Your dose of crypto news and analysis from @BTO and @Goldfinger
These are the faces of men drunk on crypto and loving life:
And these are the faces of the same men, facing the music after losing 500 million NEM tokens belonging to their customers — then (but no longer) worth around US$533 million.
That guy on the left looks, uh, uncomfortable... Yes, today Tokyo-based cryptocurrency exchange Coincheck confirmed that it has suffered what appears to be the biggest hack in the history of crypto, surpassing that of Mt. Gox in 2014. However, it is expected that the impact on the cryptocurrency market will be much smaller given the huge increases in overall crypto market cap over the past year, and the fact that the stolen tokens were limited to NEM (which did take a big hit, down -15% today).
Let this be a lesson to crypto investors. Understand how your funds are going to be held and secured by your exchange of choice before plowing money into their coffers. With Coincheck, it appears they stupidly retained all customer tokens in “hot” — as opposed to “cold” — wallets, meaning they were online and susceptible to attack, and did not use multisig (source here and here). Apparently they plan on continuing to operate, but stay away!
And hacks aren’t the only concern. In Ottawa, a suspect was charged this week in connection with a thwarted Bitcoin heist. Police are hunting for two other suspects. The three armed men bound employees at a Bitcoin exchange before fleeing empty-handed. Bitcoin-sniffing police dog depicted below:
Katy Perry is now shilling cryptos to her 68.4 million followers on Instagram. Is this a good or bad sign?
No photoshop here -- that is her actual Instagram, showing fake nails bedazzled in crypto logos.
Let’s take a look at the performance of some of the major cryptos this week (close UTC time last Friday to today):
- Bitcoin trading around US$10,900, down 5.9% on the week
- Ethereum trading around US$1,040, flat on the week
- Bitcoin Cash trading around US$1,560, down 11.6% on the week
- Stellar trading around US$0.63, up 24.2% on the week
- Litecoin trading around US$174, down 9.9% on the week
- Dash trading around US$765, down 9.5% on the week
- Monero trading around US$315, down 13.6% on the week
- Ethereum Classic trading around US$28, down 11.5% on the week
- ZCash trading around US$446, down 15% on the week
A lot of RED -- ouch! -- except for Ethereum and Stellar -- YAY!
WTF did I miss this week in crypto?
Canadian Government Launches Live Ethereum Public Blockchain Trial For Government Contracts — https://www.trustnodes.com/2018/01/21/canadian-government-launches-live-ethereum-public-blockchain-trial-government-contracts
The National Research Council of Canada (NRC) is trialing the Ethereum blockchain for recording government contracts. For the pilot, the NRC is using the Catena platform from blockchain startup Bitaccess for publishing information on government grants and contributions over the open-source blockchain. More here. The platform itself can be accessed here: https://nrc-cnrc.explorecatena.com/en.
Crypto Detective Reveals: Only 10% of Ripple is Held by the Masses — https://www.trustnodes.com/2018/01/20/crypto-detective-reveals-10-ripple-held-masses
Well this is pretty damning. An incredible 84 billion XRP, out of a total 100 billion, is held by Ripple Labs, the Ripple board or former members of the Ripple board, new extensive data reveals. Another three billion is held by a Japanese holder. While “ordinary” individuals hold only around 8 billion XRP, 3 billion of which is held on exchanges. Jed McCaleb alone, Ripple’s founder, holds around 5 billion XRP, while Chris Larsen, co-founder and executive chairman of Ripple, holds some 6.7 billion XRP. The crypto detective suggests a number of the big holding addresses trade between each other, indicating potential wash trading.
CFTC and SEC Announce Tough Stance on Frauds in Cryptoverse — https://bitsonline.com/cftc-sec-fraud-schemes/
“When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or the like – the SEC and the CFTC will look beyond form, examine the substance of the activity and prosecute violations of the federal securities and commodities laws. The Divisions of Enforcement for the SEC and CFTC will continue to address violations and to bring actions to stop and prevent fraud in the offer and sale of digital instruments.”
Korbit: Non-Koreans Prohibited from KRW Deposits at All Domestic Cryptocurrency Exchanges — https://www.ccn.com/korbit-non-koreans-prohibited-krw-deposits-domestic-cryptocurrency-exchanges/
Korbit, the third largest bitcoin and cryptocurrency exchange in the South Korean market behind Bithumb and Coinone, has announced that non-Korean nationals or foreigners will not be allowed to deposit Korean won at any domestic cryptocurrency exchanges.
Indian Government Turns Fiat Currency War on to Cryptocurrencies — https://bitcoinmagazine.com/articles/indian-government-turns-fiat-currency-war-cryptocurrencies/
There was a bunch of FUD over the past week out of India — from potential crackdowns on exchanges, including bank accounts being frozen, to the tax man cometh. The article linked above provides a bit of an overview. It is unclear as yet how much of the news is real or fake. Consider this something to watch in the coming weeks.
Resistance to Cryptocurrency as Explained by Behavioral Economics — https://hackernoon.com/resistance-to-cryptocurrency-as-explained-by-behavioral-economics-482613bed63a
For those interested in studies of cognitive biases, this article is for you. While not super in-depth, it touches on authority bias, status quo bias, loss aversion, and egocentric bias as they apply to crypto. It would be cool to see a deeper dive on this topic.
More than 10 percent of $3.7 billion raised in ICOs has been stolen: Ernst & Young — https://www.reuters.com/article/us-ico-ernst-young/more-than-10-percent-of-3-7-billion-raised-in-icos-has-been-stolen-ernst-young-idUSKBN1FB1MZ
Can’t say I’m surprised. Most ICOs are super sketchy. EY analyzed more than 372 ICOs and found that roughly $400 million of the total $3.7 billion funds raised to date had been stolen, according to research published on Monday.
The full report can be accessed here: http://www.ey.com/Publication/vwLUAssets/ey-research-initial-coin-offerings-icos/%24File/ey-research-initial-coin-offerings-icos.pdf.
Bitcoin broker Coinbase booked $1 billion in revenue last year — so the company has told hovering VCs to back off — https://www.recode.net/2018/1/22/16911692/cryptocurrency-bitcoin-trading-coinbase-revenue-secondary
Coinbase has encountered an unusual problem for a Silicon Valley startup: too many investors are trying to get in. Incredibly, the six-year-old company crossed $1 billion in revenue last year. Coinbase makes money not on Bitcoin’s price but on the volume of trades — charging both the buyer and seller usually a fee between 0.25 percent and 1 percent of the total transaction size through the site.
Robinhood adds zero-fee cryptocurrency trading and tracking — https://techcrunch.com/2018/01/25/free-cryptocurrency-trading-app/
But not so fast, Coinbase. There’s a new game in town. No-commission stock trading app Robinhood announced this week that it will let its users buy and sell Bitcoin and Ethereum without any added transaction fees starting in February. And the company is already letting users track the price, news, and set up alerts on those and 14 other top crypto coins, including Litecoin and Ripple. “We’re planning to operate this business on a break-even basis and we don’t plan to profit from it for the foreseeable future” says Robinhood co-founder Vlad Tenev. “The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.” Check is out at https://crypto.robinhood.com/ — where it’s showing a huge amount of interest in the service:
Relief! Korean Banks to Issue New Cryptocurrency Trading Accounts; Anonymous Trading Ban on Jan 30 — https://www.ccn.com/relief-korean-banks-issue-new-cryptocurrency-trading-accounts-anonymous-ban-jan-30/
Following a period of tremendous uncertainty, we know now that South Korea will enforce its ban on anonymous bank accounts used in cryptocurrency trading on Jan. 30. In conjunction, six domestic banks on board to issue new trading accounts that follow KYC norms. All in all, good news in my books. Move on.
Payment Processor Stripe Walks Away from Bitcoin — https://www.ccn.com/first-ever-payment-processor-to-accept-bitcoin-walking-away/
Irish online payment processor Stripe announced Tuesday it will discontinue accepting Bitcoin payments as of April 23, 2018. The company cites block size capacity, slow transaction confirmation times, and high fees as the reasons behind the change. Stripe became the first major processor to accept Bitcoin back in 2014. The company will continue to keep a close eye on emerging coins and platforms that may make doing business on blockchains viable again. They specifically called out Bitcoin’s Lightning Network, Ethereum, and OmiseGO as promising projects.
The company’s official post on the topic can be read here.
South Korea Fines Crypto Exchanges for Privacy Failures — https://www.coindesk.com/korean-regulator-fines-crypto-exchanges-over-privacy-failures/
A few slaps on the wrist this week to wake South Korean exchanges up to the reality that they need to be on the ball with regulatory requirements. In this instance, the government issued fines totalling 141 million won ($130,000) to domestic cryptocurrency exchanges for providing insufficient user data protection.
Rapper 50 Cent ‘Forgot About’ Bitcoin Stash Now Worth $8.5M — http://bitcoinist.com/rapper-50-cent-forgot-bitcoin-stash/
The rapper apparently sold copies of a horrifically bad album (I listened to it so you don’t have to) — Animal Ambition — in 2014 for Bitcoin, netting around 700 BTC, at the time worth $400,000. Those coins are now worth $8.5 million and he forgot about them until now. On Twitter, 50 Cent confirmed he was “getting to the bag” amid a flurry of advice from cryptocurrency holders, chief among which was to HODL his earnings.
Here -- let me help you with translating that -- he's not HODLing:
Coinsquare Crypto Exchange Eyes $120 Million IPO in Canada — https://www.bloomberg.com/news/articles/2018-01-24/coinsquare-crypto-exchange-eyes-120-million-ipo-in-canada
Coinsquare, one of Canada’s biggest digital currency exchanges, is targeting about $150 million in an initial public offering in September to help finance an overseas expansion. “The United States and the U.K. market are next,” Coinsquare Chief Executive Officer Cole Diamond said in an interview Tuesday, adding he expects to be operating in those markets in the second quarter. “We believe that we will be a strong competitor to Coinbase and other exchanges in the U.S. by the end of the year.”
May Says She’ll Look ‘Very Seriously’ at Action on Bitcoin — https://www.bloomberg.com/news/articles/2018-01-25/u-k-s-may-will-look-very-seriously-at-action-on-bitcoin
Taking a similar stance to the U.S., U.K. Prime Minister Theresa May has promised to consider clamping down on Bitcoin as she raised concerns that cryptocurrencies are being used by criminals. “In areas like cryptocurrencies, like Bitcoin, we should be looking at these very seriously,” May said. Action on crypto-currencies may be needed “precisely because of the way they are used, particularly by criminals”.
Not surprisingly, cryptocurrency was a bit of a theme this year at the World Economic Forum in Davos, drawing calls for more regulation. More here.
Trading Technologies and Coinbase Announce a First-of-its-Kind Bridge Between the Futures and Cryptocurrency Markets — https://www.tradingtechnologies.com/news/trading-technologies-and-coinbase-announce-a-first-of-its-kind-bridge-between-the-futures-and-cryptocurrency-markets/
In what will almost certainly be one of many major institutional-focused products to launch in the coming months, Trading Technologies International (TT), a global provider of high-performance professional trading software, and Coinbase announced a strategic partnership to provide professional cryptocurrency trading functionality and market access to the institutional trading world. Beginning March 2018, the partnership will allow TT customers to trade both spot and derivative markets side by side for the first time.
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 — Net Change: -$0.49; % Change: -14.9%
No news from first-mover HIVE this week, but with last week’s successful launches of the Reality Shares Nasdaq NextGen Economy ETF and the Amplify Transformational Data Sharing ETF — both of which feature the company in their top 10 holdings — Wall Street has been buying up the name. It’s not everyday you see Goldman Sachs, Merrill Lynch, and Morgan Stanley throughout the depth chart of a TSX.V stock.
With all the negative crypto press and downward price action in the major coins, however, it’s not surprising that HIVE, along with nearly all other blockchain/crypto stocks, has been a little soft. Upcoming news for the company will include updates on the ongoing Sweden expansion, with Phase 2 and 3 expected to roll out in March and April, respectively, and the release of the first full quarter of financials — expected by the end of February. The financials will cover October through December. For the first half of October, the company was operating its initial data centre in Iceland, but the balance of the period will include operations from both the initial and second data centre in Iceland. As Sweden Phase 1 did not come online until mid-January, Sweden operations will not be included, but the financials should give us a better inside look into the business, which is on track for major growth in 2018. And don’t forget the working capital on hand ($55 million), available for future unannounced projects.
Mogo Finance (TSX:MOGO) — $MOGO — Net Change: -$0.72; % Change: -10.6%
MOGO announced this week that it has formed a dedicated blockchain/crypto-focused subsidiary called Mogo Blockchain. As an initial venture, the new sub will commence Bitcoin mining through an agreement with DMG Blockchain Solutions, a Vancouver-based “mining as a service” (MaaS) provider. Mogo Blockchain will initially lease 1,000 Bitcoin mining machines from DMG, which will be operational this quarter. More information on the venture will presumably be made available when mining activities commence.
Other crypto/blockchain-related stocks riding the wave (A LOT OF RED -- OUCH!):
- HashChain Technology (TSXV:KASH) — $KASH — Net Change: -$0.22; % Change: -9.8%
- Neptune Dash (TSXV:DASH) — $DASH — Net Change: -$0.205; % Change: -34.2% (from close Monday, it's first day of trading)
- Overstock (NASDAQ:OSTK) — $OSTK — Net Change: -US$3.20; % Change: -4.1%
- MGT Capital (OTC:MGTI) — $MGTI — Net Change: -US$0.68; % Change: -17.3%
- LeoNovus (TSXV:LTV) — $LTV — Net Change: -$0.045; % Change: -14.5%
- Global Blockchain (TSXV:BLOC) — $BLOC — Net Change: -$0.17; % Change: -9.6%
- BTL Group (TSXV:BTL) — $BTL — Net Change: -$1.40; % Change: -12.2%
- NetCents Technology (CSE:NC) — $NC — Net Change: +$0.25; % Change: +9.4%
- 360 Blockchain (CSE:CODE) — $CODE — Net Change: -$0.04; % Change: -18.6%
- Riot Blockchain (NASDAQ:RIOT) — $RIOT — Net Change: -US$2.78; % Change: -14.0%
- eXeBlock Technology (CSE:XBLK) — $XBLK — Net Change: -$0.05; % Change: -7.2%
- BIG Blockchain Intelligence Group Inc. (CSE:BIGG) — $BIGG — Net Change: -$0.08; % Change: -34.2%
- 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.
I urge you to follow @Evenprime’s crypto watchlist should you wish to track the now dozens of names apparently in the crypto/blockchain game.
The CryptoTechnician Report
[Note — Short one this week, folks.]
The big pattern out there is the falling wedge in Bitcoin:
If we zoom in closer we can see a symmetrical triangle within the falling wedge:
The bigger levels in play for Bitcoin are $12,000 above and $10,00 below. A resolution to this pattern looks like it will occur within the next week, and perhaps even sooner. A breakout above $12,800 resistance would target a move back up to at least test the all-time high near $20,000, whereas a breakdown below $10,000 probably means Bitcoin is on its way down to at least $8,000 and potentially even lower.
As goes Bitcoin, so goes much of the cryptocurrency sector. Ethereum is in a very similar situation as it ping-pongs between resistance at $1100 and support in the $950-$1000 area. A resolution to the multi-week oscillation in cryptos is close at hand and if i'm correct in this analysis we could see some really big moves as soon as this weekend.
Funny things we saw this week
Every time someone tries to discuss the disadvantages of Bitcoin:
Balcony Conversations - Bitcoin Guy
lol — Watch Brian Kelly talk about HOLDing and getting REKT on CNBC’s Fast Money — “This is what the crypto kids call HODL”: https://twitter.com/CNBCFastMoney/status/955933565111369728
The Dark Conspiracy of Vitalik Buterin:
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