Canadian Regulator Green-Lights Bitcoin Fund IPO

Canadian Regulator Green-Lights The Bitcoin Fund IPO

The Bitcoin Fund’s initial public offering (IPO) filing has been accepted by Canada’s Ontario Securities Commission. Despite previously rejecting it, the Canadian regulator finally accepted the fund’s IPO prospectus after a public hearing and a favorable ruling.

Also read: Bitcoin ATMs Installed at 5 Major Malls in the US

The Bitcoin Fund IPO

Crypto-focused Canadian investment fund manager 3IQ Corp. announced on Thursday that it has filed a preliminary prospectus for the IPO of The Bitcoin Fund. More importantly, the prospectus dated Nov. 27 has been receipted by the Ontario Securities Commission (OSC) after previously rejecting it. The IPO will offer two classes of units at $10 each.

The Bitcoin Fund is a closed-end investment fund established as a trust under Ontario’s laws, the company explained, adding that “the units will be an eligible qualified investment for registered investment accounts.” The fund’s investment objectives are to provide investors with long-term capital appreciation and exposure to bitcoin and its daily price movement in USD, the announcement details.

Canadian Regulator Green-Lights Bitcoin Fund IPO

Founded in 2012, 3IQ already manages two other private digital asset funds for accredited investors in Canada. It will act as The Bitcoin Fund’s investment and portfolio manager. The crypto-focused company has been working to bring a public bitcoin fund to market for Canadian retail investors since 2016.

Success After a Long Battle

3IQ Corp. originally filed a preliminary prospectus for the IPO of The Bitcoin Fund with the OSC’s Investment Funds & Structures Projects branch (IFSP) in October last year. However, the staff raised a number of concerns after reviewing it, arguing that the fund was not in the public interest of Canadians. This resulted in the IFSP director rejecting the fund’s prospectus in February. The company then requested a hearing and a review of this decision. After a public hearing and several meetings, OSC Commissioner Lawrence P. Haber ruled that the staff’s concerns “do not warrant denying a receipt for The Bitcoin Fund’s prospectus.”

Canadian Regulator Green-Lights Bitcoin Fund IPO

The commissioner believes that it is not the role of securities regulators to approve or disapprove of the merits of the underlying investment being offered to the public — bitcoin in this case. Among other bullish statements, he said, “there is sufficient evidence of real volume and real trading in bitcoin on registered exchanges in large dollar size.” After addressing each point of concern raised by the staff, the commissioner ordered the IFSP director to issue a receipt for the fund’s prospectus unless new evidence was found to warrant a rejection. Several weeks later, the company announced that the regulator has finally issued a receipt for the fund’s prospectus.

Nonetheless, the staff noted that “there are remaining steps for completion before a final offering prospectus can be receipted.” Particularly, Commissioner Haber’s order reveals that the final prospectus would include additional information regarding the offering such as pricing information and details regarding underwriters. The order further states:

3IQ also confirmed that it does intend to offer units of the fund to Canadian retail investors in all provinces and territories of Canada.

The company has confirmed that the preliminary prospectus is subject to completion or amendment, and the sale will only commence after the regulator has issued a receipt for the final prospectus.

What do you think of the OSC finally accepting the IPO filing for The Bitcoin Fund? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Blockchain, Power and Politics: How Decentralization Engenders Freedom

The distribution of political power could be reshaped by blockchain, which provides a decentralized alternative to existing structures.

The 21st century world is connected, but not centered. These are both good things. Connections link people, cultures and ideas. Indeed, all the great advances in human history have been the result of social and economic networks.

Without the trade routes of the Indian Ocean, the Islamic world would never have acquired the numerals of India that now form the foundation of our mathematics of science. Without the coffeehouses of 17th- and 18th-century Britain, the Enlightenment probably wouldn’t have materialized. Genius dies in isolation; connection is the engine that drives human progress.

By contrast, the centralization of power is highly correlated with disaster and suffering. Some say that this is the iron law of oligarchy — i.e., as any institution, private or public, becomes larger and more complex, power will inevitably become concentrated in the hands of a small elite. It’s also inevitable that we’ll experience earthquakes and hurricanes, but this doesn’t stop us from trying to mitigate the damage of such natural disasters.

The incentives of our traditional economies have made oligarchies a practical certainty. We are now at a technological crossroads, however, which will allow us to change these incentives, keeping power in the hands of the people. And blockchain could be a key component of this process.

Blockchain should be anti-bloc. What does this mean? Simply put, that a truly decentralized blockchain will, by its very nature, resist the centralizing and homogenizing forces that tend to form into power blocs. We must not forget that blockchain is also a means to an idealistic end. When Satoshi Nakamoto mined the Bitcoin genesis block, he embedded a reference to an article in London’s newspaper The Times about the 2008 financial crash. The gesture was not subtle: Satoshi believed that centralized banks and central governments had failed their constituents.

It’s increasingly difficult to distinguish between our “online” and “offline” lives, so it’s hardly a surprise that regimes that wish to control their citizens — or even transform their citizens into “subjects” — do so by controlling the internet. It’s a scandal that even a single country is unfree, but across the world, governments are growing more restrictive and more repressive. These regimes actively ban services, put up firewalls, gather data, monitor critics and mass-produce lies.

Blockchain represents an alternative to this shift toward authoritarianism by enabling ad-hoc, censorship-resistant, peer-to-peer connections. An authoritarian state cannot seize a blockchain’s distributed P2P servers, nor can it flood the market with counterfeit cryptocurrency. The perfect blockchain doesn’t destroy economic, political or financial power, it merely distributes that power by using consensus to hold each other accountable to the truth of history.

We shouldn’t assume that all political power is wielded by explicitly political entities. Some of the largest blocs today are major tech companies and other multinational corporations, which often rival nation-states in influence and power. Where does their power come from? In many cases, it depends on the user data stored in their central servers, as well as the analysis of that data. Privacy and data-gathering scandals have been near-weekly occurrences for the past several years, and they show no signs of stopping.

After all, the biggest companies have more knowledge of their users than ever before. Google already has staggering amounts of personal data for most of its billions of users; after spending billions to acquire Fitbit, it will soon have even more. Netflix doesn’t just track what its viewers watch, it even auto-generates content thumbnails for individual users. Facebook is perhaps the most controversial data-gatherer: Mark Zuckerberg and his associates have received congressional summons to discuss just how grievously the company has abused public trust.

Although blockchain has genuine political potential, truly decentralized blockchains will require deviation from today’s practices. When the first Bitcoin (BTC) was mined in 2009 and 2010, just about any internet-ready computer could participate. The first Bitcoin found its way into dorm room laptops, aging internet cafe machines and PCs in rented studios. Anyone, anywhere — provided they were online — could mine Bitcoin.

As difficulty increased and Bitcoin’s value appreciated, however, centralization became a fact of mining. No longer could anyone with a computer successfully mine. Now, the miners were specialized machines in anonymous server farms clustered near cheap power sources. The technology became ever more powerful, but decentralization broke down.

Related: The Land of the Free: Why Decentralization Matters in the Crypto Republic

Let me be clear: Bitcoin still has a vital role to play in bringing blockchain technology to the masses. And the work it has done in providing a currency to people afflicted by authoritarian oppression and hyperinflation cannot be understated. But the limitations described above are real nonetheless, and future entries into the crypto landscape must strive to overcome them.

Blockchain and decentralization can serve as essential countermeasures to growing political and corporate authoritarianism. In countries that are already free, decentralizing tools grant greater freedom. They permit their users to opt out of systems that they believe are unjust — or even merely inconvenient. In authoritarian regimes, blockchain and related technology provide a way to evade injustice and to organize against it. These are the first steps in reclaiming the freedom that has degraded since the dawn of the 21st century.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tomer Afek is the CEO and co-founder of Spacemesh, a fair and distributed blockmesh operating system powered by a unique proof-of-space-time consensus protocol. A serial entrepreneur, Tomer has more than 20 years of experience across the tech, digital and finance industries, having co-founded and held C-level roles with ShowBox, ConvertMedia and Sanctum Inc. With Spacemesh, Tomer is on a mission to build the fairest possible decentralized economic infrastructure.

Will Ethereum’s Fundamentals Propel it Higher? Analysts are Conflicted

Ethereum has been closely tracking Bitcoin’s price action over the past several days and weeks, with BTC leading ETH to put some significant distance between its current price levels and recent lows, but the aggregated crypto markets now appear to be at risk of incurring further near-term downside.

Analysts are now debating whether or not Ethereum’s robust fundamentals will be enough to help propel the cryptocurrency higher, or if it will post further losses as Bitcoin’s recently incurred momentum begins stalling.

Ethereum Drops 2% as Analysts Target Further Losses

At the time of writing, Ethereum is trading down 2% at its current price of $152, which marks a notable decline from its daily highs of $157 that were set yesterday when bulls attempted to spark another rally.

In the near-term, ETH has been able to find some support in the lower-$150 region, as it has bounced multiple times this morning after visiting these levels.

It is important to note that Ethereum is currently trading significantly off of its recent lows of $130 that were set during the recent sell-off concurrently with Bitcoin’s downwards movement towards $6,500.

Hsaka, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that he believes Ethereum will drop slightly lower to $150 in the near-term, which could come about as a result of further BTC downside.

“Send $ETH to 150 posthaste,” he concisely noted in a tweet while referencing the chart seen below.

Will Fundamental Strength Help Propel ETH Higher?

One factor that analysts and ETH bulls alike have been closely watching is the DeFi trend’s impact on Ethereum, with a significant amount of the cryptocurrency being locked up as more individuals utilize DeFi initiatives.

Spencer Noon, a popular figure within the crypto industry, spoke about this in a recent tweet, noting that Ethereum’s year-over-year price gains do not match the amount of ETH that has been locked up in DeFi over the past year.

“Thanksgiving Price of $ETH: 2018: $121. 2019: $154 (+27%). The market can stay irrational longer than you can remain solvent, but I’m personally betting that price won’t lag fundamentals this good for much longer,” he explained in reference to a previous tweet that shows the meteoric growth of DeFi.

The coming months will likely offer the markets significant insight into whether or not Ethereum’s strong fundamentals will help propel it higher in the mid-term.

Featured image from Shutterstock.

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Bitcoin holds critical support level; where will it go from here?

Bitcoin’s bulls have built some serious momentum in the time since the crypto’s capitulatory drop that sent it to lows of $6,500, as they have been able to push its price up towards $8,000, with a break above this level potentially opening the gates for further gains.

The recent rally from $6,500 has also been technically positive for Bitcoin, as it marked a strong defense of a key support level that was in jeopardy, and bull’s ability to hold the crypto above this level may signal that significantly further gains are imminent.

Bitcoin surges towards $8,000 as bulls flex their strength 

At the time of writing, Bitcoin is trading down just nearly 3 percent at its current price of $7,520, which marks a slight climb from its multi-day lows of $7,000 that was set this past Wednesday when bears attempted to thwart BTC’s momentum.

Buyers quickly prevailed over sellers, however, as they rapidly reversed this momentum and sent the crypto surging towards $8,000, which is where it was met with some strong resistance that halted the rally.

At the moment, it does appear that Bitcoin is on the cusp of incurring another upwards leg, with TraderMayne – a popular cryptocurrency analyst on Twitter, telling his followers that he anticipates BTC to move up to its range EQ at roughly $8,600, which may prove to be a “super key level” for the crypto.

“$BTC: Not trying to call bottom but this structure looks pretty nice. We could move up to the range EQ and then reject and make another low. That said, no reason to be super bearish above the range low. $8.6k is the EQ of the range and of the yearly range, super key level IMO,” he noted.

Image Courtesy of Tradermayne

BTC bulls defend critical support level

Further adding to this potential bullishness is the fact that bulls have defended Bitcoin’s 21-month EMA and reclaimed its 89-week EMA, which are both key levels that analysts have been closely watching.

Mr. Anderson, a popular cryptocurrency analyst on Twitter, spoke about this in a tweet, saying:

“$BTC CME FUTURES: Bulls managed to hold onto the all important 21-MO EMA and managed to reclaim the 89-wk EMA. The plot thickens…”

Image Courtesy of TrueCrypto28

If Bitcoin is able to hold above these levels as the end of the year nears, bulls may lay the foundations for further gains as 2020 kicks off.

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Crypto Tidbits: Bakkt’s Bitcoin Futures Surge, UpBit Hacked for $50 Million in Ethereum, US Arrests Blockchain Researcher

Another week, another round of Crypto Tidbits. Surprisingly, Bitcoin (BTC), saw some relatively strong performance over the past seven days, gaining 2% according to Coin360. This came after the leading cryptocurrency tapped $6,600 in a surprise flash crash late last week, shocking investors the world over.

The past week was an interesting one for the industry at large: an Ethereum Foundation researcher was arrested by the U.S. for purportedly supporting North Korea, Bakkt’s Bitcoin futures saw an absolutely colossal week in terms of adoption and usage, and the chief executive of a Chinese exchange went missing, leaving the company without access to its cryptocurrency holdings.

Related Reading: Crypto Tidbits: Bitcoin Dives Under $8,000, Fidelity Bags Trust License, SEC Takes Second Look at ETF

Bitcoin & Crypto Tidbits

  • Bakkt’s Bitcoin Futures See Amazing Week: When crypto exchange upstart Bakkt launched its Bitcoin futures contract in September, few institutional investors were using the product. Bakkt’s market saw less than $5 million worth of daily volumes for weeks on end, with little sign of improvement. Though, over the past few weeks, the futures have seen a strong uptick in adoption. In fact, on Wednesday, Bakkt’s Bitcoin futures saw nearly $40 million worth of volume trade. And while Bakkt’s volumes are a sign of institutional trading interest, Bakkt’s open interest metrics are signs of institutions’ propensity to hold Bitcoin. Cryptocurrency data Twitter page Ecoinometrics recently noted that the open interest in the Bitcoin futures contracts has surged by hundreds of BTC over recent days. This implies that “some people are seeing the price dip as a good occasion to get in long.”
  • IDAX CEO Goes Missing, Crypto WIthdrawals Halted: The chief executive of IDAX, a lesser-known cryptocurrency trading platform purportedly in Shanghai, has disappeared off the face of the Earth. The exchange announced this in an announcement published on Friday morning, in which it was written that “since November 24th, IDAX Global CEO have gone missing with unknown cause and IDAX Global staffs were out of touch with him.” The exchange added that as a result of this, it will be halting all deposits and withdrawals as IDAX’s access to its cold wallet, which “stored almost all cryptocurrency balances for IDAX (including Bitcoin, Ethereum, and other assets),” has been “restricted.” Henceforth, the exchange has “drawn up and emergency plan about platform services, including our deposit/withdrawal service.”
  • U.S. Arrests Ethereum Proponent for “Assisting” North Korea: On Friday, the U.S. Attorney of the Southern District of New York State revealed something astounding: it, alongside individuals from the FBI and other authorities of the U.S. government, had arrested Virgil Griffith, a United States citizen at the Los Angeles Airport. As to why the individual was arrested, a press release indicated that the individual had “violated the  International Emergency Economic Powers Act (“IEEPA”) by traveling to the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) in order deliver a presentation… [on how to use technology] to evade sanctions.” Griffith, whose LinkedIn claims he is a research scientist for the Ethereum Foundation, was there for a state-sponsored blockchain event. Prominent members of the Bitcoin and cryptocurrency community have mixed reactions to this case.
  • HSBC to Use Blockchain to Manage $20 Billion Worth of Assets:According to a report published Wednesday by Reuters, HSBC will be using a blockchain-based custody platform dubbed “Digital Vault” to manage $20 billion worth of assets in “one of the biggest deployments yet of the widely-hyped but still unproven technology by a global bank.” HSBC representatives said that the company intends to have this done by March. This new HSBC platform will effectively bring formerly paper-based records of private placement investments onto a blockchain, reducing the “time it takes investors to make checks or queries on holdings.”
  • UpBit Hacked for $50 Million in EthereumEarlier this week, blockchain analytics services picked up on an interesting set of transactions from the wallets of UpBit, a Korean exchange. The transactions include multi-million transfers of Ethereum, Tron, EOS, and other top cryptocurrencies (not Bitcoin though) from UpBit-owned wallets to exchanges and “unknown wallets,” addresses left unmarked by these analytics firms. Eventually, UpBit came out to speak on the matter, revealing in an announcement that a 342,000 Ethereum (then valued at $50 million) transaction was suspicious. The translated version of the release does not contain the word “hack,” though many have taken the statement as a sign that the $50 million worth of cryptocurrency has been misplaced and is currently unretrievable. Upbit has confirmed that it will cover the funds with up to $51 million worth of its corporate funds, and has also revealed that it has moved all cryptocurrencies into its cold wallet to protect its customers.
Featured Image from Shutterstock

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Ethereum (ETH) 2.0 Upgrade May Revive Staking in 2020

ethereum staking

Ethereum (ETH) may bring another round of staking enthusiasm if it moves forward to further replace mining in 2020.

New Staking Projects Appeared in the Past Year

Staking coins may come in fashion again, as passive income and slow growth replace previous highly speculative uses. Staking is nothing new in the crypto space, but this time around, there is better infrastructure and more reliable projects.

The 2020 prediction comes from Alex Kruger and takes into account the staking success of Tezos (XTZ) so far.

The Tezos project offers reliable governance in the process of “baking”, and additionally, the custodial services of Coinbase offer a more reliable source of passive XTZ.

Instead of a vast array of staking coins, as in the past, passive income practice may be attracted to the most liquid altcoins, which manage to keep relatively stable prices.

Staking with Ethereum

ETH 2.0, the promised staking mechanism, will extend the culture of storing ETH coins. Currently, passive income for ETH is possible for schemes such as Maker, Compound, as well as exchange-based returns programs offered by Binance.

As ETH remains relatively stable, the coin’s new utility is as a source of passive income. However, staking also means at least some selling pressure as the rewards are monetized.

For Ethereum, staking may replace the lowered mining awards, as the difficulty time bomb still affects the network. But ETH is not the only coin to test staking. Other projects pivot to offering passive income, including the recently booming Chainlink (LINK).

Tezos “Baking” Grows on Wider Coin Adoption

Currently, Tezos offers one of the greatest passive annual income of 6.21% but combined with some inflation based on the growing supply of XTZ. Cosmos (ATOM) has annualized earnings of 8.52%. There are also coins offering outlandishly high annualized earnings, such as Livepeer at 78.6%. LTP, however, is extremely volatile and has lost 60% of its value since August.

ETH staking still has unclear parameters, ranging from staking a few ETH to thousands of coins. For now, it is uncertain what the rewards would be, but the annualized returns will aim to be relatively low.

Mining Bitcoin (BTC) remains a high-stakes activity with a great barrier to entry. Staking, however, may be a less costly mechanism for wider adoption. The only uncertainty about staking is access to the actual assets, as some of the coins may be considered securities based on offering passive income as a form of a dividend.

What do you think about staking passive income? Share your thoughts in the comments section below!

Images via Shutterstock, Twitter: @krugermacro

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Wall Street Still Doesn’t Get What Bitcoin Might be Used For

wall street confused about bitcoin

Despite being one of the most discussed topics in the last few years, Wall Street still can’t figure out the utility of Bitcoin.

Bitcoin Needs Greater Utility, Bakkt CEO Says

Adam White, CEO of Bitcoin futures exchange operator Bakkt, said that “there needs to be greater utility” for Bitcoin. Nevertheless, it didn’t stop Bakkt, a subsidiary of NYSE parent Intercontinental Exchange (ICE), to promote crypto adoption on Wall Street, even though it launched the crypto futures platform after several delays.

Speaking at a conference in New York, White said:

“There’s an argument that Bitcoin is a store of value, and acts like digital gold, and that is its use case. That may be true. It’s our thesis that the size of that pie will never be big enough to justify the aspirations and the opportunities that this technology brings.”

A recent poll involving crypto and blockchain top executives and CEO connected to VC firm Digital Currency Group showed that most leaders of the crypto industry (71%) expect BTC to be used as a store of value over the next year. 7.6% of the surveyed executives said the cryptocurrency wouldn’t be useful for anything.

Besides running the futures platform and custody service, Bakkt is trying to forge a real-world use case for Bitcoin. The company is collaborating with Starbucks to develop a payment system that would allow people to buy with BTC. However, Starbucks won’t store the Bitcoin coming from buyers, as the system will simply convert the cryptocurrency to US dollars. The service will become available next year.

Investors Don’t Care About Utility

Even with no real utility whatsoever, institutional investors are trading Bitcoin like never before. While the Bitcoin quotations have declined by over 17% in November, more investors are willing to buy, probably trying to benefit from the lower price.

Thus, Bitcoin trading volumes on Bakkt hit a record high on Wednesday, to 5,671 BTC or $42.5 million. For comparison, the previous record, which came three days before that, was at $20.3 million.

On Thursday and Friday, Bakkt saw the third and second-best trading days, with volume exceeding $21 million. As for the open interest in Bitcoin, it hit the record high yesterday at $4.6 million.

bakkt bitcoin futures volume

This demonstrates that institutional investors don’t care about Bitcoin’s utility and regard the cryptocurrency as a great investment instrument.

Do you think Bitcoin will be used for payments with major retailers? Share your expectations in the comments section!

Images via Shutterstock, Twitter: @BakktBot

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Bitcoin at Risk of Reversing Upwards Momentum as Bears Fight Back

After making a strong attempt to break above $8,000 yesterday, Bitcoin (BTC) lost the momentum that it had been gaining over the past couple of days and has begun to descend back down towards the lower-$7,000 region.

The cryptocurrency’s inability to break above $8,000 has led analysts to conclude that BTC could be at risk of reversing its recent uptrend, meaning that significantly further losses could be imminent.

Bitcoin Loses Momentum as Bears Defend $8,000 Resistance

At the time of writing, Bitcoin is trading down just over 2% at its current price of $7,600, which marks a slight retrace from its daily highs of just under $8,000 that were set at the peak of the recent rally that was first sparked when BTC bounced from $6,500.

If Bitcoin fails to garner any upwards momentum in the near-term, it is highly probable that it will see further downside in the coming hours and days, as it may signal that $8,000 is an insurmountable resistance level that will suppress any potential bullishness.

CryptoBirb, a popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, telling his followers that BTC must break and hold above $7,960 in order for it to have a chance at moving up towards $7,960.

“$BTC must reclaim 7960 to swing 9.1k (note bullish divergence). Early signal is 3D close above MA100. Anything below is MTF~5.4k-oriented,” he noted while referencing the chart in the below tweet.

Will Further Downside Reverse the Recent Uptrend? 

Assuming that Bitcoin faces further near-term downside, the recent uptrend experienced by the crypto in the time since it surged from lows of $6,500 may be in peril of being reversed.

Josh Rager, another popular cryptocurrency analyst on Twitter, mused this possibility in a tweet, telling his followers that BTC’s recent highs could mark a local top.

“$BTC could be reversing here after a short term uptrend. Remember, the overall trend has been down, though price can’t move straight down and this relief was needed short term. Price could have certainly hit local top here as we move closer to the weekly close,” he bearishly noted.

Although it does remain unclear as to whether or not this bearish possibility will play out in the coming hours and days, an inability for Bitcoin’s bulls to propel it back up towards $8,000 could mean that further downside is inbound.

Featured image from Shutterstock.

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IMF Calls on Georgia to Evaluate Crypto Income for Trade Balance

georgia crypto bitcoin mining

The International Monetary Fund (IMF) recommends that Georgia include the income from crypto trade and mining in its foreign trade balance reports.

IMF Welcomes More Transparency on Crypto Mining

The IMF’s suggestion is quite relevant, given that Georgia is currently the 4th largest producer of digital currencies from mining operations. Thus, the government should take into account the income from this kind of activity.

The media reported that representatives of the IMF had already met with leaders of large crypto-oriented companies working in the mining sector. Miners were told to account for foreigners who buy cryptocurrencies like Bitcoin from local producers. In other words, Georgia is an exporter of Bitcoin. Yet, no-one seems to know how much US dollars this activity brings to the economy.

The IMF said:

“Along with existing programs, the IMF is working with Georgia on other matters, including on improving statistics. We are consulting on improving the methodology for calculating the foreign trade balance, and in particular, we are actively discussing the possibility of introducing accounting for cryptocurrency mining.”

Georgia’s Trade Balance Should Reflect Crypt Exports and Contribution to GDP

The IMF experts agree that crypto mining accounts for a decent share of Georgia’s economy. Therefore, the government should watch the industry closely. Now the international organization is trying to figure out the real contribution of crypto mining to the country’s gross domestic product (GDP).

Mercedes Vera-Martin, Deputy Division Chief at IMF, commented:

“Cryptocurrency mining has both positive and negative effects on the country. If cryptocurrency is sold abroad in large quantities, then why should this not be taken into account in the foreign trade balance?”

She stressed that mining Bitcoin requires the import of goods, probably hinting to specialized equipment like ASICs along with materials for building the facilities. However, given that the import materials are physical, they are taken into account in official trade balance statistics. Thus, reporting on imports and ignoring exports significantly distorts the general picture.

Last year, the National Bank of Georgia calculated the number of digital wallets registered in the country. The discovered 5,300 wallets by then, which held the equivalent of $708,000. The IMF recommended that the National Bank measure the number of wallets registered by non-residents.

The IMF has also prepared a special questionnaire that should guide Georgia’s official departments to estimate the total volume of Bitcoin produced in the country and sold abroad.

On a side note, Georgia is the home of Bitfury – one of the largest Bitcoin miners in the world. At one point, Bitfury accounted for 15% of all mined BTC, though this figure has declined.

As of 2017, Georgia’s top exports were Copper Ore ($518 million), Ferroalloys ($318 million), Cars ($195 million), Wine ($172 million) and Gold ($137 million).

Crypto Mining Accounts for Over 10% of Georgia’s Electricity Consumption

Earlier in November, David Chapashvili from Green Energy said in a BBC podcast that Georgia’s Bitcoin mining generated an annual revenue of $0.5 billion. According to him, miners use a lot of electricity. For example, Bitfury alone consuming about 4% of the total power produced in Georgia, which translates into 389.7 million kilowatt-hours. However, there are many micro-miners that should be taken into account. Considering all miners operating in the country, Chapashvili said:

“I think it goes more than 10%. It consumes more electricity than big industries that Georgia has and is beating all direct consumers.”

Georgia has been attracting tons of miners thanks to its cheap hydro-electricity costs and friendly taxes. For Chapashvili, Georgia is only behind China and Venezuela when it comes to mining.

Nevertheless, not everyone is happy with the situation. The huge power consumption by miners sparked local protests here and there, mainly because of power outages in Northwest.

Do you think other countries should also report on the crypto activity inside their territory? Share your thoughts in the comments section!  

Image via Shutterstock

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Bitcoin Fails to Break $7.8K and Now Risks Reversing to New Lows

Bitcoin price failed to break through the $7,800 resistance and now likely to backtest levels that have recently flipped into new support.

Whereas Bitcoin (BTC) was hovering at $6,500 earlier this week, it has since rebounded to the resistance zone of $7,800 but failed to break it on the first attempt.

Crypto market daily performance

Crypto market daily performance. Source: Coin360

As the short term trend is still upwards, should traders be cautious about the recent price action? Let’s take a look at the charts. 

Bitcoin still inside the downwards channel

The more notable timeframe — the daily in this case  — is still showing a downward trending channel since the top at the end of June 2019. 

BTC USD daily chart

BTC USD daily chart. Source: TradingView

This downwards trending channel is still active as the price bounced back from the “support” line and the 0.618-0.65 golden ratio Fibonacci level earlier this week. 

The green zone around $6,500-6,800 can still be seen as a significant support level here, while the upwards red/yellow area is showing significant resistance. The resistance area is in the $8,000-8,200 zone, which is also around the trendline of the downwards channel.

The total crypto market cap rejected at first resistance

Total crypto market capitalization daily chart

Total crypto market capitalization daily chart. Source: TradingView

The total market capitalization of crypto is showing a similar view as BTC/USD at this point. The market cap held the green zone as support — which is crucial — but couldn’t break the first resistance. 

The overall market cap chart often provides a more unobstructed view than Bitcoin regarding price movements and, in this case, is also showing some clear signals. 

Total market capitalization chart

Total market capitalization chart. Source: TradingView

In this regard, the price retraced to the earlier resistance in April of this year. 

Currently, the price has tested whether that level can be confirmed support and did just that with a bounce from $175 to $207 billion. However, the first resistance at $207 billion was rejected, which suggests a potential retest of the purple area is in order. 

If the purple area manages to hold, the total market capitalization is moving inside a vast falling wedge pattern, which is likely to break out in January 2020.

First resistance rejected at smaller time frames

BTC USD 4 hour chart

BTC USD 4 hour chart. Source: TradingView

The BTC price has seen a surge of $1,300 during the week from $6.5K. However, it was not able to break through the next resistance at $7,800. But why is this a key resistance level? 

The left side of the chart shows that the price bounced several times at this support level before it broke down. Such a level is a reference point for traders looking for selling opportunities (or opening shorts), and thus, the price reversed and confirmed the $7,800 level as resistance. 

Before this test occurred, the price first flipped the $7,350-7,400 resistance into support. In this regard, the price is now stuck in a range, where these numbers are now defining the bounds. 

Is that bad? No, the price has been hovering inside such a range for the entire month of October before volatility kicked in

Bullish scenario


BTC USD bullish scenarioBTC USD bullish scenario. Source: TradingView

Now, several scenarios can be classified as bullish or bearish on multiple timeframes. As long as $7,350-7,400 remains support in the near term, another push towards the red/yellow area can occur with a target of $8,000-8,300.

Personally, I am not expecting to see an immediate breakthrough as that would be the first attempt to be testing this resistance. Usually, resistances don’t get broken on the first attempt. 

For the bulls, breaking and flipping this $8,000-8,300 level into support would be ideal, which would also cause the price to break out of the downtrend. If the price is not able to do this, it will continue to move within this downwards channel. 

Bearish scenario 

BTC USD bearish scenario 1

BTC USD bearish scenario 1. Source: TradingView

Now, I will explain multiple bearish scenarios as a few different ones are possible. The first scenario is a breakdown towards $7,350-7,400 area for a test of support (as that’s a significant support area). 

A potential weak bounce to $7,700 can occur from this level of support, which I’d classify as a short opportunity before the price is ready to break downwards to $6,900-7,000 area.

BTC USD bearish scenario 2

BTC USD bearish scenario 2. Source: TradingView

The second bearish scenario is classified as bearish and bullish at the same time. Why? Well, if the price can hold the $7,350-7,400 and bounce significantly from it, another push to the upper resistance zone can be expected.

However, if the price is not able to break through $8,000-8,300 again, then that would be a great short opportunity before another move down towards $7,000. 

In this case, some more upward momentum could occur. Though, I’d be personally looking to short rather than long here at these levels should this scenario play out. 


As a whole, recent price action has presented a nice v-shaped bottom that occurred at the $6,500 level through which the 0.618-0.65 Fibonacci level and trendline held up.

However, does it mean that the downwards pressure is over for now? I don’t think so. To confirm a bottom, I will be expecting some more backtests of lower levels in the $6,900-7,000 region (green zone) in the coming months.

Nevertheless, the macro perspective is still bullish, and in this regard, I still see this retracement as a macro “buy the dip” opportunity if the green zone around $6,500-6,800 can hold. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Horizen (ZEN) ranked first by active nodes, while Bitcoin (BTC) second

A renowned analyst is making a compelling case for ranking cryptocurrencies. Instead of taking into account their market capitalization, he puts emphasis on the number of nodes instead.

CoinMarketCap rankings are “nonsense”

Aat de Kwaasteniet, a former electrical designer at Vialis, explained in a Medium post that the way CoinMarketCap ranks cryptocurrencies is “highly questionable.” He specified that the price of a given crypto should not be the only factor to consider when raking these assets.

Under CoinMarketCap’s gauge, the higher the price of a digital asset in combination with the higher the number of tokens in circulation, the better positioned they would be. Kwaasteniet maintains that the industry puts a lot of weight on a “high market cap quotation,” but this value is “very fictitious.”

Kwaasteniet explained:

“Let’s say, John launches and cryptocurrency and calls it JohnDoeCoin. He sets up the blockchain in such a way that at the beginning there are 100 million JohnDoe’s (the so-called pre-mined tokens). Then, he goes to his friend William and asks if he wants to buy one JohnDoe from him for €10. According to the market cap definition, JohnDoeCoin now has a market cap of €1 billion and CoinMarketCap ranks it around the 10th place.”

The analyst believes that this way of raking cryptocurrency is “nonsense.” He suggests that instead, cryptos should be ranked based on the “nodes/peers that are active in the network and are involved in checking/approving the transactions.”

Rankings by number of nodes

Kwaasteniet stressed that for some tokens the only data available was provided on their own blockchain explorer. But, not all nodes in the network are counted in most cases.

On Nov. 24, for instance, the top 10 cryptocurrencies by the number of nodes/peers that were connected to their networks were: Horizen (ZEN), Bitcoin (BTC), Ethereum (ETH), Zcoin (XZC), PAC Global (PAC), Polis (POLIS), Dash (DASH), Zilliqa (ZIL), DigitalNote (XDN), and Gulden (NLG).

Crypto Rankings by Active Nodes
Cryptocurrency Rankings by Active Nodes. Source: Medium

It is worth noting that this list represents a snapshot of how many nodes were connected on Nov. 24. And, these values can vary at any time. Kwaasteniet believes that this way of ranking cryptocurrencies is “fairer” and serves the purpose of Bitcoin’s developer, Satoshi Nakamoto.

He concluded:

“It is fairer to make a comparison between [cryptocurrencies] that have made more or less the same start and that have obtained and enlarged their circulation supplement through mining as Satoshi Nakamoto intended.”

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“All-Knowing” Bitcoin Fractal That Predicted Drop to $6,600: BTC to Fall 20%

Bitcoin’s precipitous drop to $6,600 seen earlier this month caught many traders aback; nearly no one, not even the top traders and analysts, expected for that price action to play out as it did in real life. Few predicted the subsequent bounce to $7,800, where BTC sits as of the time of writing this, too.

Though, one trader has been calling the moves all along, using a lesser-known and slightly unorthodox method of analysis to predict the directionality of the Bitcoin and cryptocurrency market.

Related Reading: Make or Break: Bitcoin Price Closing In On Key Monthly Support Level

Bitcoin Fractal Implies Impending Doom

Over the past few months, a popular trader on Twitter, NebraskanGooner, has been touting what is known as a “fractal” via his social media pages.

A quick aside for those unaware of what a fractal is: a fractal, in financial markets, is when the historical price pattern or direction of an asset is reflected/seen again on a different time frame and/or for a different asset. While some analysts see them as pure coincidences, analyses have found that fractals can work well for Bitcoin and other cryptocurrencies, potentially due to the inherent cyclicity of this market.

Related Reading: Dr. Doom: Ethereum Still a Long Way From $0, Its True “Fundamental Value”

Nebraskan’s fractal has been extremely accurate over the past few weeks. In fact, it predicted Bitcoin’s dramatic price drop to $6,600 weeks before it took place, and the subsequent recovery to nearly $8,000 seen over the past few days.

The same fractal, which is an overlay of one of Bitcoin’s previous market cycles, suggests that Bitcoin’s trend line breakdown retest, which took place in the previous market cycle that is being fractaled, is complete, implying that BTC has found a local top at $7,800. Should the fractal continue to play out, BTC will head towards the $6,200-$6,300 region in the coming two-odd weeks, which would mark a drop of 20%.

What’s interesting is that the drop has already started to take place. As of the time of me updating this piece, the leading cryptocurrency has slipped to $7,400, putting in a local top right where the fractal said that a top would be put in.

Related Reading: Altcoin Returns to ICO Price After 11,100% Run: Bitcoin Dominates Crypto Market
Featured Image from Shutterstock

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459 Days Until BTC Hits Its Longest Streak Without a New All-Time High

459 Days Left Until BTC Surpasses Days Between the Last All-Time Price High

Since bitcoin hit its all-time high (ATH) in December 2017, crypto enthusiasts have wondered if BTC will touch or surpass it again. After the ATH in November 2013 at $1,156 per BTC, it took 1,170 days to touch the next ATH at $19,891 per coin. To many observers, the downtime has been very long after the rough crypto winter of 2018, but so far it’s only been 711 days since the last price high.

Also Read: Bakkt’s Bitcoin Futures Shatters Records Amid Spot Market Turmoil

BTC Traders Patiently Wait for the Next Bull Run

Digital currency and BTC prices rebounded after the fall in 2018 but not everyone is convinced the bearish sentiment is over. Optimism exists because on December 7 at approximately 8:05 EST, BTC prices dropped to a low of $3,306 per coin but since then BTC has regained at least half of the percentage losses. Positivity jumped back in the summer when BTC rose 320% from the December 2018 low to a high of $13,311 on June 27. But after that, expectations dropped when BTC prices slid to the $7K region during the last week of October. The dip made people wonder if the crypto winter was still alive and well. However, on October 24 BTC prices popped again from a low of $7,446 to a high of $10,021 on October 26. Since then BTC prices have been dragging low again and 27 days later the value dropped under $7K to a low of $6,400.

459 Days Until BTC Hits Its Longest Streak Without a New All-Time High

BTC has gained 5-7% in the last seven days and most digital asset markets seem to be in a recovery phase after the drops in value. One way to figure out how much longer it will be until the next ATH is by measuring how long it’s been since the last BTC price high. Historical data shows that between November 30, 2013 when BTC surpassed $1,100 per coin it took 1,170 days to surpass the 2013 ATH on February 13, 2017. Various factors drove the price up in 2013 like Mt Gox bots, the Cyprus banking crisis, and Chinese demand. Similarly, feverish retail demand, excitement for regulated BTC futures, economic hardships in Greece and Venezuela, South Korean demand, and the initial coin offering (ICO) boom helped fortify the 2017 ATH. When the Chicago Board Options Exchange (CBOE) initiated its BTC futures markets and CME Group (Chicago Mercantile Exchange) followed with its BTC derivatives products, spot markets were on fire. From February 13 to December 17, 2017, BTC jumped 1,629% to its current ATH of $19,891 per coin.

459 Days Until BTC Hits Its Longest Streak Without a New All-Time High
BTC prices all time.

711 Days Since the December 17 All-Time High

Another set of factors helped the price slide after touching near $20K per BTC. Crypto enthusiasts witnessed the regulatory crackdown in South Korea, heightened regulatory guidelines in the U.S., EU and other regions worldwide, and the ICO market got slammed with regulations and criminal enforcement. Still, there are 459 days left if we look at the days between the 2013 ATH to when it touched again in 2017. So far there’s only been 711 days between the ATH of $19,891 per BTC. Since the network launch on January 3, 2009 up until November 30, there’s been approximately 3,983 days between.

459 Days Until BTC Hits Its Longest Streak Without a New All-Time High

Data also shows that BTC has been on the up roughly 3,573 days of its existence which turns out to be 89% of its life cycle. During the downtimes, however, crypto enthusiasts grow very impatient and this is quite prevalent on social media and forums at the end of 2019. Investing in cryptos is really not good for health, years of bear markets followed by a few days of bull run hysteria — And FUD all along,” one person remarked on Twitter this week. “707 days of bear market — I think we need a break please,” another crypto proponent said on Sunday. On November 25 after BTC prices were drifting downward another trader on Twitter stated:

In terms of [percentages], we’re almost exactly where we were this many days after the bottom in 2014. The explosion out of the bear market was too quick and too irrational. This prolonged correction is normal. Markets never repeat, but they rhyme. This is just the 3rd verse.

The wait has been long and many people believe that being patient will reap the most rewards as the overall value of cryptocurrencies, in general, is headed northbound. As’s Graham Smith reported on November 24, data shows that despite the market turbulence, BTC’s support lines remain intact. Just as no one was certain when the bear market would end after the 2013 ATH, this time around enthusiasts and traders are still guessing wildly. Analysts can log trendlines and trace historical patterns and we can measure days between ATHs as well, but we are mostly dependent on guesstimates and faith.

What do you think about the days between the 2013 ATH and the current days between the $19K BTC ATH and now? Let us know what you think about this subject in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

Images via Shutterstock, Trading View, Markets, JP Morgan, and

Want to create your own secure cold storage paper wallet? Check our tools section. You can also enjoy the easiest way to buy Bitcoin online with us. Download your free Bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

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Criminal Activity in Crypto: The Fact, the Fiction and the Context

An estimated 0.2% of all XRP transactions are used for illicit activity. How true is this figure and how does it impact the industry?

It’s the clichéd rhetoric of choice for anyone seeking to discredit crypto. An ace in the hole for any argument against its proliferation. The go-to thesis for those who know very little about cryptocurrency but wish to appear otherwise. 

The idea that cryptocurrencies are solely utilized within illicit activities has become both a tool for mass media to disparage the industry and, for many, a reason to steer well clear. But besides being a tired stereotype, it may also be true.

That’s one of the prevailing problems with stereotypes: While many derive from truth, they often represent an oversimplified — and sometimes twisted — version of it. It is true, for instance, that cryptocurrencies are used to facilitate criminal activities. 

However, it is also true that any form of value will be used for illegal purposes, whether through crypto or fiat. That being said, digital coins account for just a fraction of the crimes funded with cash — which is also an undeniably more popular means of exchange.

Nevertheless, a lack of regulation and relative anonymity has granted cryptocurrencies infamy along with an air of immorality. In fact, several reports on cryptocurrency’s penchant for illegality have been published in the past two weeks alone. 

XRP’s criminal undertow

On Nov. 20, cryptocurrency forensics and analysis firm Elliptic published an analysis on XRP transactions. Within their findings, the firm disclosed that $400 million worth of XRP had been used for “illicit activity.” This represents just 0.2% of total transactions, something which Elliptic suggests makes the vast majority of activity “legitimate.” Still, $400 million is no insignificant number. This is especially true for XRP, which was designed with institutional and commercial financial systems in mind.

Coincidentally, Elliptic’s reasoning behind exposing XRP’s clandestine transactions was to warn institutional clients before any potential entanglement. Dr. Tom Robinson, co-founder and chief scientist of Elliptic explained the position to Cointelegraph:

“Any payments system, and especially open ones such as XRP, will be used for some level of illicit activity. What is critical is that this activity is identified, so that it can be mitigated.”

Robinson is of the opinion that by shining a light on such illicit activity, the company is helping the regulated financial institutions to engage with crypto assets such as XRP, adding that: 

“They now have access to tools that allow them to identify whether they have received the tiny fraction of XRP funds that originate from illicit activity, and fulfill their AML obligations by reporting it.”

However, the firm declares that support for XRP is still in beta — a fact that could plausibly compromise the legitimacy of the findings. 

Similarly calling the efficacy of Elliptic’s analysis into question was Ripple, the company behind the XRP token. Speaking to Cointelegraph, a Ripple spokesperson questioned the accuracy of data:

“Without more information or a clear methodology shared by Elliptic, it’s impossible to comment on the validity of this report.”

The Ripple representative also stated that the analysis could be little more than a publicity grab:

“We question the motive of this announcement, considering the report and its solution are not yet available, and these activities only account for 0.2% of XRP transactions — it seems like a PR stunt to leverage a better known name.”

As for Elliptic’s modus operandi, Robinson remained fairly tight-lipped, explaining the methodological basics while refraining from too much detail, although he did mention that a number of techniques are used: “We identify crypto-asset wallets that are associated with illicit activity, ranging from dark marketplaces to ponzi schemes or exchange hacks.” When pressed on the dangers of wrongly accusing an address, Robinson urged the efficacy of Elliptic’s methods: 

“This is a risk that we are very conscious of, and which we address in a number of ways. For example we will only link a crypto address to an identified actor if we have clear proof of this attribution.”

PR stunt or not, in order to glean some accord on the reported figure, it’s crucial to get an idea of statistics concerning comparable tokens. With this in mind, Cointelegraph reached out to blockchain analytics firm Chainalysis.

Maddie Kennedy, the director of communications for Chainalysis, remarked that while the firm’s own investigations into XRP are ongoing — and therefore, non-disclosable — analyses on other tokens revealed a fairly sizable chunk of criminality:

“We looked at 27 different cryptocurrencies and found that 0.4% of that transaction value is sent to an illicit entity. While that may seem like a small percent, that equals approximately $3.8B from January to October 2019.”

To clarify, that’s 0.4% of the total transaction value of 27 different cryptocurrencies. Given that 0.2% of total XRP transactions were presumed to be for illicit purposes, Eplipic’s findings are reasonably significant.

However, these figures are overshadowed by the ones the company found when conducting a similar study on Bitcoin. It suggests that dark web purchases currently account for approximately 0.5% of all BTC transactions. Robinson expanded on why he believes this figure is higher for Bitcoin than it is XRP. 

“XRP is not as liquid as BTC, XRP is more centralised than other crypto-assets, and perhaps more associated with traditional finance — this might make it less attractive to illicit actors, who might prefer something more decentralised and ‘neutral,’ such as bitcoin.”

Rotting from the inside out?

While the nefarious use of crypto is still prevailing to some extent, crime within the industry seems to be boldly flourishing. According to a recent report from blockchain forensics firm CipherTrace crypto crimes have increased by 150% over the last year. Digital asset theft and fraud now total $4.4 billion, almost tripling the $1.7 billion witnessed in 2017.

Large-scale robberies are the main reason behind such a year-on-year rise, with alleged Ponzi schemes such as PlusToken claiming the lion’s share. Billing itself as a high-yield investment program, PlusToken is the latest project being discussed as an exit scam, with the report stating that it has appropriated $2.9 billion from its investors/victims.

Related: QuadrigaCX Users Lose $190M as Speculations Over Cotten’s Death Swirl

Another high profile fraud case cited by Ciphertrace was that of the QuadrigaCX, a Canadian-based crypto exchange. A scandal involving the mysterious — and highly contested — death of the exchange’s CEO, and a misplaced mater key. All of this amounted to a loss of $190 million in cryptocurrency.

And that only scratches the surface. According to the report, many more crypto crimes aren’t even getting air time due to their relatively insignificant size compared to bigger heists.

The latest incident took place on Nov. 27, Lee Sirgoo — the CEO of crypto exchange Upbit — confirmed a theft had taken place on the platform. Hackers allegedly succeeded in compromising the exchange’s hot wallet, gaining access to, and absconding with, 342,000 Ether ($51 million) in user funds.

Related: Upbit Promises Swift Reimbursement, Theories Over Missing Funds Swell

Putting it all in context

Intriguingly, even amid the rising prevalence of crypto crime, the use of cryptocurrencies for illicit activities appears to be dwindling. Back in 2017, a study by the University of Oxford found that an extensive 44% of all BTC transactions were felonious in nature, associated with financing criminal activity. In contrast, in July 2019, a Chainanalysis report suggested that less than 1% of Bitcoin activity involved crime.   

Yet, the stigma still persists. Detractors often drum up conjecture using the (mostly baseless) argument of cryptocurrency’s more nefarious use cases. Ironically, many of these provocateurs are proponents of fiat money, the stock market, or even gold — markets that hold their own wicked transgressions.

So, while it can unquestionably be argued that there is some criminal undergrowth within crypto, what about fiat? Earlier this year, U.S. Treasury Secretary, Steven Mnuchin, slammed cryptocurrencies for their part in funding illicit activity. 

briefing on the regulation of crypto observed a hyperbolic reaction from Mnuchin, who advised that digital currencies were a threat to national security, saying “Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity.” However, while attempting to cement the stigma around crypto criminality, Mnuchin failed to provide any clear context.

Luckily, providing a distinct frame of reference was Bitcoin research firm Messari. Following Mnuchin’s damning appraisal of crypto, researchers undertook plotting BTC expenditure on the darknet against dollars laundered.

Employing data from the United Nations Office on Drugs and Crime as well as Chainalysis, researchers revealed that U.S. fiat was used an incredible 800 times more often to launder money than Bitcoin was to fund dark net activities.

In the end, crypto — just like any other value-based asset — will continue to be used for illicit purposes. The best that can be done is to actively track, monitor and blacklist illegal transactions to ensure they don’t slip by unnoticed. Ironically, that’s much easier to do with crypto than it is with cash.

Russia: De Facto Crypto Ban Will Be Hard to Achieve, Official Says

russia crypto ban difficult

Russia may prohibit crypto payments for goods and services, but achieving such a ban might be quite difficult. This is the conclusion of Anatoly Aksakov, Chairman of the State Duma Committee on Financial Market.

Ban Enforcement Might Be Challenging

Aksakov told local media that enforcement on the use of crypto for payments is difficult from a practical perspective. The official commented:

“In the draft law on [digital financial assets], these instruments (cryptocurrencies) were prohibited. Accordingly, other bills were being prepared in parallel; [they] were aimed at introducing responsibility for conducting cryptocurrency trading on the territory of the Russian Federation. While all this is being negotiated for quite a while, law enforcement has questions. Maybe this is one of the reasons that so far these bills have not been agreed upon.”

The official stressed that while it was not easy to enforce such a ban in Russia, it can be useful at least to stop conscientious citizens. Meanwhile, those who are all in cryptos will continue to use them despite the ban.

Besides this, Aksakov said that the implementation of such a ban is hindered by the lack of a clear legal definition of what cryptocurrency is. He said:

“Money substitutes are banned in Russia. So far, there is no clear definition yet that cryptocurrency is a money substitute. The ruble is the only means of payment, but [other fiat] currencies are used as well. Therefore, all these issues require a legal definition so that law enforcement agencies could do their work more conveniently. Is it a money substitute? Or is it a digital currency?”

Bank of Russia Doesn’t Give Up its Anti-Crypto Stance

The Bank of Russia has spoken against the legalization of cryptocurrencies on several occasions, citing money laundering risks and other issues. The bank’s press service told local media that the ruble was the only legal tender on the Russian territory. The high volatility in the crypto market is another aspect that the regulator doesn’t welcome. The Bank of Russia would prohibit crypto operations the way China did in 2017, though the government is still pondering the pros and cons.

The State Duma has already passed the draft law on “Digital Financial Assets” in a first reading. While the draft introduces definitions on cryptocurrency, token, and smart contracts, Russian experts do not agree on what this draft means.

Do you think Russia will follow in the footsteps of China in banning crypto? Share your thoughts below! 

Image via Shutterstock

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Bakkt Boss is the Choice for Vacant Georgia Senate Seat

bakkt boss offered georgia senate seat

Endorsed by Gov. Brian Kemp, Kelly Loeffler, CEO of the Bakkt bitcoin futures exchange, will be offered a US Senate seat next week, 

Bakkt Boss Takes Hot, Disputed Spot in Senate

Loeffler will displace the previously offered candidate, U.S. Rep. Doug Collins, defying the expectations for appointing the long-serving congressman. Her appointment has the aim of building up a female presence in the Georgia branch of the GOP, hopefully building up the party’s appeal to women, reported AJC.

But this also brings in one of the most prominent Bitcoin business firm executive and proponent into the mainstream US political space. Loeffler will be the second woman in history to serve the Senate for the state of Georgia, replacing Republican Johnny Isakson.

Loeffler may be more famous for her political role, than her role as a financial executive. But the name of the Bakkt exchange may just grow more prominent. Her appointment is expected to be announced early next week, barring last-minute changes.

Kelly’s application came as a surprise, just hours before the deadline, setting up a surprise appointment requirement. The seat for Loeffler will be a disputed one, potentially of interest to several Republican – and possibly Democrat candidates.

The potential appointment of Bakkt’s boss lady was met with hostility, as the Collins candidature was seen as more favorable and strongly supported by the US President Donald Trump.

Bitcoin Futures Operator’s Influence Grows on BTC Volatility

The appointment arrives just days after Bakkt flexed its strength, constantly growing its volumes and potential influence on the bitcoin ecosystem. BTC futures volumes are already reacting to heightened speculation, offering a counter-balance and inviting mainstream buyers.

At this point, it is uncertain how the political acceptance of Loeffler would affect the reputation of Bakkt. The BTC market is removed from politics, focusing mostly on price discovery and a battle of bulls and bears. Futures markets offer a direct gateway for new entrants to speculate on the price moves of bitcoin – while avoiding actual ownership.

Even with the Bakkt futures, traders may choose to roll over the contract instead of taking delivery.

The past week saw a series of volume and open interest records on Bakkt, though growth remains volatile.

In 2019, the bitcoin futures market became more influential, swaying BTC’s price based on dollar-denominated speculation.

The benchmark cryptocurrency moved to 00, still aiming to establish ground above the $7,800 level and rally further. Weekend volumes remained relatively high above $18 billion in the last 24 hours.

What do you think of Loeffler’s appointment to a US Senate seat? Share your thoughts in the comments section below!

Images via Shutterstock, Twitter: @BakktBot

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Scalability Enhancements Kept Bitcoin Decentralized: BitMex Research

Bitcoin node sync would be impossible without the scalability improvements implemented in the node software, according to BitMex Research.

Bitcoin (BTC) node synchronization would be impossible if it were not for the improvements that have been made to the software, according to the research arm of crypto exchange BitMex.

BitMex Research measured the Initial Block Download (IBD) times of Bitcoin Core software releases from 2012 to 2019 needed to download the blockchain and verify it and shared their conclusions in a blog post published on Nov. 29.

The research team claims that the older version of the Bitcoin Core software may be impossible to synchronize now and that the scalability improvements made to the software are essential to the operation of the network:

“Older versions of Bitcoin struggled to get past the pickup in transaction volume which occurred in the 2015 to 2016 period. Therefore we conclude that without the software enhancements, an initial synchronization today could be almost impossible.”

Bitcoin initial block download time in days — an average of three attempts

Bitcoin initial block download time in days — an average of three attempts. Source: BitMex

The team also obtained versions of Bitcoin Core prior to 0.8.6, but those versions could not synchronize past the 2015-2016 period. The team also tried to run old software on considerably powerful hardware but to no avail. The researchers noted: 

“We then even tried running Bitcoin Core 0.7.0 on our brand new local machine, with 64 GB of RAM and 8 Intel i9 processors, however, the node was still unable to get past 2016. [...] The large reductions in IBD times and the inability of old nodes to fully synchronize indicate that if it were not for these scalability enhancements, by now Bitcoin would be essentially dead, even if users had the highest specification hardware available.”

The rate of improvement slowed down

The most significant improvement in speed took place after Bitcoin Core version 0.12.0 when developers adopted a signature verification library purpose-built for Bitcoin in place of a standard one. 

This particular version of the node software also does not validate the signatures of Segregated Witness (SegWit) transactions since it did not support them, which further cuts sync times.

Bitcoin initial block download time in days

Bitcoin initial block download time in days. Source BitMex

Interestingly, until Bitcoin Core 0.14.0 the scalability improvements seemingly kept the pace and maintained the sync times in a relatively narrow time range. After those initial releases, the popularity of the Bitcoin network and its size started to grow much faster than scalability improvements made to the software, resulting in longer sync times. The BitMex research team concludes:

“The data also shows that technological innovation is unlikely to keep up with the growing blockchain going forward and that IBD times will increase.”

Much of the focus in Bitcoin development was devoted to preserving decentralization, which also means keeping the hardware specifications needed to run a node of the network as modest as possible. 

In order to lower requirements, developers also kept a relatively low four-megabyte block weight limit (with SegWit) and a relatively high block time of 10 minutes, which has kept the growth of the blockchain’s size in check.

Currently, the size of the Bitcoin blockchain is 293.37GB, with an average block size of just over 1 megabyte. There are also over 9.5K reachable nodes around the globe today, according to monitoring resource Bitnodes.

As Cointelegraph recently reported, the latest Bitcoin Core software update,, further improves on scalability by using Bech32 that natively supports SegWit transactions.

European AML Regulations Follow the US Path With a Six-Years’ Delay

Next year is to be crucial for the crypto industry in Europe, when the EU Fifth Anti-Money Laundering Directive will be transposed into the national legislation of each EU member state.

In January 2020, the regulatory landscape for crypto businesses will completely change in the European Union in comparison with the last decade — and these changes will touch all those who store clients’ crypto funds or provide fiat-to-crypto exchange services, at minimum.

Not long ago, the Anti-Money Laundering regulations were extended to cover cryptocurrency custodian wallet service providers and crypto-to-fiat exchanges in the EU. The legislation known as the EU Fifth Anti-Money Laundering Directive entered into force on July 9, 2018, and shall be transposed into the national legislation of each EU member state by Jan. 10, 2020. Before that, cryptocurrencies, in most cases, fell outside of the EU regulatory regime. 

Related: Do Lawmakers Use AML as an Excuse to Centralize Crypto and Blockchain?

Much like the EU, the United States was also compelled to act on this emerging asset class when, in 2013, the Financial Crimes Enforcement Network, or FinCEN, for the first time introduced an interpretive guidance for cryptocurrency industry participants, mainly exchangers and administrators. Exchangers are persons or entities who engage as a business in the exchange of digital currency for real currency, whereas administrators are persons or entities that engage as a business in issuing or redeeming a digital currency.

As the EU member states transpose the new directive into their national legislation, it will already be over half a decade since cryptocurrency regulation came into force in the U.S. What should we learn from this long-standing experience? And what should we expect from the regulation of the EU market as compared to the U.S.?

On the same page

Studying both the EU and the U.S. cases, we can note the explicit resemblance of regulatory approaches. Both jurisdictions stress the significance of cryptocurrency regulation to combat money laundering and counter the financing of terrorism. Back in June, the G-20 held a meeting in Japan and underlined some concerns about crypto assets, stating:

“While crypto-assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT).”

As such, specific crypto service providers face the same requirements as traditional financial institutions in terms of authorization from a financial regulator, customer identification (KYC), ongoing account monitoring, recordkeeping and suspicious activity reporting.

Notably, EU member states are free to impose stricter anti-money laundering measures in their national legislation much like the U.S., where states are permitted to impose more stringent regulations as long as they do not conflict with U.S. federal law.

In this way, competent authorities in the EU and the U.S. can more closely monitor the use of cryptocurrency. It allows for the prevention of placing illicit money into the financial system and excludes concealing transfers with unlawful purposes because of the certain degree of anonymity associated with cryptocurrency. 

Nevertheless, both jurisdictions aim to make such monitoring balanced and proportional to safeguard the technical advances of fintech.

Some of the key differences

Definitions — Despite the EU and the U.S. following the same approach to regulating crypto, there are some differences, and they start from the definition. Crypto service providers obtain the status of “obliged entities” under the Fifth Anti-Money Laundering Directive, or 5AMLD, in the EU, which is equal to “covered financial institutions” in the U.S. — both definitions have the same purpose, which is to make crypto service providers comply with the established banking rules in each regulatory jurisdiction.

Focus of regulation — 5AMLD covers custodian wallet service providers and crypto-to-fiat exchanges, while the U.S. federal regulatory regime applies to providers exchanging or transmitting crypto regardless of fiat currency involvement. 

Legislative compliance — The U.S. has two levels of regulation: federal and state. Therefore, crypto service providers must ensure two levels of compliance. Interestingly, a crypto service provider may be exempt by local laws in some U.S. states. Comparably, this is not possible in the EU, where the legislation in each member state must be equal or stricter to 5AMLD provisions.

Data protection — The final distinction is the attitude toward data protection. In the EU, the General Data Protection Regulation applies to the processing of personal data collected for the purposes of AML/CFT under 5AMLD, which means that crypto exchanges and wallet providers are obliged to ensure appropriate measures to protect the information they collect on their customers. To date, no federal privacy or data collection regulation has been enacted in the U.S., although privacy laws have started to appear in some U.S. states.

Related: GDPR and Blockchain: Is the New EU Data Protection Regulation a Threat or an Incentive?

Beneficial ownership vs. customer due-diligence

Another important thing is the introduction of the beneficial ownership rule. In the EU, it requires obliged entities to collect information about the identity of the beneficial owners of its customers. 

Analogous to this, we have the Customer Due Diligence rule in the U.S., which requires financial institutions to collect the beneficial owner information on all legal entity customers. In fact, in the U.S., this rule does not cover crypto service providers directly. Nevertheless, crypto businesses usually consider the CDD rule as a part of their risk-based approach. This also helps to meet the expectations of financial partners.

Besides this, 5AMLD obliges EU member states to make information on beneficial owners available on state public registers, which should be interconnected on the EU level to facilitate cross-border cooperation and access to information by regulators and financial intelligence units. 

To the contrary, many in the U.S. have speculated that states will soon follow suit and create a national database that tracks the beneficial ownership of entities. Currently, there is only the optional FinCEN program under the USA PATRIOT Act’s Section 314(b), allowing financial institutions to share beneficial ownership information on customer entities among the interested parties, including other financial institutions and law enforcement, but exclusively for the purpose of money laundering and terrorism financing prevention. 

What can we learn from the U.S. experience?

Cryptocurrency has been regulated in the U.S. under existing money transmitter laws for six years now. Apart from FinCEN, other U.S. regulators like the Securities and Exchange Commission and the Commodities Futures Trading Commission have sought to bring crypto partially under their jurisdictions. 

As the market evolves, and as financial products built on top of this emerging asset class continue to innovate, the impetus to solve this regulatory overlap may become more pronounced. Regulation also gives a certain level of protection to customers, which extends trust to reliable service providers who seek to avail themselves of the regulated market.

We believe the regulation of crypto in the EU will lead to the same results of bringing greater adoption to the crypto market and facilitating the stability of the EU financial system. We also think that much like in U.S. states, we may see varying degrees of rigidity in regard to crypto service providers and the specifics of their regulation from one EU member state to another. 

The EU is catching up and becoming more harmonized, analogous to what happened after FinCEN provided initial guidance in the U.S. back in 2013, by broadening the definition of regulated institutions and bringing them under the umbrella of AML/CFT requirements. The main difference between the EU and the U.S. approaches lies in the scope of regulation. 5AMLD extends to custodian wallet service providers and crypto-to-fiat exchanges, while FinCEN covers crypto exchange and transmission activity regardless of fiat currency involvement. 

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Serhii Mokhniev is a Certified Anti-Money Laundering Specialist and regulatory-compliance expert specializing in cryptocurrency regulation and prevention of money laundering. He is currently a regulatory affairs counsel at CEX.IO

Quitting Crypto Now is Akin to Selling Amazon in 2003: Analyst

There is no doubt that the crypto industry hasn’t been doing too hot over recent months.

Since topping in June, Bitcoin (BTC) has collapsed by over 40%, falling from $14,000 to $7,800, where the cryptocurrency sits as of the time of writing this. This price collapse has been marked by a capitulation in investors and other industry participants, with many throwing in the towel as they believe that Bitcoin’s price qualms are a sign that the future of blockchain and cryptocurrency remains in disarray.

Related Reading: Dr. Doom: Ethereum Still a Long Way From $0, Its True “Fundamental Value”

A former partner at Indus Capital and Goldman Sachs, however, believes that this harrowing sentiment is irrational, quipping that quitting crypto now is ” akin to selling Alibaba and other internet startups in 2000-2003.”

Don’t Quit Crypto, Analyst Asserts

A partner of The Spartan Group, a blockchain advisory and investment firm, recently released an extensive Twitter thread regarding their latest thoughts on the crypto industry.

The thesis of the individual, who goes by “SpartanBlack” on Twitter, is that there is a growing sense of despondency spreading amongst industry members, and is “putting crypto’s long-term growth” trajectory at risk.

Indeed, he went on to explain that there are clear reasons for the pessimism spreading among the market: 1) despite 10 years of development, people within Bitcoin and cryptocurrency are still waiting on the “killer app that brings the industry and technology mainstream; and 2) funding for blockchain startups has collapsed due to a confluence of factors.

Related Reading: Going to Talk Bitcoin at Thanksgiving? Here’s a Good Strategy

Although what Spartan said may induce anxiety in investors, the analyst asserted that what is going on is healthy and that there remains an opportunity for much growth in crypto.

“Many projects are either dead or dying a slow death… This is the law of natural selection and is a healthy development. Investors now play a critical role in identifying who will be the long term winners. Our job is to find the Amazon and Alibaba of crypto out of the wreckage, rather than write-off the whole industry,” Spartan wrote in a seeming bid to reassure his followers.

Spartan continued by likening the current state of the crypto industry to that of the Dotcom industry in the wake of the blow-off top seen at the turn of the millennia, during which Internet stocks shed a majority of their value, projects died, and funding from external entities neared zero.

Should history repeat, the next cycle of innovation, which the analyst claimed will be driven by institutional investors looking to implement crypto into their portfolios, will identify killer use cases for this industry at long last.

Related Reading: Why Bitcoin Price May Soon Jump 15% to $8,500: Trader Who Foresaw Decline to $6,600
Featured Image from Shutterstock

The post Quitting Crypto Now is Akin to Selling Amazon in 2003: Analyst appeared first on NewsBTC.

Crypto 2020: Security Trends Next Year and Beyond

Cryptography is the cornerstone of informational security, but not everything is entirely secure in the world of cryptocurrency. Crypto-exchanges are still subject to fairly regular attacks and hacks, while even cryptocurrencies are confronted with the rare 51% attack. How will this picture change in 2020 and the coming decade? Well, as crypto grows further and enjoys

Bitcoin Moves 30% in December Since 2015 — Will 2019 Be Different?

Over the past four years the price of Bitcoin has seen moves of more than 30% during the holiday month of December — so will this year also see volatility?

At just over 10 years old, crypto’s largest asset Bitcoin (BTC) has made a name for itself as a volatile asset, as shown by its past price action. December, in particular, has seen a notable chunk of this volatility with price moving more than 30% since 2015. 

As 2019 nears its end, Bitcoin looks back on a standout year in terms — up over 100% from the yearly lows in February of around $3,350. By the end of June, BTC/USD found itself up near $13,800. Then after several months of consolidation and subsequent selling pressure, BTC hit 6-months lows of around $6.5K in November only to recover back to the $7Ks range.

Crypto space participants often look for different narratives to make sense of various price moves, as well as try to make predictions on future price action based on historical trends. 

One such narrative involves speculation that Bitcoin moves significantly in December, in line with the Christmas and New Year holiday season. Historical price data indeed shows this to be the case, particularly over the past 4 years. 

So is Bitcoin set for a volatile December once again? Let’s take a look at some historical data for possible clues.  

December 2015

BTC USD daily chart

BTC USD daily chart. Source: TradingView

Starting with data four years ago, December 2015 saw Bitcoin shoot up more than 34% in the month of December. 

Bitcoin began the month with a red day, wicking down to $349 on Dec. 2. The following several days, however, hosted positive price action, leading to Bitcoin’s December 2015 high of $469, $119 higher than its Dec. 2 low. 

Bitcoin rode a bullish trend for the first half of the month, topping out near Dec. 15, followed by consolidation and selling pressure during the latter half of the month. 

December 2016

BTC USD daily chart

BTC USD daily chart. Source: TradingView

A year later, Bitcoin saw gains of more than 35% during the same period. But unlike in 2015, however, Bitcoin held a very slight upward trend for the first half of December 2016, posting small daily candles filled with very little price activity. 

Similar to 2015, Bitcoin hit its December 2016 low at the beginning of the month, dropping to a price of $743. It was not until the second half of the month that BTC ramped up its volatility, 

ultimately hitting $1,010 by Jan. 1, 2017.  

December 2017

BTC USD daily chart

BTC USD daily chart. Source: TradingView

On Dec. 1, 2017, BTC wicked down to $9,410 before going on its historic ride to $19,700, tallying a price move of more than 109%. 

This 2017 December ride coincided with the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) both launching their respective physically-settled BTC futures trading products. 

The CBOE launched its Bitcoin futures trading product on Dec. 10. Then Bitcoin reached its all-time high near $19,700 on Dec. 17, 2017, right when the CME launched its own cash-settled Bitcoin futures trading product. 

Similar to 2015, the BTC price increased for the first half of the month. After its all-time high, Bitcoin suffered a steep correction during the second half of the month, which ultimately started a bear market that would last more than a year. 

December 2018

BTC USD daily chart

BTC USD daily chart. Source: TradingView

Last year, price action was unlike the previous years, however. While BTC did provide over 35% in price movement over the course of December 2018, the net price stayed the same. 

The asset’s price wicked up to $4,275 on Dec. 2, followed by selling pressure until the middle of the month where it tapped its ultimate bear market bottom at $3,125. 

During the second half of the month, Bitcoin proceeded to rally all the way back up to $4,275 before closing out the month with downside consolidation. 

Essentially, Bitcoin saw both a 35% decline and a subsequent 35% rally in the same 31 day period, leaving the market looking back on an overall volatile December. 

Theories explaining the “Santa Claus rally” in markets

The last four years of price data clearly show notable activity during the holiday month of December. A price move of more than 30% is significant, regardless of the asset. 

The data also shows the middle of the month as significant in terms of topping or bottoming price activity, with the exception of 2016.

But while there’s no definite explanation for this seemingly seasonal volatility, Cointelegraph market analyst filbfilb says that traditional markets also often see volatility around this time — a phenomenon sometimes referred to as the “Santa Claus rally.” 

He explained:

“The Santa Claus Rally refers to the tendency for the stock market to rally over the last weeks of December into the New Year. Several theories exist for its existence, including increased holiday shopping, optimism fueled by the holiday spirit, or institutional investors settling their books before going on vacation.”

Crypto trader and Twitter personality Jacob Canfield also weighed in on Bitcoin’s December price action, telling Cointelegraph: 

“While it is easy to create narratives for Bitcoin, I am of the opinion that there is no 'seasonality' to Bitcoin when it comes to the time of the year. Although we have seen significant upward moves before, we've also seen significant downside moves as well.”

BTC USD monthly chart

BTC USD monthly chart. Source: TradingView (via Jacob Canfield)

Canfield did, however, point out a different concept based on big players and tax implications. 

“One theory that I have heard is that professional traders and institutions take their profits going into January to hedge for their taxes for the new fiscal year,” he said. “So while this doesn't explain we see upward price moves in Bitcoin, it may explain why we see a sell-off in January.”

Regardless of the rationale, December has hosted significant price movements each year since 2015. Will this year continue the trend?

The views and opinions expressed here are solely those of (@benjaminpirus) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.