Eurozone Rate Cuts Will Add Rocket Fuel to Bitcoin Says Pompliano

Neil Dennis

Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, believes that expected monetary easing by the European Central Bank (ECB) will be "rocket fuel" for bitcoin.

The financial press has reported widely on recent dovish comments by ECB president Mario Draghi in the face of a slowing eurozone economy and weak inflationary signals. 

Although the central bank left its main policy settings on hold at this week's meeting of the Governing Council,Draghi's speech and press conference later was seen as dovish.

Underlining the need to keep an accommodative policy stance to bring inflation levels back towards its 2% target level, he said the ECB "stands ready to adjust all of its instruments, as appropriate". This would include cuts to its key interest rates and a new package of asset purchases.

Pompliano responded on Twitter: "ROCKET FUEL: They’re going to cut rates and print money right as we march towards the Bitcoin halving. Buckle up. This will be wild."

Battle of the Doves

It could well be wild. The ECB is not the only central bank to be making dovish overtures: indeed, 22 central banks - including those of Australia, New Zealand and Russia - have already cut interest rates in this year. 

And with the US Federal Reserve - under pressure from President Trump - also adopting a monetary easing stance, the global policy outlook is looking likely to become a battle of the doves. 

Add to this the growing political and geopolitical concerns surrounding Britain's exit from the European Union and an escalating trade war between the US and China, and the politico-economic backdrop darkens further.

Turbulent Markets

Markets, therefore, can expect some turbulence during the coming months. But is a period of economic and political uncertainty and market volatility necessarily going to drive investors to bitcoin?

Ana Bencic, founder and chief executive of US exchange NextHash, agrees with Pompliano. In a press release sent to CryptoGlobe, Bencic said:

The pound and euro have fluctuated in value in correlation with major political events happening within the EU and the UK. Traditional currencies, by their nature of being linked to a central bank, can be influenced by the political situation within the country. Because of the fixed and established inflation rates and supply sources of cryptocurrencies, they are not subject to the same inflation has been witnessed with traditional currencies.

Bitcoin Halving

Pompliano alluded also to the upcoming bitcoin halving in 2020. This is a process that happens every time 210,000 blocks of bitcoin are mined - roughly every four years: the reward for mining each block is halved to help slow block production and maintain the value of the cryptocurrency. 

In its way, it is similar to how a central bank manipulates interest rates to keep control of inflation.

In the past halvings - the last one in July 2016 - there was a year, or so, lag before the price surged. In December 2017, bitcoin hit its record high close to $20,000.

Pompliano believes the next halving will have a similar impact, and when you add on suspected rate cuts and asset purchases by the ECB during 2020, the cryptoasset manager has forecast the price of bitcoin to put its previous record in the shade and rise as high as $100,000.

'Big Spender' Bitcoin Wallet Exploit Is an 'Issue With BTC Itself', Says BCH Supporter

Michael LaVere
  • Crypto security firm ZenGo has identified a double-spend exploit dubbed "BigSpender" which affected popular bitcoin wallets.
  • Exploit allows an attacker to cancel a bitcoin transaction without the receiving user knowing. 

A crypto security firm has identified a double-spend exploit targeting popular bitcoin wallet providers. 

According to a report by ZenGo, the security firm has discovered a double and multiple spend wallet exploit for bitcoin dubbed “BigSpender.” The report claims the exploit allows an attacker to cancel a bitcoin transaction but still have it appear in a victim’s vulnerable wallet. 

The report reads, 

The core issue at the heart of the BigSpender vulnerability is that vulnerable wallets are not prepared for the option that a transaction might be canceled and implicitly assume it will get confirmed eventually.

As CryptoGlobe reported, ZenGo found that a user’s balance would be increased following an unconfirmed incoming transaction, without a subsequent decrease in the event the transaction being double-spent. The firm outlined how an attacker could use the exploit to cancel transactions of sent bitcoin while still receiving goods and services in return. 

The security firm tested nine popular cryptocurrency wallets and found BRD, Ledger Live and Edge to be vulnerable to the exploit. All three companies were notified by ZenGo of the threat and subsequently updated their products. However, the firm noted that “millions” of crypto users may have been exposed to the attack prior to the update. 

Bitcoin Cash supporter Hayden Otto told Cointelegraph the exploit is particularly concerning for bitcoin-accepting merchants. 

He said, 

The technique is facilitated by RBF (replace by fee), a so-called ‘feature’ added at the protocol level by the Bitcoin Core developers.The issue exists if you use BTC. Wallet software can only make some trade off, which results in a worse BTC user experience, in order to try to protect BTC users.

Otto claimed the exploit was derived from “an issue with BTC itself” and had little to do with wallet software. 

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