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Yesterday Bitcoin Gold (BTG) finally came into existence as a forked version of the original Bitcoin Blockchain. It essentially means BTG, like Bitcoin Cash (BCH), at the time of its release will have shared blockchain history with Bitcoin. This fork has come less than three months after Bitcoin Cash fork.
Following the “blockchain snapshot” on Tuesday morning at block 491,407, which froze the balances that Bitcoin users will have in their corresponding BTG wallets, Bitcoin prices took a serious plunge – falling to as low as $5395 on some exchanges for the first time since a week.
Since then, Bitcoin has rebounded back to above $5500, but due to the Bitcoin Gold fork that is set to occur prior to the SegWit2x hard fork on November 16, the price of Bitcoin will likely hover in the $5500 region – at least until the Bitcoin Gold development team adds strong replay protection.
The entire cryptocurrency market posted a multibillion-dollar decline on Wednesday. The crypto market cap began the day at $169.2 billion but declined to a present mark of $165 billion. Altcoins rally also faded within a day. Every major altcoin suffered losses – Ethereum 2.5%, Ripple 5%, Litecoin 4.5%.
This downward trend should be attributed to the Bitcoin Gold fork. It’s no surprise that Bitcoin Gold won’t have much value, but traders and investors don’t want to leave “free money” on the table.
Top Stories from the Crypto World
1. Vitalik Buterin: 90% of token startups will fall
Founder of Ethereum, Vitalik Buterin, has always been skeptical of initial coin offerings. Speaking at his former university town of Waterloo, Canada, Vitalik said:
“It is an established fact that ninety percent of startups fail and it should also be an established fact that ninety-percent of these ERC20s on CoinMarketCap are going to go to zero.”
2. Aswath Damodaran calls Bitcoin a currency, not an asset
Professor of finance at the NYU’s Stern School of Business, Aswath Damodaran, often referred to as Wall Street’s “Dean of Valuation,” has said, “I don’t believe cryptocurrencies are now or ever will be an asset class,” or that they will change the “fundamental truths of risk, investing and management.”
He further added, “Bitcoin is not an asset, but a currency, and as such, you cannot value it or invest in it. You can only price it and trade it.”
On the other hand, we have South Korea’s central bank, which has ruled out classifying Bitcoin as a currency, arguing that cryptocurrencies are a form of a commodity instead.
While it’s hard to understand why South Korea’s central bank came to that conclusion, but here’s how Damodaran gets to his own:
Asset: Something that generates cash flows, such as bonds, stocks, or options. Cash flows can be used to derive a fundamental value for that asset.
Commodity: Something that is used as a raw material, such as oil, coal, or gold. Its utility as a raw material is used to derive a value.
Currency: A medium of exchange that does not generate cash flows. As a result, it can’t be valued.
Collectible: Something with aesthetic value but no cash flows, and no function as a medium of exchange. Examples are baseball cards or a painting. As a result, it can’t be valued.
Damodaran says bitcoin isn’t an asset because it doesn’t generate cash flows; nor is it a commodity, because it’s not a raw material. So it’s either a currency or a collectible, and he comes down on the side of the former because it fulfills the three characteristics of money.
3. Hong Kong and Singapore to collaborate on DLT Trade Finance Platform
Hong Kong’s banking regulator and the de facto central bank have announced a new collaboration with Singapore aimed to digitize trade finance using distributed ledger technology (DLT).
The CEO of the Hong Kong Monetary Authority (HKMA), Norman Chan Tak-lam, said the joint project with the Monetary Authority of Singapore (MAS) will focus on a DLT proof-of-concept called the Hong Kong Trade Finance Platform (HKTFP).
Chan described the initiative as a “breakthrough’ for distributed ledger technology and said:
“We firmly believe that the time has come for trade finance to move into the digital era.“