Author: Davit Babayan

The US stocks opened Wednesday on a higher note as President Donald Trump signaled positive outcomes of their trade talks with China.

The Dow Jones Industrial Average jumped 0.5 percent to 23902 points after adding 115 points while the S&P 500 gained 0.3 percent. The Nasdaq Composite Index surged by 43.2 – or 0.6 percent – to 6941. The jump marked the market’s fourth consecutive upside session – the first time since Sep 14 – correcting 9% from its Dec 24 lows. However, the market remained 11% down from its 2017 peak.

The latest round of talks between the US and China ended Wednesday, reportedly on a positive note. The sectors posted oversold conditions in the previous financial quarter are doing well, particularly trade-delicate industrial stocks and energy shares. Commodities are also walking north as news about Federal Reserve deciding to deaccelerate its internet rate hikes comes to the surface. It allowed the yield on the benchmark US Treasury Index to rise by circa 2.72% from 2.71%, indicating that investors are more confident in the US growth.

The CBOE volatility index, VIX, which is a barometer of investor fear, dropped 0.5 to its one-month low at 20.

Border Wall, US Govt Shutdown

Rating company Fitch alerted Wednesday that the US will lose its triple-A sovereign rating if Trump continues to practice partial government shutdown.

“I think people are looking at the CBO (Congressional Budget Office) numbers. If people take the time to look at that, you can see debt levels moving higher, you can see the interest burden in the U.S. government moving decidedly higher over the next decade,” James McCormack, Fitch’s global head told CNBC’s “Squawk Box Europe” Wednesday.

The shutdown is looking to overstay its welcome as Trump, and the Democrats remain undivided over the wall funding. The Dems said the President is holding the country for ransom.

Bitcoin Cautious

As the major markets show signs of a panic buy, things in the crypto space are quite calm as Bitcoin continues to hold its gain made earlier this week. The BTC/USD rate is very well above $4,000, showing volatile fluctuations in a 1% range.

The outcome of the Federal Reserve’s December meeting Wednesday could shed more light on which direction the digital currency could go in the medium term. If Fed plans to continue its quantitative tightening, it would mean less retail investors for the bitcoin ecosystem, which remains to be fairly tinier than its mainstream counterparts.

However, an announcement of a calmed down Fed rate hike could allow bitcoin to surge further. The decision would allow more dollar to enter the market, which could be then distributed across mainstream and crypto markets. It would not bring an outright surge for Bitcoin. But it would likely relax the investors to spread their portfolio into the digital currency space, which is beginning to look more confident over 2019’s positive forecasts.

The post US Stocks Rise on Positive Trade Talks with China; Bitcoin Cautious appeared first on NewsBTC.

On January 11, ten years ago, Hal Finney wrote a tweet about Bitcoin.

Running bitcoin

— halfin (@halfin) January 11, 2009

The late cypherpunk and cryptographer had just become the first person to receive the digital currency from its creator Satoshi Nakamoto himself. But more importantly, he had become the first person to trust bitcoin for its immense potential. He would run its code, review its anonymity and environmental drawbacks, suggest changes, and would entirely immerse himself to support an open-source project that would one day grow up to challenge the status-quo of mainstream finance.

Looking at ways to add more anonymity to bitcoin

— halfin (@halfin) January 21, 2009

Thinking about how to reduce CO2 emissions from a widespread Bitcoin implementation

— halfin (@halfin) January 27, 2009

Hal was officially the first citizen of the Bitcoin network at a time when its value was negligible. People were giving the cryptocurrency to other people as tips on the internet, without needing a third-party service. It was not until Laszlo Hanyecz purchased two pizzas for 10,000 Bitcoins on May 22, 2o10 that people realized the real-time use case of a non-government issued currency. Those two pizzas, at the time of this writing, cost Laszlo more than $3.5 million, leading May 22 to officially become the Bitcoin Pizza Day.

Hal many a time was also rumored to be the real Satoshi Nakamoto. He denied of course, but his close geographical proximity with Dorian Nakamoto, the senior citizen who was doxxed by Newsweek in 2014 and who had lived in the same town where Hal lived, led the world closer to reveal the identity of the pseudonymous Bitcoin creator – at least on papers.

Hal belonged to those first communities that believed in the true potential of Bitcoin. As the digital currency developed into the conscience of people across the world, the first community got overrun by blockchain pundits and speculators. Hal, who died August 28th, 2014 of a disease called Lou Gehrig, could have been a moral compass before the core team dismantled and one part of its created a competing BCH.

Originally, BTC was born to fight the economic crisis; it was a solution against the financial monopoly that the world’s few richest people enjoyed. When Lehman Brothers firm caused a financial meltdown in and outside the US, it was the time people came to realize that they couldn’t trust their banks, their financial regulators, their credit rating companies, and their government.

It was the time when Bitcoin appeared as “the solution.” The crazy financial experiment promised to dismantle the dollar monopoly. And it was people like Hal who would believe its potential to their grave. They sparked a dialogue that has now become the voice of a community of millions of people around the globe – despite the usual drawbacks of greed.

Today is when NewsBTC remembers the first tweet that started it all, and the person who made it. To a world of financial equality.

The post 10 Year Anniversary of Hal Finney’s Running Bitcoin Tweet: Rapid Growth appeared first on NewsBTC.

The European Banking Authority (EBA) has called for pan-EU rules on bitcoin and other crypto assets.

The London-based regulatory agency reached the European Commission, which drafts EU legislation, with its official report on cryptocurrency laws. The report concluded that the assortment of different crypto laws across the European nations could lead to exploitation of investors and consumers alike.

“Typically crypto-assets fall outside the scope of EU financial services regulation,” EBA said in the study. “Moreover, divergent approaches to the regulation of these activities are emerging across the EU. These factors give rise to potential issues, including regarding consumer protection, operational resilience, and the level playing field.”

Adding further, EBA suggested that the commission was the place to bring every nation under uniformed crypto legislation because of its influence beyond the banking sector.

FATF Recommendations

The EBA’s call comes in the wake of the Financial Action Taskforce’s (FATF) concerns about weak crypto laws and their exploitation by the money launderers. The global financial watchdog said in October that mitigating crypto-enabled money laundering risks would be its top priority in 2019. It had also asked nations to accelerate their supervision of the cryptocurrency service providers, including wallet services, exchanges, and ICO projects.

“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” said Marshall Billingslea, FATF president.

EBA advocated the recommendations made by FATF to the commission while seeking consistent intragovernmental monitoring and reporting of crypto-related financial crimes.

The watchdog also said that a broad approach should be taken to curb the impacts of crypto mining on the environment: mining crypto assets like bitcoin requires a larger amount of computing power and therefore energy.

“Given the pace and complexity of change, it would be desirable for a technologically neutral and future-proof approach to be adopted in developing any proposals should it be concluded that EU-level action is needed,” EBA stated.

What’s Next

The steps taken by the EBA would lead to a more stable legal framework for crypto companies and consumers. A global consensus on Bitcoin could raise confidence among the venture capitalists and other institutional investors that so far have kept their distance from the space over potential legal risks.

EBA stated that unless the commission comes up with a crypto framework, it will maintain a common monitoring template that will assist national regulators in obtaining better data from their firms. EBA also confirmed that it would study crypto-related business models to understand which among them requires to fall under the purview of financial regulations.

At the time of writing, Bitcoin is trading at $4,022 after attempting a small upside correction. In 2018, the digital asset had recorded a fall of 76% from its all-time high at $20,000.

The post EU Banking Authority Urges Bitcoin Law, What it Means For BTC appeared first on NewsBTC.

Japan’s financial watchdog could embrace exchange-traded funds that track the value of Bitcoin and similar digital asset classes, Bloomberg reported.

The Financial Services Agency (FSA), according to an anonymous source, has been exploring Bitcoin ETFs on the sidelines of its disapproval of the Bitcoin futures and Ethereum derivatives. The agency has clarified that it will not make modifications to Japan’s existing securities laws to cater for crypto assets. The decision came as a blow to the Bitcoin industry, which was looking to draw significant funds from the institutional markets after undergoing a very depressive year recently.

The FSA’s stance has been handled to the ruling Liberal Democratic Party. It should allow the political group to table a bill during the current Diet session. By 2020, Japan could be looking at a stricter Bitcoin law, according to which self-regulation could draw more regulatory oversights, ICO sector could come under the securities law, and crypto brokers could lose their leverages.

Bitcoin ETF a Flipside

Bitcoin ETF could be an alternative to keep the interest of potential investors alive in the crypto space. In the Western markets, the possible launch of crypto ETFs has forecasted bullish outcomes for the underlying assets. VanEck, whose Bitcoin ETF is now in the last stretch of approval from the US securities watchdog, expects a minimum of $1 billion inbound investment from retail and institutional space.

Japan, with a total of 31 ETFs available across equity and currency assets, gathers management of a $335 billion market. The country’s payment service act has ensured that bitcoin is neither currency nor equity. Instead, the FSA defines the digital currency as a “property value.” The Bloomberg report indicates that the regulator could be looking at amending the payment service act, intensifying the rumor that Japan could end up introducing Bitcoin as one of the main assets of its ETF offerings.

Japanese Retail Prefers Mutual Funds

An FSA-approved Bitcoin ETF could expose itself to the Japanese retail investment space. But whether investors would find the new asset attractive is doubtful. Like regulators, investors would prefer assets that are free from the risk of manipulation. These safeguards, unfortunately, do not exist in the Bitcoin market. It is the same reason why the Securities and Exchange Commission consecutively rejected nine Bitcoin ETF proposals because it found the underlying asset Bitcoin too volatile.

VanEck, in response, created a bitcoin price index backed by US-regulated exchanges, to meet the demand of both investors and regulators.

Japanese retail investors, meanwhile, have not publicly expressed their desires to invest in a crypto ETF. They already have alternatives in traditional markets’ stock and bond funds. But they prefer mutual funds above everything else, leaving Bitcoin with a long competitive market to win.

The post Japan Explores Bitcoin ETF but Demand for Product is Mysterious appeared first on NewsBTC.

A popular cryptocurrency recently made its way into the checkout payment option of a top-rated video game. And yes, it was not Bitcoin.

Monero, a privacy-enabled offspring of the same technology that powers the Bitcoin payment protocol, can now be used to purchase gaming merchandise on Fortnite. The online video game, first released in 2017, is a cooperative shooter-survival competition which has drawn in more than 125 million users across the world. According to Holiday 2018 consumer reports, youngsters were keen on using a cryptocurrency as a payment option – instead of cash – on Fortnite merchandise store.

“Today we have strayed from the path of righteousness,” a Redditor commented. “But seriously, that’s some pretty awesome adoption. Even if no one uses it, it’s a fantastic exposure of millions of people who might ask “What’s that groovy M? And why is it better than regular payment?”.

The event sparked one of the many debates about teenagers’ growing interest in decentralized assets. The generation that is going to build the next financial trend, as opinionated by ShapeShift’s Erik Voorhees, wants a break from the Wall Street version of money – and in a couple of years, they will drive more adoption to the crypto space.

Within a couple years, the average 16 yr old Xbox player will understand more about crypto than the average Wall St. banker. https://t.co/OvQOpcJpR3

— Erik Voorhees (@ErikVoorhees) January 4, 2019

The discussion has spread to a point where teenagers are reportedly finding banks too slow to catch up to their space. They are not ready to wait in queues to set up their bank accounts or wait for their payment requests to get approved in 3-5 “working” days. Cryptocurrencies attract them for being more independent and faster than any traditional financial regime.

My oldest son already know more about Blockchain and Crypto at 11 yr than most other people i know…

— Jonas Karlberg (@jonas_karlberg) January 4, 2019

Outside the world of young, however, crypto continues to feel the heat from its older and more matured critics. American-Iranian economist Nouriel Roubini called bitcoin a “mother of all scams” before the US Congress. Warren Buffet, an investment kingpin, said that bitcoin lacks intrinsic value, adding that probably it is “rat poison squared.” Legendary investor Gary Shilling called the cryptocurrency a “Ponzi scheme.”

The anti-crypto opinions mostly include criticism about crypto’s excited use-case in the new financial world. They believe that the whole sector, barring centralized digital currencies, is destined to go down as the most significant financial scam the world has seen ever.

Crypto world argues that mainstream economists do not focus on the crypto’s technological aspects – that their views are limited to their definition of deflationary economy. Shilling, for instance, has admitted that he does not understand how Bitcoin works. Buffet has been in a similar scenario during the introduction of Amazon and Google stocks back in the 90s. He had predicted that these companies would fail, without understanding what they were looking to create in a longer run.

Fortnite, at best, is experimenting with what could be the future of finance. It could lead many other investors to look into the potential opportunities presented by the crypto space. In the end, what Monero has today is a potential user base of millions of people.

If the next generation of school children grow up to understand the separation of money and state, then bitcoin will have succeeded.

— Erik Voorhees (@ErikVoorhees) August 14, 2012

The post Following Fortnite’s Acceptance of Monero, Investors Optimistic on Crypto appeared first on NewsBTC.

According to several reports, crypto mining giant Bitmain is running out of funds. And it could be bad for Bitcoin Cash and Litecoin.

$315.5 million worth of Crypto-Assets

Kyle Samani, the co-founder of Multicoin Capital, a crypto fund, warned in a Tweet that Bitmain would liquidate its crypto-assets to accumulate fiat-funds for its business operations. The prominent analyst cited recent media reports that have accused the Beijing company of laying off half of its staff. Among the fired – as reported – is a team that was working on the development of a Bitcoin Cash client.

This is extremely bearish for BCH and LTC

The only reason to make cuts this drastic are because you’re about to run out of cash

Meanwhile, they still have 1 BCH and 1M LTC on their balance sheet. Those are going to be liquidated soon to keep the lights on https://t.co/kneSRcK2li

— Kyle Samani (@KyleSamani) December 26, 2018

According to a leaked financial document surfaced in August this year, Bitmain currently holds 930,932 LTC (~$28.6m), 1,021,316 BCH (~$176.7m), 22,082 BTC (~$83.3m), 312,424 DASH (~$26m), and 1,097 ETH (~$142k) tokens. At press time, the fiat-equivalent of Bitmain’s entire crypto asset portfolio amounts to be near $315.5 million.

Whether or not Bitmain has already encashed some part of its crypto portfolio could not be found. But, according to Samani, the fact that the Chinese crypto mining holds a large number of digital currency reserves itself leads to a possible selling scenario. That, of course, is possible only when Bitmain feels itself running out of cash despite firing half of its workforce.

Is Bitcoin Under Selling Pressure?

Bitmain, like any other retail investors in the crypto space, would be less likely to dump its Bitcoin reserves, mainly because it is among the few crypto assets that are looking at a promising future as the new year kicks in.

The same could be told about Bitcoin Cash, which Bitmain whole-heartedly supported during the November “hash war.” But since the firing of Bitcoin Cash development squad, the probability of Bitmain holding its Bitcoin Cash reserves looks meager.

Then again, layoffs itself are a kind of a bullish indicator — a company practices downsizing when it wants to govern its spending against its revenue. Bitmain, like any other crypto company, launched new products while driven the crypto euphoria of late 2017. But as the demand evaporated for its line of products – crypto-mining chips in particular – the company had to restrategize its priorities in hopes to survive the crypto’s most depressive phase.

What’s Next?

Bitmain could also choose to look for additional capital without spending many brains on selling their crypto reserves. The firm has already shared its plans to go public via a $12 billion IPO round in Hong Kong. Just recently, its application to the Hong Kong Exchanges and Clearing Limited (HKEX) met the possibilities of rejection. The company could file another IPO prospectus in the future after fixing its infrastructure, beginning with a layoff that is already taking place.

Bitmain raised $400 million from a pre-IPO funding round led by Sequoia Capital. The company currently holds a 67% share in the market for bitcoin mining equipment, and it provides about 60% of the mining industry’s entire computing power.

The post Investor: Bitmain Firing 80% Workforce is Bad for Bitcoin Cash and Litecoin appeared first on NewsBTC.

Eighteen years ago, on March 10, 2000, the Nasdaq Composite Index established a then-intraday peak at 5,132.52 before closing that day at 5,048.61. The day marked the beginning of what the world now calls a “dotcom bubble,” which eventually washed billions of dollars off the market, a market movement uncomparable to crypto.

The financial markets in 2018 are going through a deja-vu experience while looking at the bursting of a “crypto-bubble.” Like Nasdaq 100 which boomed on the hype around the internet, the cryptocurrency market built its hype around the potential of the blockchain, raking in billions of dollars in investments for funding the fantasies of startups and corporates. On one day, the total market capitalization of the cryptocurrency market had touched the $800-billion mark. But eventually, the bubble got burst, and now the crypto market is valued at $100 billion – more or less.

Reincarnation

Generally, a burst bubble doesn’t come back to life. But in the financial space, they do reincarnate more than any other market.

Between Nasdaq 100 and Crypto 2018, the economy has suffered much more severe market crashes, followed by slow recovery periods. Notorious bubbles such as John Law’s Mississippi scheme, the 1925 Florida land boom, metals in the 1970s, biotech in the 1980s, and real estate stocks in the 2000s, saw investors losing an ample amount of money. However, the underlying assets of every bubble eventually exceeded the levels at which they had burst.

The Nasdaq index at press time is itself settled around 6,462.11, down from its 2018 peak at 8109.69, much against the prediction of analysts that predicted its end following the 90’s crash. It is only because of the companies inside the index that understood the pulse of consumers and kept innovating their products per demands. While the ones that didn’t innovate, or oversold their ambitions against the limited application of their ideas, ate dust.

It is pretty much the same story with the cryptocurrency space. The crash is now vacuuming out the unworthy players of its market while the ones that still promise to innovate per market demand holds some value.

Googles and Apples of Crypto

Bitcoin, a blockchain-based payment and settlement system, has lost more than 80% of its market cap to the 2018 crash but it is still holding relevance for its potential adoption as a store of value – just like Gold. The valuation of Ethereum, a decentralized supercomputer, is down more than 85% but its smart contracts technology could still be utilized at a larger scale, providing that the project innovates.

There are also dozens of similar examples, ranging from XRP to IOTA, which are building real-world blockchain solutions, entering partnerships with the mainstream financial giants, and whatnot.

The projects are not inflating as a standalone idea, but there is also an infrastructure of human resources and users being created around it. The year 2018 saw a growth in people working inside the crypto space, 2.5 times more than the much-hyped 2017. The year also witnessed the number of crypto users almost doubling from 17 million to 35 million. Technological issues got debated and resolved because of active community development. Institutional players set up their offices inside the crypto space to build solutions for the industrial expansion and its potential adoption among consumers and investors alike.

What Happens to Crypto

Crypto expects to recover, much less wildly after the end of every bear cycle. The technical solution it brings, mainly for the commercial space, intends to stay with both improvements and setbacks in hindsight. The question about whether or not a cryptocurrency asset would one-day be worth millions of dollars cannot yield a correct answer. In the end, the investors – both retail and institutionalized – will line up after projects which they believe would bring innovation to the internet-of-value space.

What happens after a great crypto depression? Well, the market doesn’t repeat its mistakes and recovers more organically than before. Only, it takes more time to regain its glory.

The post What Happens after a Great Crypto Recession? Path to Recovery appeared first on NewsBTC.

Bitcoin is dead; Blockchain is wasted; Crypto is gone–this is something the world has been told over and over again.

The first ever article that predicted a bitcoin death was published in 2010 by Tim Harford, an economist. At that time, bitcoin was trading at $0.23. The following year, after bitcoin surged to $7.80, Gizmodo Australia wrote that the digital currency is dying. In 2013, New York Magazine penned ‘Bitcoin Sees the Grim Reaper‘ when bitcoin jumped above $100. Three months later, a Medium post predicted a horrific death for the digital currency, and it was well above $600 at that time.

Fast forward five years, the predictions haven’t rested. The obituaries seem to have included even the underlying technology of bitcoin, the blockchain, for allegedly being totally-hyped and an utterly-waste. An article has already hanged a “rest of peace” sign around its neck. The Week in January discussed the death of crypto. And irony committed suicide when even a bitcoin millionaire said that bitcoin is dead.

That totals to more than 300 times Bitcoin has been killed by the mainstream media, according to 99bitcoin’s death calculator.

Value-Driven Sentiments

The latest round of obituaries come in the wake of crypto market’s dismissal performance in 2018. Once at a peak, bitcoin and every major and minor crypto asset fell by at least 80%. The crash prompted many blockchain startups, which raised funds in bitcoin-like assets via ICO in 2017, to either shut down their operations entirely or layoff a considerable portion of their workforce.

The Securities and Exchange Commission (SEC) rejected nine Bitcoin ETFs. Goldman Sachs and NYSE delayed their crypto-enabled products until next year. Nobel laureate Nouriel Roubini called bitcoin “a mother of all scams” before the US Congress and later patted his back when cryptos crashed. Even a controversial figure, the Wolf of Wall Street-famed Jordan Belfort, who scammed many in his notorious financial career, took a potshot at the digital currency, saying that it belongs to a scrapyard.

It seems that every time cryptos suffer a financial tragedy, their critics get the moment to attack them and predicting their end. The majority of complaints crypto/blockchain sector is receiving during its downtrend is related to their alleged overvaluation, hype, lack of demand and unrealistic business models. While some of it is true to an extent, owing to an increase in the number of ICO scams and vaporware this year, that does not exactly prove that the entire sector is on the verge of dying.

Crypto  Not Dead

Financial bubbles are not a thing that was born with cryptocurrencies. They have been there since the time of the infamous Tulip Mania, the Great Depression, and the very latest 2008 recession. Quite unlikely, nobody said that the US stock market would die or the value of the dollar will drop to zero.

A 2012 Harvard Business School report found that only 1 out of every 10 startups will succeed. But it didn’t say that the entire startup industry was doomed to fail. How many of these startups, for argument sake, had an unrealistic business model? How many of them attracted accredited investor but failed anyway? How many of them were supported by more prominent corporations but worked against the hype?

So why a blockchain startup industry should be viewed from a separate lens, even at a time when it is beginning to take its first steps towards actual adoption. Those who complain that blockchain does not have a “killer app” absent-mindedly sideline bitcoin, the world’s most secure and decentralized payment engine. On the contrary, they say bitcoin is doomed to fail, even though it is heading towards attaining the status of digital gold (or even the next global reserve), thanks to this their resembling characteristics.

As for blockchain as a technology, crypto enthusiasts have already said that it should better be decentralized that being a random database of some random private company. Forced conversion of an already-working traditional business model into a blockchain-enabled model will always be a bad idea. The killer apps would belong to blockchain projects that are genuinely seeking an intermediary-free system or are solving a real-world problem.

Big Corporations in Blockchain

Some of the biggest corporations are already exploring blockchain and have successful derived suitable products using it. They include names like IBM, Cisco, PwC, and whatnot.

“I think supply chain is going to be the first, if not near the first, to show the value of blockchain,” Mark Smith, CEO of Symbiont, a blockchain development company, told CNBC. “There aren’t any regulatory questions in supply chain management that you have to deal with.”

“Blockchain’s really about trust in data and business processes,” said Ramesh Gopinath, vice president of blockchain solutions at IBM. “When you have to rely on data, four or five hops upstream, you have to have a reason to trust it, and blockchain provides that.”

The post Contrary to Reports, Crypto Sector is Not Dead: Here’s Why appeared first on NewsBTC.