Market Update: Bitcoin Stays Below $3,900 as Ethereum Closes Gap on XRP

As we approach the end of 2018, the year bitcoin turned 10 years old, it appears the cryptocurrency ecosystem’s decline may not be over yet, although the trend may reverse next year as the equity markets appear to be entering a bearish period.

Currently, according to CryptoCompare data, bitcoin is trading at $3,870 after falling roughly 1% in the last 24-hour period. Its market cap is of about $67 billion, meaning it has roughly 51.8% of the ecosystem’s market share.

Bitcoin's price performance in the last 24 hours

This year bitcoin went from over $13,000 to a low of little under $3,200 before it started to recover. Despite the drop, adoption has been increasing as the number of cryptocurrency ATMs, as covered, has doubled to over 4,000, with 6 being installed per day this year.

Moreover, BTC’s layer-two scaling solution, the Lightning Network (LN), has been growing at a steady pace. This month, it surpassed a 500 BTC capacity, and saw a crypto artist sell a tiny piece of artwork for one milisatoshi, about $0.000000037, in what was likely the cheapest artwork ever sold.

Bitcoin is often seen as a tool to hedge against economic crisis as it’s seen as sound money. It was created after the 2008 financial crisis and since then the equities market has been in one of the biggest bull runs in history. It is, however, apparently near its end, and some analysts claim BTC may thrive as stocks crash.

Looking at the S&P 500 Index it’s easy to see why the equities market is believed to be entering a bear market. After seeing a over 250% increase since the 2008 financial crisis, the index started plummeting from a high of about 2,929 to 2,350. Although it has recovered to 2,456, some have pointed out this may be a dead cat bounce.

The Dow Jones Industrial Average has seen a similar rally in the last few years, and has also started plummeting in the last few months. Peter Brandt, a technical trader who predicted bitcoin’s 84% decline this year, believes the Dow is set to face a similar correction.

ETH Starts Closing In On XRP

This year Ethereum’s ether saw its price drop from an all-time high close to $1,400 to a low of little over $80, before it started recovering. At press time, ETH is trading at $139 after rising 1.9% in the last 24 hours, and its market cap is of $14.3 billion.

This decline saw it lose its position as the second-largest cryptocurrency by market cap to XRP, which fell from a high above $3 to $0.37 at press time. Its market cap is of $14.9 billion, as its price dropped nearly 1% in the last 24-hour period.

Market cap of Ethereum and XRPEthereum's market cap is close to surpassing that of XRP

The gap between both cryptocurrencies has been declining. While XRP is up 26.9% in the last two weeks, ETH has surged 59.8% in the same period. If its price keeps rising, it’ll soon claim the title of the second-largest cryptocurrency.

Most other top cryptocurrencies, including EOS, TRX, and LTC are up by less than 1%. NEO is notably up by about 4% in said period.

Vitalik Buterin Explains Why He Cares About Price of Ethereum (ETH)

Siamak Masnavi

On March 20th, in New York City, Vitalik Buterin, the creator of Ethereum, talked to crypto-focused journalist Laura Shin at a live taping of her Unchained podcast (at the Columbia Graduate School of Journalism’s Pulitzer Hall), and answered questions on a wide range of topics. Here are some key highlights from this interview.

What Vitalik Thinks About Zcash (ZEC)'s 'Dev Tax'

"Zcash is interesting... Definitely, like big props to them for just doing that and being proud of that and saying like 'you know, we got a 20% dev tax, what's up man?'. I am very proud of them for doing that. So, a great job, Zucco! But on the other hand, they clearly haven't solved the problem of where to allocate the money because, right now, they just have this centralized allocation pool that goes to Zcash company, or these individuals, or these other individuals, and they have hard forks, and these hard forks can decide to reallocate the pool, but then what process do they use to decide, and so it's definitely very far from the ideals that a lot of people see cryptocurrencies as having... It's still an improvement from no funding... It would be really nice if there was some decentralized process for achieving the same thing."

Why the Price of Ether (ETH) Is Important

"I'm going to be really candid because that's the right thing... Some of the earlier rhetoric, especially veering on the more extreme side of the price not mattering at all, in part was counter signaling to distinguish ourselves from other crypto projects that just do pumping and lambo-ing way too much, but another thing is that it was about minimizing legal risk by basically trying to make the project seem more distant from something that will be covered by financial regulation... 

If people try to claim the price doesn't matter at all, they [the financial regulators] are totally going to see through that...

I can tell you... why the price being higher than lower... is good.

One of them is, obviously, security. So if the price is zero, the network can't be secure, and that's true in Proof-of-Work or Proof-of-Stake. 

Another reason is, obviously, that there's a lot of projects who in the ecosystem hold cryptocurrency... and if the price is higher, then they'll have more money to do the things they want to do...

Especially, the security concern is a totally legitimate technical argument.

There are members of the Ethereum community who just say that 'Ether is a cryptocurrency and we want it to be more of a cryptocurrency'...

The Ethereum Foundation doesn't have a monopoly on Ethereum messaging, or even a hegemony on Ethereum messaging at this point...

The thing I am absolutely opposed to is engineering pumps for the sake of pumps because that's just a short term that's fundamentally dishonest. The thing I am definitely in favor of is not doing stupid that would lead to the price going to zero. So, one example of that would be having an issuance of like 100 million ether every year. Regardless of what other consequences that has, that would clearly drop the price to zero, and that would clearly be just terrible."

Decentralized Finance (DeFi) and Smart Contract Code Risk

"I'm definitely watching the whole DeFi space with interest and fascination... 

[On Twitter] Someone was trying to say something like 'Why doesn't pretty much everyone just take their money out of their bank accounts and put it into Dai earning interesting on Compound because that pays better rates, why would you just not get a free 3%?'. And I am like 'Excuse me, free? Are you really that confident that that contract has less than a 3% chance a year of having a bug in it?'. I mean, I honestly don't know how to measure the chances of those contracts having bugs in them, but there's definitely far too many people that round those risks to zero."

If Vitalik Had a Time Machine, What Advice He Would Give Satoshi

"github.com/ethereum/eth2.0-specs"... 

When Laura asked Vitalik if he was really serious about telling Satoshi to build Ethereum 2.0, he answered: "I do think it's a good architecture!" 

He then went on to elaborate:

"First of all, Satoshi had a really hard job because he just could not have predicted which way the ecosystem would have gone... I think on a technical level, suggesting a path that opens the door to upgradeability, to proof-of-stake, to more powerful virtual machines..."

What Vitalik Thinks Will Be the First Mainstream Use Case for Cryptocurrency

"Things I am near term optimistic about include first of all, the decentralized finance space... second of all, gaming [as in videogames]... on the non-financial side, identity, credentials, key revocation, and all of those things... fourth is parametric insurance... this is insurance that [for example] says if some extreme weather event happens, then pay me $500."