1150 to about 1300 in 2017 (which wasn't gold rising, it was the USD dropping from 104 to about 90).

 

Which means that some people didn't want to own dollars. Some bought cryptos, some bought PM's (probably BOTH for the same reasons).

 

FF to today. The entire crypto MARKET CAP is $300B. Since there was a 'frenzy' about it, a lot of ALT coins came into existence. Probably 90% of them will eventually become worthless (which either means that the same cap will flow into the surviving coins, or money will flow back into fiat). There are really no other alternatives (because you can't go from minor alts to fiat directly on most exchanges).

 

BTC market cap as we speak is about $142B and it's dominance is 44% Top 5 coins combined are $247B, so even if 99% of all other coins were to disappear tomorrow, the crypto space would diminish by $50-60B. Unless they all just go back to dollars, or yuan, or Euros, or Yen, or whatever.

In reply to by manofthenorth

Exponere Mendaces lester1 Mon, 03/19/2018 - 10:39 Permalink

This no-coiner again. Woke up early in the retirement home eh? Already went through the junk mail? You need a real hobby, instead of bolding all of your gap-tooth windbag thoughts.

I see ZH is busy CNBC-ing the price action again.

The real turn looks like later this month, if you subscribe to cycle analysis. But go ahead, keep typing stupid shit about something you don't understand.

Muppet.

In reply to by lester1

Full Court Lug… lester1 Mon, 03/19/2018 - 10:59 Permalink

It's a Ponzi by definition. Zero-sum (actually negative-sum once exchange fees and mining costs are taken into account), old money only gets cashed out by new money, can only keep going up if there's more new money coming in than old money trying to cash out.

This is also why the "wealth effect" claims are BS. Every nickel of profit anyone has ever made trading cryptos came out of someone else's hide. For everyone who cashed out millions, other people sunk those millions into the market and probably won't get them back.

In reply to by lester1

Exponere Mendaces tmosley Mon, 03/19/2018 - 10:43 Permalink

Yeah, BeeeeeeeeeeeeeeeeCash tends to do that.

But that fucker has been languishing like a turd ever since you leaped on the Ver-wagon. I know, you think it has "potential", even though fees are now rock-bottom and Lightning is making Roger's Ego project look like a baking-soda volcano at the science fair.

You've been beaten, and when it comes to your shitcoin/shitfork reccos - you're fucking crypto Jim Cramer.

How's that shit-token IOTA doing?

You're such a muppet.

In reply to by tmosley

Seasmoke Mon, 03/19/2018 - 10:16 Permalink

Psychology is a strange thing.

When buying 5 bitcoins for $3000, I was feeling pretty stupid when it went down to $200.

But Now it’s dropped from $19,000 to $8,000 I feel like a genius.

beyondtheprogramming Mon, 03/19/2018 - 10:29 Permalink

Crypto is proprietary candy used to prevent the kiddies from noticing their entire existence has been usurped by a cellphone run by the Google World Order - as planned ... over 20 years ago.

P.K.Snosage Mon, 03/19/2018 - 10:31 Permalink

Kuroda is also the man who said that he was confident that prices will reach 2 percent around fiscal 2019.

The only problems being;

1. Nobody actually believes him.
2. When Abe falls he will fall with him.

Able Ape Mon, 03/19/2018 - 10:55 Permalink

Crusty the Clown Praises Cryptocurrencies - that should take them to the MOON!...on the other hand - 5,000 years and many generations praise gold and silver... Who's right?  Crusty or....

Apocalypse Wow Mon, 03/19/2018 - 11:37 Permalink

Cryptos were in a major bear market primarily due to government interference fears.  Now that the G20 won't and can't do much the true supply/demand will favor the buyers now and a likely hood of a new bull market is underway.

WorkingClassMan Mon, 03/19/2018 - 11:41 Permalink

Cryptos are going to be a big part of the financial future, the governments can't stop it--certainly the naysayers can't.  It's another arrow in the quiver against corporate communism and internationalism.  Another layer of protection for the buyer and seller.

Apocalypse Wow Mon, 03/19/2018 - 11:55 Permalink

TRX-Tronix, if those behind Tronix do what they say they will, it would not surprise me if it will be the major world crypto within 2 years.  Major developments are supposed to be announced by month end.

helloimjohnnycat Mon, 03/19/2018 - 14:21 Permalink

Paris Hilton said a Bitcoin will barely fit into her ultra-pretty tight little pussy !

MSM goes wild !

The messy masses go wild !!

 

Paris' pussy is lathered & shaved.

Bitcoin is rather saved !

Price soars into the Pink !

Altho that's a crypto ready to stink.