Your dose of crypto news and analysis from @BTO and @Goldfinger
Last issue of Crypto Wars I said we'd need a big ol' stick to wake BTC from its slumber. Unfortunately, now we need an even longer one.
Things have been bleak in crypto land, to say the least, with all cryptos retreating significantly over the past couple of weeks, and then sharply declining this past weekend. Bitcoin hit a low-point on Wednesday, at around US$6,280, a price level not seen since early February (when things were also looking pretty damn bleak). Ethereum dropped as low as US$459 -- also on Wednesday. But then, SEC to the rescue!!
In an announcement at Yahoo Finance’s All Market Summit: Crypto in San Francisco on Thursday, the U.S. Securities and Exchange Commission Director of Corporate Finance William Hinman said that the commission would not be classifying Ether or Bitcoin as securities. The SEC's new thinking on crypto and determining whether a token/coin is a security or not seems to focus on the extent of decentralization:
"If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede. As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful."
The announcement sent Ethereum up over 10% nearly immediately upon the news going viral, and most other major cryptocurrencies went along for the ride. To keep the positive new flowing, what I'd love to see next (and perhaps the SEC confirmation helps) is the successful launch of a Bitcoin ETF. VanEck is in the process of its third attempt to do so. See here for more info: https://www.cnbc.com/video/2018/06/07/vaneck-bitcoin-etf.html
The other big development that could be expedited by the SEC announcement is the launch of a Ether futures market. Today, Cboe confirmed as much, saying: "This announcement clears a key stumbling block for ether futures, the case for which we've been considering since we launched the first bitcoin futures in December 2017."
Let's see how some of the major cryptos fared over this past week (close UTC time last Friday to today):
- Bitcoin trading around US$6,575, down -13.8% on the week
- Ethereum trading around US$498, down -17.2% on the week
- Bitcoin Cash trading around US$868, down -22.4% on the week
- Litecoin trading around US$98, down -18.1% on the week
- Stellar trading around US$0.24, down -17.0% on the week
- Dash trading around US$260, down -16.3% on the week
- Monero trading around US$132, down -16.8% on the week
- Ethereum Classic trading around US$13.93, down -9.6% on the week
- ZCash trading around US$199, down -17.0% on the week
Still a complete and utter bloodbath, but it would have been even worse had the SEC not made the statements they made. Better luck next week!?
WTF did I miss this week in crypto?
The mysterious reason behind the recent bitcoin sell-off may have just been uncovered https://www.cnbc.com/2018/06/14/reason-behind-the-recent-bitcoin-sell-off-may-have-just-been-uncovered.html
In a recent note, Tom Lee, Fundstrat's head of research, wrote that since the launch of Cboe bitcoin futures in December, prices have plunged leading up to expiration. "Bitcoin sees dramatic price changes around CBOE futures expirations. This was something flagged by Justin Saslaw at Raptor Group. We compiled some of the data and this indeed seems to be true," Lee wrote Thursday. "Overall, bitcoin has fallen 18 percent in the 10 days prior to CBOE contract expiration."
The Cboe bitcoin June futures contract expired Wednesday, with prices hitting a four-month low during the session. "A broader observation is there is significant volatility around these expirations," Lee added. "And on average, the price recovered by day six [following expiration]."
Bitmain Raises $400 Million in Pre-IPO Funding, Now Valued at $12 Billion: Report https://www.ccn.com/bitmain-raises-400-million-pre-ipo-funding-round-now-valued-at-12-billion-report/
Bitmain, the dominant force in bitcoin mining, has reportedly raised $400 million as it gears up to go public later this year. Regional media outlet China Money Network reports that the funding round, which values the China-based firm at $12 billion, was led by Sequoia Capital China, a VC that has been quite active in the nascent cryptocurrency space. Bitmain has not yet confirmed the funding round publicly. The $12 billion valuation matches Bitmain’s internal estimates but exceeds that of many external analysts, who estimated that the firm was worth between $8.8 billion and $10 billion. According to the report, Bitmain plans to hold an initial public offering (IPO) on the Stock Exchange of Hong Kong in September and expects to go public with a market cap between $30 billion and $40 billion.
The EOS Blockchain Is Now Officially Live https://www.coindesk.com/the-eos-blockchain-is-now-live/
The EOS blockchain is now live. The blockchain has received more than the 150 million votes needed to determine the individuals or entities that will maintain the distributed network, the world's fifth largest by total value, thus ending a weeks-long process that had been among the most complex the evolving cryptocurrency market has perhaps ever seen. The news effectively ensures that the software for which a company called Block.one raised more than $4 billion during an almost year-long initial coin offering (ICO) will now be accessible.
Port of Rotterdam Partners With Blockchain Startup to Innovate Cargo Tracking https://cointelegraph.com/news/port-of-rotterdam-partners-with-blockchain-startup-to-innovate-cargo-tracking
The Port of Rotterdam Authority has signed a cooperation agreement with Dutch blockchain startup CargoLedger to use the technology for cargo tracking, Transport Online reported yesterday, June 14th. As part of its PortXL annual accelerator, the port authority has partnered with CargoLedger to implement a blockchain solution for tracking shiploads. The technology will be applied in order to improve quality control in supply chains and establish a transparent and secure system to innovate the management and handling of cargo.
The blockchain system will record and process data from labeled shiploads, which can be scanned by receivers in Rotterdam’s ports in order to gain immediate insight into the conditions of the load, such as its temperature and humidity.
Final Frontier? William Shatner Boldly Goes into Bitcoin Mining https://www.coindesk.com/final-frontier-william-shatner-boldly-goes-into-bitcoin-mining/
Star Trek legend William Shatner has become the latest celebrity to beam into the crypto space. Shatner, known for playing Captain Kirk in the science fiction series, is representing Solar Alliance, an alternate energy developer which is planning to build a solar-powered bitcoin mining facility in Illinois, the Chicago Tribune reported Wednesday. The company - which is based in Vancouver - will be using an existing factory in the town of Murphysboro to host a solar panel array. Captain Kirk told the Tribune:
"The concept is so, I guess the word is bizarre. You have to blank your mind and say, 'What is blockchain, again? How does mining operate, again?' The concepts are really strange, and yet when you begin to grasp it, it makes sense."
Coinbase Index Fund Opens for Investments between $250k and $20 mln https://cointelegraph.com/news/us-coinbase-index-fund-opens-for-investments-between-250k-and-20-mln
U.S.-based crypto wallet and exchange Coinbase’s Index Fund is now open for large-scale investors, according to an official blog post published yesterday, June 13. The fund, whose creation was announced in March, is available only to U.S. resident accredited investors who invest between $250,000 and $20 mln. The index includes Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), as well as Ethereum Classic (ETC), whose addition to Coinbase was announced on June 11. Coinbase’s blog post notes that the fund will be rebalanced to include any future assets listed on Coinbase.
Binance User Base Reaches 9 Million, Extends Trading Support with ETC Pairs https://www.financemagnates.com/cryptocurrency/news/binance-user-base-reaches-9-million-extends-trading-support-etc-pairs/
With daily trading volume between $1.4 to $1.5 billion, the exchange registered a profit of $150 million in Q1 2018.
Adblock Plus wants to use blockchain to call out fake news https://techcrunch.com/2018/06/13/adblock-plus-wants-to-use-blockchain-to-call-out-fake-news/
Open source software "eyeo", which is the company behind the ad-block software Adblock Plus, has announced a new browser extension that will verify the legitimacy of news. The extension, which is called Trusted News, is intended to utilize blockchain technology in the future, and be moved to the Ethereum blockchain.
US Bank Wells Fargo Bans Crypto Purchases With Its Credit Cards https://cointelegraph.com/news/us-bank-wells-fargo-bans-crypto-purchases-with-its-credit-cards
San-Francisco-based bank Wells Fargo has announced that it will no longer allow its customers to purchase cryptocurrency using its credit cards, Fortune reported June 11. Wells Fargo, which is the third largest bank by assets in the US, said that its customers are now prohibited from purchasing digital currency on their credit cards issued by the financial institution. A bank spokesperson said that the decision was made in order to avoid “multiple risks” associated with cryptocurrency usage.
Adding Ethereum Classic Support to Coinbase https://blog.coinbase.com/adding-ethereum-classic-support-to-coinbase-becb9a337e9c
Coinbase announced its intention to add support for Ethereum Classic (ETC) in the coming months. They will now begin the engineering work for supporting ETC, with the final testing phase expected to occur sometime in the next few months. A launch date for trading will be announced at a later time.
Binance Signs Deal Paving the Way for British Pound Trading Pairs https://www.trustnodes.com/2018/06/12/binance-signs-deal-paving-way-british-pound-trading-pairs
A team from Binance have signed a memorandum of understanding with officials from Jersey, an island just off the coast of Britain, with the aim of launching a crypto to pound exchange in the island. “We have chosen Jersey to be the next big step in our global expansion strategy for its clear and pro-crypto investment and regulatory environment,” Changpeng Zhao, Binance’s founder, said before adding: “With its local economy based on a major currency (GBP), and its close proximity to the UK and Western Europe, we are confident the co-operation with Jersey will not only benefit the local economy, but also form a strong operational foundation for our expansion into the rest of Europe.”
CFTC Demands Crypto Exchange Data In Market Investigation https://www.coindesk.com/cftc-demands-crypto-exchange-data-in-market-investigation/
The U.S. Commodity and Futures Trading Commission (CFTC) has reportedly subpoenaed four cryptocurrency exchanges in a bid to obtain their trading data as part of an investigation into market manipulation. According to a The Wall Street Journal report on Friday, the financial market regulator is demanding comprehensive trading data from Bitstamp, Coinbase, itBit and Kraken, which altogether serve as a base for the bitcoin futures price listed by CME Group.
Alibaba Affiliate to Boost Blockchain Development After $14 Billion Raise https://www.coindesk.com/alibaba-affiliate-to-boost-blockchain-development-after-14-billion-raise/
Ant Financial, the payment affiliate of Chinese internet giant Alibaba, announced on Friday it has raised $14 billion (!!) in a Series C round funding, which will be used to further develop new technologies such as blockchain.
Former Trump Advisor Steve Bannon Calls Crypto ‘Revolutionary’, Plans Entry Into Market https://cointelegraph.com/news/former-trump-advisor-steve-bannon-calls-crypto-revolutionary-plans-entry-into-market
Stephen Bannon, co-founder of Breitbart News and former Chief Strategist for U.S. President Donald Trump’s administration, is planning to enter the world of crypto, the New York Times reported yesterday. According to the Times, Bannon has held private meetings with both crypto investors and hedge fund managers about the possibility of conducting an ICO through his investment firm, Bannon & Company.
RBI Admits It Did No Research on Cryptocurrencies Before Banning Them https://bitsonline.com/rbi-admits-it-did-no-research-on-cryptocurrencies-before-banning-them/
Back in school, we likely had days where we just weren’t in the mood for research or homework, and whipped up a paper last minute. Apparently, the RBI — India’s central bank — was in that same kind of mood the day it decided to ban cryptocurrencies.
Proposed Regulations Could Cause Major Shifts in Canadian Crypto Businesses https://bitcoinmagazine.com/articles/proposed-regulations-could-cause-major-shifts-canadian-crypto-businesses/#1528910698
Canada’s government has released draft regulations for “virtual currencies” with a consultation period of 90 days, saying that proposed regulatory changes could mean a loss of $60 million over 10 years for businesses that deal in cryptocurrencies but will improve Canada’s international reputation and make it easier for crypto businesses to deal overseas.
The Canadian crypto business community is still assessing the new proposed regulations but a number of experts have told Bitcoin Magazine that the impact on the community will be “massive” and “significant” and may result in a shake-up and consolidation of companies, including blockchain companies currently in the space.
Among other proposals, the new regulations will require firms (including exchanges) to keep detailed records of users and inform the government about suspicious activities, provide written policies and procedures, undergo a risk assessment and be ready for audits.
Billionaire Investor Tim Draper Explains Why Bitcoin Will Hit $250,000 in 2022 https://www.thestreet.com/investing/bitcoin/billionaire-tim-draper-super-bullish-on-bitcoin-14603011
"I hold a lot of cryptocurrencies and mainly Bitcoin. I am buying more. I feel that crypto and Bitcoin are the future. Fiat is the past. I do still have to hold some fiat currency for everyday transactions today, but I suspect that that will change over the next few years. I cannot wait to be able to go to a store and make purchases using cryptocurrencies. Fiat currency will eventually become as passé as trying to pay for coffee with pennies."
"I expect that since cryptocurrencies will increase the velocity of money, the current $86 trillion global market for currency will grow to be about $140 trillion in the next 10 years, and that growth will be in crypto. In fact, I estimate that fiat currencies will actually decrease in use, and that crypto will become as much as $100 trillion of that market. I expect Bitcoin to be about 10% of that market, or $10 trillion. There is a lot of room to grow there."
Potcoin Sponsors Dennis Rodman’s Singapore Visit During Summit Talks https://www.ccn.com/potcoin-sponsors-dennis-rodmans-singapore-visit-during-summit-talks/
Bizarre in so many ways...
Lastly, a few significant headlines from last week that got a bit lost in the coin price bloodbath:
Coins and tokens and stocks, oh my!
[Note — Net change and % change figures are from the close last Friday to the close today .]
HIVE Blockchain (TSXV:HIVE) — $HIVE — Last at $0.95; Net Change: -$0.15; % Change: -13.6%
There's a lot to be disappointed with if you've been watching HIVE's share price lately. But its mining farms continue to hum along 24/7, spitting out crypto, and it's not too much longer until the company's first Bitcoin mine comes online (in September). While in theory miners like HIVE should not suffer the same level of volatility as the cryptocurrency market itself, in reality HIVE's stock price has followed the ups and downs of Bitcoin and Ethereum pretty closely, hitting highs in late 2017 and for the most part declining ever since. I firmly believe we'll see a resurgence of interest and excitement in crypto this year, and with it another boom in coin prices. I am patiently waiting for this to happen, and when it does I think the climb will be swift and steep.
Globalive Technology (TSXV:LIVE) — $LIVE — NEW LISTING; Last at $1.33; Net Change: +$0.33; % Change:+33.0% (from pre-RTO financing price of $1.00 per share)
LIVE is not a pure crypto or even blockchain play, but if successful, could be the company to successfully commercialize blockchain technology (as well as AI) to disrupt the traditional sectors we've all been hearing are ripe for such an upgrade. So far, the only real blockchain use case of any value is cryptocurrencies, but that will no doubt change. I would encourage you to read the full report here -- Laughed out of 84 Investor Meetings -- to understand all the moving pieces in the company. Suffice it to say, there are a number of compelling assets in place today and an extremely ambitious plan on where they want to go from here. Their #1 asset, in my opinion, is founder (and CEO/Chairman) Anthony Lacavera, who famously took on Canada's wireless oligopoly with WIND Mobile, which he sold to Shaw Communications for $1.6 billion in 2015. His next big move is Globalive Technology. This is a long term play for Anthony, who had this to say: “GT is the rest of my career. I am fully committed to building a long term, huge company here. I don’t care what people think. That’s what I’m doing.” Looking forward to seeing him pull this off.
Overstock (NASDAQ:OSTK) — $OSTK — Last at US$38.90; Net Change: +US$3.55; % Change: +10.0%
In comments made this week by OSTK board member, Jonathan Johnson, it was revealed that revenues from cryptocurrency payments are a growing segment of the Utah-based online retailer’s business. “We have somewhere between $68,000 and $120,000 a week in cryptocurrency revenues; people buying sheets and toasters using bitcoin or ethereum or other coins,” he said. While this is only around 0.2% of the company's total revenue, this figure is apparently growing, and Johnson had some very positive things to say about how crypto is working as a form of payment:
“We pay a processing fee for credit cards, and we employ about 40 people in our fraud department. That’s a cost of doing business with credit cards... When we take cryptocurrency, we have a very small transaction fee with Coinbase, much smaller than our credit card processing fee, and we have no fraud prevention department. It’s like a cash transaction. For us, that is a much cheaper way of doing business.”
Overstock shares jumped 11% from US$35.50 to US$39.40 following Johnson’s comments, and closed out the week at US$38.90.
Other crypto/blockchain-related stocks riding the wave:
- HashChain Technology (TSXV:KASH) — $KASH — Last at $0.155; Net Change: -$0.040; % Change: -20.5%
- Mogo Finance (TSX:MOGO) — $MOGO — Last at $4.04; Net Change: +$0.34; % Change: +9.2%
- Riot Blockchain (NASDAQ:RIOT) — $RIOT — Last at US$7.40; Net Change: -US$0.31; % Change: -4.0%
- Neptune Dash (TSXV:DASH) — $DASH — Last at $0.235; Net Change: -$0.035; % Change: -13.0%
- Ethereum Capital (NEO:ETHC) — $ETHC — Last at $1.65; Net Change: -$0.25; % Change: -13.2%
- MGT Capital (OTC:MGTI) — $MGTI — Last at US$1.03; Net Change: -US$0.17; % Change: -14.2%
- Global Blockchain (CSE:BLOC) — Last at $0.38; $BLOC — Net Change: -$0.11; % Change: -22.4%
- BTL Group (TSXV:BTL) — $BTL — Last at $5.25; Net Change: +$0.39; % Change: +8.0%
- NetCents Technology (CSE:NC) — Last at $2.71; $NC — Net Change: $0.00; % Change: 0.0% (HALTED ALL WEEK)
- eXeBlock Technology (CSE:XBLK) — Last at $0.12; $XBLK — Net Change: -$0.035; % Change: -22.6%
- BIG Blockchain Intelligence Group (CSE:BIGG) — $BIGG — Last at $0.225; Net Change: -$0.075; % Change: -25.0%
- And a few others that have been getting some attention: 360 Blockchain (CSE:CODE) — $CODE; Atlas Cloud (CSE:AKE) - $AKE; Block One Capital (TSXV:BLOK) - $BLOK; Calyx Bio-Ventures (TSXV:CYX) - $CYX; ePlay Digital (CSE:EPY) - $EPY; LeoNovus (TSXV:LTV) — $LTV; LottoGopher (CSE:LOTO) - $LOTO; HealthSpace Data Systems (CSE:HS); Blocplay Entertainment (CSE:PLAY); Blockchain Power Trust (TSXV:BPWR.UN) - $BPWR-UN; CryptoGlobal (TSXV:CPTO) - $CPTO; DMG Blockchain Solutions (TSXV:DMGI) - $DMGI; Hut 8 (TSXV:HUT) $HUT; Netcoins (CSE:NETC) - $NETC; Datametrex (TSXV:DM) - $DM
Follow @Evenprime’s crypto watchlist if you want to track the now dozens of names apparently in the crypto/blockchain game.
The CryptoTechnician Report
The recent weakness in the cryptocurrency space accelerated to a crescendo on Wednesday with total crypto market capitalization falling as low as US$265 billion (the lowest level since April 6th):
While Bitcoin has so far held up above critical support at $6,000, several other leading cryptocurrencies snapped through major support levels.
Monero (XMR) plunged below major support at $160, falling all the way down to $102 at Wednesday's low:
This breakdown in Monero is about as ugly as it gets from a technical perspective; the measured move target from the descending triangle breakdown is.....$0. Several other cryptos (Litecoin, etc.) suffered similar technical breakdowns last week, as a result all of those levels of previous support should now represent resistance on the way back up.
Turning to Ethereum, ETH/USD found support at $450 on Wednesday and looks to be ending the week right around the $500 level. $500 in Ethereum has been an important level dating back to November of last year when Ether spent a couple of weeks consolidating around this level before blasting higher in December.
Ethereum has also impressively outperformed Bitcoin as evidenced by the fact that ETH/USD is well above its March low while BTC/USD is below its March low. Given the extent of the carnage in cryptos this week, and the extreme bearish sentiment percolating across the space, a weekly close above $500 is impressive.
After glancing through a dozen crypto charts it's clear that the technicals are poor enough that it's tough to find much to be optimistic about. However, from a contrarian standpoint the bearish sentiment in the crypto sector has become so extreme that any self-respecting contrarian must at least be paying attention now.
On Wednesday I posted a poll on Twitter asking which would happen first, Bitcoin $5,000 OR $7,500 - it turns out that nearly 3 out of 4 respondents see $5,000 happening first.
This is particularly interesting because Bitcoin was pretty oversold by any measure at Wednesday's low. Moreover, the $6,000 level is major support, a logical area from which a rebound could take place. There have also been numerous anecdotes of former crypto bulls giving up and tossing in the towel in the last week.
In the span of a little less than six months we've gone from one extreme to the other extreme. The ingredients for a major bottom are beginning to form, however, something tells me we're just not quite there yet.
Funny things we saw this week
Buy the f*#kin' dip!?
TA looks bullish -- u/cryptohoney on reddit
Keep things in perspective, folks...
"I'm a crypto influencer!"
DISCLAIMER — PLEASE READ CAREFULLY
All statements in this report, other than statements of historical fact should be considered forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often, but not always identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. Much of this report is comprised of statements of projection. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Risks and uncertainties respecting mineral exploration companies are generally disclosed in the annual financial or other filing documents of those and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this newsletter.
The authors are online financial newsletter writers. They are focused on researching and marketing resource and other public companies. Nothing in this article should be construed as a solicitation to buy or sell any securities mentioned anywhere in this newsletter. This article is intended for informational and entertainment purposes only!
Be advised, the authors are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer.
Never, ever, make an investment based solely on what you read in an online newsletter, including Crypto Wars, especially if the investment involves a small, thinly-traded company that isn't well known or a crypto asset like Bitcoin or Ethereum.
Past performance is not indicative of future results and should not be used as a reason to purchase any stocks mentioned in this newsletter or on this website.
In many cases, the authors, and/or site owner/operator Tommy Humphreys, owns shares in the companies featured. For those reasons, please be aware that the authors can be considered extremely biased in regards to the companies written about and featured in Crypto Wars. Because of this, there is an inherent conflict of interest involved that may influence our perspective on these companies. This is why you should conduct extensive due diligence as well as seek the advice of your financial advisor and a registered broker-dealer before investing in any securities. We may purchase more shares of any featured company for the purpose of selling them for our own profit and will buy or sell at any time without notice to anyone, including readers of this newsletter.
None of the authors, Tommy Humphreys, or Pacific Website Company Incorporated (dba CEO.CA) shall be liable for any damages, losses, or costs of any kind or type arising out of or in any way connected with the use of this newsletter. You should independently investigate and fully understand all risks before investing. When investing in speculative stocks or crypto assets, it is possible to lose your entire investment.
Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction, and should only be made after such person has consulted a registered financial advisor and conducted thorough due diligence. Information in this report has been obtained from sources considered to be reliable, but we do not guarantee that they are accurate or complete. Our views and opinions in this newsletter are our own views and are based on information that we have received, which we assumed to be reliable. We do not guarantee that any of the companies mentioned in this newsletter will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
We do not undertake any obligation to publicly update or revise any statements made in this newsletter.