Your dose of crypto news and analysis from @BTO and @Goldfinger

We're gonna need a big stick to poke BTC into action here, folks. At the beginning of the year, the crypto markets were doing somewhere in the range of US$60 billion of volume per day. Today, it's around US$15 billion. Crypto mania has given way to crypto boredom, it seems, but I'm personally holding out for a catalyst to bring things back to life. What could spur it on?

ETH implementing Casper, perhaps?

Some big news re: the Bitcoin Lightning Network?

EOS mainnet launch? (EOS tokens will become frozen on the Ethereum blockchain on June 2, 2018 22:59:59 UTC. The mainnet launch will occur shortly thereafter.)

Whatever it ends up being, and however long it takes, this crypto thing isn't going away any time soon. And when the beast awakens, it's go time, baby!

As far as what the charts might look like before we get there -- well, that's anyone's guess. This week, Willy Woo — a notable and highly respected crypto trader — took to Twitter to provide his predictions. You can read his lengthy analysis here, but he summed it all up in the following way:

He thinks this will play out into June or so, and then the next up cycle would play out quickly in Q3/Q4. But...

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$7,530, up +0.7% on the week
  • Ethereum trading around US$578, down -1.5% on the week
  • Bitcoin Cash trading around US$1,000, down -1.7% on the week
  • Litecoin trading around US$120, up 0.2% on the week
  • Stellar trading around US$0.29, up +0.3% on the week
  • Dash trading around US$311, down -8.3% on the week
  • Monero trading around US$158, down -3.8% on the week
  • Ethereum Classic trading around US$15.50, up +2.0% on the week
  • ZCash trading around US$239, down -16.3% on the week

WTF did I miss this week in crypto?

US, Canadian Regulators Launch Dozens of Crypto Scam Probes

This was the big news last week, but as we missed putting out a Crypto Wars issue last Friday, it's worthwhile mentioning here. An "international crackdown" on cryptocurrency scams has been launched by a group of securities regulators in Canada and the United States. Dubbed "Operation Cryptosweep," the effort was unveiled during a Monday event hosted by the North American Securities Administrators Association (NASAA). Cryptosweep, according to statements, constitutes "nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month." More investigations are said to be underway, though it's unclear when any related enforcement actions will be unveiled.

New Guidance From CFTC on Crypto Derivatives

Also from last week, the big regulatory news came in the form of guidance from the U.S. Commodity Futures Trading Commission (CFTC), which they sent to American exchanges and clearing houses who list cryptocurrency derivatives, such as bitcoin futures. The statement comes at a time when large finance sector players are making moves in the cryptocurrency space and planning to offer new derivatives products. This is good to see, in my opinion, and a necessary component of bringing crypto mainstream.

U.S. Launches Criminal Probe into Bitcoin Price Manipulation

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter. The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said.

As bitcoin plunges, mega-bull Tom Lee stands by his $25,000 target

By now, Bitcoin has essentially given up most of the gains it had managed to make from mid-April to early May after hitting 2018 lows. In an email to CNBC, Lee said he believes this is solely due to "typical crypto volatility," and doubled down on his $25,000 price prediction for 2018, citing three key factors as to why he remains so bullish.

EY's Maritime Blockchain Insurance Tech Is Now Live

A group of companies piloting a blockchain-based insurance platform for the global shipping industry announced on Friday that the technology is now live in commercial use. Dubbed Insurwave, the blockchain platform was developed by professional services firm Ernst & Young and software company Guardtime based on Microsoft's Azure cloud-based technology. It was built on top of R3's open-source Corda platform.
As previously reported by CoinDesk, the Denmark-based shipping giant Maersk first joined the group in September of last year to deploy the solution in a pilot phase. Other notable participants in the test included insurers MS Amlin and XL Catlin. The end goal, the group said, is to allow each party in the shipping insurance ecosystem to use a distributed ledger that would record shipment information and automate insurance transactions when needed, which touts an ability to bring efficiency and transparency.

Andreas Antonopoulos: "Bitcoin is the future... Blockchain is bullsh*t"

On blockchain: "it's basically a very slow database"

Korean National Assembly Makes Official Proposal to Lift ICO Ban

South Korea's National Assembly, the legislative arm of government, is pushing for a removal of the country's ban on domestic initial coin offerings (ICOs). As reported by CoinDesk at the time, Korean regulator, the Financial Services Commission, outlawed token sales in September of 2017, saying they are over-speculative and constitute a "violation of capital market law." And while there were reports in March that the ban might be lifted, nothing concrete has happened to date.
Now, according to BusinessKorea, the National Assembly has officially proposed legislation to permit ICOs as long as investor protections are provided for. This could be huge if true.

CryptoCup brings soccer predictions to the World Cup

In the system, once a player has made their predictions for each of the 64 matches in the tournament, a token is created. Each token holds the player’s predictions and competes for the prize pool. These tokens can also be sold in a secondary market. While the tokens are not a cryptocurrency, they operate on the Ethereum blockchain, and the value can increase or decrease according to market conditions.
“The resulting token is tradable, which means that you can buy and sell tokens during the World Cup, speculating with the current number of points and the future predictions available,” CryptoCup CEO and cofounder Federico Goldberg told me. ” For example, if my token — after 20 matches — is at the top position, and the price for the top position is 30 ETH, I might be interested in selling the token for 10 ETH to another person to cash out early and not risk more. The person who buys the token pays 10 ETH, as they see a great chance to finish in the first position and win 30 ETH.”

Investors Bet $4 Billion on a Cryptocurrency Startup’s sale of its EOS digital tokens dwarfs other coin sales—and most of this year’s IPOs. Next stop: launch of the EOS mainnet, expected this month.

SEC Obtains Emergency Order Halting Fraudulent Coin Offering Scheme

The Securities and Exchange Commission announced it has obtained a court order halting an ongoing fraud involving an initial coin offering (ICO) that raised as much as $21 million from investors in and outside the U.S. The court also approved an emergency asset freeze and the appointment of a receiver for Titanium Blockchain Infrastructure Services Inc., the firm behind the alleged scheme.

Headphones Maker Monster Is Quietly Planning A $300 Million ICO

According to a filing with the U.S. Securities and Exchange Commission, Monster is planning to run one of the biggest ICOs of all time by selling "monster money tokens" to build the "Monster Money Network," a new e-commerce site for selling its products (and potentially those of other companies) online. If it succeeds in raising its target amount, Monster will use the funds to make the Monster Money Network a platform for purchasing its products using ethereum tokens.

Quebec Gov’t Reportedly Lifts Moratorium on Energy Sales to Crypto Miners Quebec Gov’t Reportedly Lifts Moratorium on Energy Sales to Crypto Miners 

The government of Quebec will reportedly lift its moratorium on the sale of electricity to cryptocurrency miners, sources familiar with the matter told local news Le Journal De Montreal May 30. According to Le Journal, the Quebec government wants to “avoid missing the ship” on cryptocurrency, and as such is moving ahead to lift the moratorium.

Russian Company Launches Intellectual Property Registry Blockchain 

A St. Petersburg company has launched Russia’s first ever blockchain-based intellectual property registry. The move could portend larger and more ambitious distributed ledger technology intellectual property projects among state-approved copyright royalty collection societies. The registry is built on the Ethereum blockchain.

China Is Warming Up To Bitcoin Again 

If China makes a positive crypto-related regulatory announcement, expect a big BOOOM... “There’s an increasing belief that just saying no to bitcoin won’t be the eventual solution to the cryptocurrency issue,” writes Xiao Xin, author of the editorial. “A more fundamental approach would be to embrace the new technology without putting the country’s financial system at stake.” This approach is a signal that Beijing is getting ready to tighten regulations around the digital currency, as US, Japan and Korea have done, rather than ban it altogether.

Bittrex Lands Bank Agreement to Help Customers Buy Bitcoin With Dollars 

Seattle-based cryptocurrency exchange Bittrex Inc. has established a formal agreement with Signature Bank in New York to allow corporate clients in specific states to purchase virtual tokens using USD. The move is designed to increase the amount of institutional capital making its way through the crypto space.
Chief executive officer of Bittrex Bill Shihara says the exchange has been working on this partnership for months. “It’s been a long path,” he commented. “It’s not just about banks being able to trust Bittrex; it’s about banks being able to trust crypto in general, and I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance.”

Crypto Millionaire Matthew Mellon Dies Leaving More than $500 Million Lost

The cryptocurrency millionaire Matthew Mellon died of a heart attack on May 18, leaving more than 500 million dollars in ripple, that most likely, his family won’t be able to retrieve. The millionaire had faced drug problems since 2009, and supposedly was clean and sober, according to a news report from the Daily Mail.

Taking Back Power: An Upstart Government Plans to Tokenize Energy

Catalonia is continuing to test the boundaries of centralized power in Spain, this time with the help of decentralizing blockchain technology. Despite the police crackdown that followed last October's failed bid for independence, the Catalan Government plans to airdrop an energy trading token to people in the northeastern Spanish region. The plan is to incentivize solar power generation by circumventing rules inhibiting its adoption made by Madrid.
Peer-to-peer energy trading in Spain is limited by rules preventing consumers who produce solar energy (known as "prosumers") to sell their excess power back to the national grid or share it with other users.

CryptoKitties sued for trade secret theft over Stephen Curry collectibles

CryptoKitties has been growing fast with its cryptocurrency-enabled blockchain collectible kittens, and that enabled creator Axiom Zen to raise a hefty round of funding. But another company has sued Axiom Zen (also known as Launch Labs) for trade secret theft and violating a non-disclosure agreement related to its recent deal with Golden State Warriors’ star basketball player Stephen Curry.
The CEO of a company called Tradestar says he engaged in e-mail communications with Axiom Zen in February 2018 to discuss collaboration on development. Tradestar disclosed confidential details about a to Axiom Zen many confidential details, including a digital Stephen Curry collectible trading card. Although Axiom Zen reportedly signed a non-disclosure agreement, it recently announced that it had created its own Stephen Curry collectibles.
Strangely, Curry might never have been involved in Axiom Zen's launch. Having taken the CurryKitties down, the company said in a statement: “We have reason to believe Stephen wasn’t as involved in the CurryKitties as we thought. Until we’re sure he’s an active participant, we’re suspending the campaign.”

Bitcoin company Blockchain hits 25 million crypto wallets

It can be confusing for cryptocurrency newbies to learn that one of the oldest bitcoin companies, launched in 2011, is named Blockchain, and the distributed ledger technology on which bitcoin was built, in 2008, is called “blockchain.” Blockchain, the company, which is the world’s No. 1 provider of free wallet software for storing cryptocurrency, hit a significant milestone this week: 25 million customer wallets.

Binance, the world’s largest crypto exchange, plans $1 billion investment fund

The upstarts of crypto aren’t just aiming to disrupt the startup status quo, some are rivaling traditional venture capital investors, too. That’s particularly evident today after Binance, the world’s largest crypto exchange based on daily trade volumes, announced a $1 billion fund to back blockchain and crypto startups.
The ‘Community Influence’ fund, which will be denominated in Binance’s BNB coin, will be aimed at nascent startups and also funds themselves, Ella Zhang — who heads the Binance Labs division — revealed today in an online web broadcast held today in Chinese. For fund of funds investments as an LP, Binance is looking to back funds with at least $100 million in capital and, of course, a focus on blockchain and crypto.

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 $1.17; Net Change: -$0.06; % Change: -4.9%

We're in a bit of a lull with HIVE right now -- well, that goes for all of crypto, unfortunately. What's next? I'm excited to see their financials, which I believe should be coming out in the near term, but more importantly I am looking forward to news as to what they have planned in Norway. It would be great to get some insight from the company as to what to expect there -- e.g., a bit of a business plan, timeline for build-out, how large they'll take it out of the gate, how they will finance it, etc.

I liked this blog post this week discussing the energy usage in crypto mining, and thought I'd share it here in the context of thinking about HIVE -- First Bitcoin Mining Conference Hashes Over the High Cost of Energy The basic message: large energy mega-projects like hydro dams produce electricity whether they’re used or not. Scott Howard, CEO and co-founder of Toronto-based ePIC Blockchain Technologies, had this to say: “To my knowledge, no one has built out any net-new power generation to supply a crypto mine. Power generation stations are major pieces of infrastructure that take years to put in place and in the range of a decade to pay off. Most power generation is done, certainly in the western world, by publicly owned and/or regulated utilities. Those stations run 24/7, 365 for decades. The energy goes onto the grid no matter what and, until we figure out storage, is a perishable commodity... Crypto mining takes full advantage of this, typically sucking up energy at very low prices. The prices are low because the energy can’t find more productive use, often taking over abandoned industrial sites far away from urban centers.” This is exactly HIVE's strategy in Sweden, and now Norway -- finding a use for excess clean energy being produced around the clock.

Longfin (NASDAQ: LFIN) — $LFIN — Last at US$4.50; SINCE ALL-TIME-HIGH: Net Change: -US$70.00; % Change: -94.0%

On March 26, 2018, Andrew Left's Citron Research called LFIN a "pure stock scheme", tweeting:

The share price dropped dramatically following the tweet after having just hit an all-time-high of US$74.50. The stock was finally halted on April 6, 2018, when it closed at US$28.19. Well it's back trading baby! And it's a dumpster fire, closing out the week at US$4.50!!!

Other crypto/blockchain-related stocks riding the wave:

  • HashChain Technology (TSXV:KASH) — $KASH — Last at $0.205; Net Change: $0.00; % Change: 0.0%
  • Mogo Finance (TSX:MOGO) — $MOGO — Last at $3.29; Net Change: -$0.27; % Change: -7.6%
  • Overstock (NASDAQ:OSTK) — $OSTK — Last at US$34.00; Net Change: +US$0.70; % Change: +2.1%
  • Riot Blockchain (NASDAQ:RIOT) — $RIOT — Last at US$7.39; Net Change: -US$0.20; % Change: -2.6%
  • Neptune Dash (TSXV:DASH) — $DASH — Last at $0.280; Net Change: -$0.02; % Change: -6.7%
  • Ethereum Capital (NEO:ETHC) — $ETHC — Last at $1.79; Net Change: +$0.03; % Change: +3.3%
  • MGT Capital (OTC:MGTI) — $MGTI — Last at US$1.12; Net Change: -US$0.08; % Change: -6.7%
  • Global Blockchain (CSE:BLOC) — Last at $0.475; $BLOC — Net Change: +$0.015; % Change: +12.2%
  • BTL Group (TSXV:BTL) — $BTL — Last at $5.00; Net Change: -$0.72; % Change: -12.6%
  • 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 $0.175; $XBLK — Net Change: +$0.005; % Change: +2.9%
  • BIG Blockchain Intelligence Group (CSE:BIGG) — $BIGG — Last at $0.295; Net Change: -$0.030; % Change: -9.2%
  • 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

After a very rough week in the crypto space last week, total crypto market capitalization has stabilized around US$330 billion this week. On Monday, Ethereum reached as low as $492 Monday and Bitcoin found support near the $7,000 round number level.

The $500 level in Ethereum continues to be MAJOR support, however, this week's bounce fell short of resistance between $600 and $625:

I came across an interesting chart showing a significant spike in short positions in Ethereum on Bitfinex in the last couple week:

The notional dollar amount of this short position is still only around US$100 million, however, this surge in short interest on one of the largest crypto exchanges speaks to sentiment on the sector. Most people use crypto exchanges to get long exposure to cryptocurrencies - from my estimation the fact that people who would ordinarily want to be long and "HODLing" are now shorting Ethereum in greater amounts near a major support level is a sign of depressed sentiment.

A chart i've had my eye on in recent weeks, Monero (XMR), broke below major support ($160) this week:

However, the deluge of selling one might normally expect did not materialize. In fact, there has basically been a dribble of selling with price stabilizing in the $150s. This has the potential to be a classic failed breakdown setup, however, we will need to at least see a rally back above $180 to confirm that this scenario is a real probability.

Sentiment is clearly in the toilet, but I wanted to see just how bad it really is. A few days ago I put up a Twitter poll asking which would happen first, $1,400 gold or $10,000 Bitcoin. Considering that gold hasn't been above $1,400 since 2013 and Bitcoin was above $10,000 just three months ago, I figured that I would at least get a 50/50 split in the poll results. However, sentiment is now poor enough that people took gold by a nearly 2-1 majority:

Finally, the google trends chart of "Bitcoin" searches confirms the depressed sentiment story:

The relative disinterest in Bitcoin is clear. It's also interesting to note that the two December peaks occurred on emotional climax days (December 7th-short term price peak after a parabolic run, December 22nd-initial correct low after parabolic surge to $19,900 five days earlier). I will be very interested to see what catalyzes the next spike in google searches for "Bitcoin" - my guess is that it will be a large directional price movement (either over $10,000 or below $6,000).

Funny things we saw this week

Big Darrell - Crypto (Feat. Drake)

Bitcoin As Explained by A.I. -- lol

Buy The Dip - a cryptocurrency comedy (full film)

Is this a bull run?

December 2017 vs. May 2018




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