Bitcoin Price Rebounds Above $10,000 as Other Cryptocurrencies Rise
Bitcoin prices rebounded from their lows over the weekend as trading volume in the cryptocurrency increased. At 14:21 UTC on Monday, the price of a single bitcoin was $10,266.14, up 7% from its price 24 hours ago.
Bitcoin’s prices had dropped to a low of $9304.68 over the weekend. Trading volumes in the virtual currency have declined since Feb. 20, but they surged this morning. Typically, high trading volumes are indicative of high prices.
Other cryptocurrencies are also trending upwards, as of this writing. Among the top 10 most valuable cryptos, NEO was the biggest gainer, rising by 17% from its price 24 hours ago.
Litecoin, a cryptocurrency that was on a downward slide last week, reversed course and has recovered its price losses since the start of this year. The overall market capitalization for cryptocurrencies was $448 billion, up 7.27% from last Thursday’s lows.
Circle Acquires Crypto Exchange Poloniex
Payments app Circle has acquired Boston-based cryptocurrency exchange Poloniex. Both companies said the acquisition will help the exchange address customer support issues and expand operations to more geographies. Circle also stated that it aims to bring more fiat connectivity across major world currencies to the exchange.
Founded in 2014, Poloniex claims to be the world’s first crypto exchange to surpass $1 billion in trading volume. As of this writing, bitcoin is the dominant trading cryptocurrency, accounting for 23% of overall trading volumes at the exchange.
How Safe Are Smart Contracts?
Apart from NEO, ethereum is the only other cryptocurrency to have consistently delivered gains to traders this year. An important reason for the run up in its prices is the promise of a smart contract ecosystem enabled by its platform.
Smart contracts will be all-pervasive in the future and help conduct transactions, from mundane to the complex. Or so the argument goes. (See also: Are Smart Contracts The Best Of Blockchain?)
But that promise may turn out to be a false and buggy one. A research paper that is currently undergoing peer review claims that 34,000 ethereum smart contracts with $4.4 million worth of ether, ethereum’s cryptocurrency, may be at risk due to poor coding practices and weak security protocols.
How Bitcoin Price Contributed To Bitmain’s Profits
Research firm Bernstein has estimated that Chinese cryptocurrency mining giant Bitmain generated $3 billion to $4 billion in profits last year. (See also: Who Is Jihan Wu And Does He Basically Control Bitcoin Today?) To put that into context, semiconductor giant Nvidia Technologies took 24 years to reach that goal while Bitmain achieved it in 4 years.
Bitcoin’s price had an important role to play in Bitmain’s profits, according to Bernstein. According to the research firm, Bitmain generated a majority of its profits from selling mining machines. As bitcoin’s popularity and price exploded, demand for Bitmain’s miners rose and the company shrewdly jacked up prices for the Antminer S9, its most popular mining platform, writes Bernstein.
Given the decline in bitcoin’s prices recently, are Bitmain’s profits sustainable? Likely, yes. This is because Bitmain is quickly diversifying operations across the globe to low electricity-priced regimes. It has also taken to mining other coins beyond bitcoin to diversify its revenue base.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.
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