Bitcoin in 2019: Analysts See Institutional Investors Wading into Crypto

wall street bitcoin crypto cryptocurrency

The bitcoin price got hammered in 2018 amid the prolonged Crypto Winter, but many investment experts expect the volatility to subside in 2019, as institutional investors start entering the market.

Some analysts believe bitcoin will re-emerge — like the proverbial Phoenix rising from the ashes — on back of momentum created by institutional investors, the Australian Financial Review reported.

“During the coming year we will see a gradual adoption from institutions,” said Henrik Andersson, chief investment officer of Apollo Capital Fund in Australia. “We have the first US university endowments investing in funds.”

JPMorgan: Bitcoin Bears Scared Off Institutions

Over the summer, the multi-billion-dollar endowments of Harvard, Yale, and Stanford stunned Wall Street after revealing that they had invested in cryptocurrencies.

Because of the herd mentality of institutions, analysts say the move will likely trigger a chain reaction among other institutional investors, such as pension funds.

“The fact that David Swensen [Yale’s chief investment officer] put an investment into bitcoin — with his reputation on the line, his endowment on the line — tells you something,” Novogratz said. “Some of the smartest people in the investing world think it’s a store of value.”

The influx of institutional investors — which some expected in late-2018 — was stalled by the unexpectedly harsh bear market. Institutions reportedly got scared off by the protracted downturn, said JPMorgan Chase analyst Nikolaos Panigirtzoglou.

As Wall Street appears poised for more turbulence, analysts say crypto assets could be buoyed because they are not correlated to the regular stock market — making them a good investment during volatile periods.

Tom Surman, the director of Every Capital — Australia’s first retail crypto investment fund — believes the institutional phase for crypto has quietly begun.

“Massive retail offerings and institutional investors are probably the only groups that can meaningfully move the needle on the crypto market cap from here on,” Surman told the Australian Financial Review.

Push to Legitimize Crypto is Underway

However, observers say mainstream adoption hinges on regulatory clarity to help legitimize the market. As it is, the move to promulgate targeted regulation of the industry has already started.

In December 2018, US lawmakers proposed legislation designed to prevent bitcoin price manipulation and position the US as a market leader.

Congressmen Darren Soto and Ted Budd are pushing for widespread adoption of crypto, saying the US must not ignore its “profound potential” to bolster the economy.

“Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth,” said Soto and Budd. “That’s why we must ensure that the United States is at the forefront.”

washington dc capitolThe industry has been making moves in Washington, DC to promote the mainstream adoption of crypto. (Pixabay)

In September 2018, a pro-crypto lobbying group was launched in Washington, D.C. by three of the biggest cryptocurrency companies in the United States:

  • Coinbase
  • Circle
  • Digital Currency Group.

The move signals that the industry is taking concrete steps to advance mainstream crypto adoption by greasing the wheels of Congress.

“We have been very active with Congress, with policymakers,” said Jeremy Allaire, the co-founder of Circle, a crypto unicorn with a $3 billion valuation.

France Throws Down the Blockchain Gauntlet

Across the pond in Europe, French legislators are aggressively pushing blockchain adoption. Some even suggested that the Bank of France or the European Central Bank should issue their own digital currencies.

Laure de La Raudière, a member of the French Parliament, said France must move quickly to capitalize on blockchain and crypto before its international rivals China and the United States do.

De La Raudière lamented that France was late to the Internet revolution in the 1990s, and should not miss the boat again.

“France must have a conquering philosophy on this subject,” she told French financial website Journal du Net. “I’m sounding the alarm.”

Featured Image from Shutterstock

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Chinese Survey Finds Nearly 40 Percent of Respondents Would Invest in Crypto

A Chinese survey of 4,200 respondents has shown that 40 percent are willing to invest in crypto in the future, local Chinese crypto news outlet 8btc reports on Dec. 26.

PANews, whose Twitter describes the outlet a news source for sharing blockchain news across Asia, conducted the survey.

According to the answers gathered during the crypto-related survey, about half of all the respondents had heard of the following terms: cryptocurrency, digital currency or Bitcoin (BTC).

On the other hand, 63 percent of the respondents believe that there is no necessity for crypto as a means of payment. As well, only 22.2 percent of the surveyed individuals were aware of the concept of blockchain-powered tokens.

The Chinese government recently released its latest ranking of cryptocurrencies, which places Bitcoin in 18th place and EOS at the top. The second place is held by the third-largest cryptocurrency by market cap, Ethereum (ETH).

As Cointelegraph reported in mid-November, a Twitter survey conducted by former United States congressman Ron Paul — which counted 94,894 votes — favor Bitcoin over more traditional forms of money as a long-term investment.

Also, a more recent survey conducted by the German Federal Association for Information Technology, Telecommunications and New Media (Bitkom) revealed that over-one third of big German businesses consider blockchain as revolutionary as the internet.

Wells Fargo Says Bitcoin Too Risky for Clients, Pays $575 Million Fine For Scamming Them

Wells Fargo — the third-largest US bank with $2 trillion in assets — will pay a $575 million settlement after admitting that it systematically scammed its own customers for 15 years. Ironically, the fine comes just months after the banking giant dismissed bitcoin as too risky an investment.

Pursuant to a nationwide federal investigation, Wells Fargo admitted that its employees opened more than 3.5 million sham, unauthorized bank and credit card accounts in customers’ names between 2002 and 2017.

The bank then illegally charged its clients for various financial services products they never signed up for, such as life-insurance policies and collateral protection insurance on millions of auto loans.

Employees claimed they engaged in this widespread fraud because were afraid to lose their jobs if they didn’t meet Wells Fargo’s aggressive sales goals.

Over $2 Billion in Fines Since 2016

The settlement will be distributed to all 50 US states and the District of Columbia. Wells Fargo will also open a consumer restitution review program, to ensure that anyone who was illegally charged for a service they never authorized gets reimbursed.

The revelation of this fraudulent scheme in 2016 led to the resignation of Wells Fargo’s CEO at the time, John G. Stumpf.

After settling with the Consumer Financial Protection Bureau, Wells Fargo still faces ongoing investigations by the Securities and Exchange Commission, the Department of Justice, and the Department of Labor, according to its most recent securities filing.

Wells Fargo has racked up more than $2 billion in fines since its fake-accounts scandal was revealed in 2016.

California attorney general Xavier Becerra torched Wells Fargo for its gross violation of consumer protection laws.

In a December 28 statement, Becerra said Well Fargo’s unconscionable abuse of its own clients undermines consumer confidence in the banking system.

“Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products — from bank accounts to insurance — that they never wanted,” Becerra said.

This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system. Wells Fargo’s conduct was unlawful and disgraceful.

Irony Alert: Wells Fargo Shades Crypto

Ironically, in June 2018, Wells Fargo banned its customers from using their credits cards to buy cryptocurrencies, as CCN reported. The ban was enacted just as the bitcoin bear market was going into overdrive.

In a statement, Wells Fargo cited the “multiple risks associated with this volatile investment” for its decision.

“Customers can no longer use their Wells Fargo credit cards to purchase cryptocurrency,” a bank rep said in a statement. “We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment.”

Many in the crypto community say this latest banking scandal is yet another example spotlighting the epic failure of centralized financial institutions.

Between this and the Federal Reserve’s latest interest rate hike (its fourth in 2018), bitcoin evangelists say it’s time to dump corrupt legacy banking systems.

Featured image from Shutterstock.

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White Hat Hackers Earned $878,000 from Crypto Bug Bounties in 2018, Data Shows

White hat hackers have been awarded $878,000 in bug bounties this year, technology news website TheNextWeb reports on Dec. 30.

Bug bounties are a type of competition in which companies that develop software invite hackers to break their software and responsibly disclose the vulnerabilities, so they are able to fix them before they are exploited.

According to TheNextWeb, hackers earned $534,500 on HackerOne, a bug bounty platform connecting companies with hackers just from Block.one, the company which stands behind EOS. In fact, Block.one is reportedly responsible for 60 percent of all the bounties handed in this year.

Major cryptocurrency exchange Coinbase is reportedly the second-largest bounty spender and spent $290,381 in 2018. Tron is third-largest bounty spender, reportedly paying $76,200 this year.

Nearly four percent of all bounties awarded on the platform were for blockchain vulnerabilities, a HackerOne spokesman told TheNextWeb. The average prize in the blockchain industry was $1,490 this year, while the average HackerOne bounty in Q4 2018 was about $900.

As Cointelegraph recently reported, EOS decentralized apps (DApps) have reportedly lost up to $1 million to hacks since July. Also, hardware wallet Ledger recently expressed regret over the fact that the security researchers disclosed vulnerabilities in its hardware wallets publicly instead of following the standard security principles that are written in Ledger’s Bounty program.

Paxos Standard Hassling Ethereum Traders Trying to Redeem Stablecoin PAX for Dollars

The source for this article wishes to remain anonymous. He is one of multiple sources this reporter has spoken to recently. All of them are relatively large-scale traders who have used Paxos Standard. They are a group of five traders. They trade in the millions of dollars per week via multiple exchanges including Binance and Huobi. These are mentioned in this article but aren’t the subject of it.

Let’s start with some definitions. Paxos Standard defines itself as a “stablecoin.” Its tokens can be redeemed on a 1:1 basis for US dollars. Redemptions are transferred by traditional bank wire. The minimum is $100, on a set schedule that Paxos defines in its user terms and conditions. To its credit, this minimum is very low compared to Tether and others.

“Exchanges” are mostly either Binance or Huobi, which are the most-used platforms by the traders sourced in this article. It’s important to note that neither of these exchanges did wrong in the events described herein. They allowed withdrawals within their usual policies.

Paxos Withholds Funds A Week or More

At time of writing, Paxos Standard had been withholding funds from our source since December 23. This is the second time they have given him a significant hassle. Their customer support agents gave multiple reasons:

  1. They needed to know if he was the owner of the Ethereum.
  2. They questioned whether the use of multiple Binance-controlled addresses was legitimate.
  3. They questioned PAX withdrawals and deposits to Binance.

An inquisition from Paxos.

They demanded to know the exact nature of the counter-parties and owners of the PAX redeemed.

In one message, they accused the user of “misrepresenting” the origin of tokens. This trader is one of four whose accounts have been closed as a result of redemption.

A note where Paxos close an account. The redemption still went through.

Later support messages from earlier this week demand to know “more about your trading strategy.” CCN has reached out to NYDFS to see if this is even a legally sound question to ask.

As you can see, the questions might feel invasive, especially when you are committed to protect the identity of your counter-parties.

All of the people discussed in this article held legitimate Paxos Standard accounts with itBit. Until their accounts got closed following sizable redemptions, that is. One remaining person’s account hasn’t been closed, but he has $1.1 million in limbo.

As you can see, one of our anonymous sources has had their funds “pending” since Christmas Eve.

In every case, a similar pattern: the traders make deposits into Binance or Huobi and do what traders do. They acquire a payout through the preferred platform – Paxos Standard. They are then caught up in a whirlwind of questions, many of which are only tangentially important to the purpose of the stablecoin issuer.

What Are You Really Asking, Paxos?

Paxos Team says they aren’t protecting the market cap or acting punitively as regards the redemption of PAX. Yet, invasive inquiries raise the question: what is the issue?

CCN has spoken to other sources who have run into similar issues with Paxos. Paxos was not opposed to redeeming the tokens in these other cases. They did request that the redeemer “wait a week or so” to withdraw. They said it would be “bad for their business” to do so immediately. We interpret this to mean they didn’t want to take the loss in market capitalization. Their marketing message very much pushes the narrative that their market cap is nothing but growing.

We decided to take a look at the week’s volume of one specific case. One of the larger cases discussed in researching this article. A redemption of around $2.6 million was held for a week. Later Paxos sent the redemption and closed the account permanently. The week in question was that of December 6.

We will not directly allege that their withholding tactics are part of a scheme to preserve their market cap numbers. Yet, we can see why the affected traders would believe so. | Source: CoinMarketCap.com

That week saw a reduction in Paxos Market Cap of almost $20 million in one day prior to December 6. On December 5, it was as high as 178 million but by December 6 it had been reduced to 161 million. At time of writing, it is around 147 million.

Paxos purports to enforce the policies of exchanges like Huobi and Binance. Why?

We did a Q&A with the person who best represents the group. He is a US-based trader who works with counter-parties in China and elsewhere.

When did you start trading PAX?

We started trading PAX in early November.

Why have you used PAX instead of other stablecoins?

Paxos were giving a rebate/discount to people to buy PAX, so it was trading at discount at Binance. So we bought at a discount and redeemed at full price to arbitrage.

About how much money have they held up, and for how long?

In one case, 2.5 million were held up for 1 week and our account was closed. In an ongoing case, almost 1.1 million is being withheld.

Why do you think PAX alleges to care about your account statuses on places like Binance – is it really any of their business whether or not multiple accounts are being used?

I think they just try to find some unrelated compliance reason to stop us from redeeming PAX. They asked a lot questions on out accounts on Huobi and Binance, even asked our counter parties’ information which is highly confidential. We never would disclose our counter parties’ information to anyone without their consent. They asked many questions and then closed our accounts. This is the way how they stop people from redeeming PAX and how they do business.

We reached out to Paxos Standard for comment on this article, and for what reasons they will withhold customer redemptions of PAX tokens for Dollar wire transfers. First this reporter tried to call them:

This is what Dorothy Chang, Paxos VP of Marketing & Communications had to say in response to the e-mail inquiry:

As a policy, we are proud to offer all customers in good standing daily redemptions with zero fees or limits (neither minimums nor maximums). Since launching less than 4 months ago, we have honored over $178M in redemptions of PAX 1:1 for USD and aim to continue to be the most reliable and proven method of crypto redemption. In fact, we have redeemed more USD stablecoin than any of the others that have launched this year (TUSD, GUSD, USDC, etc.). We’re known to be the most reliable, fastest and cheapest redemption source.
Yes, we have closed a few accounts, only for very good reasons. It’s all for the sake of AML/KYC compliance. While we don’t comment on the status of individual account activity, we can tell you about the patterns we’ve seen lately.
We’re obligated to understand the source of funds coming to Paxos for redemption. 100% of customers that clear compliance are able to redeem within a day. This applies for nearly all customers.
But when customer activity appears suspicious or the source of funds is unclear, we conduct enhanced due diligence. This can take a few days, depending on how responsive customers are to our information requests. In some cases, customer activity didn’t match with what they claimed. For example, we have identified customers who misrepresented to Paxos (or to an exchange they are redeeming from) the ownership of their PAX. Some even openly admitted to doing so. In those cases, consistent with our regulatory obligations, we processed the redemptions but also took other appropriate action, including closing accounts.
As a regulated financial institution and Trust company, Paxos maintains rigorous compliance standards to ensure that our customers’ assets are held under the greatest level of protections possible. Suspicious activity is never tolerated to ensure the integrity of customer funds and our operations. We’re proud to maintain high standards, which this industry needs to continue to benefit those acting in good faith.

For many customers, Paxos has been a great way to use the dollar in blockchain markets. It provides an easy on-ramp from traditional bank accounts to crypto trading platforms. Yet, for others it has been a nightmare, as reported here. We will not directly allege that their withholding tactics are part of a scheme to preserve their market cap numbers. Yet, we can see why the affected traders would believe so.

It is important to note that all of the people discussed in this article eventually had their redemptions honored except the one whose request is still pending. The downside was that they lost their accounts with which to do so. The fact that Paxos/itBit were able to eventually conduct the transaction raises the question: was there ever any reason for actual concern? This is why the traders understandably believe their funds were withheld for business reasons.

We encourage our readers to do their own research in choosing a stablecoin. CCN provides regular coverage of the various options.

Images from Shutterstock and anonymous sources.

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Top Crypto Performers Overview: Ethereum, Ethereum Classic, NEO, IOTA, Binance Coin, Stratis

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The market data is provided by the HitBTC exchange.

While 2017 was a raging bull market in cryptocurrencies, 2018 turned out to be a massive bear market that wiped out more than $720 billion in total crypto market capitalization. We believe that 2019 will bring back the focus on the fundamentals and the true potential of virtual currencies.

With the arrival of traditional investors, digital currencies will at times behave similar to the traditional markets. The Wall Street Journal recently pointed out that the correlation between Bitcoin trading and gold reached as high as 0.84 over a short period of time. Similarly, it has traded at a 0.77 correlation to the Chicago Board of Options Exchange’s Volatility Index (VIX).

As the market matures, it will carve out a niche for itself. We believe that cryptocurrencies are currently in a bottoming process and might signal a bottom within the next few weeks.

ETH/USD

After surrendering its position as the top altcoin to Ripple (XRP) a few weeks ago, Ethereum (ETH) is attempting a comeback. It has made giant strides last week and has emerged as the top performer among the major cryptocurrencies.

BitMEX CEO Arthur Hayes believes that the dead ICO market will spring back into action next year and will prove to be positive for Ethereum. He expects the cryptocurrency to rise to $200. Some are hoping that the network will get a boost from the upcoming Constantinople upgrade. However, it is always difficult to predict the market’s reaction to such a major event.

ETH

The long-term trend in Ethereum is down. It has lost a lot of money for its investors this year. However, after the fall, can the ETH/USD pair start a new uptrend in 2019?

After every rise and after every fall, the digital currency has a tendency to consolidate in a range. We have highlighted these periods with ellipses on our chart. In 2018, all the ranges have resolved to the downside.

Currently, the bulls are attempting a pullback after hitting a low of $83. The support line of the former range will now act as a stiff resistance. Because of that, we anticipate selling close to $167.32. If the bears succeed in defending this level, a range bound trading action might ensue.

On the other hand, if the bulls climb above $167.32, a rally to $249.93 is probable. The traders can wait for a close above $167.32 to establish long positions with a close stop loss.

Our neutral-to-bullish view will be invalidated if the price turns down and sinks below $83. We shall confirm the start of a long-term uptrend if the pair forms a large basing pattern and then breaks out of it. Until then, the traders should aim for small targets and book profits periodically.

ETC/USD

Ethereum Classic (ETC) turned out to be the second-best performer among the top cryptocurrencies. The market participants are bullish on the upcoming cohort slated for Jan. 14. 11 startups have been selected to get access to the shared office space, developer support and funding. Can the bull run continue? Let’s find out.

ETC

The long-term trend in the ETC/USD pair is down. Currently, the bulls are attempting to break out of the downtrend line that has capped all recovery attempts since May of this year.

A break out of the downtrend line will be the first indication that the momentum on the downside is waning. It can result in a rally to the next overhead resistance of $9.5. We anticipate a strong defense of this level by the bears.

If, however, the bulls fail to break out, the cryptocurrency can again slide back to the recent low of $3.3. Any break of this support can resume the downtrend.

After the long downtrend, we anticipate the virtual currency to enter a consolidation period before breaking out to a new uptrend. Therefore, long-term investors can wait for a reversal setup to form before building positions. However, short-term traders can stay on the long side after the price breaks out and closes above the downtrend line.

Featured cryptocurrency* — STRAT/USD

Stratis is currently at the 40th place in terms of market capitalization. Recently, it released the first Turing-complete smart contracts to execute .NET code on-chain and its first sidechain, Cirrus, to the Stratis mainchain. These will provide the businesses and the blockchain developers the perfect platform to create bespoke blockchains tailored to specific applications.

The past few months have seen a slew of announcements by the Stratis group. It partnered with MediConnect, the company that focuses on blockchain solutions for the pharmaceutical industry.

It also became a certified Microsoft Independent Software Vendor (ISV) a couple of months back, which was a major step ahead. With a positive fundamental news flow, is it a good time to buy the cryptocurrency? Let’s see.

STRAT

The STRAT/USD pair was severely hit by the ongoing bear market. Its prices plunged from a high of $24.39960825 in early January of this year to a low of $0.53353976 in mid-December, a loss of 97.81 percent.

However, the positive thing is that it has participated in the recent pullback.

From its low of $0.53353976 on Dec. 14, it recovered to a high of $1.84123616 on Dec. 24, a rally of 245 percent in 10 days. Currently, the bulls are attempting to stall the pullback at the 20-day EMA.

If successful, the cryptocurrency will again attempt to move toward the overhead resistance of $1.91493444. If this level is crossed, the recovery can extend to $2.14656768. We anticipate a new uptrend to start if the bulls sustain the price above this level.

Traders can wait for the price to rebound from the 20-day EMA and rise above $1.46 to establish long positions with the stop loss placed just below $1.15. Partial profits can be booked close to $1.84 and the stops on the rest can be trailed higher.

However, if the bears sink Stratis below the moving averages, it will lose its momentum and can correct to $0.81338679, below which a retest of the low is probable.

NEO/USD

NEO has announced their second edition of DevCon on Feb. 19. The founder of NEO, Da Hongfei, is undeterred by the current bear market. He believes that the price of the cryptocurrency only tells a part of the story, as it is primarily driven by sentiment. Hongfei continues to focus on the project and the ecosystem and has called the current phase as, “ContiNEO – We keep on going,” Forbes reported.

NEO

The NEO/USD pair is in a strong downtrend. From a high of $200.59839784 reached in mid-January of this year, it dropped to a low of $5.4808 in mid-December. Currently, the bulls are attempting to pull back from the oversold conditions.

Any recovery will face a stiff resistance at $13.60337627. Previously, this level had acted as a strong support for about three months, so it will act as a strong resistance now.

If the bulls fail to scale the overhead resistance, we anticipate a consolidation period of a few days. The downtrend will resume if the bears plunge the cryptocurrency below $5.4808 once again. The traders should wait for a trend reversal before initiating fresh long positions in it.

IOTA/USD

IOTA has been attempting to climb back into the top 10 cryptocurrencies by market capitalization but has not been successful. Last week, it was the fourth best performer. How does its chart look now?

IOTA

The IOTA/USD pair is attempting to form a basing pattern. It is currently facing selling at the previous support-turned-resistance of $0.4037. If the bears continue to defend this level, we anticipate a consolidation between $0.2051 and $0.4037 for a few weeks.

Contrary to our expectation, if the bulls break out of $0.4037, it will indicate that the markets have rejected the lower levels. In such a case, a move to $0.8152 is probable.

Aggressive traders can look to enter long positions on a close above $0.4037, whereas the long-term investors can wait for a new uptrend to start before buying it.

BNB/USD

In a letter titled “2018 Binance Year-End Review,” Binance CEO Changpeng Zhao has painted a positive picture of the crypto industry. He has also outlined the various plans for the Binance exchange and its own cryptocurrency. What does the chart project? Let’s find out.

BNB

The BNB/USD pair has been a relative outperformer. It successfully held the support at $4.5200621 for four weeks, after which the bulls started a pullback attempt.

For the past two weeks, the bulls have kept the price above $5.4666, which is a positive sign. This shows that the markets have rejected the lower levels. The digital currency is likely to rise to the resistance line of the descending channel, closer to $8.25. The short-term traders can attempt to ride this move higher.

However, the long-term investors should wait for the price to break out of the channel before attempting a trade in it. Our bullish view will be invalidated if the bears plunge the digital currency below $4.1723848.

The market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.

*Disclaimer: Stratis is a featured cryptocurrency from one of Cointelegraph’s sponsors, and its inclusion did not affect this price analysis.

Cryptocurrency Exchange Kraken Adds Bitcoin Cash and Ripple Margin Trading

Kraken has added Bitcoin Cash (BCH) and Ripple (XRP) to Bitcoin (BTC), Ethereum (ETH), Ethereum Classic (ETC), Augur (REP), Monero (XMR), and Tether (USDT) bringing its margin trading offering to a total of eight cryptocurrencies.

Margin trading of all eight will be available on all of Kraken’s platforms. The latter site boasts an improved user interface and integrated charts and tools as well as supporting mobile trading.

Kraken’s news release adds:

Please note that BCH and XRP are not collateral currencies. This means you cannot open margin positions against the value of your BCH or XRP balances.

Exchange users are advised to keep balances of collateral currencies while trading and to be careful when trading collateral currencies into BCH and XRP with margin positions open, as account equity will be reduced.

Kraken then steps into the advantages of margin trading:

Margin trading allows you to leverage your account for greater profits, while also assuming greater risk.

Whilst also warning of the risks of greater losses and that margin positions can be forcibly closed if losses are great in order to protect leveraged funds.

“This means that you may be forced to take a large loss on a trade rather than having the option to try and wait for a more favorable price.”

Kraken points to its own margin trading guides and the heightened risk does mean that inexperienced traders should research the trading option thoroughly.

In June 2018 Korea judged Coinone’s margin trading to be illegal gambling. In October Poloniex announced it was removing margin products for U.S customers to remain regulatory compliant and Japan is still toying with capping cryptocurrency margin trading.

Kraken itself hit the news this September when a New York State Attorney referred Kraken, as well as Binance and Gate.io, to the New York Department of Financial Services (NYDFS) for potential violation of New York’s virtual currency regulations. Kraken’s CEO, Jesse Powell, was critical of New York’s “controlling” behavior and hadn’t returned a questionnaire that was part of the Office of the Attorney General (OAG) report.

According to CoinMarketCap, Kraken is currently the 27th cryptocurrency exchange by adjusted trading volume.

Featured image from Shutterstock.

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Fomo2Moon, a Blockchain Lottery for Everyone to Win

This is a paid-for submitted press release. CCN does not endorse, nor is responsible for any material included below and isn’t responsible for any damages or losses connected with any products or services mentioned in the press release. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the press release.

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Vitalik Buterin Bashes Bitcoin SV and Calls it a ‘Dumpster Fire’

In a series of tweets, Vitalik Buterin, co-founder of Ethereum, made his disapproval of Bitcoin Cash ‘Satoshi’s Version’ (BSV) known, calling the new hard fork of Bitcoin Cash (BCH) a “pure dumpster fire.” Buterin’s comments were made in an online Twitter debate with cryptocurrency commentator and businessman Tuur Demeester on Christmas Day.

In the discussion, Buterin debated on the merits and demerits of Proof-of-Work (PoW) and Proof-of-Stake (PoS), two algorithms used by cryptocurrency developers in building their assets. When piqued for his opinion on Bitcoin SV, Buterin tweeted:

“I have my disagreements with the Bitcoin roadmap, PoW, etc., but they’re trying to do something that’s genuinely cool tech,” he responded, before calling BSV a “pure dumpster fire.”

Vitalik Buterin Does Not “Believe in Proof-of-Work”

Buterin also made his disdain for PoW known in the discussion, at one point declaring that he no longer believes in the algorithm, but he, however, remains optimistic about the kind of technology that is being developed. Sadly, he doesn’t share the same sentiment for Bitcoin SV, which claims to have been created in line with the original vision set by Bitcoin’s core developers.

Bitcoin SV and Bitcoin ABC were both forked out of Bitcoin Cash (BCH) on November 15, 2018. BSV was developed with the goal of solving the mounting scalability issues of Bitcoin “on the chain” by making use of giant block sizes. However, ever since its inception, it has continued to face various publicity and technical issues.

It hasn’t been all sunshine and rainbows for Bitcoin SV. The other half of Bitcoin Cash’s hardfork has had its fair share of troubles, particularly with mainstream adoption and integration. At press time, it’s trading for $85.13 with a total market cap of $1.49 billion; the altcoin is yet to be listed on popular crypto exchanges, including Gemini and Coinbase.

Although the hard fork that created BSV has been responsible for major rifts between crypto investors, both it and Bitcoin Cash ABC continue to have strong support behind them.

Buterin has previously called Craig S. Wright a “fraud” to his face at an event.

Earlier this month, Buterin made investments in three different startups, donating 1,000 ETH tokens each to the startups, who are working on the development of Ethereum 2.0. The donations were inspired by a conversation involving Ethereum developers who complained about the lack of funding for projects that could contribute to the ecosystem.

Featured image from Shutterstock.

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Bitcoin-Friendly Square Uses App and Algorithms to Issue Business Loans

Payments company Square is moving into new markets by issuing business loans and will soon move to consumer lending. Its data collecting and analyzing algorithms are deciding creditworthiness letting borrowers arrange their loans in a few taps.

According to WSJ reporting, one Texan food truck owner accepted a loan offer within the Square app, then went on to borrow $150,000 to open a gastropub.

The borrower, Billy Joe Wilson, already used Square devices to process the credit card payments for his business. Square’s algorithms had been watching the transactions and monitoring sales before offering the loan which Wilson accepted with a few taps in the Square application. Wilson received the funds within a few days.

Square’s Cash App, which allows users to buy Bitcoin

Agile Fintechs vs Slow Conventional Banks

The case is a prime example of how quickly fintech is progressing and a case study of how firms like Square are beginning to outpace conventional banks which are bogged down by their size, bureaucracy, and technology lag. Fintechs are agile, beginning from a technology base to offer financial services that meet the pace expected by tech-savvy generations.

Restaurant-owner Wilson wasn’t expecting the loan offer, nor did he expect arranging the loan to be so easy:

It’s either one of those things that are too good to be true or it’s going to require a lot of time and effort where it’s not worth it for me.

Square Capital, Square’s lending arm, formed in 2013 driven by customer feedback. Noticing a gap where small business owners struggled to prove their credit, Square Capital has now awarded over $3.5 billion in business loans.

Square is now moving into consumer lending, exploring ways to offer loans to the seven million and more users of Square’s Cash App. Any service provision here is likely to use the same algorithms and machine learning to track user’s activity before deciding creditworthiness.  For Square’s business users a past Medium post by Square illustrates just how they are targeted:

“We can also utilize Square data and machine learning to help our sellers find the best Square products for their business. We have a data science team devoted to using domain knowledge and feature engineering to predict a seller’s likelihood to use any given suite of Square product offerings.”

Square has also recently filed paperwork to open a bank in the U.S state of Utah to offer business loans and deposit accounts to businesses and consumers. It would be classed as an “industrial loan company” which can operate without Federal Reserve oversight but would give Square the ability to offer fiat deposit accounts which are insured by the federal government.

Another growing fintech, Robinhood, launched checking and savings accounts offering 3% interest rates this month, immediately drawing scrutiny from conventional banking organizations as the accounts do not have Federal Deposit Insurance Corporation (FDIC) Coverage.

Square’s new market penetration doesn’t stop with business and consumer lending. After adding bitcoin-buying functionality to the Square Cash App, the app has now overtaken leading cryptocurrency exchange Coinbase to become the most used iOS app for buying bitcoin (BTC).  The app is also now the top free mobile application for iOS in the U.S, showing its growing user base.

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