Showing posts with label Bitcoin. Show all posts
Showing posts with label Bitcoin. Show all posts

January 08, 2018

Digital Currencies are too volatile. Is there a way to fix that?

By Guest Author - January 05, 2018 (cointelegraph.com)


The common question most people pose when they are confronting the idea of Bitcoin is: “what is its fundamental value?” Lay people don’t know how to approach Bitcoin, and they definitely don’t know how to value it. For many, it simply becomes a bet based on the supposition the price will continue to go up.

In recent weeks, what many believe to be irrational exuberance has bid the price up higher and higher to the point where a market correction seemed necessary. Every asset needs some form of sustainable value support and Bitcoin still hasn’t found one yet.

A potential solution is being put forward

A new idea that has emerged from China is A-SDR. This is an anchoring mechanism that serves to connect digital currencies to the real world. A-SDR consists of Ethereum, Bitcoin and ACC, and its goal is to stabilize the prices of digital currencies by tying them to real-world goods.

The idea of A-SDR came from a recent innovation by the International Monetary Fund (IMF).  The IMF’s goal was to take the world from a dollar-centric system to an SDR-centric monetary system. SDR stands for “Special Drawing Rights,” and the goal is for it to become the standard of circulation and settlement for global currencies.

ACC is the token that fuels the ACChain system and is anchored by holding title to real-world assets. The value of ACC will continue to rise as more digital assets are issued, and its share of A-SDR will continue to increase until it dwarfs those of Ethereum and Bitcoin.

ACC stands for Asset Collection Coin, and it has been created to fill the need which has been felt by all the critics of Bitcoin who see the value in digital monetary innovation but would prefer to hold tangible wealth. By holding title to real-life assets, ACC represents the combination of tangible asset ownership and digital currencies.

Collaborative effort

BTC and ETH are not anchored to real assets, which is where their volatility comes from. Rapid changes in price have made it so they cannot be used as a digital settlement currency globally. ACC will act as the connector of these digital goods to the real world and will have an exchange rate that is continually revised.

Bitcoin and Ether both have their purposes and these will not be eliminated by the coming of ACC. ACChain aims to work with the existing technology rather than competing against it. The A-SDR is a collaborative effort to harness all the good that can be experienced into one cohesive ecosystem, and buying ACC is the best way to get in on that goal right now.

Through anchoring digital gold reserve BTC and ETH with A-SDR, ACC then becomes equipped with four currency functions. These functions are the ability to scale value, means of circulation means of storage and means of payment. Basically, ACC is set to evolve into the standard token for anyone who wants to settle global digital assets. The future is bright for both ACC and A-SDR, but this also helps the performance of Bitcoin.

The future is in tangible assets that can be digitally controlled

Bitcoin is aided by the development of A-SDR because of the support that is provided by ACC. Bitcoin will be able to become a true and generally accepted digital gold, just as ACC will become accepted as the settlement digital coin in global asset trading.

ACChain is the platform which will be used to monetize goods with ACC, and every time a good is monetized, the demand for ACC will go up. This increase in demand will naturally lead to an increase in the price of the good.

When you purchase ACC via the A-SDR fund, you are helping to bootstrap ACChain to a higher profile, as well as making it more and more likely that Bitcoin becomes viewed as a digital gold. We are about to see what happens when you link hard, ownable assets with infinitely divisible digital currencies. With stability as a goal and both Ether and Bitcoin experiencing high volatility, investors are going to find huge appeal in the idea of ACC and the A-SDR funds.

January 06, 2018

Japan Becoming the Leader for Bitcoin

By Luke Bakies - January 05, 2018 (cryptocoinmastery.com)


It is undeniable that Japan has been one of the leaders for Bitcoin over the last few years and it continues to solidify its place as Bitcoin’s heart. Japan has been in the spotlight since the beginning with Bitcoin as founder, Satoshi Nakamoto, is a Japanese name. Japan has been at the forefront of groundbreaking development in Bitcoin, from preserving its longevity to determining how it will be regulated. Despite controversy also associated with Japan with issues like the Mt. Gox implosion which lost over 650,000 Bitcoin, it has remained resilient to push forward for the success of Bitcoin.

The negative events such as Mt. Gox have lead to sweeping reform and regulation to protect customers. The Financial Services Agency (FSA) which is Japan’s regulator, has worked extensively to understand cryptocurrencies to impose fair rules. Their efforts could serve as a basis for the regulation in other countries to protect exchanges and investors.

The Virtual Currency Act has tax reform pertaining to foreign investors, to incentive them to use Japanese exchanges. They also declared Bitcoin an asset and a form of payment but not a legal currency. Lastly they set up licenses for exchanges to create an established market place. These reforms can serve as an outline for future reforms in other countries.

On top of these regulations, Japan has also explored the possibility of expanding blockchain usage within government organizations. They have worked with BitFlyer and are working on a blockchain called “miyabi.” Miyabi boasts the ability to host 4,000 transactions per second with no single point of failure. This could be used with interbank clearing networks to perform faster settlements. With an open mind towards Bitcoin and blockchain, Japan has reaped benefits and it is only a matter of time until other countries follow.

December 22, 2017

The Moment of Truth for Bitcoin and the Cryptocurrency Market

December 22, 2017 (seekingalpha.com)

Summary
  • The chorus of voices labeling Bitcoin a huge speculative bubble is growing louder.

  • 2017 was a pivotal year for the future of cryptocurrencies, but 2018 is likely to be more insightful regarding their ultimate fate.

  • Bitcoin's meteoric rise has ushered in a new era and represents the birth of a new asset class. How digital currencies mature remains an open question.

One of the most notable developments in financial markets during 2017 was the phenomenal rally in cryptocurrencies and their ascent into a new, unique asset class. Throughout the year the mainstream view remained dismissive regarding the prospects of Bitcoin and its crypto-rivals. Yet, it is becoming increasingly clear that this phenomenon has deeper roots and, notwithstanding the vertiginous volatility, it is unlikely to fade away.


Very few could have foreseen the almost surreal pace of appreciation that took place in the past twelve months. In fact, the surging momentum of the Bitcoin rally was unlike anything we have seen in the past. This lack of historical precedent makes it exceptionally interesting, as well as challenging to investigate what triggered this phenomenon and which drivers continue to fuel it.

Admittedly, the substantial correction we saw the past week in cryptocurrency price movements renewed an element of uncertainty about the longer-term direction and, essentially, the fate of Bitcoin.


As a result, the chorus of voices predicting an imminent collapse in the crypto-market grew louder, to some extent silencing the optimists who expect further acceleration amid this meteoric rally. In light of the unprecedented nature of this phenomenon, widely divergent views about what lies ahead are to be expected. Nonetheless, the view that the digital currencies’ massive surge this year is nothing but a huge speculative price bubble, while logical, is inherently flawed.

A more sober examination of what we are actually witnessing is the volatile phase that typically precedes broader acceptance of a newly introduced asset class. If indeed Bitcoin becomes broadly accepted as an alternative global currency, its market capitalization is bound to grow further over the longer term. Until then and until the coexisting -- at the time of this writing -- irrational exuberance and the fatalistic predictions of Bitcoin’s premature demise subside, extraordinary volatility spikes will dominate price action in the cryptocurrency market.

Let us not forget the key developments that transpired in 2017, such as the introduction of Bitcoin futures by CME Group and Cboe Global Markets, which point to a wider recognition of the role that cryptocurrencies have the potential to play in financial markets. Meanwhile, emerging economies as well as a host of technologically advanced countries, including Japan and South Korea, are increasingly adopting a more open stance with regard to Bitcoin transactions. This is, in large part, why 2017 will go down in history as a pivotal year for digital currencies. At the same time, blockchain technology continues to evolve, and it is reasonable to expect that future iterations will address existing security vulnerabilities and facilitate a swifter adoption process, providing a more complete, credible and accessible alternative payment method.

The relentless rise of Bitcoin has also been underpinned by the high degree of difficulty that funds faced in shorting the digital currency. This is gradually changing with the inception of Bitcoin futures, but up until recently it served as a deterrent for speculators to aggressively initiate short positions. It is also especially challenging to identify reliable hedges with sufficient correlation to Bitcoin price movements. As a result, the cryptocurrency market has been relatively sheltered from external forces that tend to cause ripple effects in financial markets. This fostered conditions favorable for “long-only” speculative strategies, which, combined with the current low-volatility environment that encourages increased leverage and momentum trading, served as an excellent propellant for Bitcoin to skyrocket the way it did. In the short term, this tailwind is about to gradually run its course, and that will likely translate into a trend reversal, potentially quite sharp.

The moment of truth for Bitcoin and the cryptocurrency market will arrive after the critical correction that will inevitably ensue. At that point, it will be easier to assess whether digital currencies possess the necessary resilience to survive a concerted onslaught of external market pressures. The reaction of short-term momentum traders -- who ostensibly dominate the digital currency market-- in the face of a technical reversal remains a crucial unknown factor.

It is important not to lose sight of the fact that cryptocurrencies are built on a technological foundation that grants them a unique and lasting advantage over traditional currencies. This is why the probability of an eventual widespread cryptocurrency adoption as an integral part of the financial system is significantly higher than currently anticipated. It is, however, far too early to predict which cryptocurrencies will actually survive the ongoing tectonic shifts that are likely to redefine the future monetary landscape. In that regard, 2018 will be quite interesting, eventful and, hopefully, insightful.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

December 21, 2017

Be Smart dont sell your Bitcoin or Steem cheap to the wallstreet traders

By bitcoincompany - December 21, 2017 (steemit.com)


Be smart guys wallstreet is trying to get some cheap bitcoin dont sell any of your coins for now holdd together and let them buy after us please share this..

please resteem upvote share if you love bitcoin and steem.

Closing summary: Bitcoin futures fall as CME trading begins

Time for a recap.

Bitcoin has made a subdued debut onto the world’s largest futures exchange, as a series of politicians and officials voiced concerns about the digital currency.

The Chicago Mercantile Exchange (CME) became the second exchange to offer bitcoin derivatives trading last night. And right now, bitcoin futures contracts which settle in 2018 have all fallen below their opening value.

The January 2018 contract, which initially spiked over $20,000, has now dropped back to $18,920 - having been originally priced at $19,500.

Contracts that mature in February, March and June are all in the red (although they’ve received little attention compared to the January option).
Bitcoin futures: all down today
Bitcoin futures: all down today Photograph: CME

Futures contracts allow traders to bet against an asset, so today’s moves could suggest that bitcoin’s stunning rally is running out of steam. But, less than 1,000 contracts have been traded today (each one is worth 5 bitcoins).

The spot price of bitcoin has also dipped, currently down 1.6% at $18,640 - having hit a new alltime high near $20,000 last night.

CME’s launch of bitcoin futures was accompanied by a series of warnings. For example:

December 14, 2017

Blockstream is using satellites to beam Bitcoin down to Earth

By Alyssa Hertig - August 15, 2017 (www.coindesk.com)


Sounds fantastical? Maybe, but Blockstream swears it isn't as crazy as it sounds.

Today, the bitcoin infrastructure company is launching Blockstream Satellite, an ambitious attempt to use leased satellites to beam bitcoin nearly anywhere in the world. Now in beta, bitcoin users in Africa, Europe, South America and North America can already use the satellites to download a working bitcoin node capable of storing the network's entire transaction history.

But while complex conceptually, the company believes its end result can solve a real issue facing the $66 billion network – without internet, you can't access bitcoin.

And this poses a problem for bitcoin proponents who believe the cryptocurrency could be especially beneficial to people without internet, who also generally live in areas with economic instability.

So, Blockstream decided to set its sights on a solution, and found it in space.

According to Blockstream CEO Adam Back, the project is all about putting bitcoin into the hands of those who "desperately need" it.

He told CoinDesk:

"There is some coincidence between countries with poor internet infrastructure and unstable currencies. The people who are in direct need of bitcoin are those who currently have unstable access to bitcoin. This project will address that problem, and, we hope, will allow many more people to use bitcoin."

The vision


While running a full node is a cumbersome process, it's nonetheless the most secure and trustless way of using the digital currency, and for individuals dealing with political and economic instability, this process could prove crucial.

But because full nodes require an Internet connection and 160 GB of free space, they are a rarity in some regions of the world. There's allegedly only one man running a full node in all of West Africa, for example.

While Blockstream is now taking care of a way to download a full node, there are a few other choice technologies those that want to take advantage of the satellite will need.

Users will need a small satellite dish – if they already have a TV satellite, they could use that – and a USB to connect the satellite to a personal computer or a piece of dedicated computer hardware such as a Raspberry Pi. The rest can be accessed through free, open-source software, such as GNU Radio for establishing a radio connection.

"The cost to entry is extremely low," said Blockstream's head of satellite, Chris Cook. According to him, the package of equipment costs "a little under $100."

Then, once users have those tools, they can pull bitcoin blocks from the satellite, building a bitcoin full node.

Cheaper technology


But while they'll now be running a full node, it still takes some sort of Internet connection to make transactions over the network.

While many users in the areas Blockstream is targeting won't be able to afford mobile data connection plans to initiate transactions, Back argued cheaper communications technologies, such as SMS or bi-directional satellite, could be used instead.

Transactions, he said, take up about 250 bytes, which wouldn't cost more than one penny to transfer using such technologies.

In this way, Back's vision of the satellite as bringing bitcoin even to people completely off-the-grid is theoretically possible. He offered the example of a small hut on the side of the road in the Sahara Desert in Africa, adding:

"With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin."

Sounds like a lot, but Back argued that it would be pretty cheap, especially if costs are pooled between multiple people, like if an entire village shared the costs of setting up the infrastructure that they could then all use.

Monetizing space bitcoin


While it's ambitious as is, Blockstream is taking that mission even further, adding more satellites as the year goes on, with the hope the most people on earth will be able to access a bitcoin satellite by the end of the year.

"The only people that won't be covered are those in Antarctica," Back said.

While the project is technically feasible, though, is it financially so?

Bitcoin is admittedly a different beast, but other Internet space projects don't have a great track record so far. Although, Blockstream does have plans to monetize the satellite.

According to Back, Blockstream will eventually release an API for developers and companies to send data over the satellite connection for a small bitcoin fee.

He concluded:

"That might allow a smartphone wallet that sends messages to send it via satellite or some application to send messages via satellite. That's a way to monetize the infrastructure and to expand to more services on it."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstream.

Satellite image via Blockstream

What is Ripple and why is it beating both Bitcoin and Litecoin?

By Chris Morris - December 14, 2017 (www.bitcointalkradio.com)


Forget Bitcoin. So long Litecoin. There’s a new cryptocurrency on the rise.

Ripple, which was designed for banks and global money transfers, has seen the value of its XRP digital currency skyrocket in the past three days. On Dec. 10, the company had a market capitalization of just over $9 billion. As of Wednesday morning, that market cap had more than doubled to $18.1 billion.

Prices for an individual Ripple XRP are considerably more affordable than its alternatives, making it even more attractive to cryptocurrency speculators. As of late Wednesday morning, a single XRP cost just 47 cents, a 66% jump from yesterday’s close, according to CoinMarketCap.

This surge has pushed Litecoin down to the fifth most valuable cryptocurrency. Both Ripple and Litecoin are still far below Bitcoin and Ethereum, however.

What is Ripple?


While it wasn’t released until 2012, Ripple is actually older than Bitcoin. The original version of the company was created in 2004, according to Bitcoin Magazine. It never really went anywhere, though, until it put a professional management team in place, which included E-Loan co-founder Chris Larsen and Jed McCaleb, founder of MtGox.

Ripple’s cryptocurrency has been adopted by banks and other financial institutions. Those companies believe Ripple’s system offers both better prices and is more secure than other digital currencies, including Bitcoin. It allows users to send, receive, and hold any currency in a decentralized way via the Ripple network. The company is cash-flow positive and holds a vast store of XRP, which it periodically releases into the market.

But the real appeal of Ripple’s XRP for banks is its liquidity.

“The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalize on that. Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds,” Ripple CEO Brad Garlinghouse told Fortune earlier this year.

Why is Ripple surging?


Ripple’s rise seems to be a (pardon the pun) ripple effect from the surge of interest in Bitcoin. Investors who believe cryptocurrency may be reaching a peak are looking for others that could provide a greater return in the long term. The company has hit some notable milestones in recent months, though.

As of October, Ripple had licensed its blockchain technology to over 100 banks. Last month, American Express came on board. And Michael Arrington’s $100 million cryptocurrency hedge fund will be valued in Ripple’s XRP.

How much has Ripple grown in 2017?


Year to date, Ripple’s XRP has seen its value jump more than 7,000% and its market cap increase by nearly 7,700%.

The Bitcoin bubble – how we know it will burst

December 07, 2017 (theconversation.com)

Ready to pop? Adam Dachis/flickr, CC BY

In the last year, the price of Bitcoin has increased from less than US$800 to more than US$12,000. This huge spike in value has many asking if it is a bubble or if the high price today is here to stay.

Finance defines a bubble as a situation where the price of an asset diverges systematically from its fundamentals. Investment mogul Jack Bogle says there is nothing to support Bitcoin, and the head of JP MorganChase, Jamie Dimon has called it a fraud “worse than tulip bulbs”.

Like any asset, Bitcoin has some fundamental value, even if only a hope value, or a value arising from scarcity. So there are reasons to hold it. But our research does show that it is experiencing a bubble right now.

Together with Shaen Corbet at Dublin City University, we took as the fundamentals of Bitcoin elements of the technology that underpins it (and other cryptocurrencies). We looked at measures, which represent the key theoretical and computational components of how cyrptocurrencies are priced.

New Bitcoin is created by a process of mining units called blocks. Bitcoin is built on blockchain technology – a digital ledger of transactions – which enables the currency to be traded independently from any central banking system, without risk of fake or duplicate Bitcoins being used. Instead of having a bank verify pending transactions (a “block”), miners check them and, if approved, the block is cryptographically added to the ever-expanding ledger.

So the first measure we examined relates to mining difficulty. It calculates how difficult it is to find a new block relative to the past. As per the Bitcoin Protocol, the number of Bitcoin is capped at 21m (there are currently 16.7m in circulation). This means that as more people mine for Bitcoin and more blocks are created, each block is, all things being equal, worth less than the previous block.

Bitcoin mining affects the cryptocurrency’s values. shutterstock.com

The second measure we looked at relates to the “hash rate”. This is the speed at which a computer operates when mining. To successfully mine Bitcoin, you must come up with a 64-digit hexadecimal number (called a “hash”), which is less than or equal to the target hash. The faster you can do this, the better chance you have of finding the next block and receiving payment.

The third measurement was “block size”. This relates to how large the chain is at any given time, with larger chains taking longer to mine than shorter ones.

And lastly we looked at the volume of transactions conducted. Any asset, in particular any currency, which is more widely used will be more valuable than one which is used less frequently.

In our study, we examined data from Bitcoin’s early days – from July 2010 to November 2017. The price of one Bitcoin did not rise above US$1 until April 16, 2011, then to US$10 on June 3, 2011 and US$100 on April 2, 2013. Since then the price rise has clearly been exceptional.

Price of Bitcoin

Source: Data: investing.com






We then applied an accepted method that is used to detect and date stamp bubbles after they burst. In essence, this involves identifying the existence of an explosive component in a series. As the series, here the price of bitcoin, “explodes”, it runs the risk, like any explosion, of flying apart.

A possibly counter-intuitive result of this approach is that if a fundamental driver and the price of an asset both show an explosive component, we might not conclude a bubble is present. A bubble is when something deviates from its fundamental value. If the fundamental value is itself growing explosively then the price would also.

Think of dividends on a stock. If, somehow, these were to grow at an explosive rate we might expect to see the price do the same. While unsustainable, this is not technically a bubble. To overcome this, we then date stamp a bubble as being present when the price shows an explosive component and the underlying fundamentals do not.

Here are the results of the analysis:

The Bitcoin Bubbles. Authors own calculations


The orange lines denote when the price is showing explosive behaviour. We also see a period where the hash rate was growing explosively – the blue columns in late 2013 and early 2014. This is also an indication of a price bubble, which went on to burst.

So there are clear points where bubbles are visible – including now. The price of Bitcoin at present shows explosive behaviour in the absence of anything similar in its fundamentals. We see the price moving upwards in a manner that is not related to the technical underpinnings. It is a clear bubble.

A weakness of these tests and indeed all bubble identification tests is that they take place after the bubble has burst. Even this test, which can be redone as swiftly as new data arrives, is such. Bubbles by their nature grow in a compound manner – so even a day or two delay in addressing the situation can make a bubble significantly worse.

What is not yet available is an accurate advanced warning bubble indicator. In its absence, this approach may be the best. Unfortunately, we cannot use this approach to determine the extent of the bubble. There is no well-accepted model that suggests a “fair” value for Bitcoin. But whatever that level is, it is almost certain that, at present, it is well below where we are now.

December 09, 2017

Want to Short Bitcoin? The time to take action is now

By Kinsey Grant - December 07, 2017 (www.thestreet.com)

If you're not buying into the bitcoin hype, now could be the time to go short, as fees related to placing a short bet on the cryptocurrency could more than double
when bitcoin futures go live next week.


Bitcoin is going wild Thursday, Dec. 7. But if you're not buying the rally, now could be the time to place your short bets.

The digital currency has surpassed five major threshold prices in the past two days. After trading above $16,100 midday Thursday, bitcoin pared gains slightly, still higher 16.18% for the day to $15,971.05 Thursday afternoon.

The surge in price comes ahead of the Sunday, Dec. 10, start date for bitcoin futures on Cboe. A week later, on Dec. 17, bitcoin futures will become available on CME. Investors looking to short bitcoin need to take action before futures start trading, according to S3 Analytics.

Shorts on Grayscale Investment's Bitcoin Investment Trust (GBTC) , which is the only ETF whose performance is directly tethered to bitcoin's market price, has averaged $21 million for the year. Short interest hit a high of $71 million on Tuesday, Dec. 5.

Shorts are down $45.9 million in year-to-date mark-to-market loss, S3 wrote, or down 217%. About $39 million of that loss has been registered since October, when the bitcoin rally amped up considerably.

But the cost to short bitcoin hasn't been cheap, S3 found. Stock borrow costs have averaged a 10.2% fee for the year, and "borrow rates are getting more expensive as borrow supply diminishes," S3 said. Since GBTC is more of a retail-owned stock than an institutionally owned stock, new shorts are being charged an 18.5% fee.

"If short interest continues to climb, we should see new borrow rates hit the 50% fee level quickly," S3 said.

The cost to short the GBTC fund could rise higher than 50% and possibly near 100% by the time the first futures contract trades, S3 noted. Many analysts have asserted bitcoin is headed for a pullback when futures open for trading.

"While the futures contract will allow easier and safer bitcoin short selling, it will also allow for easier and safer bitcoin long buying," S3 said. "Long GBTC holders may feel the pain of its 53% asset premium shrinking, while short-sellers will probably be incurring a 50%+ stock borrow fee -- both sides will be paying a premium in order to ride the bitcoin roller coaster once the Cboe futures start trading."

December 08, 2017

The Bitcoin Whales - 1,000 people who own 40% of the market

By Olga Kharif - December 08, 2017 (www.bloomberg.com)

Illustration: Patrik Mollwing for Bloomberg Businessweek

On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency.

Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year.

About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What’s more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.

“I think there are a few hundred guys,” says Kyle Samani, managing partner at Multicoin Capital. “They all probably can call each other, and they probably have.” One reason to think so: At least some kinds of information sharing are legal, says Gary Ross, a securities lawyer at Ross & Shulga. Because bitcoin is a digital currency and not a security, he says, there’s no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.

Bitcoin: What’s Coming in the Year Ahead


Regulators have been slow to catch up with cryptocurrency trading, so many of the rules are still murky. If traders not only pushed the price up but also went online to spread rumors, that might count as fraud. Bittrex, a digital currency exchange, recently wrote to its users warning that their accounts could be suspended if they banded together into “pump groups” aimed at manipulating prices. The law might also be different for other digital coins. Depending on the details of how they are structured and how investors expect to make money from them, some may count as currencies, according to the U.S. Securities and Exchange Commission.

Asked about whether large holders could move in concert, Roger Ver, a well-known early bitcoin investor, said in an email: “I suspect that is likely true, and people should be able to do whatever they want with their own money. I’ve personally never had time for things like that though.”

“As in any asset class, large individual holders and large institutional holders can and do collude to manipulate price,” Ari Paul, co-founder of BlockTower Capital and a former portfolio manager of the University of Chicago endowment, wrote in an electronic message. “In cryptocurrency, such manipulation is extreme because of the youth of these markets and the speculative nature of the assets.”

The recent rise in its price is difficult to explain because bitcoin has no intrinsic value. Launched in 2009 with a white paper written under a pseudonym, it’s a form of digital payment maintained by an independent network of computers on the internet‚ using cryptography to verify transactions. Its most fervent believers say it could displace banks and even traditional money, but it’s only worth what someone will trade for it, making it prey to big shifts in sentiment.

Like most hedge fund managers specializing in cryptocurrencies, Samani constantly tracks trading activity of addresses known to belong to the biggest investors in the coins he holds. (Although bitcoin transactions are designed to be anonymous, each one is associated with a coded address that can be seen by anyone.) When he sees activity, Samani immediately calls the likely sellers and can often get information on motivations behind their sales and their trading plans, he says. Some funds end up buying one another’s holdings directly, without going into the open market, to avoid affecting the currency’s price. “Investors are generally more forthcoming with other investors,” Samani says. “We all kind of know who one another are, and we all help each other out and share notes. We all just want to make money.” Ross says gathering intelligence is legal.

Ordinary investors, of course, don’t have the cachet required to get a multimillionaire to take their call. While they can track addresses with large holdings online and start heated discussions of market moves on Reddit forums, they’re ultimately in the dark on the whales’ plans and motives. “There’s no transparency to speak of in this market,” says Martin Mushkin, a lawyer who focuses on bitcoin. “In the securities business, everything that’s material has to be disclosed. In the virtual currency world, it’s very difficult to figure out what’s going on.”

Ordinary investors are at an even greater disadvantage in smaller digital currencies and tokens. Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3 percent of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40 percent of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90 percent. Many large owners are part of the teams running these projects.

Some argue this is no different than what happens in more established markets. “A good comparison is to early stage equity,” BlockTower’s Paul wrote. “Similar to those equity deals, often the founders and a handful of investors will own the majority of the asset.” Other investors say the whales won’t dump their holdings, because they have faith in the long-term potential of the coins. “I believe that it’s common sense that these whales that own so much bitcoin and bitcoin cash, they don’t want to destroy either one,” says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change. 

BOTTOM LINE - It’s not necessarily illegal for big holders of some cryptocurrencies to discuss trading with one another. That puts small buyers at a disadvantage.

December 04, 2017

$300 Bln is a drop in the ocean, Bitcoin is still a baby and can’t be a bubble

By Darryn Pollock - November 27, 2017 (cointelegraph.com)


Looking at the total market cap of the cryptocurrency market, which recently crossed over the $300 bln mark, it is both exhilarating and terrifying at the same time. This digital currency world that came into being less than 10 years ago has grown astronomically in such a short space of time.

Indeed, 2017 alone has seen just Bitcoin go from $800 to nearly $10,000, and there is still a month to go. The records have crumbled for the Big digital currencies, as well as the new ones as the boom in ICO’s have also help set unprecedented growth.

Thus, as the most impressive performing asset class ever seen, surely Bitcoin is on the verge of taking over the world? Even that has two ways of being viewed - in relation, or in fear - but, no, Bitcoin is a small fish.

Bitcoin vs Gold


Looking at the actual commodity markets out there, and weighing up Bitcoin’s $300 bln, it quickly becomes apparent that the digital currency is still splashing in the shallow end.

Gold, which Bitcoin is supposed to be challenging, has a market cap of $6 tln. On top of that, only about a fifth of all the mined gold is held for private investment purposes, the rest is either in jewelery - the large majority - or the official sector, or still underground.

Thus, seeing as the value of all gold mined comes in just over $7 tln, about $1.6 tln of it is being used for private investment purposes.

Look deeper at the markets. Equities, another investible asset, has a market cap of $55 tln; then there is $94 tln in securitized debt and $162 tln in residential real estate, according to a 2016 report.

Not even close to being overvalued


So, what does it mean if Bitcoin is a record breaker for speed, but not for size? It breaks down a lot of the bubble talk that is floating around there. For a market that only makes up 0.3 percent, when put next to residential estate value, securitized debt, equities, commercial real estate, farmland and gold, -- it can hardly be called a massive bubble.


When it comes to bubbles, and overvaluing, stock picker and Bitcoin Bull Ronnie Moas breaks down the numbers a little more.

“We currently have $200 tln in the world tied up in cash, stocks, bonds and gold alone and all four of those, in my opinion, are overvalued. If 1/2 of one percent of that 200 tln dollars ends up in Bitcoin, you are looking at a one tln dollar valuation that would be above where Apple Computers, the most valuable company in the World, is today.”

December 02, 2017

Meme Chart Mania - Is this the tip of the iceberg or have we already hit peak Bitcoin?

By Kai Sedgwick - December 02, 2017 (news.bitcoin.com)


The White House discussing bitcoin. The Big Bang Theory discussing bitcoin. Katy Perry and Warren Buffet discussing bitcoin. Bitcoin web searches exceeding those for Donald Trump. There’s no such thing as a quiet week in bitcoin, but even by its usual agitated standards, this one’s been noisy. Celebrity hangers-on come and go and generic sitcoms move on, but bitcoin refuses to let up. By all reckoning, this is just the tip of the iceberg. But what if we’re all wrong? What if it turns out that this is as good as it gets?

Just the Tip


Everyone’s got a favorite bitcoin chart. It doesn’t matter what data it displays – trading volume; dollar price; transactions; wallet addresses – because the key takeaway is always the same: this is only the beginning. This is just a fraction of the growth we’ll see once the normies pile in. This is just the tip. Just hold, we’re told, and by this time next year we’ll be sitting pretty. Five years from now and we’ll all be driving whichever meme car happens to be de rigueur among crypto’s nouveau rich.

Bitcoin is just beginning.
In the interests of playing devil’s advocate, however, let’s consider the alternative. There’s a case for saying that 2017 will go down as the year we hit Peak Bitcoin, followed by a gradual decline as the world lost interest, the proles returning to their mind-numbing TV shows, the White House focusing on its latest bête noire and investors fixating on the latest asset class to promise sick profits. We’ll inspect that side of the coin in a moment, but first, let’s hear the case for bitcoin.

The Age of Bitcoin is Just Beginning


Since everyone’s got a favorite chart, let’s scrutinize a selection that shows bitcoin’s incredible growth and huge potential. Highly respected crypto assets author Chris Burniske produced the following chart which suggests we’re at the frenzy phase of cryptocurrency. If you thought the last few weeks were wild, you ain’t seen nothing.


Then there’s the following effort from Blockchair which shows the number of bitcoin addresses that are loaded with satoshis. Like most bitcoin-related charts from 2017, this one is exponential.


If the last couple of graphs weren’t exponential enough for you, try this one for size. The Wall Street Journal compared bitcoin’s stellar ascent to every other modern asset class and came up wanting. Nothing like this has ever been seen before, and may never be seen again in our lifetime. Bitcoin in 2017 is so steep it’s almost vertical.


Bitcoin is literally off the charts. This raw data is bolstered by the quotes of investors, analysts, and experts who all see bitcoin going parabolic. “Over the next 10 years the cryptocurrency market will explode… I actually believe that nations will begin issuing digital currencies,” said Chris Concannon on Wednesday.

Between January and November, trading volume at Bitstamp increased by 1,384%. Everyone and their grandmother is now buying bitcoin according to the WSJ.

The Counter-Argument: Peak Bitcoin is Already Here


Two rich white people discussing 
cryptocurrency.
But enough of the bitcoin back-slapping – it’s time to play devil’s advocate. Imagine, for a moment, that 2018 were to unfold as follows:

January: Futures trading rolls out, but proving the maxim “buy on the rumor, sell on the news”, an overbought bitcoin market slumps to $8,000 and a bear phase sets in.

February: Following months of speculation over its balance sheet, Bitfinex/Tether collapses, taking over a billion dollars in customer funds with it.

March: A successful terror attack on American soil, funded from the Middle East using bitcoin, prompts President Trump to issue a crackdown on cryptocurrencies.

There’s more, but you get the gist. Okay, so even the most bullish of bitcoiners isn’t pretending there won’t be obstacles in the road or temporary setbacks. But here’s the thing: none of those nightmarish scenarios could play out and bitcoin could still slump. The wall-to-wall media coverage can’t last forever. The exponential growth can’t last forever. And the sitcom appearances and celebrity endorsements certainly can’t last forever. What happens when the hype fades and the circus packs up and leaves town?

There’s just one chart that needs produced to argue the bear case for bitcoin:


Yep, it’s that one again. What if, rather than the “media attention” phase, we’re actually at the “new paradigm” stage? If so, 2018 promises to be no less enthralling, even if it’s for all the wrong reasons.

Focusing on the price of bitcoin, while headline-grabbing, misses the bigger picture. To the virtual currency’s true believers, it doesn’t matter whether bitcoin goes up, down, or sideways next year. What matters is that the cat is out of the bag.

Cryptocurrency, as a store of value, a means of purchase, a form of remittance, and anything else one may care to use it for, has been normalized. Whether we’re driving Lambos or Ladas 12 months from now doesn’t matter. The days of government-issued fiat currency – or “snail paper” as Erik Vorhees recently called it – are numbered. Bear or bull, bottom or top of the curve, bitcoin is here to stay.

Images courtesy of Shutterstock, Wall Street Journal, Blockchair, and Chris Burnsiske.


Kai Sedgwick

Kai's been assembling words for a living since 2009 and bought his first bitcoin at $19. It's long gone. He's previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

December 01, 2017

How Macro Trader Novogratz became a Bitcoin convert

Bloomberg TV Markets and Finance - September 26, 2017 (www.youtube.com)

Mike Novogratz, Galaxy Investment Partners founder, discusses his views on Bitcoin and cryptocurrencies with Bloomberg's Erik Schatzker.

Bitcoin is the revenge of the nerds... Unbelievable core of very earnest people, talent going into this field....

This is the largest bubble of our lifetime... bubbles happen around things that fundametally change the way we lives.... 

You can make a whole lot of money on the way up...

It's a dangerous place. I wouldn't tell you to put 100% of  your net worth in it. I think everybody should have some.

https://www.youtube.com/watch?v=DozrRY2NENU


Bitcoin 'ought to be Outlawed,' Economist Joseph Stiglitz says

By Marc Hochstein - November 29, 2017 (www.coindesk.com)


The former chief economist of the World Bank wants bitcoin banned.

"Bitcoin is successful only because of its potential for circumvention, lack of oversight," Joseph Stigliz, currently a professor at Columbia University, said in an interview on Bloomberg Television today, as the cryptocurrency reached new all-time highs this week.

Because of this, he added:

"So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function."

However, Stiglitz, who also chaired the U.S. President's Council of Economic Advisers during the Clinton Administration, said he does support technological innovation in payments, but thinks digital money should still be fiat created and controlled by the government.

"Let’s move away from paper into the 21st century of a digital economy," he said.

Like many other members of the Davoisie, Stiglitz – who won the  Nobel Memorial Prize in Economic Sciences in 2001 – called the run-up in bitcoin's price unjustified and unsustainable.

"It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down," he said. "The value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow."

And even though bitcoin is a decentralized network, with participants scattered around the globe, Stiglitz seemed to think Washington could easily nip it in the bud.

"If the government says 'the reason bitcoin is being used is circumvention,' they could close it down at any moment," he said. "And then it collapses."

You can watch the clip here:


Joseph Stiglitz photo via Wikimedia Commons.

Bitcoin: The End of Money As We Know It (Trailer)

By Torsten Hoffmann - April 30, 2015 (www.youtube.com)

Bitcoin: The End Of Money As We Know It traces the history of money from the ancient world to the trading floors of Wall St. The documentary exposes the practices of central banks and the dubious financial actors who brought the world to its knees in the last crisis. 

It highlights the Government influence on the money creation process and how it causes inflation. Moreover, this film explains how most money we use today is created out of thin air by banks when they create debt. 

Epic in scope, this film examines the patterns of technological innovation and questions everything you thought you knew about money. 

Is Bitcoin an alternative to national currencies backed by debt? 

Will Bitcoin and cryptocurrency spark a revolution in how we use money peer to peer?  

Is it a gift to criminals? 

Or is it the next bubble waiting to burst?

If you trust in your money just as it is... this film has news for you.

https://www.youtube.com/watch?v=lUF6klWuB38

November 30, 2017

Bitcoin Correction Back Below $10,000

By DataDash - November 30, 2017 (www.youtube.com)

Is there a possibility of Bitcoin going down to 5,000 or 6,000 level?

https://youtu.be/aF5zdVsjO6Q

Bitcoin is a vehicle for fraudsters, warns Goldman Sachs boss

By Angela Monaghan - November 30, 2017 (www.theguardian.com)

 Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday.
Photograph: Chesnot/Getty Images

CEO Lloyd Blankfein attacks cryptocurrency after value dives 20% in a day, saying bank will not get involved until it becomes less volatile.

Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday. Photograph: Chesnot/Getty Images


The boss of Goldman Sachs became the latest high-profile critic of bitcoin, claiming it was a vehicle to commit fraud as the value of the cryptocurrency plunged 20% in less than 24 hours.

Lloyd Blankfein, chief executive of the US investment bank, said: “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”


His comments came during another wildly volatile trading session for the digital currency, which plunged by over $2,000 in a 24-hour period. Having topped $11,000 to reach a new record high of $11,395 on Wednesday, it fell to a low of $9,000 on Thursday, before picking up slightly later in the day.

Blankfein said Goldman did not need to have a bitcoin strategy, adding the digital currency would need to be a lot less volatile and a lot more liquid to justify closer attention.

“When do I have to have a bitcoin strategy? Not today. Life must be really rosy if that is what we are talking about,” he said. “Bitcoin is not for me. A lot of things that have not been for me in the past 20 years have worked out, but I am not guessing that this will work out.”

Blankfein is the latest boss of a major bank to voice scepticism about bitcoin, after JP Morgan’s chief executive, Jamie Dimon, described it as fraud that would ultimately blow up and said it was only fit for use by drug dealers, murderers and people living in places such as North Korea.

On Wednesday, Sir Jon Cunliffe, a deputy governor of the Bank of England, said the digital currency was too small to pose a systemic threat to the global economy. He also cautioned that bitcoin investors needed “to do their homework”.

Despite the fall in bitcoin’s value on Thursday, it remained far higher than it was at the start of 2017, when it was trading at $998. It is the biggest gainer of all asset classes this year, prompting sceptics to declare it a classic speculative bubble that could burst.

Banks and other financial institutions remain concerned about bitcoin’s early associations with money laundering and online crime. Unlike traditional currencies, bitcoin is not issued or regulated by a central bank or government.


Lee Wild, head of equity strategy at online trading company Interactive Investor, said the volatility in bitcoin trading was “wild west stuff”.

“Cryptocurrency land’s extreme volatility is like catnip to high-risk traders, and even traditional investors are dipping their toe. Given there’s no logical way to value them with any accuracy, this remains wild west stuff.”

Analysts at the spread betting firm, City Index, said: “While traditional assets are experiencing historically low levels of volatility, the whipsaw action of the bitcoin is drawing the attention of traditional traders. Meanwhile existing traders and newcomers are increasingly interested in fear of missing out.”

November 29, 2017

“Avoid Bitcoin like the plague”, We’ll talk when it’s $100: Vanguard Founder

Another Wall Street giant joins the bitcoin bashing brigade.

By Samburaj Das - November 29, 2017 (www.cryptocoinsnews.com)


Wall Street magnate John Bogle has warned investors to keep their money away from the bitcoin industry.

Jack Bogle, a legendary investor and founder of Vanguard Group, an investment firm managing $4.5 trillion in global assets, has poured scorn on bitcoin as an asset at a time when the decentralized cryptocurrency is valued above $10,000.

At 88 years old, the now-retired chairman of the Vanguard Group was present at a Council on Foreign Relations event in New York on Tuesday when an audience member sought his opinion on bitcoin.

In remarks reported by Bloomberg, Bogle was sharp in his response, stating:

"Avoid bitcoin like the plague. Did I make myself clear?"

“Bitcoin has no underlying rate of return,” Bogle added, pointing to bonds relying on interest coupons, stocks with earnings and dividends. “Gold has nothing,” he added, before quickly turning to bitcoin again. “There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it,” he reportedly said.

Bitcoin has gone stratospheric this year, rising nearly 1,100% since the turn of 2017 after hitting a fresh all-time high of $10,948 (Coinbase) today.

Bogle is adamant in his belief that bitcoin is overvalued, opining that the value of the world’s first cryptocurrency could double before predicting a seismic correction.

“It’s crazy to invest in the digital asset,” he said, adding:

"Bitcoin may well go to $20,000 but that won’t prove I’m wrong. When it gets back to $100, we’ll talk".

Bogle is only the latest Wall Street figure to join the list of nearby naysayers. The most vocal and infamous quote of all came earlier in September when noted skeptic and JP Morgan Chase chief Jamie Dimon labeled bitcoin a “fraud” that will see someone “going to get killed.”

Featured image from YouTube/Morningstar, Inc..