Bitcoin Inches Away from $9,000 as Analyst Claims It’ll Hit $10,000 in a Week

The happy days for the bitcoin faithful are back. After a lengthy period of turmoil in the market and the long crypto winter, the currency has shown its resilience. Despite having many skeptics write it off, bitcoin has fought back and now, it’s just inches away from $9,000. And this won’t be all, according to one analyst who believes that it’ll hit the important $10,000 milestone in a week.

At press time, bitcoin was trading at $8,730. In the past 24 hours, the currency had gained 0.4%. The trading volume stood at $24 billion. On BitMEX, the currency had registered $2.5 billion worth of trading volume in the past 24 hours. On some exchanges such as LakeBTC, the currency had already hit the $9,000 mark.

The last time bitcoin traded above $8,700 was exactly a year ago in May 2018. Since then, it has been on a downward trend, hitting new lows in December last year. However, the worst seems to be behind us now.

And if you think this is impressive, check back in a week. According to one experienced analyst, the currency could surpass the all-important $10,000 mark in a week.

To The Moon

Naeem Aslam, the chief financial analyst at online forex broker Think Markets, believes we’re just getting started. In a note to clients, Aslam stated:

If you are not ready then get ready, because the bitcoin price is about to blast past the level of $10K, recovering half of its losses from its all-time high, a really embarrassing moment for those who said that the currency will never recover from its losses.

There have been many who had hailed the 2018 bear market as the end of the crypto industry. Just this month, Brad Sherman, a Democratic Congressman from California, asked for the banning of crypto in the U.S. According to him, the U.S gets its power from “the fact that the U.S. dollar is the standard unit of international finance and transactions.” In allowing the use of bitcoin, it would be relinquishing this ‘power.’ Interestingly, bitcoin has surged by 50% since his comments.

Aslam believes that bitcoin will hit $10,000 by the end of the next week. The rise is supported by the fact that it’s trading above its 50, 100 and 200 moving day averages. These technical tools enable traders to create a continuous updated average price.

Aslam added:

The moving averages are very important because they define the trend; if the price stays above them, it shows that the uptrend is strong and when it starts to trade below them, then it means a downtrend.

Never Doubt Bitcoin’s Resilience

To Congressman Sherman and all the other doubters, Aslam had one thing to say:

This is what bitcoin is all about. Never doubt the resilience of the currency and the support it has among the community.

Once the currency hits $10,000, the $15,000 level will be the next target. However, at $10,000, market factors could push it back to the $8,000 support level before it finally takes off.

Nevertheless, the crypto industry hasn’t been in a better position than it is right now. This is partly thanks to institutional investors who have continued investing in cryptos. The evidence of their involvement is the rising volumes for bitcoin futures, Aslam explained.

 

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Could Bitcoin Have a Bull Run Towards the Next Halvening? History Suggests It Will

The next halvening is next year, and the effect on the price of bitcoin could be significant. For the few who are unaware, halvening is an event that takes place every four years. It’s when the reward that miners receive gets cut in half, reducing the rate of production of new tokens by half. It takes place a year from now in May 2020 and will reduce the reward for every mined block from 12.5 BTC to 6.25 BTC. But, will it have an effect on the price of bitcoin?

History suggests it will. There have been two previous halvenings, or halvings as some call them. The first was in November 2012, four years after Satoshi launched the currency. In the one year that followed the event, BTC’s price spiked by 10,000% from $10 to around $1,000.

The second halvening took place in July 2016, and this time, the price took off even before the event. The next year, the currency hit $20,000, its all-time high.

Granted, there’s no concrete evidence to link the two events to the price rise. However, one would be foolish to ignore the connection. After all, Satoshi created the halvenings for this exact purpose. In a letter to celebrated cryptography expert Ray Dillinger, Satoshi wrote:

The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation. If the supply of money increases at the same rate that the number of people using it increases, prices remain stable. If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase.

Some Think So, Some Don’t

There are those who believe that the next halvening will be the catalyst for a major bull run. In a Twitter poll cited by Bloomberg, over 60% of the respondents stated they believe BTC will rally towards and after the event.

And it’s not just the Twiter community. Crypto bull Anthony Pompliano recently also expressed his belief that the halvening will bring good tidings. Pomp as he is known, who is also the co-founder of Morgan Creek Digital, tweeted:

Brian Kelly, the founder of BKCM capital, a crypto hedge fund also believes that the event will have significant implications on the BTC price. He told CNBC, “You generally have a rally a year into it, and a year out of it. And so we’re just at the beginning of that stage.”

But not everyone believes the event will be that significant, certainly not Kyle Samani. Samani, the co-founder of Multicoin Capital Management, a crypto VC firm, told Bloomberg:

“The first halvening brought inflation from 40% to 20%. The second from 20% to 10%. The next halvening is going to reduce it from about 3.8% to 1.9%. On an absolute basis, each halvening is becoming increasingly less relevant.

 

 

 

 

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One Dollar or One Bitcoin? an Overwhelming Majority Went for the ‘Less Risky’ Option

Would you rather have one dollar or one bitcoin? That looks like the easiest choice to make, right? Well, not so much. Capital Creators, a YouTube channel that focuses on entrepreneurship conducted a survey with students from the Unversity of Colorado Boulder. The results? A surprising majority would rather have one dollar over one bitcoin!

The question was simple: would you rather I give you one dollar on my hand or the one bitcoin on my phone? To the dismay of anyone who has even the remotest understanding between the values of the two, most of the respondents chose the dollar.

What was most interesting were the reasons the young students gave for choosing the dollar.

“Currently, I only have $0.83 to my name, and so I wouldn’t mind adding onto that. Plus bitcoin is kinda risky. If I had the money to invest, I would invest in something other than bitcoin,” said one.

And that wasn’t even the most interesting response. One student responded, “Definitely the dollar. I’m really hungry and I could use it on the vending machine.”

Other responses included the value of the dollar doesn’t change and the dollar’s value is not dependent on speculation. For one student, he believes that bitcoin’s creator is “a guy in a cave in Antarctica” and he still runs it. Surely, no one wants to bet on a guy in a cave just next to the South Pole.

Education Could Break or Make Bitcoin

Pitiful as it is, the students’ perception of bitcoin can’t be totally blamed on them. Bitcoin, and cryptos in general, are one of the most misunderstood technology globally. There’s a portion of the population which hasn’t heard of cryptos at all. However, the biggest proportion has heard of cryptos, but from the wrong sources.

This generation of young people, in their teens and early twenties, get a lot of their information from Twitter, Facebook and other social media sources. On Twitter, the crypto community has been divided into small groups that believe in different cryptos. These factions are always fighting, as we’ve seen between bitcoin, bitcoin cash and bitcoin SV for instance.

And that’s not the worst of it. The rife misinformation available on such media platforms is perhaps the most cancerous. From scam bots that pose as famous people, to click bait sources that look to prey on the gullible, the crypto narrative is chaotic.

As if this wasn’t enough, there are mainstream crypto media sources and their negative coverage of cryptos. While with time the narrative is slowly changing, these outlets have crucified cryptos for the longest time. Hundreds of crypto and blockchain startups are transforming the lives of many users, and yet, it’s the few scammers that the media focuses on.

Educate Someone Today

It’s up to the crypto community to engage those who know very little about cryptos. The narrative that this huge proportion of the population hears first about cryptos is most likely what will shape their view on cryptos. The vloggers, after overcoming their shock that someone could pick one dollar over one bitcoin, took to educating the students they encountered. They talked to them about the value of one bitcoin, how to use it online such as with Amazon, how to sell it for fiat and how to secure it. And as a testament to the effect that misinformation has, the students all chose bitcoin after learning about it.

Educate someone about cryptos today. It’s the only sure way to change the negative perception.

 

 

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EOS to Return over 6,500% to Early Investors in Biggest Buyback Yet: Report

Block.one, the company behind EOS cryptocurrency, is set to return as much as 6,567% to some of its early investors in a buyback project. According to a report by Bloomberg, EOS will defy the market and reward those who believed in it during its early days. 

The report comes at a time when the price of EOS has recovered in recent months to trade at $6.22 at press time. The crypto had been the victim of the crypto winter in 2018, dropping to a low of $1.69 in mid-December. It has fought back consistently to trade at $6.63 just days ago, a 290% increase in five months. However, its still way below its all-time high price of $22.

While many projects have brought losses to their investors, EOS is set to be one of the most profitable ventures for its early investors. One of these is Peter Thiel, the popular venture capitalist and innovator behind PayPal, Palantir and the Founders Fund.

The achievement by EOS shows that “Block.one is very much the odd one out in the crypto market,” Tom Shaughnessy stated. Tom is the co-founder of New York-based crypto research firm Delphi Digital.

Richard Burton agrees, citing the innovative funding method as the key to their success. Burton is the founder of blockchain-based fintech startup Balance.io. However, he believes that the firm didn’t need to raise that much money.

They designed a very clever mechanism to hoover up as much capital as possible. Bitcoin was started on a shoestring and Ethereum raised just a few million dollars, which goes to show you don’t need anything like the money Block.one raised to launch and scale a successful network. It should be beholden on them to explain why they needed that much and what they are doing with it.

The Money Makers

Thiel will not be the only investor to reap big from the EOS success story. British billionaire hedge fund manager Alan Howard was also one of the early investors. Fellow American hedge fund manager Louis Bacon, the founder of Moore Capital Management, will also reap big. The two declined to comment on their lucrative venture, as did Thiel.

One early investor who disclosed his next move was Christian Angermayer, a serial entrepreneur and fintech investor. He told the publication, “Block.one is one of the most promising and best-positioned companies in the blockchain industry, and its success story is just beginning.”

Mike Novogratz also made his decision known earlier this week after his company, Galaxy Digital sold most of its shares in Block.one. Citing the company’s substantial performance as the reason for the sale, Galaxy revealed that it had recorded a 123% return on its investment.

And while the buyback is certainly outstanding of the company, there could be other sinister motives. Nic Carter, a partner at Boston-based investment firm Castle Island Ventures explained:

A private buyback of this sort signals to me that the company believes that there are few growth opportunities in sight, or badly wants to consolidate ownership and avoid outside scrutiny.

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JPMorgan: Bitcoin Surged Beyond Its Intrinsic Value, Mirrors 2017 Boom-Bust Pattern

Bitcoin has been unstoppable in recent weeks. The digital currency continued its recovery after a horrid few months, hitting a 2019 high of $8,350. This was after the currency had traded below $4,000 just a month earlier. While many believe that the price is finally catching up to the developments in the field, U.S’ largest bank isn’t as enthusiastic.

According to JPMorgan, bitcoin may have gotten ahead of itself with its recent rally. In a note to investors, some of the bank’s analysts suggested that the currency had surged beyond its intrinsic value. This, they believe, is a similar situation to the 2017 price rise which preceded a devastating slump.

The analysts wrote:

Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.

A report by Bloomberg revealed that the analysts treated bitcoin as a commodity in their analysis. They then calculated its cost of production using inputs including hardware energy efficiency, electricity expense, and estimated computational power.

A Lot Has Changed, JP

And while the analysts believe that the current momentum is similar to 2017, there are a few distinguishing factors. One of these is the low amount of money initial coin offerings have raised. In 2017, one of the major factors that led to high prices was the huge number of ICOs. These ICOs raised money through bitcoin and ether. Therefore, many investors bought into the two currencies so that they could invest in ICOs. The high demand for the two currencies pushed their prices up.

In the first quarter of 2019, ICOs raised just $118 million according to the Wall Street Journal. This is over 58 times less than the amount they raised in a similar period in 2018 which stood at $6.9 billion.

Yet another significant change is the entry of global giants, including Wall Street firms. Facebook is at an advanced stage in the development of its cryptocurrency according to reports. The social media giant, which has over 2.5 billion users, has been on a hiring spree in recent months for its crypto department.

Other giants include Fidelity which has been steadily onboarding clients on its platform. Its crypto trading desk is set to launch soon according to a report by Bloomberg. JPMorgan launched its cryptocurrency as well after bashing the industry for years. The Intercontinetal Exchange, the parent company of the NYSE is set to launch its Bakkt platform this year. Whole Foods, Starbucks, Nordstrom, Barnes & Noble and a host of other retailers are also accepting BTC.

These are just a few of the significant changes since the 2017 bull run.

What Really Is Bitcoin’s Intrinsic Value?

Despite being over a decade old, we are yet to agree on what bitcoin’s intrinsic value is. The note from JPMorgan agreed as much saying:

Defining an intrinsic or fair value for any cryptocurrency is clearly challenging. Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.

 

 

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Only Ignorant Millennials Believe Bitcoin Will Replace Gold: Investment Mogul

Gold vs. Bitcoin is a debate that has heated up ever since the virtual currency took off a few years back. Crypto proponents believe that it’s time to move on from gold as the standard store of value, and Bitcoin’s is the obvious replacement. However, according to one investment mogul, the two are not directly opposed and both have their own pros. Only ignorant millennials believe that Bitcoin can replace gold as a store of value, he added.

Frank Holmes believes that gold is still the best store of value. Holmes is the CEO of U.S Global Investors, an asset management firm that specializes in investments in emerging markets and natural resources. In an interview with Kitco News, he explained why there are those that believe Bitcoin will replace gold:

“I think there’s a whole audience of ignorant millennials. […] They (the millennials) should do their homework. They should open up their history books on why gold is so significant. Why the great ‘love trade’, that if you love your country you should have gold in reserve. If you have a crisis, your paper money goes down in tremendous value. Gold is what bailed out Britain, getting it over to Canada, and then trading to get weapons from America. It was gold that did it.”

The Resilient Crypto Community

And while he doesn’t think Bitcoin will replace gold, Holmes is still a great crypto fan. He believes that Bitcoin’s momentum will continue. According to him, the crypto community has shown great resilience during the crypto winter. This has been one of the main factors behind the bounce back.

He explained:

What’s important during this whole year is that even though the price fell 80% to 90% depending on the coins, you had an increase of wallets out of people buying bitcoin, and that’s a sign that we’re ready for the next bull cycle.

Indeed, the crypto community has proven that it’s not here for the hype. According to a report by Chaninalysis last year, the number of personal Bitcoin wallets has steadily increased even during the bear market. Bloomberg further supported this, citing a report by Flipside Crypto. The report revealed very high activity in crypto wallets even before the current bull run.

The JP Morgan Turnaround Signalled Bottom

Holmes believes that the market hit its bottom when JP Morgan announced its own crypto, the JPM Coin. The bank, which is the largest in the U.S had not held back its criticism against cryptos before that. The CEO, Jamie Dimon, had especially been a vocal crypto skeptic before the turnaround.

Homes, who also serves as the CEO of Hive Blockchain stated:

And Bitcoin bottomed when JP Morgan came up with their coin. So, they trash talked Bitcoin all the way down until February of this year when they released their coin. All of a sudden we had a bottom in Bitcoin

The Bitcoin vs. gold debate is certainly not going to end anytime soon. Grayscale Investments has been one of the leading voices campaigning against gold. In it’s latest effort, the investment firm conducted an extensive #DropGold campaign. According to its CEO Barry Silbert, its ads had registered over a million views, excluding TV commercial numbers.

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Do Dapps Have a Future? Joseph Lubin and Jimmy Song Make a $500k Bet on It

Do decentralized applications (dApps) have a future? Will they ever get consistent users? Do they pose any threat to centralized applications? Two people are willing to risk over $500,000 on this.

Ethereum co-founder Joseph Lubin and Bitcoin developer Jimmy Song disagreed on the future of dApps a year ago. During last year’s Consensus conference, the two outspoken crypto leaders decided to put their money where their mouths were. However, the two never finalized the terms of the bet.

Well, now they have.

As reported by CoinDesk, the two shared the stage again at this year’s conference. And as expected, the bet was one of the main talking points. During the past year, Song has called Lubin out, accusing him of cowering from the bet. He even took to Twitter to remind Lubin that he was still waiting for him to honor the bet.

The Bone of Contention

The bet revolves around whether decentralized applications, especially those on Ethereum’s blockchain are viable in the long term. Song believes they aren’t. He stated:

“The only reason dapps exist is to raise money from gullible people or from greedy FOMO people, and that’s essentially what the ethereum platform has done.”

To Song, Bitcoin is the only viable blockchain product and in time, all the other developments will die off.

Expectedly, Lubin stood up for dApps, expressing his firm belief that they are the foundation for the next web revolution. He explained:

“Jimmy’s thesis was that there would be no significant applications on blockchain, and the only thing relevant in blockchain was bitcoin. My thesis is bitcoin is awesome, and there’s a narrow set of use cases built on bitcoin and that’s wonderful. We love that, but decentralized applications are also really useful.”

The Terms

The terms indicate that should applications on the Ethereum blockchain be doing well in four years, Song will pay Lubin 810.8 ETH. At the current price, thee tokens are worth $167,000. If the dApp ecosystem will have fizzled out, Lubin committed to paying Song 69.74 BTC. At the current price, this is worth $560,000.

Depending on how well either Bitcoin or Ethereum performs, the loser could end up paying millions of dollars come 2023.

The terms also indicate that for Lubin to win, there must exist at least 15 unique dApps, each achieving at least 10,000 daily users and 100,000 monthly active users for any six calendar months up to May 23, 2023.

The bet was first made in May last year. However, since then, there have been variations in the value of the tokens at stake. Bitcoin was trading at $8,577 then, and so the difference is slight compared to today’s prices. Ethereum, on the other hand, has seen great declines. At the time, it was trading above $720. Currently, it’s at $207, a 73 percent decline in value.

Further, Song made it clear that he wanted the bet to cause maximum pain to Lubin, if Song wins. With some other bets in the past, the proceeds have gone to charity, but not this time. Song insisted that he wanted Lubin to send him the BTC personally, a term Lubin was fine with.

And as always with crypto, it ends in a friendly tone. The two hugged it out at the end, with each promising to honor the bet.

Only time will tell.

 

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China, Whales, New Buyers or the Reward Halving? Why Bitcoin Is up 60% in Two Weeks

Bitcoin has made a leap in the past fortnight. Granted, the rally started two months ago. However, it’s in the past two weeks that the digital currency has made the biggest gains. Currently trading at $7,900, it hit $8250 earlier today, a level it last hit close to a year ago. The other cryptos have also followed the example set by their leader, but BTC has been the biggest gainer by far.

The biggest question, and rightly so, has been why the sudden spike? The first logical conclusion is the continued warming up by major retailers into crypto payments. As we reported yesterday, global giants such as Whole Foods, Nordstrom and Starbucks are now accepting a variety of cryptocurrencies as payment. Nevertheless, the rally started way before Gemini and Flexa announced the partnership that enabled the payments.

And while there exist complex theories around the price rise, there are those who believe that it’s as simple as more buyers than sellers. Travis Scher, an executive at the Digital Currency Group, is one of them. Scher told TechCrunch:

So all I can say with certainty is that there are more buyers than sellers in recent months. But in this case, I do think that one factor driving the rally is that the narrative around Bitcoin as digital gold is growing. We fully expect Bitcoin to replace gold as the leading non-government controlled store of value over the coming decade.

The China Factor

China’s link to the ascension of crypto prices, especially Bitcoin, can’t be ignored. In recent days, trade talks between the U.S and China have hit a snag. This, some experts speculate, has led many traders to hedge their funds in cryptos, BTC mainly.

Andy Brenner at the National Alliance Securities believes that Chinese money is the key reason for the recent spike. He told CNBC, “We can see that the bid for bitcoin in this latest run has coincided with a big downtick in the value of the Chinese yuan versus the dollar.”

And yet, not everyone is convinced that China had much to do with it. In any case, Bitcoin started gaining over two months ago. Back then, trade talks between China and the U.S were going on smoothly.

Yuji Nakamura, a tech expert with Bloomberg stated in an interview:

“I know there’s a lot of uncertainty with the trade war with China, but this Bitcoin bull run really began in late February. It went all throughout March, all throughout April. At the time, trade negotiations between China and the U.S were going on pretty well. So, I think it’s a bit of a stretch to call it a haven play even though it’s always been considered that. But, I’m not convinced that just because the China trade talks aren’t going on well, that Bitcoin is going to shoot to $10,000. I think that it’ll shoot to $10,000 for other reasons if it does.”

The Skeptics

And of course, there are the skeptics who have dismissed this as just another ploy to prey on the gullible. One of these is David Gerrard who in a blog post yesterday attributed the rise in prices to whales. These whales are allegedly buying up the market until all the short positions get liquidated. Gerrard wrote:

“It’s because the price of Bitcoin is a proxy for margin trading — and rather than investing in the commodity itself, you can make more money by manipulating this thin and ill-regulated market to burn the margin traders.

This also allows the large holders — the “whales,” and the exchanges themselves — to cash out to whatever little actual-money US dollars are available, in a trading system where the liquidity is mostly fake dollars called “tethers.”

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The Bitfinex Scandal Continues: Is Binance Tanking Tether to Launch Its Own Stablecoin?

TheMerkle_Bitfinex Pocketing User Funds

It has been one of the dominating revelations in recent times for the crypto industry. The $850 million Bitfinex-Tether scandal has grabbed all the headlines in the past month. Since the New York Attorney General announced an investigation into the two firms, the industry has waited with bated breath to see where this latest scandal leaves us.

Well, the scandal could be much bigger than we previously thought. According to one cryptocurrency YouTube star, the number of people in this intricate web of deception is quite high. And it includes some of your favorite crypto personalities.

In his latest video, Tyler Swope dug into the Bitfinex mess. Swope, who runs the popular Chico Crypto channel highlighted the web that began with the arrest of Reginald Fowler. The prosecutors charged Fowler, a former part-owner of NFL team Minnesota Vikings, with operating a shadow banking chain for crypto exchanges. Upon further investigations, The Block discovered that Fowler’s companies were key partners with Crytpo Capital, the Panamanian company that prosecutors allege either stole or lost $850 million belonging to Bitfinex.

However, that’s not all. What some may not be aware of is that Crypto Capital was in the heart of the QuadrigaCX scandal. This was yet another mega-scandal that raised a lot of questions on how exchanges handle our tokens.

It goes deeper. Crypto Capital is purportedly extensively linked with Coinapult, a crypt wallet services provider. Erik Voorhes, the CEO of ShapeShift was one of the founders of Coinapult with Bitcoin.com’s Roger Ver also being involved with the Panamanian company.

In Comes Binance

Away from the back room gimmicks that could cost the crypto industry $850 million, another angle is shaping up. This angle puts the largest cryptocurrency exchange globally at the center of it all.

Binance has been the largest holder of Tether tokens for over a year now, rightly so given its high daily trading volume. In an interview recently, the iconic CZ pronounced that he had met with Bitfinex executives and that he was certain the accusations against them – of having lost the money – was just FUD. As we now know, it wasn’t FUD. Bifinex did indeed lose money to Crypto Capital.

It goes on. Towards the end of April, CZ announced on Twitter that Binance was moving funds as a standard operating procedure.

One large transaction he said, but he lied. According to information available on the blockchain, Binance moved the USDT tokens to thousands of different addresses. The transactions are in small amounts, all sent to different addresses.

Significantly, after the transactions, the amount of Tether that the exchange held in its cold wallets was $100 million less. For one, it’s possible that there were withdrawals by clients, forcing the exchange to turn to its cold storage. What’s more likely, however, is that the exchange cashed out the tokens. And this was just days ago, so there’s no reason to think it won’t do the same again soon.

The Golden Opportunity

If Binance is cashing USDT tokens, it could mean that it sees a bleak future in the stablecoin. Should it cash out all the tokens, there’s no telling how the market will react, especially given the recent questions on whether USDT tokens are fully backed.

And therein lies the golden opportunity for Binance; the creation of its own stablecoin. In recent times, a number of stablecoins have emerged aiming to take over from Tether. While some like USDC have had the backing of exchanges such as Coinbase, a stablecoin backed by Binance would be lightyears ahead.

And CZ has given us hints in the past, stopping short of blatantly declaring this to be the ultimate goals for Binance.

 

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Over 20% of Institutional Investors Already Exposed to Cryptos, Survey by Fidelity Reveals

TheMerkle Fidelity investments Cryptocurrency mining

22 percent of institutional investors already have exposure to digital assets. This is according to a new report by Fidelity Investments, one of the largest asset managers in the world. The report goes against many crypto skeptics who have been quick to state that institutions are no longer interested in digital assets.

The survey polled 441 institutional investors between November last year and February this year. Interestingly, this was a time in which cryptos hit their lowest levels. Nevertheless, institutional investors remained unfazed, with interest in digital assets never really dwindling.

Tom Jessop, the president of Fidelity’s digital assets division explained, “We never saw a decline in interest or sentiment during the crypto winter.”

The survey revealed that 47 percent of institutional investors view digital assets as “having a place in their portfolios.” The investors, who include crypto funds, also disclosed their preferred investment methodology. 72 percent prefer to invest in digital assets through customized investment products. 57 percent prefer to invest in digital assets directly, with another 57 percent revealing they prefer “to purchase an investment product that contains digital asset companies.”

Clearly, the investors had the option of picking a combination of different methodologies.

Jessop further revealed that cryptos have evolved from their humble beginnings.

We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments

The investors also differ in their perception of digital assets. 47 percent of them view cryptos as an attractive technology. 46 percent are attracted to the low correlation that digital assets have with other assets.

There Are Challenges Still

While the interest in digital assets is still high and rising, there are challenges and concerns that investors share. Jessop explained:

“Institutions are doing the work to develop their own investment theses—but there’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them. For example, price volatility, which was a primary concern of survey respondents, may dampen as the underlying custody, trading and financing infrastructure continues to develop in a direction that traditional market participants are familiar with.”

And it’s not just Jessop who is bullish on cryptos at Fidelity. Abigail Johnson, the Fidelity CEO, has been one of the biggest crypto proponents on Wall Street. According to Bloomberg, she believes that Wall Street’s confidence in Fidelity will play a key part in crypto adoption.

The survey supports Abigail’s assertion. 37 percent of institutions prefer investing in digital assets with a traditional financial firm as opposed to 24 percent who prefer a crypto-focused firm.

Jessop also supported his colleague’s views stating:

People are relying on the institutions they’ve done business with for a long time to fulfill their objectives and needs. I’m not trying to throw shade on anybody else, but it’s up to the clients to decide.

Jessop further pointed out that Fidelity Digital Assets has continued to receive interest from a number of giant Wall Street firms. He explained, “Many of them are approaching it from a different perspective, whether it’s asset allocation, or others looking at the fundamentals like network activity, a more quantitative approach. It’s healthy people bring different analytical lenses to the same subject.”

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We Wanted to Overthrow the Dictators, but Did We Create New Ones?

NullTX Kidnapping Monero Ransom

Satoshi Nakamoto had a dream. A dream that one day, a few elites wouldn’t have a stranglehold on the monetary system used by billions. A dream that one day, people would rely on a trustless system that the elites couldn’t manipulate. And to bring his dream to reality, he (or she, or they) gave us bitcoin.

A decade later, more than 2,000 cryptocurrencies have sprouted, all offering different solutions. Satoshi’s invention, bitcoin, still towers over all of them. And while the world is yet to fully embrace cryptos as the preferred payment method, we’ve still made great progress.

However, as we move into a decentralized world of freedom, elitism and centralized controls are yet to be stamped out. In fact, if anything, we may just be redefining the elites.

The first thing that springs to mind is the recent Bitcoin SV debacle. The crypto has been delisted from a number of exchanges in the past month. A number of payment processors have also ceased support of the crypto. This is well within their prerogative.

However, it’s the genesis of this wave of BSV delisting that’s interesting. Binance was the first exchange to take the stand, and again, this was well within its right. It announced a fortnight ago that it would cease support for BSV on its platform.

The Elites

It’s the involvement of Binance’s CEO and founder that brings out the elitism that exists in the crypto space. Changpeng Zhao, fondly known as CZ, has always been vocal about his dislike for Craig Wright, the self-declared Satoshi Nakamoto. Wright, who is central to the BSV community has been one to attract love or hate in great proportion. Just before Binance delisted BSV, CZ tweeted:

Again, CZ as an individual is entitled to have an opinion. After all, we can’t, as the crypto and blockchain community, preach freedom if we can’t let people voice their opinions. However, just days later, CZ’s Binance delisted BSV.

BSV is much more than Craig Wright. There’s a community behind it that can no longer trade on the largest platform globally just because CZ believes Wright is a fraud. And then, the saga continued. A number of other exchanges, Kraken included, delisted BSV to follow in the footsteps of the crypto world’s Mark Zuckerberg. Kraken was the most interesting, having conducted a Twitter poll as the basis of its decision. Again, an entire community was affected by events that had nothing to do with them.

And not to be misconstrued, I’m in no way taking sides. However, we can’t criticize JPMorgan Chase for closing the account of a crypto startup for no apparent reason and then turn a blind eye to what’s happening within the industry.

The BSV case isn’t unique. Centralized exchanges have become the very enemies we created cryptos to fight. Many a time, crypto projects have had their chances of mass adoption depend solely on whether they can afford the listing fee on major exchanges.

Vitalik Buterin, the celebrated Ethereum founder once stated:

“We can really take away this stupid king-making power that these centralized exchanges have where they have this ability to just decide which tokens become big by deciding to list them and then charging these crazy $10 million to $15 million listing fees. The more we can get away from that world and into something which actually satisfies the blockchain values of openness and transparency the better.”

Alex Wang, a founder of Ember Fund, a crypto hedge fund that seeks to make investing available for the masses, wrote:

“99% of exchanges and products in the cryptocurrency space are custodial. They are bigger, more well funded and although well-intentioned(?), we’re heading right back to the paradigm of pre-2008 centralized banking. In fact, some would argue we’re already there.”

What Now?

And he may be right. We could be replacing what we abhorred about the big banks, and the big techs as well, with a savvier and ‘cooler’ version. The CZs and Brian Armstrongs of the crypto world have replaced the Jamie Dimons and Timothy Sloans of the banking world.

Alex Mashinsky, the founder of the Celsius Network crypto startup sees the new crypto wave as just a rebirth of the same bad ideas that brought turmoil in the past. In an interview with Forbes, he stated:

“A lot of what the crypto community is seeing in traditional crypto markets is just a rebirth of bad ideas from the 1800s, all being used to take advantage of the fact that regulations don’t cover loopholes. […]We are seeing a lot of conflict of interest concentrated most with exchanges where people don’t understand that these entities don’t act in their best interest.”

So, what can we do? For one, we must stand up against the subtle wielding of power by a few elites who have made themselves the kingpins of the crypto community. Allowing one person to condemn a whole community for the transgressions of an individual goes against everything Nakamoto envisioned.

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Electrum Wallet Botnet Infects 150,000 Machines, Steals $4.6 Million in User Funds

TheMerkle WaterMiner Monero Mining Malware

A botnet that has been targeting Electrum users just won’t quit. If anything, it seems to be picking up more hosts along the way and getting stronger. In the past month, the number of infected hosts has averaged 100,000. On April 24, the number went up to 152,000 according to a report by security firm Malwarebytes Labs. Since detection on April 4, the botnet has stolen over $4.6 million in users’ funds.

As we reported earlier this month, Electrum announced on Twitter that it had suffered a denial of service (DoS) attack. At the time, the botnet behind the attack had pooled together the power of 140,000 machines. It targeted Electrum clients who were using the old version of the wallet.

And now, according to Malwarebytes, there are two distribution campaigns that are fueling the botnet. The two, known as Smoke Loader and RIG exploit kit, are dropping the ElectrumDoSMiner malware. The team also identified a loader it named Trojan.BeamWinHTTP that’s involved in downloading the malware.

(Image courtesy of Malwarebytes Labs)

As shown in the graph, the researchers have only identified a handful of methods that the hackers have used to distribute the malware onto Electrum users’ machines. However, the number of malicious binaries downloading the Trojan could be in their hundreds.

Through analysis of the IP addresses, the team discovered that the malware was predominant in the Asia Pacific region. Away from this region, Brazil and Peru also have a high concentration. Egypt also has a significant number of malware hosts.

The Rise of DoS Attacks 

The team further explained:

The number of victims that are part of this botnet is constantly changing. We believe as some machines get cleaned up, new ones are getting infected and joining the others to perform DoS attacks. Malwarebytes detects and removes ElectrumDoSMiner infections on more than 2,000 endpoints daily.

And indeed, the Malwarebytes team has been actively fighting the malware. The graph below shows their progress on three different days.

(Image courtesy of Malwarebytes Labs)

Developers believe the attack was retribution by the hackers after Electrum developers thwarted their initial plans. Speaking earlier in the month, Electrum lead developer explained, “We are not sure what motivates the attacker. It might be some kind of retaliation after we took steps last month in order to prevent phishing attacks. This counter-attack has been effective against phishing because it does not require a lot of legit servers.”

The Malwarebytes believes that though the attack has been massive, media outlets have underreported on the issue.

“Crooks wasted no time in exploiting a vulnerability in Electrum wallets to phish unsuspecting users. What followed next with retribution attacks on Electrum servers was unexpected but logical, considering what is at stake. While these DDoS attacks have not been publicized much by mainstream media, they have undoubtedly caused millions of dollars in losses over the span of just a few months.”

DDoS attacks have become the biggest threat to cybersecurity, a survey earlier in the year showed. The survey by the Neustar International Security Council (NISC) found that 75 percent of cybersecurity experts believe DDoS attacks pose the largest threat. Half the companies sampled had suffered a DDoS attack of some sort in 2018.

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World’s Largest Bitcoin-Priced Real Estate Project Put on Hold

British entrepreneur Michelle Mone grabbed the headlines in late 2017 when she announced the world’s largest Bitcoin-priced real estate project. Worth £250 million ($323 million) Aston Plaza in the heart of Dubai spans more than 2.4 million square feet. The development contains 150 apartments, all of which one could purchase in BTC. However, the daring dream has hit a snag according to a new report.

The report by U.K publication The Times revealed that construction of the venture had stopped. Citing government inspectors who visited the site last year, the report didn’t reveal the reasons for the snag.

Mone and her billionaire partner Douglas Barrowman had touted the development as the first of its kind in the world. In an interview with CNBC, Mone stated:

And this is the first major global development where you can purchase in bitcoin. Previously there’s been an apartment here and there’s been a house here and there, but never a £250 million development, so it’s really exciting to be involved in.

According to its official website, the development is a 33-floor residential tower. 25 percent of the property is supposedly complete, with 400 apartments already having been purchased.

Mone and Barrowman partnered with BitPay to enable the BTC payments. BitPay’s CEO, Stephen Pair expressed his excitement at the partnership, saying that it would set a new precedent for both Bitcoin and the real estate industries.

Pushing Crypto Adoption

Barrowman said in an interview last year that they chose Bitcoin after it had emerged as a “more mainstream means of investment.” The British billionaire, who is the chairman of the Knox Group of companies explained:

I’ve been invested in the crypto world for the last couple of years really, and it’s a sector I’ve watched grow and emerge. So I see it coming to that stage where the early adopters are giving way to a more mainstream application of cryptocurrency, and therefore it’s a logical extension to take land and buildings and effectively offer people the opportunity to pay in cryptocurrency or bitcoin rather than just fiat currency.

At the time of its launch, cryptos were doing quite well. The two perhaps hoped they could capitalize on the new crypto millionaires. They even promised investors who purchased properties that they would receive a nine percent return on their investment if they didn’t wish to live on the property.

This isn’t Mone’s first crypto venture, having founded a crypto startup previously. The startup, known as Equi Capital issued an ERC-20 token that meant to make investing more accessible. According to The Next Web, Apple’s co-founder Steve Wozniak was working with the startup directly.

The firm planned to issue an ICO, but it failed shortly after a pre-sale. It had raised an initial $7 million in a private token sale. However, after canceling the ICO, it refunded all its investors. It launched a bounty program shortly after, but this failed as well.

 

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$65 Billion Online Trading Firm E*Trade to Offer Crypto Trading Services

TheMerkle_Bitcoin Trading

One more major player is joining the movement to push crypto adoption mainstream. Online trading platform E*Trade is set to offer crypto trading services, a source revealed to Bloomberg. In doing so, the platform will join close competitor Robinhood which has received a significant push among millennial customers by offering crypto trading services.

E*Trade is an online trading platform that enables its users to trade a diverse set of financial assets. These include common stocks, preferred stocks, options, exchange-traded funds and futures contracts. It also offers online banking services as well as margin lending.

The New York-based company has been one of the companies that have revolutionized the online trading industry. This new crop of electronic platforms have given young clients a stress-free method of investing. Consequently, they have been a hit with the millennial generation.

E*Trade will first integrate Bitcoin and Ethereum, the source indicated. In the future, it will consider adding other cryptos.

By offering crypto trading, E*Trade will avail Bitcoin and Ethereum to over five million new users. This could go a long way in pushing for the mainstream adoption of cryptos. In 2018, the firm processed over 280,000 transactions on average daily. This vibrant market, which is predominantly young, could take to cryptos swiftly.

Targeting Millennials 

E*Trade declined to comment on the development. As such, it’s unclear if the crypto trading services will be available throughout the U.S or if it will pilot the program with a few states. Previously, some crypto trading firms have found it difficult to get a license to operate in some states.

Just recently, Bittrex was in a feud with the NYDFS. The exchange accused the regulator of bias and misrepresentation of facts. This was after the regulator denied the exchange the BitLicense, the much-coveted license to operate in New York. Kraken has also previously had a run-in with the NYDFS. At the time, Jesse Powell, Kraken’s CEO accused the regulator of acting like an ex who didn’t want them to move on.

E*Trade’s main rival Robinhood has already been there and done that. Robinhood has been offering crypto trading services for quite some time now. When the platform implemented the crypto trading service, it was behind E*Trade in user numbers. A few months later, it leapfrogged E*Trade after heavy user onboarding in the few months following the crypto announcement.

Speaking to CNBC at the time, Robinhood’s co-founder and co-CEO Baiju Bhatt highlighted just how important a role the integration of crypto had played in its aggressive growth. He stated:

Crypto has certainly added to our growth. In the next couple of years, I think you’ll see Robinhood looking like a full-service consumer finance company.

E*Trade must have taken notes and now, it’s following in the footsteps of its rival. Robinhood only offers its crypto trading services in ten states in the U.S. E*Trade could be looking at adding more states to give itself an edge over its rival.

Image(s): Shutterstock.com

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Hamas Terrorist Organization Turns to Bitcoin to Raise Funding

TheMerkle_Terrorists

A terrorist organization has turned to bitcoin as it seeks to raise funding for its activities. According to a new report, the military wing of Hamas, known as Izz el-Deen al-Qassam Brigades has been asking its supporters to send in donations using bitcoin.

The United States and the European Union have both labeled Hamas as a terrorist organization. Others, such as Britain have only proscribed the military wing, al-Qassam Brigades as terrorists. This makes it illegal for citizens in these regions to support the organization financially. Financial firms that handle funds related to the organizations are also obliged to report them to the authorities.

According to the report by Reuters, the organization has gradually evolved in its crypto methods. Initially, it asked its supporters to send the cryptos to a single BTC address. However, in recent months, its system generates a new address for every donation. This makes it extremely difficult to pin down the addresses that belong to the terrorists.

Reuters cited blockchain analytics firm Elliptic which has been on Hamas’ trail for quite some time now. According to Elliptic, in the period between March 26 and April 16, the organization received 0.6 BTC. At the time, this was worth around $3,300. Cumulatively, the BTC fundraising campaign, which lasted four months, brought in around $7,400.

Tom Robinson, the co-founder of Elliptic, told Reuters that while still not the organization’s biggest funding avenue, BTC funding will grow in importance. Currently, the group is just experimenting, trying to see what works best, he said.

Bitcoin Use in Crime

On its website, Hamas has a two-minute video that explains how to donate in cryptos. The video, which is in Arabic but with English subtitles, states that this is the only way to evade the traditional financial system.

It then goes on to give very simple instructions on how to donate in cryptos. It even reminds the supporters to use public devices so that their IP addresses don’t end up giving them away.

According to Elliptic, the organization used a major Asia-based crypto exchange to cash out. The London-based analytics firm withheld the name of the exchanges.

The move by Hamas was a logical step in light of recent events. The organization, which governs the autonomous Gaza Strip since it took over a decade ago, has lost key revenue streams. One of these was its connection with Egypt. The Egyptian government cracked down on some major channels that the organization used for smuggling. Its support from Iran has also waivered after widespread condemnation for its part in the Syrian war.

Hamas is just the latest instance of crypto use in crime. The anonymity that made cryptos a darling for many has become its Achilles heel. Just recently, the CEO of Chainalysis revealed in an interview that bitcoin continues to be the most preferred crypto by criminals. This is despite the recent proliferation of privacy coins such as Monero and Zcash. India also recently joined the anti-crypto bandwagon with reports indicating that most government departments had supported the decision to ban cryptos completely. The main condemnation of cryptos in India has been their use in criminal activities.

 

 

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Tether and Bitfinex Accused of Covering up $850m Loss, Sparks a $10b Loss in One Hour

TheMerkle BitConnect Lawsuits

Tether is on the spotlight, again. This time, the largest stablecoin in the market is at the center of an alleged $850 million cover-up. The New York attorney general Letitia James obtained a court order yesterday enjoining iFinex Inc., the operators of Bitfinex as well as Tether Limited, accusing the two, and their related entities of defrauding New York crypto investors.

Bitfinex has been struggling to find a banking partner since Wells Fargo cut ties. The search has taken the exchange across the globe, with links to such banks as ING and HSBC. However, the search wasn’t successful. Bitfinex was then left no choice but to entrust $1 billion to Crypto Capital Corp, a Panamanian firm.

A few months later, the AG alleges that Bitfinex and Tether discovered that Crypto Capital had either lost or stolen the money. Despite their efforts, they weren’t able to recover $850 million.

The AG cited some correspondence between one of the senior executives at Bitfinex and Crypto Capital. In it, the Bitfinex executive tells the Panamanian firm that the exchange is under pressure to produce the $850 million. This was after experiencing an unprecedented spike in client withdrawals. The executive, whose name the AG withheld, even implied that it could be extremely damaging for bitcoin. He allegedly stated:

Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.

At the time, bitcoin was trading at over $6,500.

James told the Manhattan Supreme Court:

Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.

Market Bleeds

Bitfinex never signed any formal contract with Crypto Capital, she continued. This is despite handing the firm over $1 billion.

Bitfinex knew it had to move quickly to cover up the loss. It thus allegedly transferred over $700 million from Tether’s reserves to Crypto Capital. This was done without any notice to the shareholders. Even worse, the two entities conspired to hide these transactions when the Office of the Attorney General set out to investigate them.

The court order requires that Tether and Bitfinex cease all transactions involving the dissipation of the U.S dollar assets that reportedly back Tether tokens. Further, it bars the companies from destroying any material relevant to the case.

Unsurprisingly, the market bled after the AG announced the investigation. Just one hour after the announcement, the crypto market had lost over $10 billion according to data from CoinMarketCap. Currently, bitcoin is trading at $5,295, down 3.5 percent in the past 24 hours. And according to one expert, it could go below the $5,000 mark before long.

Stephen Innes, an executive at SPI Management told Bloomberg:

These latest allegations not only bring Tether’s credibility into question, they cast a dark cloud over the entire industry. While the market remains tentatively supported above the key psychological $5,000 mark, given the waves of pessimism hitting the market this morning it wouldn’t surprise me if this major support level gives way.

The AG Acted in Bad Faith, Bitfinex Says

Bitfinex responded quickly, posting a press release on its website shortly after the AG’s announcement. The exchange claimed that the AG’s claims were “written in bad faith” and were full of false assertions. The exchange further denied the $850 million loss, disregarding it as mere hearsay.

Bitfinex will not take the accusations lying down, the press release stated.

And both Bitfinex and Tether are committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this, and any and all other actions, by the New York Attorney General’s office.

But not everyone is convinced that the AG is on a witchhunt. Certainly not the CEO and co-founder of Paxos, Charles Cascrilla. Chad, as he is popularly known believes that stablecoins must be fully compliant with the existing laws. In a statement shared with NullTX, he told us that in the long run, fully regulated stablecoins like PAX are the only ones that will stand the test of time.

The news today reinforces our belief that regulation and oversight create confidence and stability for the industry. The industry is trading billions of dollars worth of cryptocurrencies daily – and relying on exchanges and stablecoins that have no licensing, no registration, no oversight, is bad for business and reckless in the long term. We knew this was coming – and we’ve been expecting the tide to turn.

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Bitcoin Still Dominates Criminal Activity Despite the Rise of Privacy Coins

CaaS

Bitcoin is still the favorite cryptocurrency for criminals. This is despite the springing up of more than 2,000 cryptos, with some like Monero and Zcash hinging on privacy. However, the crypto king still dominates criminal activity by over 95 percent.

In an interview with Fortune, the co-founder and COO of Chainalysis Jonathan Levin stated:

Bitcoin is by far the favorite. With our law enforcement customers, we’ve seen that over 95 percent of criminal cases involve bitcoin.

Chainalysis develops tracking software for businesses and regulators, enabling them to implement crypto anti-money laundering programs. Currently, its know-your-transaction (KYT) platform is in use by over 100 clients, including crypto exchanges, major multinationals and regulators.

Over the past three years, law enforcement agencies have become better at tracking BTC transactions. However, this has done little to deter criminals from using the largest crypto. This is because thanks to its dominance, bitcoin is the most widely used and traded crypto. This makes it easier to cash out or pay with at retail outlets.

Levin also revealed that the New York-based startup has also played a great part in taking down many of the criminals using cryptos.

“Some of the best examples are some of the darknet takedowns and a lot of the arrests recently of opioid dealers within the United States,” he said.

Chainalysis has helped law enforcement agencies to track blockchain transactions that involve payments for illegal substances. Levin went on:

What we’ve seen is that there is the ability to tie some of those cryptocurrency transactions either to the pharmacies in China or to the services that people are using to distribute fentanyl. Homeland Security and the DEA have actually become really good at apprehending those people.

Quadriga Duped Us All

Chainalysis has also been looking into the Quadriga case, Levin revealed. The Canadian exchange grabbed the headlines after its founder supposedly died with the keys to its crypto wallets.

However, according to the blockchain analytics expert, the exchange never had the funds that it purportedly lost.

We were looking at the bitcoin and tether holdings of Quadriga and what we found very quickly was that Quadriga, as an exchange, actually didn’t have those customer funds that were reported lost on the media. Those funds actually never existed. The industry has been raising the red flag about it for a while now that this was an exchange that was operating on fractional reserves and that was already in deep trouble

Levin further revealed that Chainalysis was expanding the number of cryptos that its platform supports. Previously only supporting six cryptos, the startup added three stablecoins in USD Coin, Paxos Standard Token and Tether as well as Binance Coin. This takes the number of cryptos that the firm tracks to ten. Litecoin, Bitcoin, Ether and Bitcoin Cash are among the earliest that its platform supported.

Chainalysis recently raised $30 million in Series B funding to expand its suite of products. The funding round was led by Accel Partners, with Japanese conglomerate MUFG being among the participants.

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Buy Now! New Report Says BTC Risk-Reward Ratio Is the Best of Any Asset in the World

TheMerkle |Cryptocurrency ICOs risk Reward

Wondering whether this is the best time to stock up on bitcoin? It is, at least according to a recent report by Adamant Capital. The report stated that the currency is in its last stage of the bear market; the accumulation phase. Bitcoin HODLers have begun committing for the long term again. BTC’s fundamentals are gaining momentum, the report stated, both as a disruptive technology and a financial asset.

Adamant Capital, founded by the very influential Tuur Demeester, has published two other similar reports. The first one was far back in 2012, with the second one being in 2015. In both periods, BTC was down at least 80 percent from its previous highs. As we now know, in both times, the currency has fought back to set new records. Currently, it’s 75 percent below its 2017 ATH. A precursor for another record-setting bull run? Adamant Capital believes so.

In the current accumulation phase, the currency should trade in a range of $3,000 to $6,500, the report states. Bitcoin HODLers have started to consolidate their positions in readiness for an impending bull run. With the market having experienced capitulation towards the end of last year, many retail traders who were in it for quick profits exited. The result was that most of the people who continued to hold cryptos are strategic and dispassionate investors.

To further support the claim, the report pointed to the low level of volatility in the crypto market since it capitulated in November.

High Bitcoin volatility can be a proxy for the involvement of trigger-happy retail speculators, whereas low volatility tends to coincide with phases of consolidation, apathy, and accumulation. Recently, the Bitcoin 60-day volatility dropped below 5%, a level not seen since late 2016.

The HODLers Are Central to the Future Price Movement

The report put bitcoin HODLers at the center of the future price movement. In the first three quarters of 2018, this group accumulated BTC in the hope that the prices would rebound. However, this wasn’t to be. Towards the end of 2018, many HODLers panicked and started getting rid of their positions. The effect was the fateful Wednesday in November in which the market crashed to its knees.

According to the report, between November 14 and 16, over 70,000 Bitcoin days were destroyed. This was the biggest such move in a year.

Bitcoin days is a product of the amount of BTCs sent with the number of days that these BTCs have been dormant. A high number of Bitcoin days indicates that traders who have held the tokens for long have sold their stashes.

The report further looked at the factors that have been behind bitcoin’s bear market. On top of the list were hacks on exchanges. Back in 2013 when the then-dominant Mt. Gox was attacked, the market crashed by over 50 percent. Adamant Capital conducted a survey last year that sought to find out what is most likely to affect the bitcoin price. According to the report, lack of security expertise was the outright leader with over 84 percent of the votes.

The report concluded by touting bitcoin as the best investment option currently available in the market.

We assert that the long term risk-reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world. We expect for it to trade in a range of $3,000 to $6,500 after which we foresee the emergence of a new bull market

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Bitcoin Not Hitting All-Time High Soon, Could Take 22 Years: Top Bank Analyst

NulLTX Bitcoin Cash Prce Decline

When bitcoin and other cryptos started rallying on April 2, the cryptoverse was predictably excited. The industry had been extremely slow since November last year. Bitcoin hit $5,000 for the first time in over four months, with some other cryptos registering even higher gains. It wasn’t long before some analysts started drawing parallels between the current turnaround and the 2017 crypto boom.

However, according to one tech analyst, we shouldn’t be too excited just yet. In fact, we may have to wait for some 22 years before we finally get back to 2017 record high.

Kevin Dennean believes that the crypto community is getting carried away with recent gains. Dennean is the top tech analyst at UBS, the biggest bank in Switzerland with assets totalling over $1 trillion. In a recent research note to investors, he compared stated, “The argument here is that bitcoin has gone through its bubble phase and is ready to rise phoenix-like from the ashes just as other assets and indices did in the past.”

BTC’s journey is similar to previous bubbles such as the Dow Jones in the Great Depression and the Dotcom bubble, he went on. While most of the other industries eventually recovered, it was after a long period of time. Dennean especially likened BTC’s journey to the Dow Jones. If bitcoin follows a similar path to Dow Jones after the 1929 depression, we may have to wait for 22 years to recover to all-time-highs.

Return to ATH Not Guaranteed

Dennean further sounded a warning that the return to the top isn’t guaranteed. In all the other bubbles he cited, all but one lost at least 75 percent of their values. However, not all of them recovered to previous high levels. He stated:

“Maybe crypto-bull contingents should consider what happens after the bubble–not every bubble that bursts recovers the old highs.

And to compound on the crypto industry’s concerns, CoinMetrics believes that the recent comeback was orchestrated by a solitary actor. The research and analytics firm stated on its Twitter page:

Our theory is that a single committed actor went long and traded in a manner that maximized price impact. The movement in price started at 04:30 UTC time, the point in the day where global liquidity is at a minimum.

The supposed actor traded in a manner designed to “trigger stop losses and force a short squeeze through liquidations of margin positions and short future positions.”

The price turnaround took place on April 2, with CoinMetrics tracing HitBTC as the genesis of the entire price movement. After the supposed actor made large trades on HitBTC, the firm then observed similar trades on Coinbase and then Bitfinex. CoinMetrics could not, however, rule out the possibility of wash trading at HitBTC, with the exchange having been one of those implicated by a recent report on fake trading volume.

If this is true, then the implications are huge. For one, it shows just how susceptible the industry is to manipulation. While this time the manipulator had good intentions, there’s no guarantee that this will always be the case. The next time the actor decides to singlehandedly determine the market movement, he might decide to go short, leading to a massive market crash.

 

 

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What Winter? Binance Defies Odds to Post a 66% Rise in Q1 Profits

NullTX Binance Coin price 17

Binance has always been one to defy expectations. The exchange hit the ground running in mid-2017. At the time, some exchanges had been running for years already. This didn’t stop Binance from becoming the largest crypto exchange by daily trading volume. And in the spirit of defying expectations, the exchange has now posted a 66 percent quarter-on-quarter increase in its profits.

Announcing the profits in a blog post, the CEO Changpeng Zhao revealed the exchange had burned 829,888 Binance tokens (BNB). Binance uses 20 percent of its profits to buy back BNB tokens which it destroys in the coin burns. This was its seventh coin burn, destroying BNB tokens worth $15.6 million. This translates to $78 million in overall profits for the first quarter of this year.

In the previous quarter, the exchange burnt 1.6 million BNB tokens. At the time, the price of BNB tokens was much lower and thus Binance had to burn more tokens. With the profits in Q4 last year having stood at $47 million, the exchange registered a 66 percent increase in its profits.

The achievement is even more significant given that the first quarter of the year was quite slow for the crypto industry. Since shedding almost half of its market capitalization in November last year, the market was extremely slow in the first three months of 2019. However, this didn’t deter Binance.

CZ further pointed out the breakaway that BNB had registered when the rest of the market was still going through bearish times. The token started gaining way before the rest of the market caught up. In January alone, BNB registered a 75 percent gain as it burst into the top ten cryptos by market cap.

The Success Story

So, why did BNB gain rapidly when the other cryptos were trading sideways? CZ explained:

Well, I don’t really know. Our mantra has been quite simple, to keep our heads down and focus on building. We kept building all throughout 2018, and 2019. I think that’s really it. We build products that people use and we never stop trying to improve ourselves and our products. Price will eventually catch up to the value you create.

The CEO, who has a cult following especially on social media further attributed Bitcoin’s comeback to Binance. According to CZ, the successful token sale of BitTorrent tokens on Binance’s Launchpad went a long way in reviving people’s faith in the crypto market, he wrote.

CZ further explained why his company brought Launchpad back to life at a time when the market was at its bottom. While the platform helps projects raise funds, it goes beyond just that. It helps raise awareness about a product, introducing it to millions of users whom it would have otherwise missed out on. It leverages the trust people have placed on its brand to bring in not just investors but also some of the first users.

Perhaps the best reflection of Binance’s great performance is the progress that the BNB token has been making. The currency started the year at $6. Two months later it had doubled and as it stands, it has tripled its price, currently trading at $19.5.

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Market Manipulation Through Trading Bots Rampant on Decentralized Exchanges

spoofy bitcoin manipulation

The crypto industry looked at decentralized exchanges as the long-awaited solution to a very centralized crypto exchanges industry. DEXes, as they are popularly known, give the ultimate control back to the user. They rely on smart contracts to execute the trades, all without having to relinquish your cryptos to an exchange operator. However, according to a new report, DEXes are rife with trading bots that are manipulating the markets.

The report by researchers from Cornell University and several other universities attributed the bots to DEX design flaws. It comprehensively looks at all the ways in which trading bots have exploited these flaws and other inefficiencies to give some traders an edge over their peers.

At first glance, decentralized exchanges seem ideally designed. They appear to provide effective price discovery and fair trading while doing away with the drawbacks of centralized exchanges. […] Despite their clear benefits, however, many DEXes come
with a serious and fundamental weakness: on-chain, smart contract-mediated trades are slow.

One of the methods the bots use is known as front running. This is where the bots get to see another trader’s order and place their own first. This is mostly associated with traditional stock traders. In the crypto world, bots do this by engaging in priority gas auctions (PGAs) where they bid up transaction fees (gas).

The bots can also engage in yet another manipulation tactic which the researchers termed miner-extractable value (MEV). This is the value that miners can extract directly as crypto profits from smart contracts.

These and several other strategies give traders using these bots an unfair advantage over their peers.

Could Be Affecting Centralized Exchanges as Well

The researchers have been tracking six DEXes since October last year. They also examined historical data from many others. On just these six exchanges, over 500 bots existed, executing trades worth over $20,000 daily. EtherDelta and Bancor were two of the leading culprits, lead author Philip Daian told Bloomberg.

Granted, this is just a small percentage of the $10 billion that the crypto industry trades on average daily. However, the research only focused on DEXes. The situation could be just as bad with centralized exchanges.

Speaking at a blockchain event in its New York City campus, Cornell Tech professor Ari Juels explained:

We have no idea what the extent of the malfeasance is on centralized exchanges. If we extrapolate from what we’ve seen on DEXes, it could well be on the order of billions of dollars.

Moreover, the use of DEXes is increasing gradually over time. This is led by people’s disdain for platforms that require them to relinquish control of their crypto assets. With centralized exchanges being the prime targets for hackers, cryptos traders are finding the need for platforms that rely solely on programming and mathematics. Additionally, centralized giants such as Binance have delved into DEXes, with more heavyweights likely to take the plunge.

While Bancor was among the most notable exchanges rife with bots, the exchange denied the claims. According to Bancor’s communications director Nate Hindman, the Swiss exchange has inbuilt features that fight manipulation. One of its strategies is setting the maximum gas price to ensure that attackers can’t skip over other traders by bidding higher.

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Bitcoin Holds Steady Above $5,000 as Tom Lee Predicts $10,000 This Year

Themerkle_Bitcoin Price Prediction

Apri has been a stellar month for the crypto industry. Having begun the month at just above $4,000, bitcoin quickly fought to hit the $5,000 mark again. The rapid gains on the second day of the month came as a surprise to many. However, the currency has held on strongly to the support.

At press time, the currency is trading at $5,096, with only a slight change in the past 24 hours. The currency started the weekend at $5,070. And while the weekend has previously not been too friendly to cryptos, bitcoin has managed to hold on.

Bitcoin’s price has been perhaps best supported by a continuously high trading volume. While the volume has almost halved since Friday, it’s still much higher than it has been previously. In the past 24 hours, the volume stood at $9.7 billion. On Friday, the volume stood at $16.5 billion.

BitMEX lost its position as the contributor of the largest trading volume to the controversial FCoin. The Chinese exchange contributed 7.7 percent of the total trading volume with $979 million, ahead of BitMEX which came in second with $772 million. OEX, CoinBene and BW.com were the other exchanges that noted significant trading volumes over the weekend.

BTC Heading to $10,000 This Year

Tom Lee is back on the bullish line of thought that he has become renowned for. Talking to business outlet MarketWatch, Lee stated his belief that given the current run of form, the currency will hit $10,000 before the end of the year.

The head of Fundstrat Global Advisors stated:

Risk appetite is positive for bitcoin. If the S&P 500 made a 2.5 standard deviation move [as it has done year-to-date] and investors are looking for vol [volatility], that’s building a base case for bitcoin.”

This is not the first prediction that the former JP Morgan chief U.S equity strategist has made. However, he hasn’t been very successful with most of his calls. Last year, he predicted that bitcoin would end the year at $25,000. But as we now know, he couldn’t have been more wrong. But it has always been in his nature to be bullish since his JP Morgan days. Back then, he was known as Wall Street’s most bullish strategist.

Banks Have Played Right into Our Hands

While cryptos have unleashed a whole new world of possibilities, banks and other financial institutions have played right into their hands. This is according to Naeem Aslam, the chief markets analyst at Think Markets U.K. Aslam explained:

Monetary policy has become a joke. All it did was fuel buybacks and inflate asset prices and as questions grow about how independent the Federal Reserve is and as we see it run out of options, people will turn to digital assets.

Iran and Venezuela have provided the best examples. In such countries, citizens have turned in earnest to cryptos as they seek to find an escape from the hostile domestic economic conditions. Travis Scher, the head of investments at crypto hedge fund Digital Currency Group stated:

The most stark example is Venezuela. This is the first real example of adoption and unfortunately, when you look at bad central bank policy reaction, history tells us this won’t be the last.

 

 

 

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Bitcoin Wallet Electrum Suffers Massive DoS Attack, Users Lose Millions of Dollars

exchanges hacked

Electrum, a popular bitcoin wallet has suffered a denial-of-service attack. The company announced the attack on Twitter, assuring its users that its developers were working on a “more robust version of the Electrum server.” It also advised its users to disable auto-connect and select their servers manually.

The source of the attack was an extremely powerful botnet. The bot pooled together the power of 140,000 machines, making it difficult to bring down. It directs unsuspecting users to a version of the Electrum software that the hackers have compromised, stealing their BTC.

According to a report by The Next Web, the attack has focused almost exclusively on users who are using old versions of the software. Currently, the wallet doesn’t have an auto-update option. Therefore, users have to update their software manually.

Speaking to the publication, the wallet’s lead developer Thomas Voegtlin explained:

Indeed, updated versions are not at risk, but the service might be temporarily unavailable. If that is the case, we recommend to users that they stick to the same server (disable auto-connect), until they eventually manage to open a session.

As with any other DoS attack, the bot is directing massive traffic to Electrum servers, causing crashes. The hackers then direct users to the fake servers being that they operate. Here, the malicious server urges the user to update his client with a hacked version. Once he installs the hacked version, the user loses all the funds in the older version.

Electrum developers are working to resolve the attack, Voegtlin said. However, he warned users that they could face service interruptions as they work on mitigating the damage that the intense traffic had caused.

A Retaliation Attack

One security researcher told the publication:

The total amount stolen is in the millions of dollars so far, with a single person alone losing almost $140,000, based on our analysis. The DoS attacks are a new level, which only began about a week ago. People have seen 25 Gigabits per second worth of traffic being flooded at community run servers.

While the motives behind the attacks are unclear, Voegtlin believes they are a retaliation attack. Electrum previously suffered a phishing scam by a Trojan known as Electrum Stealer. The Electrum developers modified some servers to increase protection against such an attack. This is the loophole that the attackers have exploited.

Voegtlin told the outlet, “We are not sure what motivates the attacker. It might be some kind of retaliation after we took steps last month in order to prevent phishing attacks. This counter-attack has been effective against phishing because it does not require a lot of legit servers. If you randomly connect to 10 servers, the chance that at least one of them is performing the counter-attack is very high.”

He also advised Electrum users to only download Electrum software from the Electrum.org website. They can also use the wallets official GitHub depository. This is the only way they can protect themselves from the attack, he said.

 

 

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New York Times Trashes Bitcoin in New Wave of FUD Attacks, Coinbase COO Responds

TheMerkle_Misleading News Sites

Mainstream media’s relationship with cryptocurrencies has had many chapters. Initially, most outlets bashed cryptos as just another bubble that would fade in no time. That was back when it was cool to trash the new technology that not many understood. Things changed quickly and the market started being receptive to cryptos, and so did the media outlets. CNBC began running segments dedicated to cryptos, Fortune had ‘The Ledger’ crypto and blockchain segment while Bloomberg had all the breaking crypto news.

However, every once in a while, a mainstream media outlet decides to go on an anti-crypto rampage. The latest is the reputable New York Times, the second-highest selling newspaper in the United States. In a report titled ‘Amid Bitcoin Uncertainty, the Smart Money Knows That Crypto Is Not Ready’, the publication dug into how institutional investors have failed to invest in cryptos.

There were signs that Wall Street was quite interested in cryptos, the report said. However, most of the early entrants have stalled or quit crypto altogether. It cited Goldman Sachs’ failed crypto desk, Bakkt delay and delisting of Bitcoin futures by the Cboe as some of the key indicators that Wall Street was having a second thought.

Part of the report read:

“Some cryptocurrency enthusiasts had hoped that the entrance of Wall Street institutions would give them legitimacy with traditional investors. But their struggles — and waning interest — illustrate the difficulty in bringing Bitcoin from the fringes of the internet into the mainstream financial world.

The report by the fifth-most visited news website globally irked many in the crypto community. While it is true that some of the Wall Street titans have had to re-strategize, it certainly doesn’t mean cryptos are flawed or have lost their potential to overhaul financial systems.

We Won’t Take it Lying Down

One of the first to respond was Asiff Hirji, the president and COO of the leading U.S crypto exchange Coinbase. Hirji took to Twitter to call out the NY Times, describing the report as ironic since Bitcoin had just hit $5,000.

He continued:

Crypto is more than ready. Coinbase offers a scale, insured, Qualified Custodian; the deepest compliant pool of liquidity and agency-only execution (we do not trade against our clients). Smart money is already in crypto.

And yet, this wasn’t even the worst attack on cryptos this week. Tech news website Gizmodo published an even more scathing article in which the publication blatantly attacked Bitcoin. Why should you care what Gizmodo says, you wonder. Well, it’s because according to some estimates, it rakes in over 23.5 million unique viewers a month. Spreading FUD to such a high number of people can have a significant effect on Bitcoin’s overall perception.

The controversial article stated:

“To be clear, Bitcoin is absolutely worthless by any real measure. It’s fake money that’s about as practical to use in the real world as Monopoly bills. Bitcoin is backed by nothing and requires tremendous amounts of energy to mine using computers. As it becomes more difficult to mine, it saps more and more energy, causing millions of tons of carbon dioxide to be pumped into the atmosphere and accelerating climate change. Bitcoin is little more than a speculator’s death cult at this point.”

In an era where fake news has become the order of the day, you’d be forgiven for thinking that reputable media outlets such as the New York Times and Gizmodo would do better.

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Simply Unstoppable: Bitcoin Cash Price Has Doubled in Two Days, Volume up 10 Times

NulLTX Bitcoin Cash Price Drop

The cryptocurrency market has been on one of the best runs since 2017. Bitcoin has rallied to hit the $5,000 level before a brief rollback took it to $4,700. However, it has since regained its momentum and currently trades just above $5,000. Litecoin is up nine percent in the past 24 hours to trade just shy of $90. EOS hit the $5.5 mark after a bullish run, with Ethereum currently trading at $163, up 77 percent in the past two months.

However, Bitcoin Cash has been the undisputed leader of the current bull run.

The Unsung Hero

The currency has been on one of the best runs ever, doubling its price in the span of three days. On Tuesday, April 2nd, BCH was trading at $168. It had ranged between $155 and $170 for the previous two weeks. It started the week slow on Monday, trading at $167. The daily volume stood at $460 million.

However, everything was about to take a turn for the best for the currency. On Tuesday, the currency made rapid gains, shooting up 28 percent to close the day at $215. The trading volume also tripled to hit $1.35 billion by end of the day.

And it wasn’t done just yet. On Wednesday, the currency picked up where it had left off, gaining an incredible 58 percent. It closed the day at $340, its highest price so far this year. In fact, this is the highest that BCH has traded since November last year when the Bitcoin SV hard fork led the market to a plunge. BCH has been unable to pick itself up from the fork, up until now.

The volume has also shot up tremendously. While just three days ago it stood at $460 million, it went up to $4.2 billion on Wednesday. Huobi Global continues to be the biggest contributor to the BCH trading volume with $420 million, a 10 percent contribution. Binance, LBank and Upbit follow suit with upwards of $200 million each.

However, the BCH momentum has slowed down a bit and at press time, the currency was trading at $310. Earlier, it had dipped to $292, but it quickly rebounded to trade once again above $300. The volume has also come down slightly to stand at $4 billion.

Following the Leader?

So, why has BCH skyrocketed in the past few days? While there are factors within the BCH ecosystem that have boosted the price, some experts seem to believe that it’s just following the general tone set by the leader, Bitcoin. Speaking to Forbes, crypto trader and investor Marius Rupsys stated that BCH has BTC to thank for its momentum.

“Bitcoin started moving and only then other coins followed,” he told the business publication.

Lance Morginn, co-founder of crypto analytics firm Blockchain Intelligence Group shared the opinion. He stated:

Bitcoin is acting as the anchor currency and can be credited for the initial price pop for bitcoin cash. From my perspective, it looks like the traders have hopped on to BCH given its greater momentum, as they can leverage BCH more than BTC.

While this may be true, BCH has also been greatly boosted by an explosion in the volume of BCH futures contracts at Crypto Facilities, the London-based crypto derivatives provider. The startup was acquired by U.S exchange Kraken earlier this year, and this has provided a turnaround. Previously, clients were almost exclusively interested in BTC and ETH futures. However, after the acquisition, Crypto Facilities got exposed to Kraken users who were also interested in other altcoin futures.

Speaking to crypto media outlet CoinDesk this week, the startup’s head of indices revealed that Bitcoin Cash futures had shot up 500 percent in the past month. Litecoin futures have also seen increased interest since the turn of the year, he revealed.

 

 

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Bitcoin Shoots up 21% in One Hour to Hit $5,000, Many Unable to Explain the Gain

TheMerkle_Blockchain Excitement

Some have written it off, stating that its best days are behind it. However, Bitcoin has once again proven the doubters wrong. The currency shot up by over 21 percent to hit the all-important $5,000 level earlier today. Making the gain even more spectacular, it happened in less than an hour. 

Bitcoin shot up 21 percent between 12:30 a.m and 1.30 a.m New York time. The currency defied all odds to once again hit the $5,000 landmark, a very important milestone for the currency. Many analysts have previously stated that if Bitcoin can regain the $5,000 mark, it could set the stage for an explosion in the coming months.

The gain came at the back of a 78 percent increase in its trading volume. The 24-hour trading volume for the currency shot up from $9.1 billion to $16.3 billion. This is the highest 24-hour trading volume the currency has registered since early January last year when its price stood at $11,000. A majority of the trading volume emanated from BitMEX which accounted for 16 percent with $4 billion. Controversial Chinese exchange FCoin also contributed a huge chunk at over $3 billion.

The currency hasn’t been able to maintain its price over the $5,000 mark, however. At press time, the price stood at $4,782. This is still a 15.8 percent increase in the past 24 hours. In some markets such as Bitfinex, it’s trading much higher at $4,895.

What Led to the Flash Gains?

While the crypto community is overjoyed at the rapid gains, no one can exactly seem to pinpoint what sparked them off. Even the experts seem at a loss. Binane chief Changpeng Zhao is one of those who was puzzled by the flash gains. CZ, who has a cult-like following from crypto enthusiasts took to Twitter where he said he is clueless about what is behind the gains.

And yet Kraken believes that it’s solely responsible for the gains. Kraken, in an April Fool’s banter, took to Twitter to claim that since it had “announced support for the MacCoin (McDonalds’ stablecoin)”, the market had taken off. Kraken wrote:

Market showing a very strong reaction to the MacCoin (BMAC) listing. News is making the rounds. Bitcoin already up over $5k for the first time since Nov`18 in the 2 hrs since the story broke. Synergies are immense and we don’t fully yet understand the potential. Bulls smell it.

However, while the current spike injects lots of hope into the hearts of crypto enthusiast, it may not have a lasting effect. At least not according to Julien Auchecorne. Julien is the chief operating officer at XBTO International, a crypto trading and investment firm based in London. He stated:

The bounce is not enough to reset crypto winter as we have no major new products and last year’s big breakthroughs are still in their nascent stage. Sure it was a joke but it showed that the hope is for inflows and institutional infrastructure.

The joke Julien was referring to was a few widely circulated articles that indicated the SEC had finally approved two Bitcoin ETFs. The articles were part of the too-many-to-keep-up-with April Fools day jokes that were all over the internet. And while Bloomberg and other mainstream media outlets seem to think these articles could have pushed up the price, nothing could be further from the truth. The crypto community is very informed and sources its information from credible sources only.

 

 

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Police Officers Conspire with Kidnappers and Demand $142,000 Bitcoin Ransom

kidnapping bitcoin ransom

Everyone wants to get into crypto. And while most of us get into crypto through legal means, police in Pakistan turned to crime. Three police officers were part of a kidnapping case and demanded 20 million rupees ($142,000). However, police officers thwarted the plan after tracing and arresting the seven-member gang.

According to Pakistani English outlet Dawn, it all began in the office of the Lahore deputy commissioner (DC). In its report today, Dawn cited a police report that it had obtained. The report revealed that one of the culprits was Mazhar Abbas, a phone operator for the DC.

The other police officers were police Constables Mohsin Abbas and Mohammad Arif. The two were the official guards of a high court judge. Also involved in the crime were two crypto dealers who would process the ransom.

However, the person who hatched the whole plan was Faisal Yousof, a student of information technology. Yousof was a student of the victim, Prof Shahid Naseer whom they kidnapped on March 19.

On that day, the suspects allegedly rented a car and brought it to the DC’s office. Here, Abbas removed its registration number plate and replaced it with an official government one. They then kidnapped the professor whom they kept at an abandoned warehouse in the city of Sheikhupura.

They called Asmar Sheikh the next day and demanded 20 million rupees in ransom. Sheikh sent the kidnappers 2.5 million rupees ($17,700) at first. They promised to keep in touch with him for the rest of the payment.

Unknown to the suspects, cryptos aren’t impossible to track. A team of three experts in the Pakistani police force tracked the funds which led them to the suspects. They rescued the victim and arrested all those involved.

How Safe Are You?

The Pakistani police force fears that this could set a bad precedent in the country. According to police officials who spoke to the outlet, the case could spark crypto crimes. It could point criminals towards using cryptos to demand ransom in kidnapping cases. It could also spark other crimes, including financing of terrorism using cryptos.

This isn’t the first time that the police have been on the spotlight regarding crypto crimes. In India, eight police officers were arrested for kidnapping a crypto trader and forcing him to transfer 200 bitcoins to them.

The police officers had called in the businessman to their offices. They then kidnapped him and took him to a farmhouse where they forced him to comply with their demands. After allegedly transferring the bitcoins, he had to promise them an additional 320 million rupees ($4.6 million) to secure his freedom.

And it’s not just the police officers who have been accused of involvement in crypto crimes and scams. Yet again in India, the country’s Congress accused the ruling BJP party heads of laundering up to $12.8 billion through cryptos.

According to local reports, money laundering wasn’t the only crime the leaders were involved in. The Congress spokesperson told reporters at the time:

There were reports of the state police blackmailing some businessmen in Surat for extortion and named a former BJP legislator as one of the kingpins

While some of the victims had filed complaints with the police, the suspects used their political power to suppress investigations.

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Move to Switzerland! The Aftermath of SEC Actions on Crypto Companies

TheMerkle SEC Regulation Cryptocurrency

It may have taken its time to get into the gist of the crypto industry, but its all in now. The U.S Securities and Exchanges Commission has always made its presence known. It has warned severally that some cryptos qualify as securities and should abide by the relevant law. However, in recent months, it has backed its talk with actions. 

For those that have fallen victim to the regulator’s bloodthirst, the consequences have been far-reaching. One of the victims was Airfox, a blockchain startup that raised $15 million in its ICO in 2017. Airfox was one of the first two victims, setting the stage for what some termed as the death of the ICO industry in the U.S.

After the SEC charged Airfox with selling unregistered securities, the company came forward to strike a deal. Victor Santos, the 26-year-old CEO and founder was ordered, was ordered to refund the investors, with interest. Moreover, he was ordered to pay a $250,000 fine to the Jay Clayton-led commission.

At the time, Santos said that he was just happy to get over the whole ordeal. He hoped that it would help future blockchain startups know what to do and what to avoid. However, in a recent interview with Fortune, he wasn’t as optimistic. His advice to other blockchain startups in the U.S; move your operations to Switzerland.

For those who can’t, Santos advised them to register with the SEC promptly to avoid going through the ordeal that he did. Currently, the SEC has a lot to do to regulate the industry, he stated. However, he hopes that his interaction with the commission will help chart a way forward for the industry. The SEC must strive to get to the levels of crypto regulations that Switzerland has achieved, he urged.

You Can’t Run, You Can’t Hide

When it comes to the SEC, you can neither run nor hide. Max Niebylski realized this in time and did what no other crypto startup had done before. Max made history after his startup, Gladius Network became the first crypto firm to report itself to the SEC.

A month ago, the SEC announced that it had charged Gladius with conducting an unregistered ICO. The ICO had raised $12.7 million with the promise of a platform where users could rent out spare computer bandwidth to clients. These clients would then use the bandwidth to enhance speed and protect against cyber attacks.

The commission ordered Gladius to compensate investors with interest, as was the case with Airfox. Gladius also had to register its tokens as securities and file regular reports for at least 12 months. The startup consented to the terms, but neither denied nor admitted the charges.

Unlike Santos, Max is more upbeat and he believes that his action made the industry better. He does, however,  admit that the move was quite daring. He described it as “jumping into the jaws of the beast and making it to the other side.”

The SEC’s decision not to penalize Gladius set a good precedent for other crypto firms. Many have been afraid that if they enlisted the help of the SEC they may end up paying hefty fines. However, the commission showed that it’s more interested in working together than fighting the crypto industry.

 

 

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Bitcoin Bull Tim Draper Makes a Bet with Argentine President on Price of Bitcoin

Renowned crypto bull Tim Draper has in the past made known his deep belief that cryptos are the future. He is so confident in bitcoin that this time, he decided to go one step further. He made a bet with the president of Argentina, Mauricio Macri. And if Draper wins, Argentina might become the first official bitcoin nation in the world.

According to Argentine publication La Nacion, the VC heavyweight met Macri last week on a business visit to the country. During the meeting, the two discussed diverse issues, with Draper giving his two cents on how Macri can salvage the country’s economy.

The first is to legalize bitcoin, and other cryptos, in the country. The world is moving towards digital currencies, and Argentina should strive to keep up, Draper reportedly told the president. Legalizing digital currencies would also go a long way in helping the government to attract top global companies.

The revolution of cryptos, blockchain and smart contracts could change the world as we know it. And if Argentina plays its cards right, it could end up being one of the biggest benefactors. In sectors like insurance and health, AI and blockchain have proven that they can increase efficiency and reduce costs. But it doesn’t have to be limited to a few sectors, Draper believes.

Draper further advised the president to invest in technology in the country. This will help local companies have the ability to compete with global brands.

“…so it is important for governments to understand that they now need to act like companies that make headphones or iPhones: they have to be able to compete globally to provide a service, not just to their people, but to people around the world. And this is the beginning of a new anthropological advance in societies.

The Bitcoin Bet

However, it’s his bet with the president that was the most intriguing.

We were speaking of Bitcoin and the devaluation of the peso, and I proposed a bet: if the peso would be valued more than Bitcoin, I would double my investment that I was making for the country. But if Bitcoin gained a higher rate than the peso, they would have to declare it as a national currency. That would be a perfect decision, as there’s a lack of confidence in this coin.

This would make the South American nation the first in the world to officially adopt bitcoin as the national currency. What a time this would be.

However, in a follow-up interview with La Nacion, Draper stated that it most likely was a joke. However, he reiterated his belief that bitcoin would hit $250,000 by 2023.

So I think that’s why I made that prediction [bitcoin at $250,000 by 2023] and then the bet with the President was a joke: He is a brilliant man, he is going to investigate it and he will see if it makes sense for his country; I hope he is reelected.

 

 

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Binance Is Skirting Regulators, It Will Be the Ultimate Loser: MIT

binance featured

The world’s biggest crypto exchange is playing dangerous games with regulators. It has continued to act like the market is still bullish, capitalizing on initial coin offerings. However, in its games with regulators, it will be the ultimate loser. This is according to Technology Review, a publication wholly owned by the Massachusettes Institute of Technology (MIT).

Founded in 2017, Binance quickly rose to be the biggest crypto exchange globally. The quick rise was perhaps due to its extensive listings, with some veteran exchanges like Coinbase only listing a few cryptos. It also focused on Asia, a region that far outpaced all the other regions in crypto trading.

However, according to the report, these games can only go so far.

But Binance’s overall strategy, which seems to depend on avoiding regulatory accountability by playing a high-stakes game of cat and mouse with policymakers around the world, comes with the obvious risk that it will eventually get caught.

One of the areas that will be an Achilles heel for Binance according to the report is its involvement in ICOs. The Changpeng Zhao-led exchange launched the Binance Launchpad to help blockchain startups issue ICOs seamlessly and target a wider audience. And despite the slowdown in ICOs in the past few months, Celer Network raised $4 million in 17 minutes on Binance’s platform.

Binance is also known to have lax user registration checks, the report further alleged. Its KYC policies “run afoul of anti-money-laundering rules in the US, Western Europe, and other major economies.” 

Binance is also one of the exchanges that lists the most extensive lineup of cryptos. Many of these are accepted in most regions globally such as Bitcoin, Ethereum, Litecoin, Bitcoin SV, Ethereum Classic and Bitcoin Cash. However, some of the cryptos have rubbed regulators the wrong way in some parts of the world.

Why Binance Is Unfazed

The report further claimed that some regulators may view Binance’s own BNB token as a security. Regulators the world over have been very insistent that crypto tokens that qualify as securities must adhere to securities laws. In the U.S, the SEC has only exempted Bitcoin and Ethereum from this classification.

However, even with all these questions around its operations, Binance remains unfazed. In the past, it has had to shift its headquarters twice as regulators stepped up their game. Currently, it’s based in Malta. However, constant relocation has not affected its trading volume in the least.

Binance is a leader in what is a rapidly evolving field. Therefore, regulators are more likely to be willing to work with the exchange than to fight it. By collaborating with the exchange, regulators can formulate suitable laws that could govern the crypto field for centuries to come.

And according to Kyle Smani, that’s not the only reason Binance remains unfazed. Samani is a co-founder of crypto hedge fund, Multicoin Capital, a fund that has invested in Binance.

He stated:

You can say it’s illegal, and maybe you try and block IP addresses—that’s not clear if that will work in a meaningful way. You can fine them, but they make so much money, it kind of doesn’t matter. It’s unlikely that the leadership goes to jail because they’re probably not in a country where anyone can arrest them.

 

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