Samsung, South Korea’s Largest Firm, is Manufacturing ASIC Chips For Bitcoin Mining

Samsung, the largest company in South Korea which is accountable for a large portion of the country’s economy, has started the production phase of bitcoin and cryptocurrency mining equipment and ASIC mining chips.

Local media outlets reported that Samsung partnered with a Chinese bitcoin mining equipment manufacturer last year and finished the development of its ASIC chips. Samsung, which operates one of the largest semi-conductor manufacturing plants in the world, will manufacture and supply cryptocurrency mining equipment to the Chinese market first.

In the long-term, Samsung plans to expand its mining equipment venture from China to other regions like South Korea and Japan that have a stronger demand for cryptocurrencies than other countries.

A Samsung spokesperson told local media that the company will operate a foundry to manufacture mining equipment and to match the supply requested by the Chinese bitcoin mining firm it has partnered with. In the beginning, Samsung said it will focus its venture on targeting the Chinese market and because Samsung has just started its foundry business, it is not unsure of the revenues its mining venture can generate.

“Samsung is operating a foundry that supplies a Chinese cryptocurrency mining firm with mining equipment and ASIC chips. Since Samsung has just begun its cryptocurrency mining venture, it is unsure of the revenues it can generate from it,” a spokesperson said.

In the upcoming months, Samsung also intends to manufacture GPU miners for miners targeting small cryptocurrencies.

Samsung has a large-scale and sophisticated semi-conductor manufacturing plants which are capable of matching orders of any size. Since last year, Samsung has been the sole supplier of OLED screens for Apple’s iPhone X production line, because it has been the only company that is able to match the supply needed by Apple.

While Apple has invested several billions of dollars in Samsung’s competitor LG to manufacture OLED screens, no company has been able to match Samsung in manufacturing chips and electronic components.

Currently, Taiwan’s TSMC remains as the only major semi-conductor manufacturing firm and foundry operator to support a major bitcoin mining equipment manufacturer in Bitmain. The entrance of Samsung in the global cryptocurrency mining sector could provide Bitmain and its partner company TSMC their first real competitor.

Hwang Min-seong, an analyst at Samsung Securities, told local media outlets that Samsung will be able to increase its revenues through ASIC chip manufacturing. But, until the company expands its venture internationally, it will be difficult for Samsung’s ASIC chip manufacturing division to have a major impact on the revenues of Samsung Electronics.

“Samsung Electronics could increase its revenues through ASIC chip manufacturing but because the foundry only accounts for a small portion of the company’s semi-conductor manufacturing plant, it is difficult to predict that the firm’s mining venture will have a significant impact on the company’s revenues.”

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Through the utilization of artificial intelligence (AI) and blockchain technology, the development team behind Neurogress has created a system with which anyone can take control of devices simply with thoughts.

By enabling an Internet of Things (IoT) network using a decentralized blockchain network, Neurogress allows users to access neuro-controlled devices such as drones, smart home appliances, and virtual reality (VC) technologies. Essentially, without the necessity of physical controllers, users can gain absolute control over any device on the Neurogress blockchain-enabled IoT network by merely thinking about it.

Within the Neurogress ecosystem, blockchain technology serves as an immutable ledger that keeps track of the data flow from a user to an IoT-enabled device. The first prototype of Neurogress, the Neurogress robotic arm, allows any user to freely move joints, fingers, wrist, and any part of the arm simply by thinking about the movement.

Data from the user’s brain is transmitted to the arm through the Neurogress blockchain network. If sensors are applied to devices , the Neurocontrol System can be applied to a wide range of electronic devices, allowing users to manipulate various systems with the Neurogress software.

Demonstration of Neurogress robotic arm

“Neurogress wants every company and developer to contribute from its platform. Blockchain serves as an ideal transaction processing mechanism for the marketplace. It also provides the means of intellectual property for the developers via smart contracts.”

While there exists an abundance of neural interfaces in the global market, the Neurogress development team noted that the vast majority of the technologies struggle to showcase a high level of specificity in reading and processing brain commands. Consequently, information sent from a user’s brain to the device can be distorted, through existing technologies in the market.

Neurogress researchers were capable of delivering a highly accurate neural interface by processing brain signals and converting them into action using AI.

“This is achieved through incorporating artificial intelligence into the process of interpreting a brain signal and converting it into action. By introducing software which actively generates an evolving algorithm for interpreting an individual’s brain signals, the potential for sending detailed, precise commands to a device is greatly increased.”

The AI system of Neurogress acts as the data processing technology which is responsible for transmitting and processing data from the user’s brain to an IoT-enabled device. Blockchain technology is then used to either store, send, and receive neural information, operating as the main database of the Neurogress network.

One of the immediate applications of Neurogress and its blockchain technology is the assistance of disabled individuals through wireless devices. Individuals with physical disabilities with prosthetics can use the Neurogress network to move a part of their bodies with ease.

“The use of artificial limbs (frequently referred to as a ‘prosthesis’) to replace or augment natural parts of the human body has been in place for a long time. The sophistication of these devices has evolved immeasurably. Today, a prosthesis may employ an array of technologies drawing from informatics, electrical engineering and biomedical engineering,” the Neurogress development team added.

With a hard cap of 42,152 Ethereum’s native cryptocurrency Ether, the Neurogress team will raise a fundraiser by conducting an initial coin offering (ICO). Presale of Neurogress tokens begins on February 10, 2018.

The South Korean government has started to focus on fostering and regulating the local cryptocurrency market to protect investors and ensure businesses have robust infrastructure to secure sensitive information.

Major Banks Supporting Cryptocurrency Exchanges

Earlier this month, several officials in the South Korea Finance Ministry told local investors that banks and financial institutions within the country will begin cutting off money flow into cryptocurrency exchanges and trading platforms.

Investors became increasingly concerned when Kookmin Bank, the country’s biggest financial institution, stopped providing virtual bank accounts and banking services to cryptocurrency exchanges.

On South Korean bitcoin trading platforms, each user is granted a virtual bank account issued by local banks. With it, traders can initiate trades and execute orders without directly moving funds to their original bank accounts. Instead, traders can choose to keep their funds on virtual bank accounts on the exchanges to swiftly trade cryptocurrencies to fiat.

Korbit and Bithumb, two of the largest cryptocurrency exchanges in the market, revealed this week that Shinhan Bank along with five other major banks in South Korea will begin supporting cryptocurrency exchanges with virtual bank accounts. As such, by the end of this month, new users will be able to open accounts on trading platforms and existing users will be permitted to trade large volumes once again.

Previously, the Justice Ministry, which was heavily criticized for its premature statement on a cryptocurrency trading ban bill that was later refuted by the South Korean government, suggested that it will request banks to cut services to both investors and exchanges in the cryptocurrency market. However, with the exception of Kookmin Bank, all of the country’s major banks will continue to support cryptocurrency exchanges.

Cryptocurrency Exchanges Fined For Poor Security Measures

Today, on January 24, eight cryptocurrency exchanges in South Korea including Korbit and Coinone were fined $130,000 in total for implementing poor security measures. The South Korea Communications Commission (KCSC) penalized local exchanges for violating the Information and Communication Network Act and Privacy Act.

The KCSC, which led an investigation into 10 cryptocurrency exchanges in cooperation with the South Korea Technology, Science, and Information Ministries, discovered that the majority of exchanges have had poor security breach prevention systems, unsecure user information storage protocols, and unreliable storage technology for sensitive user information.

The eight cryptocurrency exchanges each received a fine in the range of $10,000 to $25,000. Analysts stated that the fines were significantly small relative to the magnitude of the business local cryptocurrency exchanges operate. The KCSC noted that small fines were imposed because poor security measures on cryptocurrency exchanges were discovered for the first time and since the exchanges have been provided with a 30-day window to implement stronger systems.

The strict regulation of the South Korean cryptocurrency market by the country’s Finance Ministry and KCSC is an optimistic sign for the long-term growth of the industry, because it demonstrates the unwillingness of the government to ban the market and cryptocurrency trading.

Six major South Korean banks including Shinhan Bank, the second largest bank in the country, will officially begin providing local cryptocurrency exchanges with virtual bank accounts.

Virtual Accounts Restarted, Traders Relieved

On South Korean cryptocurrency exchanges, each trader or investor is provided with a virtual bank account which can be used to deposit or withdraw large amounts of fiat money, or Korean won. Virtual bank accounts allow traders to execute fiat-to-cryptocurrency trades efficiently, without having to withdraw or deposit using actual bank accounts that can be costly and time-consuming.

Earlier this month, South Korean cryptocurrency exchanges were requested by local financial authorities to overhaul their current Know Your Customer (KYC) and Anti-Money Laundering (AML) systems. Two of the many requirements the government demanded local exchanges to comply with were the prohibition of foreigners from trading cryptocurrencies and the elimination of anonymous cryptocurrency trading accounts.

As a part of the AML system change, banks were asked to shut down virtual banking accounts provided to cryptocurrency exchanges. Kookmin Bank, the largest bank in South Korea, refused to provide services to cryptocurrency trading platforms, leading local investors to fear for a potential cryptocurrency trading ban, which was later refuted by the South Korean government.

Recently, Bithumb and Korbit, two of the biggest cryptocurrency exchanges in the market, announced major changes to their AML systems. By the end of January, the Korbit team stated that foreigners will no longer be able to deposit Korean won to any South Korean exchanges — disabling fiat deposits and withdrawals for foreigners.

The Korbit team also noted that traders with Shinhan Bank accounts will only be able to trade cryptocurrencies starting February. While the newly implemented AML system can be inconvenient for existing users, it is an optimistic movement for the market, since the government will no longer be able to threaten the market with a cryptocurrency trading ban. The Korbit team stated:

“As previously announced, in order to comply with the identification and anti-money laundering regulations being enforced by the government, the current KRW deposit method will be terminated by the end of January 2018.

To use the new KRW deposit method, which is slated to be implemented within this month, you must have a Shinhan Bank account registered under your legal name. Please use this time to create a banking account at Shinhan Bank. We will follow up with further instructions on how to input the new KRW withdrawal account information on Korbit.”

Hence, even though Kookmin Bank has disabled its virtual trading accounts for cryptocurrency exchanges, Shinhan Bank, IBK Bank, NongHyup bank, KDB Industrial Bank, and Woori Bank will start providing services to cryptocurrency exchanges beginning on February 1.

Banning Cryptocurrency Trading Unrealistic

Instead of outright banning the local market, the South Korean government has decided to take a practical approach by regulating and fostering the cryptocurrency exchange market. As Financial Services Commission (FSC) chairman Kim Sang-jo previously stated, banning the cryptocurrency exchange market is unrealistic.

“[Banning cryptocurrency exchanges] is not realistically possible. Based on the electronic commerce law, the government doesn’t even have the authority to close down cryptocurrency trading platforms.

From the viewpoint of an economist, it is not a fair and transparent decision to outright ban economic activity. Whether it is excessive speculation or not, the gain or the loss is the responsibility of the investor.”

As CNBC Africa’s CryptoTrader host and producer Ran Neuner noted, bitcoin declined by 30 percent on five different occasions in 2017. This month’s 20 percent correction in bitcoin is tolerable, given the major corrections it had experienced in the past 12 months.

Major Correction

Other major cryptocurrencies such as Ethereum and Bitcoin Cash also recorded corrections in the 50 percent range last year, with the price of Ether, the native cryptocurrency of Ethereum, dropping from $360 to $130. Since then, Ether has surpassed $1,000, and surpassed $2,000 in the South Korean cryptocurrency exchange market.

Ethereum co-founders Vitalik Buterin and Charles Hoskinson expected a major correction to occur in the cryptocurrency market, because the market has grown at such a rapid rate within a short period of time. Blockchain projects with no products and users, solely with whitepapers with technobabble reached multi-billion dollar market caps.

Major corrections prevent short-term bubbles within the cryptocurrency market from occuring by shaking off weak hands and speculators. After major corrections, the market tends to solidify and strengthen, and initiate stronger rallies, as shown in the chart provided by prominent finance analyst Max Keiser below.

With initial coin offerings (ICOs) without products, users, and legitimate business models dominating the cryptocurrency sector, a major correction was long overdue. When the cryptocurrency market surpassed $500 billion in valuation for the first in history, Buterin questioned the justification of that valuation, and whether blockchains have done enough to support the billions of dollars invested in the market.

Hence, while the recent correction led to a $200 billion drop in the market cap of cryptocurrencies, it was necessary to ensure that the market remains stable and strong. Already, in the past 24 hours, the market valuation of cryptocurrencies increased from $450 billion to $520 billion, by over $70 billion.

Where Does the Market Go Next?

The bitcoin market in particular is expected to have a strong year in 2018, given the entrance of institutional investors and retail traders. Several markets including India are also expected to regulate their bitcoin markets, introducing many millions of new users to the digital currency.

Constantin Papadimitriou, president of Pundi X, told QZ in an interview that approximately 10 percent of all bitcoin transactions take place in India. According to Pundi X, which focuses on offline cryptocurrency sales, surveyed 3,000 respondents across India, Indonesia, Japan, Russia, the UK, and the US, the demand for bitcoin India is stronger than ever, despite the government’s strong warnings against the cryptocurrency.

While it is unlikely the government of India will legalize and regulate its cryptocurrency market in the short-term, given that a task force has already been established, there is a higher probability than before that the government will regulate its bitcoin market.

With China, the world’s largest remittance market, having banned bitcoin, the next big market in terms of remittance and e-payments is India. The penetration of bitcoin into the Indian market would lead to a surge in the user activity of the digital currency.

Kentucky Fried Chicken (KFC), the beloved US-based fried chicken chain, has started to accept bitcoin from its customers.

KFC’s Bitcoin Campaign

For a limited period of time, KFC is selling a bucket of fried chicken for $20 presented in a bitcoin-themed container demonstrating the price of the fried chicken bucket at the time of the sale. For instance, at the time of reporting, $20 is equivalent to $0.0011204, and upon the request of a delivery, KFC embeds the amount of bitcoin equivalent to the price of the bucket of fried chicken onto the container.

While KFC Canada does not intend to integrate bitcoin as a permanent and long-term payment method as of current, the company has introduced its bitcoin campaign to address the rapidly increasing demand for bitcoin and the cryptocurrency market in general.

The strategy of KFC Canada to implement a unique campaign involving one of the fastest evolving technologies and forms of money in bitcoin has been massively successful, as the company obtained significant mainstream exposure from the media and social media platforms such as Facebook and Twitter.

Throughout the limited offering of bitcoin-themed fried chicken buckets, KFC consumers can utilize BitPay’s payment processing service to purchase the signature KFC fried chicken with bitcoin.

In total, the bitcoin-themed bucket of fried chicken costs just over $27, including the $20 price of the bucket itself, taxes, and shipping fee. Inclusive of bitcoin transaction fees, which are averaging at around $5 on major blockchain wallet platforms like Blockchain and Trezor, the KFC bitcoin-themed fried chicken bucket costs over $30.

Given the current state of the Bitcoin network and its underlying scalability issues, it will be difficult for any large-scale commercial fast food chain to accept bitcoin as a payment method. But, in the future, the integration of second-layer solutions could allow restaurants to enable bitcoin payments, if transaction fees can drop below $1.

Second-layer and off-chain scaling solutions including Lightning and Ethereum’s Plasma are capable of processing near-instant payments with significantly low fees. As such, in the long-term, fast food conglomerates like KFC accepting cryptocurrencies as major payment methods is a possibility.

McDonald’s and OmiseGo

In late 2017, McDonald’s Thailand partnered with OmiseGo, the Ethereum blockchain-based payment processing platform, to process payments of McDonald’s online orders using the immutable blockchain network of Ethereum.

Already, McDonald’s Thailand is processing large volumes of credit card payments on the OmiseGo blockchain network. The integration of McDonald’s Thailand of OmiseGo enables the company to seamlessly integrate cryptocurrency payment methods, if the company decides to address the growing adoption of bitcoin, Ethereum, and other digital currencies.

“The consumer’s experience begins right when they place the order online, and payments is a critical component of that experience. Offering highly secure, seamless payment options across all platforms and devices is key to delivering a seamless experience for McDonald’s customers.” said Jun Hasegawa, CEO & Founder of Omise.

The adoption and integration of blockchain technology by fast food chains like KFC and McDonald’s will drastically increase the awareness of millennials in bitcoin and cryptocurrencies, which have evolved into a major asset class.

Ted Rogers, the president at Xapo, one of the most widely utilized bitcoin wallet platforms in the global cryptocurrency market, firmly emphasized that bitcoin is still the most sound money in the market.

Bitcoin is the Reserve Currency of Cryptocurrency Market

Over the past few months, the alternative cryptocurrency (altcoin) market has overtaken bitcoin, based on its dominance over the global market. While bitcoin remains as the most dominant cryptocurrency in the global market, it is no longer more valuable than all of the other cryptocurrencies in the market combined.

The decrease in the dominance index of bitcoin has been triggered by the rapid rise in popularity of cryptocurrencies such as Ethereum, Ripple, Bitcoin Cash, Cardano, along with digital tokens from initial coin offering (ICO) projects.

But, Rogers stated that bitcoin is still one of the only forms of sound money in the market that is currently being dominated by digital tokens and altcoins. He wrote:

“The altcoin/ICO mania of recent months is a circus of intellectual laziness, gambling and greed. Just hold to one central truth: bitcoin is the most sound money – the best money – human civilization has ever known.

Folks, I do think the ICO is important innovation, ETH has value as platform (not sure fair to call it ‘altcoin’) & we are headed for tokenized future. But ‘overvalued’ is trading at P/E of 20 instead of 15, worthless tokens with market caps of billions is Bosch and Bruegel madness. Period.”

Investors and analysts including Rogers firmly believe that bitcoin is the reserve currency of the highly volatile cryptocurrency market, as it is one of the few cryptocurrencies that is being utilized at a large and commercial scale internationally, apart from Ethereum which is processing more than 1.2 million transactions per day.

The market valuation of Ethereum can be justified, as Rogers suggested, given the value of decentralized applications launched on top of its protocol. But, the valuation of the rest of the cryptocurrencies in the market, remains questionable.

What Happens With Bitcoin?

Bitcoin and other major cryptocurrencies like Ethereum, Litecoin, and Bitcoin Cash tend to move together in a similar trend while digital tokens or ICO tokens move differently. If a massive sell-off from highly overvalued ICO projects and digital asset occurs, the money will not flow into fiat currencies. Rather, it will likely flow back into bitcoin and other legitimate cryptocurrencies.

If so, when bitcoin regains dominance over the global market, its market valuation will be able to surpass the trillion dollar mark, as analysts including billionaire investor Mike Novogratz stated earlier this month.

“Bitcoin could be at $40,000 at the end of 2018. It easily could. There’s a big wave of money coming, not just here but all around the world.”

Blockchain Capital, a cryptocurrency-focused hedge fund and venture capital firm, has revealed in survey that 30 percent of millennials would rather invest in bitcoin and the cryptocurrency market than government bonds or stocks.

Millennials Prefer Bitcoin Over Stocks

In an interview with Forbes, Timothy Tam, the founder of CoinFi and former hedge fund trader, emphasized that millennials and investors from the traditional finance industry have become more intrigued by bitcoin due to its fixed supply and its exponential growth rate.

“There’s limited supply because, aside the fact that there will only ever be 21 million Bitcoins in circulation, most of the holders of Bitcoin are long terms holders. The demand on the other hand keeps soaring,” said Tam.

In December 2017, billionaire investor Mike Novogratz described bitcoin as a speculator’s dream, because of its fixed supply and rising demand for the asset class.

But, for millennials and the vast majority of investors, bitcoin’s presence is more significant than a speculator’s asset. It is a robust store of value and a decentralized currency, which is unalterable and consequently, resistant to censorship. It serves the $40 trillion offshore banking industry better than the banks that dominate the space, as BlockTower’s Ari Paul previously noted.

Hence, given that bitcoin is still in its early stage in development and adoption, the fact that the relatively large portion of millennials are willing to and prefer to invest in the cryptocurrency market instead of the traditional finance sector is noteworthy. Bitcoin has already begun to evolve into a major asset class, as JPMorgan global markets strategist Nikolaos Panigirtzoglou said:

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class. The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

Where Does Bitcoin Go in 2018?

Panigirtzoglou explained that bitcoin has started to evolve into a major asset class with the listing of bitcoin futures by leading markets like the Chicago Board Options Exchange (Cboe) and CME Group.

But, the truth is, the global cryptocurrency market and exchanges within it have become multi-billion dollar companies of their own, and have started to process more volumes that stock markets. Bithumb for instance, the world’s second largest cryptocurrency exchange based in South Korea, has started to process more volumes on a daily basis than the KOSDAQ, the country’s main stock market.

In 2018, with the entrance of millennials and young investors, analysts expect the price of bitcoin to reach the $50,000 mark, and become the first cryptocurrency to reach a $1 trillion market cap. The introduction of bitcoin exchange-traded funds (ETFs) by the New York Stock Exchange (NYSE) and Cboe could bring the price of bitcoin to $50,000 much quicker than the expectations of investors.

Merrill Lynch, a major US-based bank that was acquired by Bank of America in 2011, has reportedly banned its clients from investing in bitcoin.

An internal memo released by Merrill Lynch obtained by The Wall Street Journal read:

“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product.”

Bitcoin Investment Trust (GBTC) Banned

Specifically, Merrill Lynch prohibited its clients from purchasing shares of the Bitcoin Investment Trust (GBTC), the only regulated bitcoin investment vehicle in the US market operated by Grayscale Investments, a brokerage arm of Digital Currency Group.

The forbidding of GBTC trading by Merrill Lynch is noteworthy because GBTC remains as the only regulated channel with which bank clients can trade bitcoin. Outside of that, there are bitcoin futures exchanges operated by the Chicago Board Options Exchange (CBOE) and CME Group but those two platforms target institutional and retail investors.

Merrill Lynch advisor also told WSJ:

“I think it’s a very good idea. [The company] made an assessment that there’s too much risk. [When you buy a currency, you buy that country [based on its underlying economy and monetary supply.] When you buy bitcoin, you just buy bitcoin.”

However, given that the value of any asset, currency, and commodity is subjective, and their performance depends on the market, the definition of risk involved in cryptocurrency trading remains unclear. Investment in any asset class or market can be risky. Every year, individual investors lose billions of dollars in the global stock market. Still, banks enable investors to invest in the stock market.

It is not for the banks to decide which assets can be classified as risky or safe, considering that solid criteria to segregate assets based on their risk cannot be formed. More to that, in a free market, the market and investors within it have the authority and the right to invest in whichever asset or currency, as the market decides the value of an asset.

In a business standpoint, or the viewpoint of Merrill Lynch, it is not the best decision to disallow bitcoin and cryptocurrency trading because other leading financial institutions in the global market including the $96 billion Goldman Sachs and $360 JPMorgan Chase are providing an efficient platform for investors in the traditional finance market to engage in cryptocurrency trading.

Clients of Merrill Lynch are not obligated to remain with Merrill Lynch. If they are dissatisfied with the decision of the company to outright ban bitcoin trading, clients will inevitably move to other major banks, that are larger than Merrill Lynch, to invest in the cryptocurrency market.

Vietnam’s Bitcoin Ban

The global cryptocurrency market and finance industry reacted similarly to the imposition of a nationwide ban on bitcoin trading by Vietnam. The entire community was taken aback by the fact that major economies like Japan, the US, and South Korea have regulated bitcoin as a legitimate currency and an asset while a minor economy like Vietnam prohibited the usage of bitcoin.

As with any other asset and technology, the failure to address the demand for a rising asset like bitcoin could isolate businesses such as Merrill Lynch from the global market.

Subsequent to a major correction that occurred on December 17, the bitcoin price has struggled to recover to $15,000, remaining stable in the $13,000 region.

Analysts Optimistic

From December 22 to January 2, with the exception of December 27, the price of bitcoin has remained below $14,000 for nearly two weeks, sparking concerns from long-time investors and analysts.

Some cryptocurrency researchers and investors have predicted the price of bitcoin to fall below $10,000, prior to regaining momentum and surging towards $20,000 and establishing a new all-time high. While many investors have predicted the price of bitcoin to surpass $40,000 in 2018 by achieving a trillion dollar market valuation, analysts have claimed that the price of bitcoin would likely suffer a big correction before initiating a rally.

“Bitcoin could be at $40,000 at the end of 2018. It easily could. There’s a big wave of money coming, not just here but all around the world. What’s different about these coins than other commodities … there is no supply response here. So it’s a speculator’s dream in that as buying happens there’s no new supply response that comes up,” said Novogratz.

In late December however, Novogratz stated that he has halted his cryptocurrency hedge fund because of the market conditions. He stated that the price of bitcoin could drop to $8,000 in the short-term as a result of a major correction.

“We didn’t like market conditions and we wanted to re-evaluate what we’re doing. I look pretty smart pressing the pause button right now,” Novogratz added.

Fast forward two weeks, a major correction has not occurred and the momentum of bitcoin has started to build up with a staggering 15 percent increase in value within the past 24 hours.

Given the recent rally of bitcoin, analysts have started to express optimism towards the mid to long-term price trend of bitcoin throughout 2018. The integration of bitcoin by some of the largest financial institutions in the global market including the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (Cboe) have also triggered the demand for bitcoin from investors in the traditional market.

Most recently, billionaire entrepreneur and investor Peter Thiel invested a massive amount of money in bitcoin, demonstrating his confidence over the entire market entering 2018.

Potential Factors For Surge

Analysts are particularly optimistic in regard to the filing for six bitcoin exchange-traded funds (ETFs) by NYSE and Cboe, as the introduction of ETFs will further increase the liquidity of Bitcoin especially for accredited investors in the traditional finance sector.

Despite its recent price slump, investment in bitcoin by key players within the finance sector such as Peter Thiel demonstrate that the cryptocurrency has the potential to increase by large margins throughout 2018, especially if it can improve in terms of scalability and market infrastructure.