Category: Money Exchange Software

Bitcoin Hits $13 Billion Value

Although the push for increased international regulation of Bitcoin continues to gain momentum, the threat of oversight and scrutiny has done little to assuage to the fascination with this anonymous online currency whose value has now reached a monumental $13 billion. Although Bitcoin remains one of the most popular “virtual currencies” in existence today, there are well over 90 of these monetary systems currently in operation, many of which have gained some measure of credibility with retailers and merchants around the world.

 

The call for enhanced scrutiny of virtual currencies is largely due to the stigma that they have gained due to their popularity in criminal circles. The anonymity that Bitcoin affords users has become a valuable tool for those wishing to engage in illicit activities and avoid a larger paper trail.

Although several Bitcoin operators and exchanges did suspend their operations following the initial onset of the “big brother” bureaucratic mechanisms, the majority of these organisations are now operating at full capacity yet again. Regulation, in itself, is not necessarily a bad thing, some prominent Bitcoin heavyweights have argued. By allowing for an internationally mandated “rules of order,” Bitcoin users can also gain increased confidence in the currency due to the fact that the threat of catastrophic seizure or infrastructure collapse is much less likely. Regulation may also help protect virtual currency users from malicious scams and fraudulent offers that, up until this point, have been relatively invincible due to previous policies.

As virtual currencies continue to gain prominence in the contemporary economic landscape, it is inevitable that dramatic policy changes will continue to occur. Where this ultimately ends, however, remains to be seen. As many virtual currency users will attest to, the appeal of these products is not only in their monetary worth. On an idealistic level, Bitcoin represents an opportunity for “sovereignty” in a world that many believe is already too over-regulated. The community itself is largely responsible for Bitcoin’s success. Were enhanced policy-making to confine the level of operations enjoyed by current Bitcoin users, the currency may see it’s overall popularity and, thus, worth, decline.

Forex Trading Moves Closer To Computer Platform

Amid recent controversy regarding illegal activities within international currency markets by licensed traders, a growing number of investment banking executives are calling for a full transition to electronic, computer-based trading platforms that do not rely upon the soon-to-be “obsolete” human “voice spot” trading.

The advantages of a fully integrated electronic trading platform are obvious. By the very nature of the code manifested to create the trading algorithms and platforms, compliance is simply a non-issue. There exist no opportunities for malicious or deviant behavior when all trading is undertaken within a carefully monitored and regulated software infrastructure.

Although electronic trading methods were virtually unheard of at the dawn of the new millennium, roughly 74% of all currency trading now occurs through software platforms. That being said, investors should not completely forget voice trading just yet. In the spot market, where currencies change hands directly and traders themselves assume the risks previously held by market-makers, roughly 35% of all trades still occur via voice trading.

As an increased volume trading switches into the electronic currency trading marketplace, it is expected that the larger players in the industry will continue to grow and quickly develop overwhelming dominance. Currently, the most prominent electronic trading platforms for currency exchange are Deutsche, Citi, Barclays and UBS.

One of the largest criticisms of electronic trading is the decreased profit margins that results from such exchanges. Unlike voice trading, which allowed for decreased transparency and the opportunity to quickly shift massive quantities of wealth, electronic trading typically requires these large actions to be broken into significantly smaller quantities, resulting in increased financial loss and, therefore, decreased profit.

While some believe that electronic trading helps reduce in-office manpower levels, this couldn’t be farther from the truth. In fact, electronic trading platforms commonly require up to a 33% increase in personnel, as software algorithms and infrastructure must constantly be maintained. Additionally, many state that this “neutral” interface remains a vehicle for wrongdoing. Claims have been made that these electronic platforms can be engineered to adjust pricing levels depending upon mouse movements and behaviors of consumers, leveraging their uncertainty or desires against them.

Gold Enjoys Reprieve Around $1240

Although gold prices have fluctuated significantly over the past week, a small margin of confidence has been restored following the stability that this precious metal seems to exhibiting. Falling sharply from a well-established $1275, gold reached a four-month low near $1240, a move which, for many, was as disappointing as it was financially painful. That being said, it seems that this particular price point may signal the full extent of the ‘damage’, as further losses have not been seen. Given the relative stable nature of the precious metals marketplace, significant fluctuations in gold price are bound to quickly draw attention.

That being said, this new pricing base is markedly lower than the recent high of $1315. Although many believed that market volatility around gold was largely reducing, the fast drop to $1240 has caused some to rethink their original predictions and quickly adopt new tactics in this particular niche of the precious metals marketplace.

The price of gold is, essentially, determined by a variety of factors. The health of national currencies is one of the most significantly influential forces when assessing the overall strength of a commodity. With this in mind, it becomes much easier to understand the relationships between the price of gold and the economic health of the world’s prominent economies during the 2008 financial crisis: as markets plummeted, the price of gold soared. Gold is, due to this ‘sovereignty’ often thought of as a “safe haven” during periods of economic turmoil.

With a number of important policy decisions soon to be announced, including the ECB’s potential disclosure of new policy options and the U.S. non-farm payrolls data, gold traders are waiting with somewhat bated breath to see what exactly may happen to the price of gold in the coming weeks. Were the ECB to announce new, looser regulations, many believe that the price of gold would inevitably rise. That being said, the loss of value in the Euro may also serve as a prominent factor in assessing the value of gold in the coming weeks. Volatility, it seems, may be returning to the precious metals marketplace after all.

GBP EUR USD AUD Foreign Exchange Rate Forecasts & Predictions June 2014

The world of foreign exchange (forex) trading is arguably one of the most complex and nuanced financial marketplaces on the planet. Featuring an array of finely tuned pricing mechanisms and intricate arrangements, the process by which currencies lose or gain value relative to one another has become a trillion dollar industry.

Market analysts have released their exchange rate predictions for the month of June, and their assertions seem to coincide directly with recent announcements in key nations around the world.

The British Pound Sterling has made further gains, expanding its competitive edge on international currencies due in large part to recent announcements that manufacturing data has demonstrated healthy growth. Although the Bank of England’s recent statements on monetary policy are causing some to worry that the price rally being experienced by the Pound Sterling is only temporary, analysts are recommended a neutral to positive outlook on this particular currency.

Similar successes cannot be claimed by the Euro Dollar, which has suffered slightly due to recent revelations that the ECB might continue to reduce interest rates, further driving down the value of this already beleaguered currency. Combined with disappointing manufacturing news, the Euro is believed to currently be in a period of decline. Analysts have adopted a negative outlook on this particular currency.

The US Dollar’s positive manufacturing reports will most likely keep this currency within previously established ranges compared to the Pound Sterling. That being said, the recent Michigan sentiment index is largely negative, potentially undercutting any positive outlook nurtured by the overall manufacturing report. Analysts currently believe that the US Dollar sits at a neutral to positive outlook.

The Australian Dollar has been impaired slightly by recent reports illustrating weak domestic building numbers. Because of this, it is unlikely that the Reserve Bank of Australia will move to strengthen the national currency using an interest rate hike. According to analysts, the Australian dollar currently sits at a neutral to negative outlook.

Overall, the assertion could be made that the “threat” of volatility in the forex marketplace will be greatly enhanced or reduced by policies currently being decided upon in Europe and Australia. That being said, many of the world’s major currencies stand to benefit from any sign of weakness in these aforementioned economies.

“To say FX Volatility is Low is an Understatement”

to put the current “tranquil” state of the FX markets in context, it’s necessary to look back in history…way back. The stability of the US Dollar against the Japanese Yen that is being observed in FX exchanges today has not been seen since 1977. Using a variety of proxy modelling techniques, it could also be stated that the Euro Dollar has not been this tame since 1979.

Although many would view these observations as simply part of a larger pattern occurring in the international economy, the actual data points to something else entirely. According to George Saravelos, a currencies analyst at Deutsche Bank, “The decline in currency volatility is unusual compared to other asset classes.”

So, what could be the cause of this unique situation? Analysts agree that current economic conditions would not promote this level of stability. In fact, both the S&P 500 and 10-year US Bonds are experiencing over a 1% increase in volatility when compared to levels witnessed in the early 1990’s. Following the “taper tantrum” that occurred last summer, as well as a variety of unexpected policy surprises coming from the ECB, it seemed reasonable to assume that volatility would shake up for the FX markets for a reasonable amount of time.

One possible explanation for the placid nature of the currency markets could be a shrinking gap between buy and sell prices due to increasing competition and ever more powerful FX trading technology. This year alone, the buy and sell spread for FX exchanges at large was reduced by 20%. As automation and complex algorithms take over the marketplace, some say, it is inevitable that stability will slowly embed itself within the infrastructure of the FX markets.

Another possible theory points to the growing shift towards electronic trading platforms as opposed to traditional inter-bank voice trading. This shift is not just relegated to the FX markets. Following recent changes outlined by Dodd-Frank, many of the asset classes within the US fixed income market are also being transformed and revolutionized by electronic trading systems.

FX traders shouldn’t be overly worried that the glory days of foreign exchange are over. That being said, some experts are saying that the highs experienced earlier this year may not return for quite a while. According to Saravelos, this unheard of stability, “is also a warning shot on the impact that technology and regulation can have on other asset classes as competition and the market mature.”

Global Concerns Eased Surrounding AUD/USD

It’s common knowledge that the volatile dynamics of international politics and conflicts have serious repercussions on the FX markets. In recent months, the upsurge in geopolitical tension between Russia and the Ukraine, as well as US military intervention in Iraq against the ISIS militant group, have resulted in a series of substantial price swings of the US dollar, the EU Dollar and the GBP. The EU Dollar recently retreated to a nine-month low, due largely to its inability to withstand investor scrutiny in light of Russia’s aggressive moves. As could be expected, the GBP shed value in tandem with the EU Dollar.

Optimism, however, isn’t far off. Although the US Dollar declined in value following the initiation of airstrikes in Iraq, prices have not been significantly affected. A recent, temporary ceasefire between Hamas and Israel has also helped provide a small level of comfort and reassurance for those assessing their positions in the US Dollar.

That being said, tensions have yet to fully abate in Easter Europe, where the Russian military remains poised to launch a series of devastating strikes against Ukraine. The sanctions levied against Russia have served as a moderately effective deterrent against Putin’s militaristic endeavours, although no formal withdrawal has occurred as of yet. Although Russian governmental representatives have declared that the military exercises they had undertaken near the border with Ukraine were now over, investors remain somewhat cautious.

The Australian Dollar recently dropped to two-month lows against the US Dollar. This decline is largely due to statements by the Reserve Bank of Australia declaring its intentions to cut growth and inflation forecasts while, simultaneously, keeping interest rates stationary.

As is becoming increasingly common, however, even the most informed of predictions can change substantially when global dynamics are as volatile as they currently are. Although the recent Ebola outbreak has yet to produce any substantial head-waves in the FX markets, any indications that the deadly virus had established its presence in Europe may also exacerbate existing volatility. Yet again, only time will tell if such issues will transform into pressing concerns requiring immediate attention.

It is likely that the vast majority of international investors will remain intently focused on current events until these substantial global conflicts reach some level of long-term resolution.

Is the Bitcoin Boom Over for Mining Software Providers?

When the Bitcoin hype machine tapers down, two potentially dangerous actions occur: 1.) people stop investing in the coin, which, given the absolute need for early-stage adoption, is causing significant hurdles for traders and investors alike, and 2.) Bitcoin miners stop mining Bitcoin due to a substantially decreased profit margin. Given the fact that the successful operation of the Bitcoin platform relies upon the miners to enable the transaction verification platform, commonly referred to as the Blockchain, a lack of miners means more than just a general loss of interest in this notorious alt-coin; it could mean the end of the entire operation.

It’s also important to remember that the process of mining bitcoin becomes inherently more difficult and cost ineffective as more coins are placed into circulation. The massive spike in Bitcoin miners in recent months has served to drive the operating expenses of competitive Bitcoin miners much higher than they ever could have imagined. As more and more hardware is required to mine Bitcoins, even the most experienced miners have begun to wince at the expenses they are incurring, especially as the price of Bitcoin continues to fall.

Ultimately, there are essentially two viewpoints one can adopt when discussing the current Bitcoin trends with an eye towards predicting the future. As there really exists no discernible trend or precedent for a product or idea such as Bitcoin, even on the most advanced bureau de change software available today, it’s anyone’s guess as to what exactly will happen. The coin will either flourish…or it won’t. In order for Bitcoin to remain a trending topic, however, Bitcoin miners are going to need to get excited about mining yet again. This, truly, is the first step towards keeping the Bitcoin operation in the running for status as a revolutionary product.

Is the Bitcoin boom over? It very well could be. Numerous experts have already proclaimed that the coin will be virtually worthless in coming months. As with all things revolutionary, however, a “wait and see” approach may be the best available. One thing is for sure, however: Bitcoin has dramatically redefined how we think of payment, currency, and bureau de change software in the 21st century, and that in itself is a commendable feat.

Pound will hold up against Dollar – Unless Scotland votes ‘yes’

Over the course of the past few months, it’s been readily apparent that volatility in the FX markets has become practically non-existent. Although brief swings have been seen due to tensions between Russian and Ukraine, as well as the United States and the Islamic militants in Iraq, prices have remained largely stable. Although some traders are predicting devastating fluctuations due to tensions within the UK regarding the possibility of an independent Scotland, others believe that the Pound will stay on solid ground. That is, of course, unless the UK is broken up by a majority “yes” in the upcoming vote.

The value of the Pound is largely created by the collaboration of the various political entities within the United Kingdom, including England, Scotland and Northern Ireland. If any one of these entities were to leave the UK, it seems likely that, at least over the short-term, the value of the Pound would take a hit. When asked to discuss this particular issue, Kit Juckes, a currency strategist with Societe Generale, said that, “The more divided the UK is, the weaker the pound will be…”Sterling’s correction to date has far more to do with the UK rate rethink than anything else, and there is very little political risk premium in the pricing – yet”

Other possible catalysts of price fluctuation could occur in the early months of 2015, when the Bank of England is planning on raising interest rates, the first move of its kind by any nation in recent years. That being said, it is expected that the Federal Reserve of the United States will follow up with a similar move shortly thereafter. The Federal Reserve has indicated that their strategy remains to implement a very slow, gradual increase of rates in order to ensure that the US economy, which is now developing on a much firmer footing, does not get sidetracked.

Regardless of what potential outcomes may occur, it seems likely that the rather lengthy slumber the FX markets have been in may come to an end shortly, which, for many traders, is welcome news.

How Big Should Bitcoin’s Role be in B2B Payments?

What exactly is the future of Bitcoin, and what role should this digital currency play in the B2B payments market, one of the most vital niches within the larger global infrastructure in existence today? These two questions are often asked by financial analysts and industry experts seeking some sort of invaluable insight into the future of the digital currency, not only for speculative purposes, but also in hopes of gaining some sort of traction when developing sustainable business platforms in what is arguably one of the most dynamic and volatile economic climates in recent history.

For some, Bitcoin’s precipitous rise in both value and public interest is a sign that this product (and the revolutionary system it represents) should be avoided at all costs. After all, Bitcoin has not only undermined the modern banking system as we know it, but it has also posed a credible challenge to the sovereign currencies of nations around the world.

These exact critiques are, for some, the very same reasons why they believe Bitcoin is poised to adopt an even larger role in the B2B payments market in the months and years to come. Due to the fact that Bitcoin is arguably much more secure than standard transactions, Bitcoin could trade back and forth on a B2B level without as high a risk of hacking and theft. Combined with the fact that Bitcoin transactions carry no additional charges, some are proclaiming that this method of payment is undeniably a cornerstone of the future 21st century business infrastructure that has slowly been evolving over the past decade.

Regardless of whether or not Bitcoin does indeed become a fixture in B2B payments, it stands to reason that an increasing number of businesses will begin to demand what Bitcoin provides – a no-hassle, expense-free service by which money can quickly find its way into the hands of those who need it the most, all without the threat of a security breach or online theft.

Is this the future of B2B transactions? It seems there are very few reasons why it shouldn’t be. With Bitcoin, however, success is measured not only in literal effectiveness but also public sentiment, a more elusive standard of measure that has proven itself to be a major catalyst for price increases and drops in recent history. If Bitcoin is, indeed, to become a fixture within B2B practices, it must first be embraced by the influencers and thought leaders who hold power over this particular enterprise.

Facebook Wants to Start Handling Your Money – Here’s Why

Gotten swept up into the social media craze in recent years? That’s understandable. After all, never before in the history of the human experience have individuals been able to explore so many elements of their daily lives simultaneously, ranging from pertinent world and local news to advertisements, product placements and social updates from friends and family.

That being said, Facebook is ready to take their immersive experience one step further by offering a convenient and powerful method for undertaking e-commerce transactions with many of the world’s larger retailers as well as between Facebook friends.

In many ways, this information should come as no surprise. After all, virtually every other major internet and tech platform has begun to release tools that individuals and business owners can use to quickly transfer money, pay invoices, etc. One of the more prominent technologies featured recently has been Bitcoin, the revolutionary crypto-currency that has quickly risen to become one of the most talked about and, simultaneously, controversial tech innovations in years.

Currently, there’s no concrete details on whether or not Facebook’s system will handle Bitcoin transactions, nor is there really any information at all! The news leak concerning this payment system was actually instigated by a computer techie at Stanford who discovered lines of existing code within the Facebook infrastructure that allowed for payments to be processed and undertaken via the messenger app.

This, really, is the only information that is actually available at this point. It stands to reason, however, that Facebook would be considering a platform such as this to unleash in the upcoming months, if only to remain competitive with the other tech giants who are operating in similar fashion.

A payment system would also ensure an even more regular supply of traffic to Facebook, which is only good news to investors and shareholders. It’s obvious to see, therefore, that any one of several reasons could be used as justification for implementing this new program. Because of this, it will be quite interesting to see exactly how this product rollout occurs and, more important, when. Timing is everything in the tech world, and numerous businesses have lost out to the competition simply by letting first mover advantage slip out of their fingers. If Facebook is serious about gaining respect and competing with the nation’s other tech giants, it’s definitely important for them to consider just how much time and money they are willing to invest in this particular enterprise.

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