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Bitcoin Bearish Signal: Analyst Warns Of Potential Drop To $59,000

Amidst the anticipated positive effect of the recently concluded Bitcoin Halving event, Ali Martinez, a well-known cryptocurrency analyst and trader has issued a noteworthy warning about BTC’s trajectory, predicting that the price of the crypto asset could undergo a correction to the $59,000 mark.

Potential Declines For Bitcoin

Martinez’s analysis delves into the potential for Bitcoin to experience possible dives on the downside in the short term. Considering the BTC’s chart in the 12-hour timeframe, the analyst noted that two signals have manifested signaling potential price declines.

Related Reading: Analyst Points To Possible 30% Bitcoin Correction, Calls For Caution

These include a red candlestick from the TD (Tom Demark) Sequential and a death cross between the 50 and 100 Simple Moving Average (SMA). As a result, Martinez believes that the development could trigger a price drop to $63,300. Additionally, he urged the community to be ready for further dips to around $61,000 and $59,000.

Bitcoin

Martinez previously highlighted that the TD Sequential indicator on the 12-hour chart has flashed a sell signal. This signal came in light of Bitcoin experiencing a mid-level resistance of a parallel channel. Given this, he underscores a cautious approach amidst times like this, given the history of this indication, especially in the event that the digital asset falls below the $65,500 support level.

According to the expert, the trend score for the coin’s accumulation has fallen to zero. Specifically, this suggests that whales are either distributing or not hoarding BTC at the moment.

It seems Martinez’s forecast has taken place as BTC is already trading below the aforementioned support level. Following the price decline, Bitcoin has also seen a notable drop in accumulation.

Over the past few weeks, there has been consolidation in Bitcoin’s price as it has been unable to sustain its surge over its all-time high of $73,000 achieved in March. On Thursday, BTC witnessed a notable drop to around $63,000, which higher inflation and slower growth in the United States were considered to be a catalyst for the drop.

BTC’s Path To $1 Million

Even though there have been some short-term swings with Bitcoin, its long-term trend is still positive. Jack Mallers, the Chief Executive Officer (CEO) of Strike has predicted a long-term growth for BTC to a whopping $1 million.

Mallers shared his perspective on the digital asset’s future trajectory during an interview with David Lin. The financial instability in the bond markets, which significantly involves banks, is the foundation upon which Maller draws his projection.

He asserts that significant liquidity infusions could result from the possible rescue needed to stabilize these markets, driving up the price of assets like Bitcoin. Mallers believes BTC’s value will rise, underlining the limited availability of BTC when paired with rising demand.

At the time of writing, BTC was trading at $64,207, indicating a 0.72% increase in the last 24 hours. Despite the crypto asset showing positive signs, its trading volume is down by over 8% in the past day.

Bitcoin

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Bitcoin Bearish Signal: Analyst Warns Of Potential Drop To $59,000

Amidst the anticipated positive effect of the recently concluded Bitcoin Halving event, Ali Martinez, a well-known cryptocurrency analyst and trader has issued a noteworthy warning about BTC’s trajectory, predicting that the price of the crypto asset could undergo a correction to the $59,000 mark.

Potential Declines For Bitcoin

Martinez’s analysis delves into the potential for Bitcoin to experience possible dives on the downside in the short term. Considering the BTC’s chart in the 12-hour timeframe, the analyst noted that two signals have manifested signaling potential price declines.

Related Reading: Analyst Points To Possible 30% Bitcoin Correction, Calls For Caution

These include a red candlestick from the TD (Tom Demark) Sequential and a death cross between the 50 and 100 Simple Moving Average (SMA). As a result, Martinez believes that the development could trigger a price drop to $63,300. Additionally, he urged the community to be ready for further dips to around $61,000 and $59,000.

Bitcoin

Martinez previously highlighted that the TD Sequential indicator on the 12-hour chart has flashed a sell signal. This signal came in light of Bitcoin experiencing a mid-level resistance of a parallel channel. Given this, he underscores a cautious approach amidst times like this, given the history of this indication, especially in the event that the digital asset falls below the $65,500 support level.

According to the expert, the trend score for the coin’s accumulation has fallen to zero. Specifically, this suggests that whales are either distributing or not hoarding BTC at the moment.

It seems Martinez’s forecast has taken place as BTC is already trading below the aforementioned support level. Following the price decline, Bitcoin has also seen a notable drop in accumulation.

Over the past few weeks, there has been consolidation in Bitcoin’s price as it has been unable to sustain its surge over its all-time high of $73,000 achieved in March. On Thursday, BTC witnessed a notable drop to around $63,000, which higher inflation and slower growth in the United States were considered to be a catalyst for the drop.

BTC’s Path To $1 Million

Even though there have been some short-term swings with Bitcoin, its long-term trend is still positive. Jack Mallers, the Chief Executive Officer (CEO) of Strike has predicted a long-term growth for BTC to a whopping $1 million.

Mallers shared his perspective on the digital asset’s future trajectory during an interview with David Lin. The financial instability in the bond markets, which significantly involves banks, is the foundation upon which Maller draws his projection.

He asserts that significant liquidity infusions could result from the possible rescue needed to stabilize these markets, driving up the price of assets like Bitcoin. Mallers believes BTC’s value will rise, underlining the limited availability of BTC when paired with rising demand.

At the time of writing, BTC was trading at $64,207, indicating a 0.72% increase in the last 24 hours. Despite the crypto asset showing positive signs, its trading volume is down by over 8% in the past day.

Bitcoin

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Strike Brings The Lightning Network To Every US Merchant. The Market Yawns

The Strike announcement was an atomic bomb, but the market is not impressed. Since Jack Mallers wasn’t there to reveal an Apple deal as rumored, the general public was somewhat disappointed. However, the Strike CEO announced something much bigger. The company partnered with Blackhawk and NCR to bring Lightning Network transactions to Point Of Sale terminals all over the United States. Plus, with Shopify for the e-commerce equivalent. 

The man was playing third-dimensional chess with us. Mallers titled the presentation “The King’s Gambit,” an alternative to the “pawn to e4” chess opening he usually mentions. Here’s the video:

Inside Strike ‘s Announcement

The presentation started with a brief history of payment networks, starting in 1949 with the invention of the Diner’s Club card. The first revelation comes next: payment networks have not evolved or innovated in 50 years. The legacy financial system is still using this ancient technology like there’s no tomorrow. 

These merchants are adopting Bitcoin for payment this year. (Jack Ballers – Strike). pic.twitter.com/FF57vYF7BH

— Big Sky HODL ⚡ CO Beef Initiative (@BigSky_HODL) April 7, 2022

As usual, Strike’s Jack Mallers proposes to the world that it should join an “open payment standard.” That it should use a “superior payment network.“ And with these partnerships, he finally accomplishes it. Strike will use the bitcoin network as payment rails to enable Lightning Network transactions in a high percentage of merchants in the US. According to Mallers, bitcoin will finally be “embedded into our lives.”

Another interesting part of the story is Senator Cynthia Lummis’ support. According to a letter she sent to Mallers, she says “I am working to bring smart legislation to the digital assets space, so that innovations like this can be integrated into America’s financial services industry.“ That’s reassuring. Because chances are legacy players will fight this. 

thank you @jackmallers. you're an incredible inspiration.

— jack⚡ (@jack) April 7, 2022

The senator will speak tomorrow, on Bitcoin 2022’s final day of conference. 

BTC price chart for 04/08/2022 on Oanda | Source: BTC/USD on TradingView.com
How Did The News Affect The Market?

The general public was expecting Strike to announce an Apple partnership that would’ve made bitcoin’s price pump to infinity. It didn’t get it. So, bitcoin traded around the $43K range the whole day and acted unaffected in front of Jack Mallers’ news. It seems like the market didn’t even flinch. 

What @jackmallers just announced is going to kick off the #Bitcoin circular economy in a massive way.

I think few understand that the inability to easily use BTC is what makes it difficult to accept as a daily driver.

Medium of exchange is here. Next stop, Unit of Account.

— Guy Swann ⚡ (@TheGuySwann) April 7, 2022

More nuanced than an Apple partnership, it will take months, maybe years to see the new’s impact. On the one hand, people aren’t incentivized to spend their bitcoin. As long as its price is increasing, people will want to hold the asset. On the other, this provides a non-KYC way to spend your bitcoin. A non-KYC way of paying. The Strike announcement makes bitcoin a competing Medium of Exchange and puts it into every store in the US.

Is that fact priced in? 

What Does The Twitterati Think About Strike ‘s News? 

The Guy Swann sums up the announcement by declaring it’ll “kick off the Bitcoin circular economy in a massive way. I think few understand that the inability to easily use BTC is what makes it difficult to accept as a daily driver.” For his part, podcaster Anthony Pompliano said, “Hundreds of millions of people can now spend bitcoin or dollars across the Lightning Network instantaneously, completely for free at every major US retailer.”

Strike CEO @jackmallers and Strike just announced partnerships with Shopify and other leading payment providers.

Hundreds of millions of people can now spend bitcoin or dollars across the Lightning Network instantaneously, completely for free at every major US retailer.

— Pomp 🌪 (@APompliano) April 7, 2022

In a phenomenal thread, Economist Lyn Alden explains the implications. “The more places that accepted BTC at point of sale (on-chain or Lightning or otherwise), the more permissionless the whole network is. This is because, if all you can do with BTC is convert it back into fiat on a major exchange, then it’s easy to isolate it, effectively blacklist addresses, etc.”

This is because, if all you can do with BTC is convert it back into fiat on a major exchange, then it's easy to isolate it, effectively blacklist addresses, etc.

But if you can directly spend it on goods and services across companies and jurisdictions, it's harder to isolate.

— Lyn Alden (@LynAldenContact) April 7, 2022

On the other hand, notorious YouTuber Bitboy Crypto misses the point completely and says. “Michael Saylor: Never Sell your Bitcoin (crowd goes WILD) Jack Mallers: Here’s a great way to spend your Bitcoin (Crowd goes WILD) Like does no one see the disconnect here?” 

Michael Saylor: Never Sell your Bitcoin (crowd goes WILD)

Jack Mallers: Here’s a great way to spend your Bitcoin (Crowd goes WILD)

Like does no one see the disconnect here?

— Ben Armstrong (@Bitboy_Crypto) April 7, 2022

Matt Ahlborg, head of research at Bitrefil, gives Bitboy the 411. “What Jack Mallers is really saying is that you will be soon be able to offload your Bitcoins in the real world without KYC’ing through an exchange first.” While Jack Dorsey keeps it short and sweet by saying, “thank you Jack Mallers. you’re an incredible inspiration.”

What Jack Mallers is really saying is that you will be soon be able to offload your Bitcoins in the real world without KYC'ing through an exchange first.

If this is true, it is actually an extremely substantive and important development for Bitcoin.

— Matt Ahlborg (@MattAhlborg) April 7, 2022

The whole world changed after that Strike announcement. It might feel similar, but we’re living in bitcoin world now. Make of that what you will. 

Featured Image: Jack Mallers at Bitcoin 2022 taken from this tweet | Charts by TradingView

Bitcoinist @ Bitcoin 2022 Miami

Bitcoinist will be at Bitcoin 2022 Miami in Miami Beach, FL from April 6th through 10th reporting live from the show floor and related events. Check out exclusive coverage from the world’s largest BTC conference here.

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Lightning Speed 004: What’s The Lightning Development Initiative?

There’s no denying that 2021 was the Lightning Network’s year. What does the future hold, though? If the objective is to onboard the next billion people, the network needs work and fine-tuning. To grab the bull by the horns, The Human Rights Foundation and Strike set up three 1 BTC bounties. 

The bounties will go to the first person or team to develop an anonymous Lightning tip jar, a tokenless way to peg BTC to dollars, or a privacy-focused wallet that supports some kind of Chaumian e-cash feature. In a Twitter Spaces conversation about the program, they named it The Lightning Development Initiative. 

A catchy name that we’ll use from now on to refer to all of this. This fourth edition of Lightning Speed is all about the future. Let’s explore the three ideas and the new information that we have about each of them.

The Lightning Development Initiative In Twitter Spaces

Among the speakers were Strike’s Jack Mallers, The Human Rights Foundation’s Alex Gladstein, Bitcoin Magazine’s Christian Keroles AKA CK Snarks, and Tales From The Crypt’s Matt Odell. It took place on December 29th and Bitcoin Magazine hosted it. A Twitter user named Gigi summarized it for us.

🚨 A thread summarizing the Lightning Développement Initiative Space ⬇

3 amazingly interesting topic related to the bounties were discussed.

I'm so bullish on Lightning⚡ it hurts. Very grateful to have these people on our side ❤👑

let's look at my notes 🧵 pic.twitter.com/PRs9cohPaN

— Gigi ⚡🇨🇵 (@GuerillaV2) December 29, 2021

Bounty #1: An Anonymous Tip Jar

In our sister site Bitcoinist’s report, they described the challenge as follows:

“Can you create a Lightning tip jar that doesn’t reveal any information about the parties involved? That’s the first task. How to receive completely anonymous donations. According to Bitcoin Mag, the “goal is to enable anyone to use free and open-source software (FOSS) to print a QR code that can be used for receiving Lightning payments privately. Importantly, “The QR code should not reveal the public key or IP address of the user.” 

In the Lightning Development Initiative’s report, we learned that this has to do with the two competing protocols, Bolt12 and lnurl. Jack Mallers “pointed out the absolute need for interoperability on the Lightning Network and that even though lnurl might not be “optimal” right now, the market will eventually decide what open standard they prefer to use. He thinks that currently UX is a major focus for the Lightning community and we should make peace with the fact that there will be competition between solutions.”

Rockstar pointed out that this debate around lnurl vs bolt12 will have huge implications for the future but that he's glad that there's now an active discussion on the matter.

Jack added that contrary to the Bitcoin main chain, we can somewhat afford to fuck up on LN..

— Gigi ⚡🇨🇵 (@GuerillaV2) December 29, 2021

Mallers put forth another interesting idea, “contrary to the Bitcoin main chain, we can somewhat afford to f**k up on the Lightning Network. As long as the Bitcoin monetary policy is not threatened then we can freely fiddle on top of the protocol via Lightning.”

BTC price chart for 01/14/2022 on Bitfinex | Source: BTC/USD on TradingView.com
Bounty #2: Stablecoin On Lightning Without A Token

Bitcoinist described this one as:

“The second challenge seems to be even more difficult, at least on a conceptual level. The HRF and Strike want a wallet that enables “anyone to “peg” an amount of bitcoin to U.S. dollars without needing an exchange or another token.” That’s right, without a centralized entity. And relying only on sats and bitcoin.”

Gigi summarizes why the world needs this:

“The goal is to allow people to access dollars without a single point of failure. Further down the line, as Bitcoin becomes less volatile, these people can use btc, but until then there’s massive demand for holding value in dollars. The tether market cap is proof of this.”

It serve an important humanitarian use case. We need to create the foundation for this new financial system.@Chris_Stewart_5 >> maybe it can be done with DLC's? Not using a token but rather something representing price exposure (think Eurodollar system). (oracles?)

The END.

— Gigi ⚡🇨🇵 (@GuerillaV2) December 29, 2021

Bounty #3: A Chaumian E-Cash Feature

First of all, Investopedia defines Chaumian e-cash as:

“eCash was a digital-based system that facilitated the transfer of funds anonymously. A pioneer in cryptocurrency, its goal was to secure the privacy of individuals that use the Internet for micropayments. eCash was created by Dr. David Chaum under his company, DigiCash, in 1990.“

So, once again, anonymity is the priority. As Alex Gladstein put it when announcing the bounties, they’re “for the first open-source, non-custodial, non-KYC Lightning wallets to ship features requested by dissidents worldwide.” Also, take into consideration the words of security expert Brian Trollz, “Bitcoin without privacy is nothing but a surveillance system.”

Bitcoin without privacy is nothing but a surveillance system.

— Shino (@brian_trollz) January 13, 2022

What does Gigi have for us on this topic? “We need a sort of Chaumian e-cash, extremely easy to use for the Plebs and accessible. Maybe the solution is a federated  one, making it harder to regulate.” He then quotes Jack Mallers again, “There’s going to be a singular standard for the internet of money (Bitcoin). Many will compete on top of BTC so we need “interoperability to the standard.”

Matt: We need to make it very easy to use because experience shows us that if it's somewhat challenging (coinjoins etcc) people won't bother to protect their privacy (goddam idiot normies 🤡)

— Gigi ⚡🇨🇵 (@GuerillaV2) December 29, 2021

Conclusion: The Future Is Bright

Developers, teams, companies, anyone can earn the Lighting Development Initiative’s bounties. The non-profit OpenSats will serve as the judge. They are all open for the whole year. If by the end of 2022 no one has claimed them, the money will go to the Human Rights Foundation’s Bitcoin Development Fund on January 1st. Which is fair. Especially considering they just gave 425 million Sats to these worthy organizations and individuals.

For more information and details read Bitcoinist’s original report.

Featured Image by Micah Tindell on Unsplash | Charts by TradingView

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Charlie Lee Sums Up Litecoin’s 10 Years History. Part Four: SegWit Activation

Today is the day, Litecoin’s 10th anniversary. Congratulations to Charlie Lee and everyone involved in the project over the years. We are exploring Litecoin’s history through the eyes of its creator. We covered its fair launch, the long-hard road to exchanges adopting LTC, and we introduced the SegWit story. It’s time to finish it. 

The last time, we introduced Bitmain’s co-founder Jihan Wu. Reportedly, he was singlehandedly stopping SegWit adoption in the Bitcoin blockchain. Lee’s plan was to use Litecoin as a Testnet of sorts for SegWit. “I realized that here’s a chance for Litecoin to do something to help Bitcoin. If we can get SegWit on Litecoin, it can clear out all the FUD and prove that SegWit is safe and a good upgrade for Bitcoin.” To accomplish that, he had to convince miners to side with him and not with the manufacturer of the most efficient ASICs.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

According to Coindesk, there was another important incentive for Litecoin to adopt SegWit:

“Since SegWit could potentially pave the way for technologies that expand the value proposition of cryptocurrencies, the move toward accepting the upgrade has reignited excitement around the normally less-popular cryptocurrency. Litecoin’s price has nearly tripled since the end of March as a result.”

And this is where today’s story starts.

LTC price chart for 10/13/2021 on FX | Source: LTC/USD on TradingView.com
Charlie Lee Talks To Litecoin‘s Miners

During the end of 2016 and the beginning of 2012, Lee talked to everyone. One of his first victories was to get “Innosilicon, another LTC ASIC maker,” to his side. In this part of the story, we can see how hard Jihan Wu was playing. A “huge LTC Miner” was ready to signal for SegWit in principle, but, since his machines were in a farm controlled by Jihan Wu, he was afraid that he might lose access to cheap electricity.

Innosilicon was immediately on board with SegWit. They agreed with me that it's the best path forward. And they were able to convince some of their customers to support SegWit.

One of their customers was a huge LTC miner. He owned about 5% of the hashrate. Having him was huge.

— Charlie Lee (@SatoshiLite) October 8, 2021

The objective was to get “75% of blocks signal for SegWit within a 2-week timeframe.” Easier said than done. LitecoinPool was the first great pool to side with SegWit. Another big mining pool, F2pool, also promised to do it, but they didn’t right away. This turned out to be great for the cause because they provided a clear signal that the market supported the SegWit transition. Lee narrates, “over the next month, F2pool actually flipped flopped. They would signal and then stop signaling. The market reacted accordingly. When F2pool started signaling, the price will go up, and vice versa.” 

To complicate things, “Jihan wanted me to personally visit him and the miners in China to convince them about SegWit.” Lee didn’t like the power-play, but that was nothing. As more and more miners signaled for SegWit, Jihan turned to the ace up his sleeve. There was a rumor that “Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade.”

Over the next week, more and more miners started signaling for SegWit and it started to look inevitable. And then this happened. Bitmain was building a ton of LTC miners and was going to turn them all on themselves to block the upgrade. 😡https://t.co/Zvs9srExJJ

— Charlie Lee (@SatoshiLite) October 8, 2021

It was time for Charlie Lee to call in the big guns.

The User Activated Soft Fork

Since both the miners and the market were clearly signaling in support of SegWit, Charlie Lee felt he had the right “to pull the UASF trump card out.” One of the wonders of decentralized organizations is that the users can also activate a soft fork. “If the majority of users and exchanges run the UASF code, SegWit will activate.” If that happened, miners had to comply and adopt SegWit as well.

UASF stands for User Activated Soft Fork. What it means is that instead of having the soft fork (SegWit) being miner activated, the user decides to activate the soft fork in a future date. If the majority of users and exchanges run the UASF code, SegWit will activate.

— Charlie Lee (@SatoshiLite) October 8, 2021

The threat of a UASF was too much to bear, so the miners agreed to meet with Charlie Lee online and work things out. 

Yes we will do roundtable online with @SatoshiLite ASAP, not need to wait for June. https://t.co/rVWQjLu5kJ

— Jiang Zhuoer BTC.TOP (@JiangZhuoer) April 20, 2017

And the rest is history, “On April 21, I met with Jihan, Innosilicon, and miners for over 8 hours IIRC. It was exhausting.“ They reached an agreement, this is the blog post announcing it. Among other things, it says:

“We agree that protocol upgrade should be made under community consensus, and should not be unilateral action of developers nor miners. We advocate that Litecoin protocol upgrade decision should be made based on the needs of the users, through the roundtable meeting voting process, and activated by miner voting.”

Charlie Lee reflects, “Although this seems so bad for a decentralized cryptocurrency to have a closed door meeting to make decisions that affect the future of Litecoin, I felt like it was a compromise I’m willing to take. It’s better than an all out war between the miners and I.”

On May 10th, 2017, SegWit was activated on Litecoin.

SegWit has activated on Litecoin! 💥😁 pic.twitter.com/lpeklpQpZe

— Charlie Lee (@SatoshiLite) May 10, 2017

After that, a few historic transactions took place

  • On THE SAME DAY, a notorious Bitcoin developer completed the first Lightning Network transaction.
  • A few days later, Lee posted an anonymous “$1m bounty on a SegWit address:” The text says:

“A lot of people have been saying that segwit is unsafe because segwit coins are “anyone-can-spend” and can be stolen. So lets put this to the test. I put up $1MM of LTC into a segwit address. You can see it’s a segwit address because I sent and spent 1 LTC first to reveal the redeemscript.”

  • A few months later, Bitcoin activated SegWit through a UASF. “It’s hard to know exactly how much Litecoin helped with this. I feel like it definitely has helped.”
  • Days later, Charlie Lee and Strike’s Jack Mallers starred in the first Lightning Network request/ payment transaction on Litecoin. That man Jack Mallers has a way to get involved in historic transactions, like this one, and this one.
  • That same month, Lee did his first Atomic Swap transaction. “This shows how one can move coins between different chains in a decentralized way. It was a great proof of concept and paved the way for decentralized exchanges.”
  • And later, he did another Atomic Swap but this time with Bitcoin.
  • And the next month, Lee did “the first ever cross-chain swap between BTC and LTC via Lightning.” This time it was with the now world-famous Lightning Labs.

Related Reading | Binance Burns Record $600 Million BNB In Its 15th Quarter

Wasn’t that an amazing, amazing story? We learned so much. And, even though we said this was the last chapter in the Litecoin 10-year history, Charlie Lee has another story to tell. Join us tomorrow for the infamous story of Charlie selling all of his Litecoin. Another legendary moment in crypto land.

Featured Image: Charlie Lee’s picture from this tweet | Charts by TradingView

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Is Mexican Exchange Bitso Behind El Salvador’s Chivo Wallet?

The mystery of the Chivo wallet persists. And Bitso comes into the picture as part of a more credible report confirmed through official channels. It seems like NewsBTC was right to doubt Forbes’s article about BitGo being behind the Chivo wallet.  This Reuters report, on the other hand, comes with specific information and quotes confirming the news. For example:

“We are looking forward to working with El Salvador in an initiative that will transform payment structures and increase financial inclusion in the country,” said Santiago Alvarado, vice-president of Bitso for Business.

Related Reading | Bitcoin Price Bloodbath: Is El Salvador A “Sell The News” Event?

Even that could be considered evasive, it doesn’t refer to the Chivo wallet specifically. This chunky bit of information, on the other hand, leaves little to the imagination.

“Bitso said it will work with Silvergate Bank, a U.S. federally-regulated and California state-chartered bank, to facilitate transactions in U.S. dollars.”

The language suggests they’re talking business.

El Salvador made history by becoming the first country to make Bitcoin legal tender, and today, we’re proud to announce that Bitso is committed to building and developing El Salvador’s vision of Bitcoin by being the core crypto-service provider for Chivo.Let’s #MakeCryptoUseful https://t.co/2rrTNDdXab

— Bitso (@Bitso) September 7, 2021

If Bitso Is Behind The Wallet, What’s The Deal With BitGo?

On the other hand, in the BitGo report, the language suggested otherwise. The quote from BitGo’s CEO was non-comital and it all sounded like a paid press release. NewsBTC questioned:

“The most worrying sentence, however, is “Forbes has learned El Salvador appears to have tapped…” They’re not committing to anything here. It “appears” this way, but nothing is certain.”

However, could both companies be involved? Reuters says Bitso will be “the core service provider for Chivo.” Forbes said that BitGo would “provide Chivo’s wallet infrastructure and security platform.” Are both of these statements contradictory? Or are both of these giant companies behind the controversial Chivo wallet?

A funny detail is that Bitso’s name was present in the leak of the Chivo wallet’s architecture that our sister site Bitcoinist reported on. BitGo’s name wasn’t. And Athena was at the center of the whole operation. Still, it’s a funny detail.

One thing’s for sure, Strike seems to be completely out of the picture. In a recent Twitter thread, Strike’s CEO Jack Mallers clearly said “Strike has no business relationship with Chivo wallet or any of their ATMs.”

All that was needed was interoperability with the #Bitcoin network.

Strike has no business relationship with @chivowallet or any of their ATMs.

We simply both integrated and operate on top of the same, singular, payment standard that is #Bitcoin and the Lightning Network.

— Jack Mallers (@jackmallers) September 7, 2021

Mallers seems to be perfectly fine with the situation. “With the Bitcoin network, there is one singular, open standard for the world,” he says later on in the thread. 

BTC price chart for 09/10/2021 on Bittrex | Source: BTC/USD on TradingView.com
Remittances Are The Key

In the days prior to the Bitcoin Law coming into effect, Bitcoinist quoted the executive president of the Central American Bank for Economic Integration, Dante Mossi. He said their eyes were on remittances and that:

“Guatemala, Honduras and El Salvador are the countries that would have the most to gain if the adoption of bitcoin lowered the cost of sending remittances.” All countries in his organization’s area of influence.

Instead of focusing on how much Salvadorans are going to get back, a recent report about how much Western Union is going to lose with El Salvador’s Bitcoin move recently made the news. About it, Bitcoinist said:

“With bitcoin though, the middleman, in this case, Western Union and the likes, are completely removed from the process. The funds sent go directly to the recipient without the need for a processing fee to a third party. It is estimated that these remittance companies are set to lose about $400 million a year when remittances are routed through bitcoin instead.”

Related Reading | Bitso Raises Over US$1.85m to Boost Mexican Bitcoin Remittance

As it turns out, remittances are Bitso ’s specialty. The company processed “more than $1.2 billion in remittances between the United States and Mexico in 2020.” In the article, Reuters quotes Santiago Alvarado again:

“As the leading crypto exchange in the region, we are thrilled to bring our experience in remittances and in secure and low-friction financial services to Salvadorans.”

So, this all makes sense. Still, the mystery of the Chivo wallet continues.

Featured Image by Thomas Jarrand on Unsplash – Charts by TradingView

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Is BitGo Behind El Salvador’s Chivo Wallet? This Old School Mag Thinks So

Where did BitGo come from? In all of this time covering El Salvador’s Bitcoin Law, the name wasn’t in the picture. Now, all of a sudden, Forbes claims that BitGo’s technology is behind the controversial Chivo wallet. How and when did this happen? Or, more importantly, is this real news or a paid piece to take advantage of the “historic moment for cryptocurrency adoption.” 

Related Reading | NewsBTC Crypto Trading Course. For FREE.99

Not to be conspiratorial, but Forbes’ tone through this whole piece has a press-release-feel to it.

“For months, El Salvador has kept many of Chivo’s details under wraps with the nation’s 40-year-old president, Nayib Bukele, teasing the wallet’s launch on Twitter just last week. However, Forbes has learned El Salvador appears to have tapped cryptocurrency unicorn BitGo to provide Chivo’s wallet infrastructure and security platform, making the Palo Alto, Calif-based startup the nation’s exclusive hot-wallet provider in a historic moment for cryptocurrency adoption.”

What’s all this about “cryptocurrency unicorn BitGo” and “the nation’s exclusive hot-wallet provider in a historic moment”? Is this the appropriate vocabulary for a legacy media publication like this one? The most worrying sentence, however, is “Forbes has learned El Salvador appears to have tapped…” They’re not committing to anything here. It “appears” this way, but nothing is certain.

BTC price chart for 09/07/2021 on Bitstamp | Source: BTC/USD on TradingView.com
What Does BitGo Say About The Announcement?

Not El Salvador’s government, nor Strike commented on the Forbes piece. They did get a quote from Mike Belshe, CEO of BitGo, who said:

“Digital assets look so different from what we’ve seen with other types of money, and so people wonder about how [they] fit in, but this is an opportunity to build financial freedom for the people of El Salvador” says BitGo CEO Mike Belshe, speaking from his home in Silicon Valley on Saturday. “The ability to send money in a hurry on a Saturday night, when banks are closed, across the planet and at almost no fees, it’s hard to put into words how empowering that is, and what we’ll see in El Salvador is, people will start figuring it out.” 

Did Belshe confirm the news? Is BitGo behind the Chivo App? He talks about “an opportunity to build financial freedom for the people of El Salvador.” So yeah, assuming Belshe was talking about this specific rumor, he seems to confirm the news. Indirectly. In a non-comital way.

To make things worse, the article ends presenting BitGo as their own marketing material would:

“Founded in 2013, BitGo has grown into one of the biggest cryptocurrency wallet companies in the world, raising more than $70 million in funding from investors including…”

Let’s Remember, What Did Strike Say About The Subject?

Strike’s Jack Mallers has met with the Bukeles, announced El Salvador’s Bitcoin adoption, and the company has an office at Bitcoin Beach. Everyone was assuming that the technology behind the Chivo wallet was going to be Strike’s. However, if we go back to the interview in which Mallers told the whole story, our sister site Bitcoinist quotes him saying:

“There’s no commercial agreement between Strike and the government of El Salvador.

“In fact, I advised and gave my opinion of the opposite. The economies of scale and network effects associated with open networks are so powerful. Just by plugging in to them you’re going to get the freemarket competition that every country would die for.”

Related Reading | Tomorrow, The Community Will Buy $30 In BTC To Support El Salvador’s Bitcoin Law

Did President Bukele take his advice and went with another company? Can we trust Forbes even if it sounds like a copy-and-pasted press release? Is BitGo’s technology behind the Chivo Wallet? We will know for sure very soon.

Featured Image by Chräcker Heller from Pixabay – Charts by TradingView