Miners to the rescue as bitcoin drops below $6,000?

Bitcoin has fallen below $6,000 but traders hope miners will come to the rescueBitcoin has fallen below $6,000

Market participants hope miners will come to the rescue as the bitcoin price drops below the key $6,000 level and  looks likely to slider further going into the weekend as the bounce at the beginning of this week proves to be a mirage. The top crypto is 4% cheaper today at $5,880 while top altcoins are all lower, with Tron leading the declines, off 10% at $0.0349.

Brian Kelly at crypto investment firm BKCM expects miners to prop up the price, given that it is in their interest to keep it above the $5,900 profitably level. “There’s an incentive for miners to keep that price [of bitcoin] above that level” he says.

With news that Bitmain is approaching majority control of hash rates on the bitcoin network, the Chinese miner may be among the contenders for bidding the bitcoin price higher – not a far-fetched possibility given the current thin volumes. The dominant crypto miner owns huge data farms in China and is also the main manufacturer of ASIC mining equipment. Miners may start to go out of business if the bitcoin price stays in the $5,000 for any length of time.

The Bank of England yesterday told banks and insurance companies not to go anywhere near the crypto market, citing its highly volatile pricing and unregulated ecosystem as red flags.

Spencer Bogart from crypto services firm Blockchain Capital, thinks bitcoin has further to fall. He backs up his view with reference to crypto hedge funds soon ending their lock-up of client funds, with investors selling in order to realise profits while they are still their to be had.

Even Facebook reversing its ban on crypto advertising hasn’t helped to arrest the crypto price slump. The rumours that Facebook might be in the market to buy Coinbase have been bobbing about for a while, with the Economist getting the rumour mill going in early June. Some have seen Facebook’s lifting of its advertising ban as more to do with its own internal plans, given that it is actively researching blockchain and cryptocurrencies.

Seeing little opportunity to compete with the tech giants on their own turf, investors and startups are going where they can spot an opening. The lack of an incumbent giant is one reason why there is so much investor enthusiasm for crypto-currencies and for synthetic biology today. But the giants are starting to pay more attention. There are rumours Facebook wants to buy Coinbase, a cryptocurrency firm. – The Economist

Trouble at EOS has also sucked some of the enthusiasm out of the market given the high hopes for the project, which is now mired in disputes about governance and a lack of faith in the structures currently in place. Lead dev Dan Larimer has proposed getting rid of the current interim constitution and in a bid to curtail the power of the EOS Core Arbitration Forum (ECAF) that has been freezing accounts in what is considered as indicative of the centralised nature of the EOS network.

Entitled The “Intent of code” is Law, the blog post by Larimer has been interpreted as a move away from the bold participatory democratic vision initially expounded by the project to one where the code is law. So-called Ricardian contracts, in which legal and business logic is handled in the code, a la smart contracts, is now seen by Larimer as the way to govern the network, with much less role for arbitrators and more formally proscribed power for block producers.

EOS is 7% lower today ay $7.73.

One coin bucking the falls is Ethos, which is up 12% on hopes that a trailed “big announcement” will see its universal wallet go live, or perhaps heralds even stronger news about a tie-up with a Nasdaq-listed partner, if some of the rumours are to be believed.

NEO partner Ontology is slated to launch its mainnet tomorrow (30 June).

 

 

 

About the Author

Gary McFarlane
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK's second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane

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