Your dose of crypto news and analysis from @BTO and @Goldfinger
Another doozy of a week in crypto, summed up in a single GIF. My work here is done...
Actually, let's dig in a little bit. Who is this Mt. Gox trustee, and WTF man? Click here for a short but detailed account of what seems to have happened, but first some background (credit: Wikipedia). Launched in July 2010, by 2013 and into early 2014 Japan-based Bitcoin exchange Mt. Gox had become the largest in the world, handling over 70% of global BTC transactions. In February 2014, trading was suspended and Mt. Gox filed for bankruptcy protection from creditors. In April 2014, the company began liquidation proceedings and announced that approximately 850,000 BTC belonging to customers and the company were missing and likely stolen. 200,000 have since been "found".
The Mt. Gox implosion started a precipitous fall in BTC prices from above US$1k down, ultimately, to around US$250, before beginning its eventual recovery and relentless climb to all-time highs around US$20k. Jumping ahead to present day, we learned this week that between December 2017 (when crypto all-time highs were being made left, right, and centre) and February 2018, the trustee in possession of the "found" Bitcoins sold 35,841 of them (for $362 million), as well as 34,008 Bitcoin Cash (for $45 million).
Controversially, the sales were done on an exchange, as opposed to through, say, an auction process -- as is typically done for seized BTC (e.g., see this). @matt_odell on Twitter did some sleuthing to determine the wallets used and effect on the market: "The arrows on the chart below mark the dates of each Gox wallet transfer. Worth noting, these aren't the dates of the sales, those most likely happened right after, these are the dates of the transfers to the exchange."
The trustee still has another ~165,000 BTC and BCH. What he will do with those funds remains unclear. If the funds already raised are sufficient to pay out Mt. Gox's creditors per the terms of the bankruptcy proceedings, perhaps we've seen the last of the trustee dumping, and the balance would be left for, presumably, distribution to the company's shareholders (?). Time will tell, but the market is in a state of panic at the moment given the uncertainty and the manner and pace at which the trustee seems to be willing to dump coins. And traders are rightfully pissed at the whole situation:
Add to the Mt. Gox situation, the following headlines:
That's a lot of FUD to handle in one week:
So it wasn't surprising to see the return of the sea of red:
And, of course, the calls that Bitcoin is dead once again:
With all that said, let’s see how some of the major cryptos fared overall this week (close UTC time last Friday to today):
- Bitcoin trading around US$9,100, down 17.7% on the week
- Ethereum trading around US$702, down 18.1% on the week
- Bitcoin Cash trading around US$1,010, down 20.7% on the week
- Litecoin trading around US$189, down 11.2% on the week
- Stellar trading around US$0.30, down 5.7% on the week
- Dash trading around US$475, down 21.3% on the week
- Monero trading around US$272, down 21.2% on the week
- Ethereum Classic trading around US$21.78, down 29.2% on the week
- ZCash trading around US$299, down 22.9% on the week
Oooof. Ouch.
WTF did I miss this week in crypto?
Webster's Dictionary Adds 'Cryptocurrency' and 'Initial Coin Offering' — https://www.coindesk.com/websters-dictionary-adds-cryptocurrency-initial-coin-offering/
One of the world's most established dictionaries has gotten a cryptocurrency update. Merriam-Webster announced Monday that it has added terms such as "cryptocurrency," "blockchain" and "initial coin offerings" to its word lists as of this month. The additions came amid more than 800 new entries. Cool re: the crypto stuff, but wow that's a lot of new words!
XRP, BCH, LTC & ETH: DCG Fund Adds 4 New Crypto Trusts — https://www.coindesk.com/xrp-bch-ltc-eth-dcg-fund-adds-4-new-crypto-trusts/
Creator of the Bitcoin Investment Trust ($GBTC), Grayscale, is launching new trusts - which bring Ethereum, Litecoin, Ripple, and Bitcoin Cash to the offerings the firm provides. Previously launched products: Bitcoin, Ethereum Classic, and Zcash investment trusts.
Japan Toughens Oversight, Penalizes Cryptocurrency Exchanges — https://bitcoinmagazine.com/articles/japan-toughens-oversight-penalizes-cryptocurrency-exchanges/#1520542044
In its most sweeping crackdown yet, a Japanese regulator has penalized seven cryptocurrency exchanges, requiring two to halt operations for one month. Japan’s Financial Services Agency (FSA) announced March 8 that it came down on the exchanges due to their failure to provide proper internal-control systems. All of the exchanges were ordered to step up efforts to improve security and prevent money laundering.
DMM: Mining Is a Means to an End, We’re Building a Token Economy in Japan — https://bitsonline.com/dmm-mining-building-token-economy-japan/
Japanese online media giant DMM says its goal is to build a “token economy”, where cryptocurrencies actually get used — not just hoarded for speculation. The mining facilities it’s building in Japan are “a means to an end, but not the end itself” in creating an ecosystem made of real products and services.
US Congress to Discuss ICOs in Hearing Next Week — https://www.coindesk.com/us-congress-discuss-icos-hearing-next-week/
A subcommittee of the U.S. House of Representatives Financial Services Committee is set to hold a hearing next week on cryptocurrencies and initial coin offerings (ICOs). A notice posted on the committee's website states that the Capital Markets, Securities, and Investment Subcommittee hearing - entitled "Examining the Cryptocurrencies and ICO Markets" - is scheduled for March 14 at 10 a.m. EST. Something to watch for next week.
Reddit rumour: Bank of Montreal (BMO) to block cryptocurrency transactions through BMO Credit and DEBIT cards including Interac Online Payment — https://www.reddit.com/r/Bitcoin/comments/829415/canada_bank_of_montreal_bmo_to_block/?st=jekbkn5g&sh=2482f991
Chalk this up to a rumour, but the leaked internal email copied in the post seems legit. Dumb move by BMO if true.
Cryptos Are Commodities, Rules US Judge In CFTC Case — https://www.coindesk.com/us-judge-rules-cryptocurrencies-are-commodities-in-cftc-case/
According to a Memorandum & Order for a court case that the CFTC had brought against cryptocurrency business operator Patrick Kerry McDonnell, Judge Jack Weinstein from a district court in New York ruled that "virtual currencies can be regulated by CFTC as a commodity. ... Virtual currencies are 'goods' exchanged in a market for a uniform quality and value. ... They fall well within the common definition of 'commodity'."
Ex-President Of Mexico, Vincente Fox Speaks On His Support Of Cryptocurrency
Coinbase Launches Index Fund Tracking Ethereum, Bitcoin, Bitcoin Cash and Litecoin — https://www.trustnodes.com/2018/03/07/coinbase-launches-index-fund-tracking-ethereum-bitcoin-bitcoin-cash-litecoin
The biggest crypto broker is launching Coinbase Index Fund (CBI) for accredited investors which proportionally weighs a basket of assets listed on the exchange. “If a new asset is listed on the exchange, it will be automatically added to the fund,” Coinbase says. Describing a managed fund with a 2% fee, annually rebalanced to maintain the percentage of each asset proportional to their market cap.
And in another enterprise-focused move by Coinbase this week, they've hired NYSE finance vet Eric Scro as vice president of finance. Scro - who has held roles at NYSE since 2009 and previously worked for J.P. Morgan - will work out of New York City, with a focus on developing enterprise clients and partnerships.
The news doesn't stop there. Earlier in the week, Coinbase also announced the hiring of Emilie Choi to serve as the company’s vice president of corporate and business development. Choi will be tasked with “scaling Coinbase globally, seeking out world-class acquisition and partnership opportunities, and managing our strategic projects,” according to a post published on the company blog.
Ex-Trump Adviser Bannon Says Cryptocurrency Will Bring 'True Freedom' — https://www.coindesk.com/steve-bannon-crypto-revolution/
Bannon is out there touting the liberating potential of cryptocurrency and blockchain technology. In a lecture given on Tuesday in Zurich, he described cryptocurrency and blockchain technology as the "very heart" of a populist movement in Switzerland. "We take control of the central banks away. That will give us the power again...Once you take control of your currency, once you take control of your data, once you take control of your citizenship, that's when you're going to have true freedom."
Sierra Leone Holds First-Ever Blockchain Presidential Vote — https://www.coindesk.com/sierra-leone-secretly-holds-first-blockchain-powered-presidential-vote/
Behind the scenes of Sierra Leone's presidential election Wednesday, a second, perhaps larger milestone was quietly achieved. As voters in the nation's most populous Western District lined up to cast votes in what had been a heated campaign between 16 candidates, unbeknownst to them, blockchain voting startup Agora was helping keep track of it all, and through its proprietary distributed ledger, providing unprecedented insight into the process.
Getting Robbed May Save These Crypto Traders $262 Million — https://www.bloomberg.com/news/articles/2018-03-08/getting-robbed-may-save-these-crypto-traders-262-million
For victims of the $500 million heist at Japanese cryptocurrency exchange Coincheck, getting robbed may have been a blessing in disguise. The 260,000 traders who lost money in the theft will be reimbursed by Coincheck at a rate of about 88 yen (84 U.S. cents) for each NEM coin that was stolen from their accounts, Chief Operating Officer Yusuke Otsuka said on Thursday, bringing the total payout to about $440 million. That’s $262 million higher than the current market value of the stolen coins!
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 $1.46; Net Change: -$0.25; % Change: -14.6%
With the awful week we had in crypto, it's no surprise to see HIVE -- and essentially every other crypto pubco -- in the red. The launch of Hut 8 (TSXV:HUT; $HUT) this week, which markets itself as a HIVE competitor, also may have resulted in investors perhaps trying to compare the two companies and come to a consensus on how to value each one in relation to the other. I think it's too early to do that as HUT still has to prove to the market that it is the real deal and can execute on what they have promised to do. It's also futile, IMO, to compare MW usage where the power is running completely different types of machines, operated by different people, subject to differing underlying costs, and mining different blockchains. HIVE has already proven it can execute on plans, and perhaps the market is waiting for its next move to show that it will continue to expand and lead the charge. Goldfinger put out a TA piece on HIVE this morning, which I encourage you to read. Time will tell if he's right when he says that the bloodletting could be over for the stock. It certainly looked that way today, with it being up on day by +$0.08 (+5.8%) after a week of downward trajectory. I think for all the crypto pubco deals, we're in need of a strong cryptocurrency rally to re-ignite the fire. Let's go!!!
Mogo Finance (TSX:MOGO) — $MOGO — Last at $4.53; Net Change: -$0.17; % Change: -3.6%
Mogo's fourth quarter results (see here) arrived as advertised, according to analyst Nikhil Thadani, who maintains his “Speculative Buy” rating and 12-month target price of $12.00 on the stock (more here). The launch of MogoCrypto could increase its subscription and fee revenue growth in 2018, but another catalyst for the stock may be a US listing. Apparently, the company recently filed its 40F, which could suggest a potential NASDAQ listing may be on the table.
Other crypto/blockchain-related stocks riding the wave:
- HashChain Technology (TSXV:KASH) — $KASH — Last at $0.34; Net Change: -$0.08; % Change: -19.0%
- Neptune Dash (TSXV:DASH) — $DASH — Last at $0.33; Net Change: -$0.08; % Change: -19.5%
- Overstock (NASDAQ:OSTK) — $OSTK — Last at US$61.10; Net Change: +US$0.55; % Change: +0.9%
- Riot Blockchain (NASDAQ:RIOT) — $RIOT — Last at US$9.24; Net Change: -US$1.34; % Change: -12.7%
- MGT Capital (OTC:MGTI) — $MGTI — Last at US$1.77; Net Change: -US$0.16; % Change: -8.3%
- Global Blockchain (TSXV:BLOC) — Last at $0.46; $BLOC — Net Change: -$0.11; % Change: -19.3%
- BTL Group (TSXV:BTL) — $BTL — Last at $7.50; Net Change: -$0.73; % Change: -8.9%
- NetCents Technology (CSE:NC) — Last at $1.43; $NC — Net Change: -$0.24; % Change: -14.4%
- eXeBlock Technology (CSE:XBLK) — Last at $0.28; $XBLK — Net Change: -$0.05; % Change: -15.2%
- BIG Blockchain Intelligence Group (CSE:BIGG) — $BIGG — Last at $0.69; Net Change: -$0.08; % Change: -10.4%
- 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); Stompy Bot (CSE:BOT); Imagination Park (CSE:IP); Blockchain Power Trust (TSXV:BPWR.UN) - $BPWR-UN; CryptoGlobal (TSXV:CPTO) - $CPTO; DMG Blockchain Solutions (TSXV:DMGI) - $DMGI.
Follow @Evenprime’s crypto watchlist should you wish to track the now dozens of names apparently in the crypto/blockchain game.
The CryptoTechnician Report
An ugly week for the cryptocurrency sector as total crypto market capitalization sunk below US$400 billion and Bitcoin finally broke the $9,200 support level:
The $6,000 support is the big downside target here, however, there is a more bullish scenario possible involving a test down to the $7,800-$8,000 area which results in the final capitulation before a reversal back above $9,200 creates a failed a breakdown and a powerful bullish reversal. While odds currently favor the former (a retest of $6,000) due to the strength of the downtrend, we should be prepared for all possibilities at this point.
The Ethereum chart is extremely interesting because there are two clear ways one can choose to interpret it:
The first interpretation could be that Ethereum is in the final stages of a bull market correction, characterized by higher lows, and declining volume on sell-offs (sellers running out of energy, and price is declining simply because buyers have vanished). If this interpretation proves to be the case, once the bulls regain energy price could easily reverse back above $1,000.
The more bearish interpretation is that Ethereum hasn't yet experienced a high-volume selling climax, which could result in a decline all the way down to test the MAJOR long-term support/resistance at $500.
The extremely low volume we have seen in the cryptocurrency sector in the last month is characteristic of depressed sentiment and a market that is extremely out of favor. From a long term investment standpoint it's usually a good idea to buy assets that are out of favor, however, the short term downside could still be on the order of 30%+ before the ultimate lows are put in place.
This morning I published a technical piece on HIVE Blockchain (TSX-V:HIVE, OTC: HVBTF): https://ceo.ca/@goldfinger/the-bloodletting-could-be-over-for-hive
I believe many names in the crypto sector are oversold and hated enough to be ripe for 30%-50% counter-trend rallies. Of course the alternative is that they all melt to zero and we forget that cryptocurrencies ever existed.....
Funny things we saw this week
"... he bought the dip..." "Continue the dump..."
ICO Lists Ryan Gosling as Lead Designer (and Crypto Twitter freaks out: https://bitsonline.com/ico-ryan-gosling-crypto-twitter/)
Someone updated the Crypto Expectations meme for the month of March, and it's quite apt (credit: @Mike)
Block and Jerry's, an ice-cream delivery service in San Francisco, will run solely on bitcoin's Lightning Network at launch
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