Your dose of crypto news and analysis from @BTO and @Goldfinger
I missed you guys last week. I was busy getting laser eye surgery, which was a big deal for me — I’ve worn glasses since I was 6 years old! In the aftermath, this has been me, in between attempts to focus long enough to get through the crypto news each day:
What did I miss? Let me see, well, Ethereum has been on an absolute tear, climbing from around US$750 at year-end to where it is today: US$1,260 — a gain of 67%!!! Is ETH finally gearing up for the flippening (i.e., overtaking Bitcoin in market cap)?
You can see in the chart that the flippening came very close to occurring back in June 2017, when Bitcoin was around 38% of global crypto market cap and Ethereum was around 31%. Bitcoin reclaimed its dominance throughout the rest of the year — that is, until mid-December when the alt-coins started to relentlessly climb. Bitcoin is now at a low point in its history in terms of percentage share of the global crypto market cap — sitting at around 33%. ETH is around 17%, but should it continue to outperform other alts (as it has in January thus far), I could see this figure going up.
Ethereum co-creator Steven Nerayoff says the cryptocurrency's value could triple in 2018: "What you're seeing with ethereum is exponential increase in the number of projects — there are billions of dollars being poured into the ecosystem right now — maybe 10 times more projects this year than last year, which could easily lead to a doubling, probably a tripling in price by the end of the year.”
The next big catalyst for Bitcoin growth, on the other hand, will be the launch of ⚡Lightning Network⚡. If implemented, it will sit on top of the Bitcoin blockchain as a secondary layer to permit speedy and cheap micro-payments in BTC. It could be coming soon, too. At the end of 2017, the first real mainnet transaction using the Bitcoin Lightning Network was reportedly completed by Bitrefill software developer Alex Boxworth. Bitrefill allows you to purchase pre-paid mobile phone plans with Bitcoin and Litecoin in more than 100 countries. See here and here.
There’s been lots of important news over the past couple of weeks, but the news that had the most impact in the crypto markets was some fake news / FUD put out overnight Wednesday and into yesterday morning.
Europe woke up to these kinds of headlines and hit the sell button, sinking the global crypto market cap by more than US$100 billion — from around US$740 billion down to US$630 billion. But here’s the real news:
When it came to light that the journalists had taken some artistic liberties in crafting their stories, the crypto markets bounced back dramatically (just a couple hours after the panic selling began) and are now holding around the US$713 billion mark.
Don't forget how these dips worked in 2017:
Let’s take a look at the performance of the major cryptos year-to-date (close UTC time Dec. 31 to today):
- Bitcoin trading around US$13,900, down 1.6% on the year
- Ethereum trading around US$1,260, up 67% on the year
- Ethereum Classic trading around US$34.70, up 24% on the year
- Bitcoin Cash trading around US$2,590, up 2.4% on the year
- Dash trading around US$1,050, flat on the year
- Litecoin trading around US$237, up 2% on the year
- Monero trading around US$380, up 8.8% on the year
- ZCash trading around US$693, up 37.2% on the year
- Stellar trading around US$0.66, up 83% on the year
Here’s a handy guide outlining the basic premise behind each of the top 100 cryptos (credit @eigenjoy on Twitter):
Here we go!
WTF did I miss this week in crypto?
Bitcoin is too hot for criminals. They're using monero instead — http://money.cnn.com/2018/01/03/technology/bitcoin-popularity-criminals-monero/index.html
Europe's top law enforcement official -- Europol executive director Rob Wainwright -- tweeted that there will be a “progressive shift in 2018 towards criminal use of cryptocurrencies other than bitcoin”. Europol highlighted several cryptocurrencies it says are growing in popularity among criminals: monero, ethereum, dash and zcash.
Ripple's XRP Token Sets All-Time Price High Above $3 — https://www.coindesk.com/ripples-xrp-token-hits-time-high-3/
Just two weeks after it surpassed $1 for the first time, the price of XRP, the token that powers San Francisco startup Ripple's open-source RippleNet network, set a new all-time high above $3 in the first week of January. But consider some of the criticisms levied against the startup, in particular the following conclusions in an OpEd piece published by CoinDesk last year.
Bitcoin is the “new world currency” Peter Thiel wanted PayPal to be — https://qz.com/1170210/bitcoin-btc-price-is-up-on-news-of-peter-thiels-massive-investment/
The price of Bitcoin shot up in the first week of January when it was announced that Founders Fund, the venture-capital firm co-founded by PayPal co-founder, Peter Thiel, bought millions worth of Bitcoin last year. Now we learn that Thiel has had a vision for a stateless digital currency for nearly two decades. His original ambition was to turn PayPal into a “new world currency”, stating at a company meeting in 1999:
World's Top-Ranked Crypto Exchange Adds 240,000 Users in One Hour — https://www.bloomberg.com/news/articles/2018-01-11/world-s-top-ranked-crypto-venue-added-240-000-users-in-one-hour
This Bloomberg article features what is now the world’s largest crypto exchange: Binance. The firm recently added 240,000 new users in a single hour and has had to limit the inflow of new users to ensure quality of service continues. Be sure to watch the rare interview with Binance CEO, Zhao Changpeng.
NYSE files to list leveraged Bitcoin ETFs — https://twitter.com/EricBalchunas/status/949713640944435202
The New York Stock Exchange has made filings indicating its intention to list leveraged Bitcoin ETFs. They will come in many flavors including 2x and -2x. Here's the full list:
Ethereum Foundation Announces Millions in Grants for Scaling Research — https://www.coindesk.com/vitalik-buterin-announces-new-subsidies-for-ethereum-scaling-research/
The non-profit that oversees development of Ethereum has officially unveiled two subsidy programs that will support research on how to grow the number of transactions its blockchain can process. Great to hear this kind of news, especially given Ethereum has 30 times more devs than the next blockchain community. To the moon!
Vitalik Buterin Wants to Reinvent the ICO with DAO Technology — https://bitsonline.com/vitalik-buterin-daico-new/
The Ethereum creator has proposed a new decentralized fundraising model called the DAICO. Using “some of the benefits” of Decentralized Autonomous Organizations (DAOs), Buterin hopes to make Initial Coin Offerings (ICOs) more responsible and further democratized. On January 5th, Buterin uploaded a post entitled “Explanation of DAICOs” to the Ethereum Research forum. In it, the young Russian-Canadian programmer proposed merging characteristics of DAOs and ICOs to create what he dubs a “DAICO”.
Global Market Cap Rises Above $800 Billion — http://www.trustnodes.com/2018/01/06/global-market-cap-rises-800-billion
Wow is all I can say. At the beginning of 2017 the global market cap of all cryptos was around US$18 billion. And now, at the beginning of 2018, it peeked its head above the US$800 billion mark.
Nvidia Curbs Data Center GPU Use – But Crypto Miners Are Excluded — https://www.coindesk.com/nvidia-wants-to-halt-data-center-gpu-use-but-crypto-miners-are-excluded/
GPU manufacturer Nvidia announced this week that companies must use Nvidia's more expensive enterprise-level products for data center applications like running artificial intelligence tests. The price gap is significant — while a GeForce card is in the $700 range, the enterprise-level product, the Tesla V100, runs for just under $10,000. Never fear, however, crypto miners are excluded from the rule!!
China Moves to Ban Bitcoin Mining — http://www.trustnodes.com/2018/01/08/china-moves-ban-bitcoin-mining
The Communist Party of China is undertaking a crackdown on bitcoin mining according to leaked documents ordering local governments to “lead mining factories to quit gradually”. If true, this could be welcome news for miners situated outside of China. As this other article puts it, “this could be the beginning of the end of China’s dominance in bitcoin mining”.
Not too long after this news broke, Chinese mining giant Bitmain announced expansion plans into Switzerland.
Jamie Dimon: I ‘Regret’ Calling Bitcoin a Fraud — https://www.wsj.com/amp/articles/BL-MBB-65683
Goldman Sachs Caves: Bitcoin Is Money — https://www.forbes.com/sites/kenrapoza/2018/01/10/goldman-sachs-caves-bitcoin-is-money/#3cbe32d174b7
The two Goldman economists behind the report think bitcoin could become a portfolio asset comparable to gold. Duh.
SEC Worries Cause Funds to Drop Bitcoin ETF Proposals — https://bitsonline.com/sec-funds-drop-bitcoin-etf-proposals/
Despite bitcoin getting plenty of mainstream attention from the media and Wall Street, two U.S. companies looking to launch bitcoin-based ETFs have decided to drop their attempts. Their decision came after SEC staff expressed concern regarding the liquidity and valuation of digital assets, including bitcoin.
Stock Exchange to ICO — http://www.trustnodes.com/2018/01/11/stock-exchange-ico
The Gibraltar Stock Exchange is to hold a token sale from Feb 7-14 through its subsidiary, the Gibraltar Blockchain Exchange (GBX). They plan to raise $6 million issuing Rock Tokens following a pre-sale of $21 million to fund an “institutional-grade token sale platform and cryptocurrency exchange.”
Zuckerberg to Study Crypto in Quest to Fix Facebook — https://www.coindesk.com/zuckerburg-study-cryptocurrency-quest-decentralize-facebook/
Kodak Launches New Ethereum Blockchain Image Platform, Stock Skyrockets — http://www.trustnodes.com/2018/01/10/kodak-launches-new-ethereum-blockchain-image-platform-stock-skyrockets
Not only that, but it has licensed its name to a new bitcoin mining product. Oh, Kodak…
The world now has a cryptocurrency pop group — https://qz.com/1177249/japans-kasotsuka-shojo-the-worlds-first-cryptopop-group-sings-about-bitcoin-and-cryptofraud/
Yep, Japan has a new all-girl pop group called Kasotsuka Shojo (literal translation: “Virtual Currency Girls”). Each of the eight members represents a different cryptocurrency… Listen to their first hit single, “The Moon and Virtual Currencies and Me”, below. You can’t make this stuff up.
Coins and tokens and stocks, oh my!
[Note — Net change and % change figures are year-to-date — i.e., from the close Dec. 29 (last trading day of 2017) to the close today.]
HIVE Blockchain (TSXV:HIVE) — $HIVE — Net Change: -$0.16; % Change: -4.7%
HIVE entered 2018 on a high note, having just closed a massive $115 million financing — and is now cashed up to forge ahead with its previously announced expansion into Sweden (including a large Bitcoin mine), with around US$50 million left over for new projects and acquisitions. I’m eagerly anticipating news on the Sweden launch, with Phase 1 expected to come online mid this month. This phase alone will increase HIVE’s crypto mining power consumption by more than 175%. And it’s just 1 of 3 GPU-based expansion phases, with the ASIC-based (Bitcoin) phase expected to come online later in the year. Altogether, this will bring HIVE to 44.2 MW of mining capacity.
HashChain Technology (TSXV:KASH) — $KASH — Net Change: -$0.15; % Change: -4.8%
Dash and Bitcoin miner KASH started the year with a bang, announcing the closing of its approximately $30 million bought deal financing and the entering into of a purchase order for 5,000 crypto mining rigs. This is expected to increase the company’s mining power consumption to approximately 8.7 MW. It also signed up a commitment for space for mining operations of up to 20 MW in a facility in Montana.
Mogo Finance (TSX:MOGO) — $MOGO — Net Change: -$0.09; % Change: -1.4%
MOGO added some crypto brass to its advisory team this week, with Anthony Di Iorio joining as Special Advisor to support the upcoming launch of MogoCrypto and new strategic partnership opportunities in blockchain and cryptocurrencies. Di Iorio is a co-founder of Ethereum, and is the CEO and founder of Decentral Inc., creator of multi-token wallet platform Jaxx.io.
Overstock (NASDAQ:OSTK) — $OSTK — Net Change: -+US$15.05; % Change: +23.6%
Overstock just got a hefty chunk of change from one of the biggest names in finance, and CEO Patrick Byrne says much of it will fund the company's blockchain work. The company disclosed in an SEC filing last week that the holder of a warrant had exercised its right to buy $100 million worth of shares. Although the filing did not identify this investor, Byrne told CoinDesk it was the Quantum Fund, managed by billionaire George Soros. See more here. And although the retailer reportedly mixed up Bitcoin and Bitcoin Cash — woops — the stock has been on a tear so far this year, closing out the week at US$78.95, up a whopping 23.6% since it closed out 2017 at US$63.90.
Other crypto/blockchain-related stocks riding the wave:
- MGT Capital (OTC:MGTI) — $MGTI — Net Change: -US$0.59; % Change: -12.3%
- LeoNovus (TSXV:LTV) — $LTV — Net Change: +$0.025; % Change: +7.8%
- Global Blockchain (TSXV:BLOC) — $BLOC — Net Change: $0.00; % Change: 0.0%
- BTL Group (TSXV:BTL) — $BTL — Net Change: -$1.33; % Change: -10.3%
- NetCents Technology (CSE:NC) — $NC — Net Change: +$0.19; % Change: +7.3%
- 360 Blockchain (CSE:CODE) — $CODE — Net Change: -$0.04; % Change: -15.7%
- Riot Blockchain (NASDAQ:RIOT) — $RIOT — Net Change: -US$6.52; % Change: -23.0%
- eXeBlock Technology (CSE:XBLK) — $XBLK — Net Change: -$0.02; % Change: -2.1%
- BIG Blockchain Intelligence Group Inc. (CSE:BIGG) — $BIGG — Net Change: -$0.01; % Change: -0.7%
- And a few others that have been getting some attention: Atlas Cloud (CSE:AKE) - $AKE; Block One Capital (TSXV:BLOK) - $BLOK; Calyx Bio-Ventures (TSXV:CYX) - $CYX; ePlay Digital (CSE:EPY) - $EPY; LottoGopher (CSE:LOTO) - $LOTO; HealthSpace Data Systems (CSE:HS); Stompy Bot (CSE:BOT); Imagination Park (CSE:IP); Blockchain Power Trust (TSXV:BPWR.UN) - $BPWR-UN.
The CryptoTechnician Report
The week started strong for the cryptocurrency sector with total crypto market capitalization reaching another all-time high at US$833 billion Monday morning. However, that would be the high for the week and cryptos would spend the rest of the week suffering the 2nd ~20% correction within the last month:
Friday has been a strong day for the cryptocurrency sector with total market capitalization ticking up more than 10%, climbing back up to US$713 billion at publishing time.
One of the big stories of the week has been the seemingly relentless trend of Ethereum taking market share from Bitcoin:
The BTC/ETH ratio (number of Ethereum needed to equal one Bitcoin) has fallen as low as 10.70 this week after reaching as high as 38.35 on December 8th.
For its part Bitcoin just completed a couple of its quietest trading days in a long time; it seems that the incredibly strong uptrend which persisted for virtually all of 2017 has given way to a period of range-bound oscillation constrained by support at $12,800 and resistance at $17,200. It is notable that Bitcoin completed its first daily close below its 50-day moving average since the rally kicked into high gear in September, however, until support at $12,800 is breached the #1 cryptocurrency will remain in a sideways oscillation.
Ethereum has had a monster week, reaching nearly $1,400 before suffering a ~20% correction:
Support clearly exists near $1,100 with resistance above $1,300.
Ripple which briefly dethroned Ethereum as the #2 crypto by market cap last week has since crashed back down to earth, dropping more than 50% from its high on January 4th to its low on January 11th:
Much like Bitcoin, Ripple appears ready to enter a period of consolidation centered around the $2 level.
The cryptocurrency sector has experienced two 20%+ corrections within the last 3 weeks. This got me thinking about an analog to the 1999-2000 Nasdaq. In January 2000 the Nasdaq Composite suffered two 10%+ corrections before screaming higher for the next six weeks before ultimately putting in place a massive bubble top at 5132.52 on March 10th, 2000:
While I don't believe exact market analogs repeat, I do believe that markets do rhyme. Cryptos have many similarities to the 1999-2000 Nasdaq market, are we in for a massive crypto rally over the next six weeks before a substantial top is put in place in mid-March?
Funny things we saw this week
A Bitcoin hodler’s worst nightmare:
The “HOT NEW CRYPTO” Starter Kit:
CNBC guy shrugs and says put $1k in or a little more:
aka Buy the F*^%ing Dip!
🎶Andreas Antonopoulos Shows us a Whole New World🎶
This was an actual tweet from an SEC branch this week - lol:
Incredible — there was a 1997 Cypherpunk documentary called “Crypto Wars”!!
We need Lightning Network:
And, last but not least — I can’t leave this gem out:
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