Cryptocurrencies: Surprising results of the Bank of England poll

Summary:

• Bitmain, one of the biggest crypto miners, is said to cut jobs due to depressed crypto prices

• BITCOIN halted latest decline at the 200-week moving average

• People prefer cryptocurrencies to bank transfers or cash as a way of receiving money gifts

Majority of the main cryptocurrencies take a step back today with Bitcoin Cash and Ethereum being the biggest underperformers. Bitcoin is trading around $3700 handle at press time and the capitalization of the whole market stands subtly above $127 billion.

BITCOIN underperformed throughout the first half of the year until it reached the $6000 handle in June. Since then the coin was consolidating above this level for a couple of months. The latest plunge saw price dropping to almost $3100 where the decline was halted by the 200-week moving average. Source: xStation5

2018 was way different for cryptocurrency investors and miners than the previous year. While in 2017 valuations of digital currencies were surging for the major part of the year, the situation reversed in 2018. Most of the coins were in the freefall mode throughout 2018 leading to almost 85% drop in the capitalization of the whole market. As we have hinted earlier this year low prices on the cryptocurrency market may lead to supply constraints as mining companies find it harder to stay profitable. Reports surfaced recently saying that Bitmain, one of the world’s biggest cryptocurrency mining companies, experienced some heavy losses in the past few months on the back of depressed coin valuations. While the company did not confirmed this news it has released a statement saying that it is preparing to reduce workforce at the company hinting at potential problems and cost pressures. The word on the street was that the company may even reduce employment by half but Bitmain said that jobs cuts will not be so severe. Nevertheless, the company upheld its optimistic view on operations in 2019.

Bank of England launched poll on Twitter and results are surprising to say the least. Source: Twitter

Bank of England recently launched a poll on Twitter asking website users if they were to be gifted money at Christmas what would be their preferred way to receive it. Bank proposed four answers: cash, bank transfer, gift voucher and digital currency. The outcome of the poll may come as a surprise to some. Out of almost 17 thousand people who took part in the poll 75% chose digital currency as their preferred way of receiving money. Cash was the second most chosen answer with 18% while bank transfer and gift vouchers received 5% and 2% of votes respectively. While this by no means suggests that Bank of England will no go to great lengths to ensure favourable cryptocurrency adoption but may inform lawmakers that the public is becoming increasingly aware of digital money. Having said that, central banks will soon find increasing use of cryptocurrencies hard to ignore and will have to set up regulatory framework for this market whether they want to or not.

LITECOIN failed to maintain the uptrend structure and reversed in the vicinity of 38.2% Fibo level of the latest downward impulse. The coin pulled back beneath the $30 handle and found support in the $28.5-29.0 area. Note that the price is reacting to 33-period moving average on the H4 interval (orange circles on the chart above). Source: xStation5