Showing posts with label trading. Show all posts
Showing posts with label trading. Show all posts

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 20, 2017

The CIO of a crypto hedge fund explains why the market will explode over the next 2 years

By Jacqui Frank, Kara Chin and Trevor N. Cadigan - November 28, 2017 (www.businessinsider.com)

Ari Paul, CIO of cryptocurrency hedge fund BlockTower Capital, talks with Business Insider executive editor Sara Silverstein about the value in cryptocurrency and where he thinks the market is headed in the next two years. Following is a transcript of the video. 

Ari Paul: I’m Ari Paul, CIO of BlockTower Capital and this is why there's value in cryptocurrency

Sara Silverstein: Why do you fundamentally believe that there is value in this cryptocurrency world?

Paul: So there are quite a few use cases. I think the biggest and clearest, and easiest to understand, is as a store of value that can't be censored and is resistant to seizure. And so, the really clear example of demand for this, that I see, is the offshore banking system. Which is roughly 20 trillion dollars today. And it's not just people trying to dodge taxes. Apple, Amazon, every billionaire on the planet, has wealth stored there. And firms like JPMorgan collect fees to offshore law abiding citizens’ wealth. And people want to store their wealth securely, in a way that no single judge could freeze all of their assets. Right? Amazon doesn't want their entire global business operation to be shut down by one judge in Brussels. They want to be able to go through a lengthy appeals process and keep their business operating. So cryptocurrency performs that same task of the offshore banking, of keeping wealth secure an order of magnitude better. So we see massive real fundamental demand for this use case.

Silverstein: And what other financial assets make sense to be on a decentralized database or why would they?

Paul: Yes, there’s a huge distinction between the money use case, store of value, and the blockchain use case, for other assets. And I think it’s useful to kind of separate those. So a blockchain makes a ton of sense to record in real-time legal title. So I was a treasury bond trader, for example, and an example in finance, that anyone who’s traded treasuries is familiar with, is: failure to deliver. So Goldman Sachs will sell a bond to Credit Suisse, who borrows it from JPMorgan, and the same bond, in a day, might trade across 12 banks. And if one back office fails, they fail to make delivery of that bond, you get what's called a cascading failure to deliver. Because no one knows who actually owns the bond. And that can take weeks to fix. So imagine if you just have a shared database, a database that each of those banks held, that was kept accurate in real time,  and that no one could maliciously change or manipulate. You would know who owns what bonds and you might be able to eliminate half of the existing back offices in big banks. So a massive cost savings.

Silverstein: So you believe in the blockchain as having a value in the future for us? How does that translate into value for cryptocurrency?

Paul: So, yeah. I think a really useful idea — a blockchain is just a type of database. It's a distributed ledger that in some use cases, like for a banking back office, is kind of like a database upgrade. So massive improvements in efficiency, but probably not that transformative or disruptive. When you take a blockchain and you make it public and decentralized, and then you add money to that — you add a cryptocurrency — then you're looking at something that is that first use case, that offshore banking system, that I think is fundamentally disruptive. And disruptive financially, economically, and even potentially politically.

Silverstein: Do you see any institutional money in cryptocurrency right now, and is that going to be a huge lever for these values to all skyrocket?

Paul: Absolutely, so we've seen this really clear path of adoption. The earliest adopters were engineers, self-described cypherpunks. Then you had a wave of kind of Silicon Valley tech elites, people who would have a successful exit, who had a high risk tolerance, and who liked taking risk on new technology. Then you had kind of an early wave of maybe people like myself with a little more of a Wall Street background, as well as high net worth individuals, who are a little bit risk-tolerant. What we’re seeing right now is a shift from small family offices to big. Venture capital firms are basically all in. So most of the famous venture capital firms, not only have they been in the space for a few years, they’re now directly investing in new cryptocurrencies. And of the ten largest family offices in the country at least seven of them on cryptocurrency. Maybe more, but seven I'm sure of. So the next wave is — in kind of the institutionalization of the space — is we’re having the CME futures that are likely to launch next month. There's a huge number of entrants who want to invest in cryptocurrency, but can’t. For security reasons, operational reasons, regulatory, but they can easily buy a future, that's on the CME. So that opens the door to groups like endowments and pensions. So far, endowments and pensions own zero cryptocurrency. You have an asset that has been the highest returning asset class over the last eight years and it’s uncorrelated to everything else. And while there’s certainly debate over the future prospects, it lines up as the holy grail for a portfolio. In the sense that, if you size it appropriately, if you size it small, the risks are idiosyncratic. It actually reduces the risk of a portfolio. So endowments and pensions, as they get comfortable with the space, in all aspects regulatory, compliance, as well as underwriting investment risk. They're going to get in. And that's a massive wall of money coming in to a relatively small asset class.

Silverstein: And what do you think the timeline is for that?

Paul: I think the first endowment is probably going to write a check in the next few months, a small check. Endowments won't be in size for probably six months and not in size by — from their perspective for probably 12 months. Pensions are probably 18 months away and the key — the reason given those dates is having third-party custody, that is a legal qualified custodian, is a huge hurdle particularly for pensions. You have issues like ERISA, that are actual fiduciary challenges. And having a third-party qualified custodian, for many crypto assets, is probably something like 12 months away, maybe 18 months away.

The cryptocurrency market is now doing the same daily volume as the New York Stock Exchange

By Oscar Williams-Grut - December 20, 2017 (www.businessinsider.com)

Traders on the floor of the New York Stock Exchange on December 6
REUTERS/Brendan McDermid

  • Global volume in cryptocurrency markets has passed $50 billion, close to the average turnover on New York Stock Exchange.
  • The comparison is inexact but highlights just how popular digital currencies have become.


LONDON — Global cryptocurrency markets are now averaging the same daily trading volumes as the New York Stock Exchange.

Twenty-four-hour trade volume in the cryptocurrency market passed the $50 billion mark on Wednesday, according to the data provider CoinMarketCap.com.

That is close to the average daily volume of trade on the New York Stock Exchange this year. Daily trading volumes on the London Stock Exchange hover at about £5 billion, or $6.7 billion.

The comparison is inexact, as the cryptocurrency market is arguably closer to the foreign-exchange market, which has daily volumes of over $5 trillion.

But it highlights just how hot the cryptocurrency market has become in 2017. Unlike the foreign-exchange market, cryptocurrency trading is largely done by small-time, retail investors, making it closer to the stock market (though some huge institutions are playing in the market.)

Investors have flocked to cryptocurrencies in 2017 because of the eye-catching returns of bitcoin, which has grown by about 1,500% against the dollar. A boom in so-called initial coin offerings, in which startups issue their own cryptocurrencies to raise money, has created a raft of other digital assets for investors to speculate on. There are now more than 1,300 cryptocurrencies in circulation, according to CoinMarketCap.com.

But many people within the financial industry have expressed concern about the largely unregulated market. The UK's top financial regulator warned earlier this month that people should be prepared to lose all the money they invest in bitcoin, and JPMorgan CEO Jamie Dimon has called cryptocurrencies a "scam."

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

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.

November 29, 2017

Bitcoin Futures Trading is coming to Nasdaq, the World’s Second Largest Stock Market

By Joseph Young - November 29, 2017 (www.cryptocoinsnews.com)


The $6.831 trillion stock market Nasdaq, the world’s second-largest stock exchange behind New York Stock Exchange, will enable bitcoin futures trading by mid-2018.

Nasdaq and Cantor to Integrate Bitcoin by First Half of 2018


A Wall Street Journal report revealed that Nasdaq and Cantor Fitzgerald & Co. will list bitcoin futures within the first half of 2018. The two financial institutions are “rushing” the integration of bitcoin given the cryptocurrency’s recent surge in price, to $11,441.

According to sources familiar with the Nasdaq’s plans for a bitcoin futures exchange launch, Nasdaq’s bitcoin futures and contracts will be listed on Nasdaq Futures. Through that, investors in the traditional finance sector and stock brokerages will be able to engage in bitcoin trading.

In an interview with WSJ, Cantor, a major US-based financial firm, also revealed that it intends to launch bitcoin futures and derivatives on its flagship exchange.

Shawn Matthews, chief executive of Cantor Fitzgerald & Co., stated that cryptocurrencies are a new asset class that “is not going away,” and that bitcoin is here to stay.

He stated:

"The asset class is not going away. If you look at the next level, it will be the institutions coming in and being larger participants in the marketplace, especially as liquidity gets better".

Cantor’s futures exchange has already been approved by the US Commodities and Futures Trading Commission (CFTC), and considering that CFTC has approved several bitcoin futures listings including the bitcoin options, derivatives, and futures exchange of LedgerX, regulatory hurdles of Cantor in listing bitcoin are expected to be minimal.

Nasdaq’s Bitcoin Integration Will Trigger Other Exchanges to Adopt Bitcoin


Other major exchanges including Nodal Exchange are actively investigating the potential of listing bitcoin futures on their regulated exchanges and trading platforms.

John D’Agostino, a former Nymex executive, told WSJ that every department of every regulated exchange is considering listing bitcoin futures, and that the number of bitcoin futures exchanges will drastically increase throughout 2018, as leading exchanges and markets such as CBOE, CME, Nasdaq, and Cantor move to implement bitcoin.

“Every research department of every regulated exchange is saying, ‘Can we do this?. The majority of costs associated with that are marketing. If people want to trade this thing, why wouldn’t you?. This is a gift from the heavens,” said D’Agostino.

In early 2017, the integration of bitcoin futures could have required marketing to a certain extent to attract investors within the traditional finance sector. Currently, the mere act of integrating bitcoin is an impeccable marketing strategy. Some reports revealed that if multi-billion dollar companies like Overstock switch their businesses to cryptocurrency-focused ventures, they are likely to see 70 to 100 percent increase in sales and market valuation.

Given the rapid increase in the mainstream adoption of bitcoin and the rise in demand for cryptocurrencies, every exchange in the US and in the global finance market is planning to integrate bitcoin in the short-term. Nasdaq’s listing of bitcoin futures will trigger more exchanges to pursue the path of bitcoin futures in the upcoming months.

Featured image from Shutterstock.

November 24, 2017

JP Morgan is getting into Bitcoin Futures trading, Despite Jamie Dimon’s statement about Bitcoin’s fraud

BY Eugenia Kovaliova - November 22, 2017 (www.coinspeaker.com) 


JP Morgan, one of the largest banking institutions in the United States, is looking at allowing its clients to trade bitcoin futures, while its Chief Executive James Dimon stays negative to Bitcoin believing it’s a fraud.

According to the latest Wall Street Journal report, JP Morgan Chase & Co., a leading global financial services firm operating worldwide and the US largest banking institution, is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit. The final decision depends on JPMorgan’s customers’ demand.

The news can seem a bit contradictory if we remember JP Morgan’s Chief Executive James Dimon, stating that Bitcoin is a fraud, which became the most outspoken critic of Bitcoin on Wall Street. Moreover, on multiple occasions Dimon hinted that he believes digital currency is a bubble that will crash. On a conference last month he said: “If you’re stupid enough to buy it, you’ll pay the price for it one day.

Dimon also said he would fire anyone caught investing in Bitcoin and seemed to be ready to fulfill the promise. His finance chief, Marianne Lake, has struck a more measured tone. Last month she said that the firm was open minded to the potential uses for digital currencies so long as they are properly regulated.

Surprisingly, that despite Dimon’s negative attitude to cryptocurrency, JPMorgan would be moving forward with plans to allow clients to trade in it through the bank.

The introduction of Bitcoin Futures Contract by the CME group, which is planned to be launched by the end of the year, was followed by Bitcoin’s new all-time high of $8336. The upswing was recorded on Monday, November 20. And the rate doesn’t seem to stop rising. According to the predictions of legendary hedge fund manager and a billionaire trader Michael Novogratz, Bitcoin can touch $10,000 by the end of this year.

Apart from CME Group, a few more Wall Street financial institutions have turned optimistic about Bitcoin’s future. One of such examples is LedgerX, a federally regulated exchange and clearinghouse, which has initiated the first-ever long-term Bitcoin futures ‘option’ pegged at a price of $10,000.

Bank of America Merrill Lynch has recently stated that bitcoin futures could help dampen the coin’s volatility:

“We would not overstate this, as a material reduction in volatility would require there to be a large community of speculators prepared to provide liquidity to the natural owners of the various coins, but given the volatility of the coin markets, maybe there already exists a cadre of participants who would look to short coins on strong days and vice versa, which could overall reduce volatility.”

Still, some experts continue to doubt that bitcoin futures would be positive for the markets, holding on to the point that such a product could ultimately destabilize the real economy.

November 18, 2017

20+ Banks set to join Singapore-Hong Kong Blockchain-powered Trade Network

More than twenty banks are expected to join a DLT-based trade network being built jointly by partners Singapore and Hong Kong.


By News Desk - November 18, 2017 (cryptovest.com)

Top Central Bankers from Singapore and Hong Kong have confirmed that more than 20 global banks will be joining their partnership to build a blockchain-based trade network.

The development was announced at the Singapore Fintech Festival this Thursday. The project is called the Hong Kong Trade Finance Platform (HKTFP), and is the result of a collaboration between the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS). The HKTFP – a pilot which has been described as a global trade connectivity network (GTCN) which will digitize trade finance – is among the first of its kind and is an initiative which is expected to serve as a global model for the industry.

The partnership between competitors Singapore and Hong Kong is geared toward the advancement and promotion of fintech and blockchain, and the HKTFP is a major part of the collaboration. The platform is designed to ensure the smooth transfer of digital data, to facilitate global trade that passes through Singapore and Hong Kong – both major trade hubs.

The launch date for the HKTFP is early 2019, as was announced by the MAS earlier this week; Singapore is likely to target the Asean region with the project, while Hong Kong will be focusing on China.

Currently, however, the DLT pilot is still under development. Numerous aspects are being ironed out, and Li Shu-Pui, executive director HKMA, revealed that banks involved in the project have raised multiple concerns, among them worries about data and transaction privacy. He added that it was imperative for regulators worldwide to start laying down rules for the oversight of blockchain tech, so it could fully play its part in the rapidly advancing trade finance sector.

Both HKMA and MAS also aim to expand the scope of the HKTFP, and expect European banks to get involved as the project develops and progresses.


Pump and Dump - Know the signs when trading Altcoins

By Carter Graydon - September 07, 2014 (www.cryptocoinsnews.com)


Like penny stocks traded on the NYSE or those on pink sheets, cryptocurrency is a prime target for pump and dump scams. For those with buying power, it’s an easy way to get rich quick by inflating the price. For everyone else, nine out of ten times, you will lose. This is one of several reasons people are afraid to trust Bitcoin.

For those of you who don’t know how the pump and dump works, it’s fairly straight forward. They are also illegal in the market, though federal agencies do not actively protect Bitcoin users.

Pump and dump scams involve two groups of people. First there are the players who artificially increase the price of a coin by promoting or endorsing it. They’ve spent several minutes, hours or even days buying up cheap coins, and when they are ready to dump them, they build up the buzz.

As buzz around the coin gains momentum, trading volume increase and the coins value goes up. You are both the pump and dumper. Once the coin hits a desired price the players sell all their coins, and people begin to panic sell, dumping their coins on the market and sending the price plummeting.

It’s not too difficult to detect a coin that’s being primed for a pump and dump. You’ll often see buying patterns like the ones in this graph. The price is falling and rising just slightly each time the players buy, loading up on the cheap coins without drawing too much attention.


Once they’ve purchase the coins the players head to the forums and chat boxes to talk up their coin of choice. They’ll use several different accounts, and there can be many players involved helping make this look real. The  coin will be talked up until there is a buzz and people start buying – this is when the pumping happens. The chatter picks up on trading platforms, and people start purchasing the coin and pumping the price skyward. This fuels the buzz even further, and more people begin purchasing.

Once the coin hits a high point, the players will start selling off their coins, but not all of them at once – this signals the dumping process is about to begin. It can happen in a matter of seconds or be dragged out over hours. Players will sell small amounts of coins as fast as they can without dragging the price down until their out. Once the players are out, a panic sell begins, and this is when the dumping process happens. The price is no longer climbing the volume is down, and people start realizing their own sell orders aren’t getting filled. Panic sellers will sell below the market value just to get out, and this can send the coin’s value crashing to the floor.

The players are the ones getting rich, and they have the capital and knowledge to do so, but that doesn’t mean you have to lose out every time.

If you are able to spot a coin that’s being prepped for a pump and dump, you can purchase cheap coins yourself. If you were able to grab up some coins before the pump starts, you can make money if you’re not greedy. It shouldn’t be hard to make decent profit in five minutes if you’ve spotted the signs early.

If you come late to the party and the coin has already begun being pumped, but still in the early stages, you still can make a profit. Your risk will be greater and your profit smaller, but if your enter and exit fast the market fast you should be able to expect a modest return.

There are many people offering to “let you in” on the next coin to be pumped and dumped for a fee. Some people charge as little as .5 Bitcoins, but is it worth it?

Most of these are scams in order to get your Bitcoins. They will tell you what coin is going to be targeted but do nothing because they don’t need to. They have already made their profit. At .5 Bitcoins, with only five subscribers these people have already made over $2,000, which is about what you’d expect to make on pumping and dumping a coin, but now there is no risk.

Even if these offers for insider trading – that’s what it is – were real, and they did pump and dump the coin, you’d have to invest a significant amount of money to see a return of half a Bitcoin. Which means greater risk for you and a smaller return.

Always remember:

Buy the rumor.

Sell the news.

Information provided in this article is not intended to constitute an invitation or an inducement to engage in any investment activity. Featured image by Shutterstock. 

Posted by Carter Graydon
A UNC Chapel Hill graduate, blockchain enthusiast and analyst. I have a background in programming and IT, strong studies in econ, stats and game theory. Currently working as a Social Media Director and pursuing my MS in Online Marketing – busy!

November 14, 2017

Police posted at Bithumb as users file lawsuit after server outage costs millions

By Kai Sedgwick - November 14, 2017 (news.bitcoin.com)


Users of Bithumb, the world’s largest cryptocurrency exchange, have filed a class action lawsuit following a costly server outage on November 12. Despite only lasting 90 minutes, the outage cost traders millions of dollars, occurring at the height of frenzied bitcoin cash trading. One customer complained of losing 250 million won ($223,000) in the chaos.

A Tale of Lost Won


Disgruntled traders gather outside Bithumb
As bitcoin cash was setting new records on Sunday, hitting all-time highs before plunging sharply, traders at Bithumb, which was leading the BCH rally, could only watch in frustration after the trading platform was knocked offline. Such was the ire of the affected traders that police were posted outside Bithumb’s Seoul headquarters on Monday morning as a precaution. The Korea Times quotes a Bithumb official as saying:

"We are discussing measures to compensate the investors. We will meet our legal and social responsibilities concerning this issue".

That’s not enough for some traders though, who are are still angered after missing out on the lucrative profits that could have been made on the BCH swings. The exchange, which accounts for around 75% of all South Korean trading volume, has now been hit by a lawsuit from around 3,000 customers who were affected by the server outage.

Crash and Cash


The basis for the affected traders’ legal action stems from the fact that Bithumb was previously compromised in June, when trading of Ripple was similarly impacted. They allege that there are critical issues with the exchange’s servers which still haven’t been fixed, leading to the bitcoin cash debacle. The impending legal action raises questions over the obligations of exchanges, and whether they can be held liable for downtime caused by unusually high trading volume or external factors.

Police attended the scene after Bithumb customers protested on Monday morning

Sour Grapes and Just Desserts


In June, a class action lawsuit was filed in Florida after Kraken exchange was floored by DDoS attacks, allegedly costing traders up to $1 million. Often, such suits settle out of court, with plaintiffs filing a formal complaint to compel the defendant to pay swift compensation. The likelihood of Bithumb customers being eligible for court-awarded compensation is dubious, with one financial expert opining that the exchange is not liable for such events.


Most of the trading during the weekend’s fierce bitcoin cash rally originated in South Korea, with the won leading the action. In the past 24 hours, bitcoin cash volume on Bithumb was $1.16 billion, with bitcoin a distant second at $445 million. Cryptocurrency trading is a risky business at the best of times, and the affected investors have earned little sympathy in other quarters of the bitcoin community.

Despite Bithumb’s server issues, the global cryptocurrency market set a new record on Sunday, hitting $25 billion in volume. Given the vast amounts of money at stake, it’s safe to assume the Bithumb lawsuit won’t be the last of its kind.

Images courtesy of Shutterstock, Naver, and Coincodex.


Kai Sedgwick

Kai's been assembling words for a living since 2009 and involved with bitcoin since 2013. He's previously written white papers for blockchain companies and is especially interested in P2P exchanges and DNMs.

November 13, 2017

Rollercoaster Weekend - Bitcoin price Falls From $7,300 to $5,600 and Rebounds to $6,200

By Joseph Young - November 13, 2017 (www.cryptocoinsnews.com)

Within a single weekend, from November 11 to 12, the bitcoin price plunged from $7,300 to $5,600, and recovered to $6,200, in less than 48 hours.


Beginning late Saturday evening, the bitcoin price began to fall from $7,300 to $6,900, as Bitcoin Cash started to record major gains. By Sunday morning, the price of Bitcoin Cash has surpassed $2,900, a new all-time high, while the price of bitcoin plummeted to $5,600.

As such, the rapid surge in the market valuation of Bitcoin Cash and abrupt plunge in the price of bitcoin led to serious market turbulence and uncertainty, as a relatively large portion of investors initiated a sell-off of bitcoin.

Daily Trading Volume Hits $22 Billion


The daily trading volume of the cryptocurrency market achieved $22 billion on Sunday, as the trading volumes of both bitcoin and Bitcoin Cash surpassed $10 billion. Since then, trading volumes have decreased.

According to reports, several major bitcoin investors including bitcoin angel investor Roger Ver sold billions of dollars in bitcoin and allocated the majority of those funds to Bitcoin Cash. As a previous CCN report explained, the sole beneficiary of the cancellation of the SegWit2x hard fork has been Bitcoin Cash, as supporters of SegWit2x migrated to Bitcoin Cash and unified their vision of scaling bitcoin’s on-chain capacity for short-term scaling.

Consequently, the demand for Bitcoin Cash increased in one major region that is South Korea, mostly through Bithumb, the world’s second largest cryptocurrency exchange by trading volume behind Bitfinex. Several cryptocurrency communities in South Korea heavily invested in Bitcoin Cash primarily due to the movement of miners from bitcoin to Bitcoin Cash.

However, traders were made aware that the migration of miners from bitcoin to Bitcoin Cash cannot be permanent, as miners moved when the Bitcoin Cash blockchain was more profitable to mine. Miners are extremely sensitive to profitability, primarily because mining requires a significant amount of resources, capital, and infrastructure.

Hence, in the near future, after a difficulty adjustment on both blockchains, it is likely that miners will move back to bitcoin if it becomes the more profitable blockchain to mine. Because of the tendency of miners to switch between more profitable blockchains, hash power is often not an accurate indicator to utilize to determinate the mid-term growth of a cryptocurrency.

In fact, as Ivie Business School professor JP Vergne wrote, developer activity is usually the most accurate indicator of a cryptocurrency’s price trend.

“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it,” explained Vergne.

What Lies Ahead?


Given that the bitcoin price has stabilized in the $6,200 region and the tendency of bitcoin to rebound to its previous all-time highs, it is likely that the price of bitcoin will soon recover back to the $7,000 region, especially if institutional and retail investors attracted by CME Group and CBOE’s bitcoin futures exchange launch begin to engage in bitcoin trading.

Featured image from Shutterstock.

November 10, 2017

Bitcoin Cash surges as businesses abandon legacy BTC

By Kai Sedgwick - November 10, 2017 (news.bitcoin.com)


Bitcoin cash is enjoying a new lease of life as major figures throw their weight behind the chain. In the wake of the abortive Segwit split, neither bitcoin nor B2x has prospered, with the latter failing to materialize and the former dropping below $6,800 for the first time in 10 days. BCH, meanwhile, hit $866 earlier today.

All Aboard The BCH Express


As the elation, anger, and acrimony over Segwit2x has started to settle, focus has returned to the seemingly intractable problems of bitcoin scaling and transaction fees. Given the difficulty of attaining consensus for developments of the bitcoin network, many have grown frustrated by the stalemate, with widespread Segwit adoption and Lightning Network implementation still months or years away.

With bitcoin currently unsuitable for small transactions due to high fees, various businesses and public figures have expressed their preference for a cryptocurrency more suited to everyday use. For some, this has meant looking to the world of altcoins, where the likes of Litecoin and Dash beckon. For those keen to stick with the bitcoin brand, however, bitcoin cash looks increasingly attractive.

One member of the Openbazaar team tweeted:

"Hearing lots of great things about @BitcoinCash $BCH today. Many developers and businesses seem better aligned with the vision now that 2x has failed".

The team running the P2P marketplace have every reason to be extolling the virtues of bitcoin cash, having announced that they’ll be accepting BCH on account of its cheaper fees along with zcash. As businesses have wrestled over what to do with a legacy bitcoin that’s becoming increasingly un-transactable, the BCH team have wasted no time in wooing defectors, stating:

"BTC’s utility continues to decline. Watch as businesses adopt BCH".

One public figure who has thrown his weight behind BCH is Pirate Party founder and bitcoin maverick Rick Falkvinge, who declared: “With recent developments, I’m putting all available dev resources to retool my software for #Bitcoin Cash. I suspect I’m far from alone.” He later added: “I’m moving my development effort to Bitcoin Cash, as Bitcoin Legacy now has hit a brick wall and needs to be dropped like a bad habit. I have no real reason to move the coins.”

One Coin to Rule Them All


The Bitcoin Cash market has surged over the last 24 hours, with volume exceeding $2.5 billion, 57% of which was trading against the Korean won. Much of the fevered interest in BCH will simply have been market sentiment, fueled by the growing consensus that the legacy bitcoin chain is ill-equipped to handle growing volume. It would be speculative at this stage to suggest that BCH is gearing up for its own version of The Flippening, when Ethereum believers thought their coin might actually overtake bitcoin to become The One True Coin.

Make no mistake though, if BCH’s most ardent supporters have their way, not only will bitcoin cash steal bitcoin’s market cap eventually but it will also steal its name. In the wake of the Segwit2x furore, there were hopes that the in-fighting which had driven a wedge into the bitcoin community would cease and work could resume on infrastructure improvements. Instead, the BTC/BCH debate has been ramped up, with supporters of both chains adamant that theirs is the best bitcoin.


Bitcoin legacy’s decentralized nature is both its greatest strength and its greatest weakness. The BCH team is wasting no time in rolling out network upgrades and implementing a clear roadmap. More than 1,500 businesses are already accepting bitcoin cash, a modest figure but one that is rising steadily.

Images courtesy of Shutterstock, Coincodex.com and Bitcoin Cash.



Kai Sedgwick

Kai "Segwit" has been assembling words for a living since 2009 and fascinated with Bitcoin since 2013. He's previously written white papers for blockchain companies and is particularly interested in P2P exchanges and DNMs.

October 28, 2017

How Bitcoin forks influence Bitcoin price rise and fall

By Patrick Thompson - October 28, 2017 (cointelegraph.com)


Prior to the Bitcoin Gold fork two days ago, the market made some interesting moves.

Bitcoin price reached a new all time high on Oct. 20, 2017 - five days before the Bitcoin Gold fork -surpassing $6,000 for the first time and eventually climbing to nearly $6,200.

Those of you who have endured past chain splits are aware of what usually happens when there’s a split from the Bitcoin network. Ordinarily, the community complains, reddit.com, medium.com, and twitter.com become platforms for soapbox speeches, and a lot of trash is talked by factions within the community.

However, have you noticed the other events that are correlated with a chain split? Once a chain splits, you suddenly own a number of split tokens equivalent to the number of tokens you had on the Bitcoin network. This is because the new chain will be an exact copy of the Bitcoin Blockchain up until the point where the fork occurs.

If the wallet you use supports the forked chain’s software, you will be the owner of two digital tokens: Bitcoin and the Forked Chain Token. In our example we will use Bitcoin Cash (BCH) as the forked token. When the Bitcoin Cash chain forked off of the main chain, owners of Bitcoin became owners of an equivalent amount of Bitcoin Cash. This is because the chains were identical until the fork occurred. If you owned 10 BTC before the split, then you owned 10 BTC and 10 BCH after the split. 

This is where the slope becomes slippery.  People or organizations with unfathomable amounts of money can use forks as an opportunity to extort both the Bitcoin network and the forked network for enticing capital gains when a fork occurs.

Preparing for the fork


Let's say Randy owns 35,000 Bitcoins; at a value of $5,000 per Bitcoin, Randy’s digital assets are worth $175,000,000. Just like anybody with large amounts of money invested in a market, Randy pays attention to news that may affect his position (wealth) in that market. Randy learns that there will be a hardfork in the Bitcoin network and that the hardfork will create a new token, Bitcoin Cash (BCH).

On top of this, Randy learns that his Bitcoin wallet provider will support the forked software, so he knows that he will own Bitcoin Cash as well as Bitcoin once the fork occurs. Now, Randy expects to have 35,000 Bitcoin Cash tokens in addition to his 35,000 BTC after the fork.  If Randy was to increase his position by millions of USD worth of Bitcoin, he would be the owner of more Bitcoin than he previously owned.

However, he would also create a buy wall that drives the Bitcoin price up since he is such a large player in the Bitcoin market. When Randy increases the amount of Bitcoin he owns, he also increases the amount of Bitcoin Cash he will own once the fork occurs.

Because Randy is an educated investor, Randy decides to increase his position in Bitcoin so that he owns 50,000 Bitcoin the day before the fork. Randy did this because he would like to own even more Bitcoin Cash than the 35,000 he would have had if he did not increase his position in Bitcoin. Now when the fork occurs, Randy expects to have 50,000 BCH in addition to his 50,000 BTC.

What happens when a chain forks


When the Bitcoin Network forks, some of the value that was in the Bitcoin network splits into the forked chain. When Bitcoin Cash forked from the Bitcoin network, the value of Bitcoin went from $2800 to $2700 (July 23,2017).

As a result of the fork, Bitcoin Cash was created and was valued around $555 at the time of it’s launch. (July 23, 2017).




Now what does that mean for Randy?


When Bitcoin dropped from $2,800 to $2,700, Randy's digital assets (wealth in Bitcoin)  dropped from $140,000,000 to $135,000,000, a $5 mln loss. However, because of the fork, Randy now has 50,000 BCH worth $555 a piece. Because Randy is an educated investor and has no plans to use the Bitcoin Cash (BCH), he immediately sells his BCH for a profit the moment the option to sell BCH becomes available to him on his preferred exchange.

Randy sells all 50,000 of his BCH for a profit of $27,750,000. A nice $28 mln gain (rounded number) to make up for the $5 mln loss that he suffered due to the decline in the price of Bitcoin. At the end of the day, Randy profits around $23,000,000 from the chain split.

Keep in mind, there are other investors like Randy who are highly educated and extremely skilled at what they do. Furthermore, they may be executing a similar or even more efficient strategy as Randy regarding the hardfork; buy a lot of Bitcoin, anticipate a chain split where you are left with a number of new altcoins equivalent to the number of Bitcoin you own, quickly sell off the altcoin for a profit and then decrease your position in Bitcoin because it is overvalued.

Individuals like Randy are referred to as whales: individuals who hold positions so large in the Bitcoin market, that their bid and ask orders are capable of shaking up the market. Since it only takes a few big players using a similar strategy to drive the value of Bitcoin up or down, when an opportunity like this presents itself (a hardfork), the price of Bitcoin may not reflect the true value of Bitcoin.

Since educated investors know that the Bitcoin price may be artificially high due to big players like themselves implementing a hardfork strategy, the big investor(s) have an incentive to lower their position in Bitcoin once they have executed their hard-fork gameplan. This is because they expect the Bitcoin price to correct to a value that is closer to its true value once all the hard-fork affiliated nonsense subsides.

Because there are multiple people like Randy who have a relatively large position in the Bitcoin market, when these people decrease their position in Bitcoin to an amount that they are comfortable owning during a bear period (and that number may be zero) their collective ask offers are capable of creating a sell-wall that drives down the price of Bitcoin.

After the big sell off of both the altcoin - because investors find it virtually worthless for them to hold for the long term - and Bitcoin - because investors know the price is artificially high for the short term due to their market strategy - investors capitalize on the low price of Bitcoin from the massive sell-wall and they buy back the Bitcoin that they previously unloaded.

On top of the profit investors make from selling-off all of their altcoin, investors will experience capital gains from selling their Bitcoin at an artificially high price and then purchasing Bitcoin back once the price is lower. During the period where investors buy back Bitcoin, we tend to see the price stabilize for a short period of time.

Boom and bust


Investors may have stockpiled Bitcoin anticipating an equal amount of altcoin and then sold off a significant amount of both Bitcoin and altcoin - in our example Bitcoin Cash - to reap the massive capital gains available to them.

I can’t rule out the possibility that several other market factors had an effect on the Bitcoin price surge and subsequent plummet, but that being said, how plausible do you think it is that the whales set off the surge and fall of Bitcoin?

South Korea advances Crypto Bill targeting multi-level and door-to-door sales

By Kevin Helms - October 28, 2017 (news.bitcoin.com)


South Korea is moving forward with a bill to regulate cryptocurrencies. According to the country’s Ministry of Justice, the bill will primarily focus on cracking down criminal activities including crimes perpetuated through multi-level and door-to-door sales.

Bill To Focus on Criminal Activities


The South Korean government has announced that the legislation to regulate digital currencies “is expected to focus on cracking down on criminal activities,” such as “multi-level crimes,” Yonhap News reported.

The existing regulation for criminal activities does not explicitly include digital currency. A digital currency task force has been set up by relevant government departments including the Ministry of Justice, the Financial Services Commission (FSC), the Ministry of Strategy and Finance, and the Fair Trade Commission. According to the publication, its task is “to clarify the grounds for punishment” for digital currency-related crimes and recommend relevant amendments to the laws and regulations.

The Ministry of Justice said last week that the punishment rule will be significantly increased from “5 years imprisonment or fines of less than 50 million won” to “10 years imprisonment or penalty of less than 500 million won,” the publication detailed, adding that:

"It also plans to establish confiscation rules for criminal profits to increase the effectiveness of punishment".

Currently, there is no clear law regarding digital currencies seized as criminal proceeds. Last month, news.Bitcoin.com reported on Suwon District Court in South Korea ruling that the confiscation of bitcoins by the police in a criminal case was inappropriate.

Amending Existing Regulations


The discipline system for virtual currency trading activities is also included in the amendment bill of the Act on Regulation of Similar Receiving Act, according to the news outlet. “The purpose of this A
ct is to protect good traders and to establish a sound financial order by regulating ‘similar receiving behaviors’,” Article 1 of the law explains.

“Similar receiving behavior” is defined in Article 2 of the law as “an act that does not receive authorization or permission under other laws and does not register or notify and procures funds from an unspecified number of persons.”

Since the government does not view digital currencies as currencies or financial products, it is trying to regulate them through the above Act, Yonhap News detailed, adding that:

"The government will set up regulations for securing consumer protection and transparency of transactions for virtual currency traders who conduct sales activities such as the sale, intermediation, and arbitration of virtual currencies in the amendment".

These regulations include the obligation to prohibit transactions on the Door-to-Door Sales Act, including multi-level and door-to-door sales, the news outlet described.

In addition, the government will also amend some Financial Information Acts to impose an anti-money laundering (AML) obligation on digital currency trading including requiring exchanges to report suspicious activities to the Financial Intelligence Unit. An FSC official was quoted saying:

"The amendment plan is being revised with the aim of passing the revision bill of the Act on Regulating Receiving Behavior in the National Assembly this year…We will clarify the grounds for punishment for similar receiving behaviors that imply virtual currency investment by adding the phrase ‘virtual currency or virtual currency trading."

Images courtesy of Shutterstock.


Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.