Tag: Bitcoin

On Wednesday, CNBC televised three separate cryptocurrency-related interviews, all of which were with individuals who have significant influence over the degree to which institutional capital enters into Bitcoin (BTC), Ethereum (ETH), and other particular cryptocurrencies and ICOs.

In order, the three men interviewed were Jay Clayton (SEC Commissioner), Brett Redfearn (Director, Division of Trading and Markets, SEC), and Bart Smith (Head of Digital Asset Group, Susquehanna International Group).

No Crypto Compromise From SEC

Appearing at Wednesday’s Sandler O’Neil Global Exchange and Brokerage Conference, Clayton was forthcoming in declaring his trust in the U.S. securities trading market, and the ‘Howey Test’ that determines whether an asset is a security. And that there’d be no bending of the rules for cryptocurrency and ICOs when it comes to classifying the emerging asset class.

We are not going to do any violence to the traditional definition of security that has worked for a long time.” – Clayton

CNBC’s Bob Pisani also asked Clayton to provide a status update in relation to the approval of any Bitcoin ETFs. Having established the first Bitcoin futures market last December, many issuers have been restlessly waiting on the SEC to greenlight Bitcoin ETFs.

In the above 15-minute interview, Clayton also revealed that the SEC’s Division of Investment Management is actively communicating with the industry with regards to the types of things they require in order for them to approve Bitcoin ETFs. The SEC Chairman mentioned reliable market pricing and asset verification, in particular.

Redfearn On Crypto Red Tape

Appearing in his first public interview since having recently taken on the role as director of the SEC’s division of trading and markets, Redfeard explained what the crypto-industry needs to do in order to establish a fair and efficient marketplace that is regulation-compliant.

The issue of determining a unified cryptocurrency pricing mechanism was discussed, as well as the recent interest expressed by certain industry entities who are wishing to register as an alternative trading system (ATS) and/or broker-dealer.

We are underwhelmed by the enthusiasm for coming within the regulatory structure right now.” – Redfearn

Also addressed was the potential level of market manipulation (e.g. spoofing, pump-and-dump schemes, fraud) currently occurring in the highly unregulated cryptosphere. “I cannot understate our concern about this,” Redfearn added.

 

Is #bitcoin being manipulated? Here’s what the director of the SEC’s Division of Trading and Markets just said pic.twitter.com/UWv2Suj9yk

— CNBC’s Fast Money (@CNBCFastMoney) June 6, 2018

Crypto King Awaits Institutional Upswing

Speaking on the panel of CNBC’s Fast Money, Smith – who the show dubbed the ‘Crypto King’ of Wall Street – talked about how Susquehanna, one of the largest players when it comes to trading traditional investments (e.g. stocks, options, ETFs), will begin offering a basket of “four or five” virtual currencies to institutional clients “who want to buy something other than cash-settled Bitcoin futures.”

 

Wall Street has a new crypto king, and here’s what he said about the business of #Bitcoin $BTC pic.twitter.com/AJ09IFfiTE

— CNBC’s Fast Money (@CNBCFastMoney) June 6, 2018

Smith outlined what was currently hampering a would-be influx of institutional capital from entering the young cryptocurrency market. He suggested the arrival of a Bitcoin ETF would particularly please those oft-conservative financial institutions currently waiting on the sidelines, for it would solve many lingering unknowns, namely, things that concern taxation, custodianship, and KYC/AML regulatory requirements.

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On Monday, Bitcoin evangelist Tom Lee (Co-Founder, Fundstrat Global Advisors) appeared on the desk of CNBC’s Fast Money program to provide insights in relation to the sluggish price performance of cryptocurrencies in recent months. A slump that has been spearheaded by market-leader Bitcoin (BTC), whose price continues to dwindle around the low-to-mid US$7,000 mark; more than 60 percent off its December all-time high.

Bitcoin Search Slump a Non-Factor

The Fast Money host, Melissa Lee, began by asking Lee to address the massive drop off that Bitcoin has experienced in relation to the volume of people entering “bitcoin” as a search term on Google – as depicted below (per Google Trends).

The Bitcoin enthusiast – who also serves as managing partner and research head for Fundstrat – responded by stating that “Googles searches aren’t the leading indicator for Bitcoin,” but instead, acts as a “coincident indicator,” and therefore shouldn’t be looked to as some sort of BTC price predictor.

How Quickly We Forget

Whilst admitting that cryptocurrency trading volumes were down some 80 percent since their December highs, Lee cautioned that viewers ought to remember that “December was the parabolic blow-off for Bitcoin.”

This break-out moment for Bitcoin – and cryptocurrencies at large – made for a short-lived period of unprecedented trading activity. To measure trading volume relative to such a frenzied time fails to accurately depict just how far the crypto movement has progressed over the past twelve months. Per Lee:

Compared to just the second half of last year, Bitcoin volumes are up forty percent. And compared to a year ago, [over] the same time (i.e., January to June), Bitcoin volumes are up nine hundred percent.”

Mining Costs Setting BTC Price Floor?

Lee also told the Fast Money panel about a unique hypothesis that considers the cost of Bitcoin mining acts to be a major determinant of $BTC; specifically, when it comes to the establishment of a price floor.

From the Bitcoin bear market in December 2013 to January 2015, Bitcoin bottomed at its mining cost.” – Tom Lee

He made reference to a recent Bitcoin mining cost calculation by Sam Doctor (Quant Strategist, Fundstrat) which found the average all-in cost to mine one Bitcoin as totalling ~US$6,000. Applying this pricing theory, ~$6,000 “should act as the floor for Bitcoin’s price,” Lee explained.

Notable factors that influence mining cost, according to Lee, are Bitcoin’s block reward halving scheme, the level of mining difficulty, and the efficiency of ASICs.

 

Bitcoin mega-bull Tom Lee of @fundstrat says there’s three things the bitcoin bears are getting wrong pic.twitter.com/FdF5knZyfw

— CNBC’s Fast Money (@CNBCFastMoney) June 4, 2018

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Ran Neu-Ner (Presenter, Crypto Trader; Founder, ONchain Capital), appeared on CNBC’s Fast Money today to discuss yesterday’s Bloomberg article that claimed that the U.S. Department of Justice was launching a criminal probe into whether traders illegally manipulated the price of Bitcoin (BTC) and other cryptocurrencies.

Following a live cross to Seema Mody (CNBC Business News) – who explained how yesterday’s allegations were welcomed by many crypto enthusiasts – Neu-Ner appeared on Fast Money to provide insight on crypto market manipulation and the current regulatory climate.

Conversation on Manipulation

Acknowledging how “everybody thinks manipulation is going on” whenever she’s scrolling through Twitter, host Melissa Lee asked Neu-Ner if he shared this same sentiment.

The South African responded firstly by agreeing that “in the past, it was easier to manipulate Bitcoin” and other cryptocurrencies. This, he justified, was due to there being far less on-ramps and off-ramps connected to the whole ecosystem (i.e., crypto exchanges, trading platforms, brokerage services); making for an illiquid cryptoasset market.

However, Neu-Ner disagreed with Lee regarding the manipulability of the crypto market we know today. Because trading activity is orders of magnitudes higher than in years past, he concluded that “today, it would be a lot harder to manipulate.”

I think now, at a 330-billion-dollar market cap, I don’t think there’s much manipulation going on.”

Whilst respecting his reasoning, Lee countered by referencing last decade’s Libor scandal, which, despite being “perhaps one of the deepest markets” out there, was able to be manipulated by certain banks.

CNBC Africa “Cryptotrader” host @cryptomanran says the DOJ’s crackdown on #bitcoin is actually a buying opportunity for $BTC pic.twitter.com/QeazR3fcXq

— CNBC’s Fast Money (@CNBCFastMoney) May 24, 2018

A Crackdown on What Exactly?

Neu-Ner admitted to being confused about why U.S. regulators would be “clamping down” on potential Bitcoin price manipulation, when the asset class still hasn’t been defined by U.S. federal law; asking, “it’s (i.e., potential market manipulation) illegal in terms of what act?”

We’re not regulated as an equity, we’re not a currency, we’re not a commodity; we don’t know what we are.”

That aside, Neu-Ner encouraged any would-be U.S. regulatory crackdown, saying that “we’ve got to weed out the bad actors.” Should such parties continue to participate in the market, the Crypto Trader host worries that it will “create a lack of trust in this asset class,” thus harming the chances that Bitcoin, Ethereum, and other major cryptoassets have of someday achieving mass-scale adoption.

Regulatory Hot Potato

On categorizing virtual currencies and ICOs, Neu-Ner stated that, either “unfortunately or fortunately,” it seems that “a lot of territories are waiting on the SEC” to set a legal precedent.

He pointed to March’s G20 meeting, along with commentary out of the European Parliament, as indicators that most developed countries are basically saying, “we’re not legislating this thing yet, we’re still going to watch;” which Neu-Ner interprets as an unspoken agreement that they’re fine with permitting the SEC to “call the shots.”

He highlights Japan and Singapore as harbouring a “very favourable” regulatory climate for cryptocurrencies and ICOs. South Korea, too, should “come out with positive regulation” in June, Neu-Ner added.

I’m buying. Expecting major support at $6900 if it gets there. Market manipulation may have happened-if manipulators are taken to task it brings us closer to Institutional money inflows.Add that to infrastructure being built, @coinbase launching institutional grade trading system https://t.co/rMTRW7vPVN

— Ran NeuNer (@cryptomanran) May 24, 2018

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On Thursday, creative educator Brit Cruise (u/britcruise) posted on the Bitcoin subreddit a trailer of his soon-to-be-released long-form video on Bitcoin – The Trust Machine. The preview comes as Cruise declared that he was “finally done” with creating the thirty-minute Bitcoin-oriented video; a project that had taken him “over a year” to complete.

Describing it as “my gift back to the Bitcoin community,” Cruise revealed that the goal of his upcoming video was “to educate both moms and engineers about the key insights” underpinning the Bitcoin movement; one that’s prompted various other blockchains and distributed ledger technologies to similarly challenge numerous models that civilization has considered the norm for centuries. Focussing on Bitcoin, The Trust Machine – being released on June 28 – will also teach viewers how and why it works.

I have a trailer for a 30min Bitcoin video I’m about to publish. https://t.co/aPtrBRY6aI

— Brit Cruise (@britcruise) May 23, 2018

The trailer explores how “a reckless system of over-lending came to a head in 2008” by way of the global financial crisis. “The only option governments around the world had,” the narrator explains, “was to create trillions of new dollars…[to keep] the wheels of the economy turning.”

In closing, The Trust Machine preview explains how this disastrous systemic failure shed light on “debates around what money should be…[and] who should be in control of its creation.”

It’s one third economics, one third computer science and one third politics – I can’t wait to tell it.” – Cruise

The uploader of the trailer was the co-created Art of the Problem, a YouTube channel (~48,000 subscribers, 5,000,000+ views) that focusses on delivering educational content on matters relating to cryptography, information theory, and computer science.

Per his website, Cruise has a background in engineering and computer science. Notably, the Canadian – who has been investing since he was twelve – also runs a cryptocurrency investment fund. Adopting a (modified) indexing approach (see: Crypto Capital: My Cryptocurrency Fund Thesis), Cruise had, until recently, been publishing insightful monthly updates since the fund’s inception last January.

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Yesterday was Bitcoin Pizza Day, an annual celebration of the day one Jacksonville resident, Laszlo Hanyecz, bought two pizzas for 10,000 BTC. The day is commemorated by a twitter account @bitcoin_pizza, which posts a daily update of what the pizza would be worth if Laszlo had kept his Bitcoin.

The #Bitcoin pizza is worth $83,131,600 today. (-2% from yesterday) Today is Bitcoin pizza day!

— Bitcoin Pizza 🍕 (@bitcoin_pizza) May 22, 2018

It was 2010 when Laszlo, a software programmer from Florida, decided to try prove Bitcoin could actually be used to buy something. At the time it was fairly unknown and worth very little, so Laszlo posted on a message board that he would pay anyone 10 000 bitcoin to deliver him two pizzas. At the time it was the equivalent of about $40.

Since then Bitcoin has, of course, skyrocketed, leaving many to mock Laszlo’s decision. However, he defends his position, pointing out that Bitcoin was worth very little at the time and nobody knew how big it would get. Here was a brand new, potentially powerful technology that wasn’t going to develop, improve, or go anywhere if everybody just sat around, not using it. 

Rather than ridicule him, perhaps the wiser stance to take would be to acknowledge that Laszlo had a good point and was correct in what he did. One of the biggest challenges facing the progression of blockchain technology today is Bitcoin – and specifically, the treatment of Bitcoin as commodity or asset.

Bitcoin, and blockchain in general, is a powerful technology with the potential to change the world and reshape the disparate financial landscape we currently find ourselves in.“HODLing” cryptocurrency in order to achieve individual financial gain is almost certainly against everything Satoshi Nakamoto intended when first creating his gift to us.

If given the option of receiving 1000 BTC of your own, or the opportunity to help create a world where poverty and economic equality is a thing of the past, what would you choose?

We need more people like Laszlo, who are active, innovative and want to test this technology and discover it’s true potential.

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Bitcoin – the most widely known cryptocurrency to date – is set to continue seeping into the shared psyche of the masses; this time by way of a movie-length documentary that has just been bought out for a seven-figure sum by a video-on-demand platform that’s powered by blockchain technology.

Indeed, at this year’s edition of the Cannes Film Festival (May 8 – 19), a documentary about the fast-moving, dynamic world of cryptocurrency was acquired by Binge (i.e., a subsidiary of Slate Entertainment Group Inc.); a new video-on-demand platform that’s being fuelled by blockchain technology.

Last announcement of the day we promise, our new doc #BeyondBitcoin just bought by new blockchain platform  #Binge, we’re so excited about this partnership, special thanks to @NateBolotin & the @XYZFilms team https://t.co/6TsEtvAVFt

— Fulwell 73 (@Fulwell73) May 9, 2018

Titled Beyond Bitcoin, the Jake Witzenfeld-directed documentary features three influential figures of the cryptosphere: Roger Ver (CEO, Bitcoin.com), Perianne Boring (Founder & President, Chamber of Digital Commerce), and Ryan Radloff (CEO, CoinShares).

Thanks to the invention of Bitcoin, we’re about to see a worldwide separation of money and state.” – Roger Ver

Sticking true to its title, Beyond Bitcoin promises to introduce the concept of initial coin offerings (ICOs) to the audience, before proceeding to explore the reasons why (and how) these fundraising mechanisms have been able to attract such exorbitant amounts of invested capital.

Further, Beyond Bitcoin will delve into the various ideologies driving the entire cryptocurrency movement. This, of course, can’t be explored without covering the infamous mid-2017 Bitcoin Cash (BCH) hard fork.

This is a global portrait of an emerging future in all its complexity told through the lives of three diverse and deeply passionate pioneering dreamers.” – Jack Witzenfeld

The documentary will also focus on other topics such as altcoins, how governments and other regulatory bodies are reacting to the crypto-movement, and the real-world applicability of distributed ledger technologies like blockchain.

Binge is expected to release Beyond Bitcoin in spring of 2019. Producing the documentary is Fulwell 73 and Conch Studios.

Who are Slate Entertainment Group?

Slate Entertainment Group Inc. (SEG) is currently developing a decentralized streaming media platform powered by blockchain technology. By introducing the Slate (SLX) token, SEG is hoping to advance the entertainment industry forward by creating an ecosystem that will make for vastly improved levels of transparency and integrity; issues that currently plague the incumbent content delivery model.

How Is Binge Involved?

SEG is the parent company of Binge Media Corporation and Slatix Solutions. Per the Slate whitepaper (pg. 5), “each of the two operating subsidiaries are tasked with specific objectives relating to the development of a new entertainment ecosystem.”

As stated earlier, Binge will represent a video streaming platform built upon blockchain technology; a creation they’ve dubbed Blockchain Video on Demand (BVOD™).

Additionally, Slatix will serve predominately as a decentralized entertainment ticketing application. Native to both projects will be the Slate (SLX) virtual utility token.

Underpinning all of Binge, Slatix, and Slate will be the SlateChain. Per page 6 of the whitepaper, SlateChain will identify as “a blockchain media delivery and storage protocol that can be shared by small and medium enterprise for years to come.”

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The New York Times has reported that Goldman and Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange has been working on launching their own trading platform for Bitcoin.

The proposed platform would ‘allow large investors to buy and hold Bitcoin’, according to emails and documents procured by the New York Times with additional details provided by four people who are close with the project.

The move is seen as a direct response to Goldman Sachs opening their own futures trading desk, the first of its kind to be offered by an investment bank on Wall Street.

ICE’s alleged new platform would be going one step further than futures contracts, which is a method of exchange that deals with the future price of the particular asset and is only delivered and paid for at an agreed-upon future date.

Reports indicate that the new platform would be for swaps – a derivative contract that results in the owning of an asset such as Bitcoin the very next day – all powered by official, large and licensed financial institutions operating on Wall Street.

It is understood that the implementation of the exchange of swaps is a means to operate within regulations set by Commodity Futures Trading Commission of the US. Most cryptocurrency exchanges operating in the US have been loose with their interpretation of such regulations, but the largest investment firms and hedge funds have been more cautious in their approach to trading cryptocurrencies.

If ICEs platform comes to fruition, it could set an important precedent for complete adoption along Wall Street.

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Cryptocurrency and gold exchange Vaultoro has become the first in the world to implement the Lightning Network for Bitcoin.

Currently it is only being utilised for the processing of Bitcoin deposits, but it does make those deposits instantaneous and completely free of fees.

It is in line with Vaultoro’s previous adamant backing of the soft fork that spawned the Lightning Network. They were vocal supporters of its creation in May 2017, at a time when the community was locked in debate regarding the necessity of the Lightning Network.

This first implementation will allow Vaultoro’s users to send Bitcoins instantly, cheaply and privately. Our next goal is to enable people to take orders from the order book directly from their controlled wallet. Vaultoro traders will be able to deposit funds in milliseconds without having to trust our exchange hot wallet if set to instant order. Our goal at Vaultoro has always been to make the exchange radically transparent and now with lightning network, market takers will have no need to trust our hot wallet.”

The Lightning Network is a proposed solution to the scalability problem for Bitcoin, which allows for transactions to be processed off the main blockchain, utilizing a top-layer blockchain that eventually settles via the main chain.

Currently the advantages of the Lightning Network are only available to those using the Eclair Wallet. Eclair is one of the only cryptocurrency wallets native to the Lightning Network developed so far.

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On Thursday, Blockchain Capital’s Spencer Bogart appeared on CNBC’s Fast Money to discuss the significance of yesterday’s news that Goldman Sachs would launch a trading operation for Bitcoin (BTC) futures contracts.

Sceptical as to whether the investment banking giant’s announcement was deserved of being “touted as a big step” – as reflected by rising prices in the cryptoasset market – the CNBC host, Melissa Lee, asked Bogart if he believed “the lack of a trading desk” had previously been considered a major barrier preventing any would-be mass inflow of institutional money into the cryptosphere.

Blockchain Capital partner Spencer Bogart (@CremeDeLaCrypto) comments on Goldman’s plans for a #Bitcoin trading operation and how it could rock the #crypto world pic.twitter.com/ul4ufrzI3o

— CNBC’s Fast Money (@CNBCFastMoney) May 3, 2018

Whilst acknowledging that “absolutely, it’s definitely a big step,” Bogart was hesitant to declare the beginning of an institutional spending spree. Instead, he recommended that we interpret the Goldman Sachs news as confirmation that the cryptoasset space is well and truly on the radars of established financial institutions; citing last December’s introduction of “robust derivatives products” as the lead domino.

This market is so large that you can’t ignore it anymore.”

The research lead at Blockchain Capital – one of the oldest venture investors in the blockchain technology sector – added that most major banks would be highly aware of “the numbers that companies like Coinbase and Binance are putting up.”

Now respectful of the “real risk” that some crypto companies “could overtake…some of Wall Street’s biggest banks,” it’d be remiss of these financial incumbents “if they don’t get in the market,” Bogart suggested.

Fight For Custody

Bogart admitted that the news from Goldman Sachs wasn’t “a perfect solution [that instantly] opens the floodgates to the institutionalization of Bitcoin.”

When asked what then poses as the next big problem preventing a would-be influx of institutional money into cryptoassets, Bogart replied: “custody.”

Indeed, the Bitcoin trading desk launched by Goldman Sachs will deal exclusively with derivate products. When (if) they eventually enable direct trading of Bitcoin, the decision will have been made because of regulatory clarity surrounding custodial obligations having been achieved, according to Bogart.

Progress Report

Acknowledging the fact that custody “became a very well-known problem over the course of 2017,” Bogart told Lee that “probably a dozen credible players in this space” are actively addressing the hampering issue; citing Coinbase and BitGo in particular.

Non-HODLers > HODLers

Despite imminent regulatory pressures, Bogart – ranked #43 by Crypto Weekly’s list of The 100 Most Influential People In Crypto (2018) – remained long-term bullish on Bitcoin.

He justified this by questioning which direction investor capital will flow (i.e., more buyers than sellers, or vice versa). The answer, he believes, is that “there’s going to be way more people” entering the cryptoasset market than there will be ‘HODLers’ selling their positions.

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It has been announced today that Swiss start-up Tangem is to release its pilot Bitcoin banknotes for use in Singapore.

Tangem is a cryptocurrency platform focused on bringing digital currency usage to the masses. It’s product, the Tangem Note, is reportedly the first hardware storage solution of its kind on the cryptocurrency market. The products architecture is based on the S3D350A chip developed by Samsung and is certified by Common Criteria EAL6+ and EMVCo security standards.

The Tangem Notes will be in the denominations of 0.01 and 0.05 BTC and are designed with the intention of improving accessibility, simplicity and overall security of dealing with cryptocurrencies for incoming and seasoned users alike.

The notes will be available for purchase by the general public at the Megafash store in Suntec City, Singapore.

In addition to the launch in Singapore, the company has distributed over 10,000 notes to prospective partners and clients for additional commercial projects.

The Tangem team is quite impressive as well. It boasts Vijay Sondhi as their Senior Strategic Advisor, who has unique experience in the financial industry after serving for five years as Senior Vice President and Head of Innovation at VISA.

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