Canada’s Regulators Might Help Crypto Exchange QuadrigaCX’s Victims After All

Provincial securities regulators in British Columbia, Canada, won’t be investigating the QuadrigaCX scandal. However, new developments could see Canada’s largest securities body, the Ontario Securities Commission (OSC), begin an investigation.

On Friday, according to Reuters, the OSC has confirmed in a statement it will be looking into cryptocurrency exchange QuadrigaCX, where currently $190 million in cryptocurrency has been lost. Though an OSC spokesperson did not confirm if the regulator will conduct a formal investigation, it said:

“Given the potential harm to Ontario investors, we are looking into this matter.”

The OSC’s role, as the Ontario provincial arm of the Canadian Securities Administrators (CSA) is to protect regional investors. In its “2018-2019 Statement of Priorities,” the body committed to “innovative regulation” of cryptocurrencies and actively encourages fintech start-ups in the province.

Canada has yet to beef up crypto regulation and add a more comprehensive legislative framework for the sector. But it has also taken action against illicit ICO offerings and the OSC may well decide to pursue QuadrigaCX further.

Allan Goodman, co-chair of a technology group at Goodmans LLP believes the OSC would first check if QuadrigaCX has breached securities laws in Canada. He stated:

“For example, should (Quadriga) have been registered as an exchange and were any securities laws breached with respect to the trading of the coins on the exchange?”

Earlier, the British Colombia Securities Commission (BCSC) said QuadrigaCX was outside of its jurisdiction. It will take no action to benefit those affected.

A BCSC spokesperson told Bloomberg in an email:

“[BCSC] does not currently have any indication that Quadriga CX, the crypto asset trading platform, was trading in securities or derivatives or operated as a marketplace or exchange under British Columbia securities laws.”

QuadrigaCX – An Elaborate Scam or an Unprecedented, Unexpected, Scenario?

The QuadrigaCX scandal is unprecedented. Its founder Gerald Cotten, reportedly the only person with access to QuadrigaCX cryptocurrency cold storage died suddenly in India. There were no protocols in place to allow another QuadrigaCX employee access and now no one can reach the $190 million belonging to QuadrigaCX users.

There is ongoing speculation about whether Cotton is really dead. Or if this could be some elaborate scam, as well as if QuadrigaCX really held cryptocurrency balances in cold storage.

One user, Ethan Lou, with $2,000 invested in the platform and who met with Cotten in 2014, writing for the Toronto Star says:

“Cotten’s death in India is suspicious. Vancouver’s Quadriga had been having cash-flow problems for months. Twelve days before Cotten’s death, the man made a detailed will, including money for his Chihuahua dogs — how did he neglect his laptop password?”

Last Tuesday, a judge gave QuadrigaCX a 30 day stay on claims from creditors and potential lawsuits while the exchange continues to try to gain access to Cotton’s laptop and the millions in lost cryptocurrency.


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Author: Melanie Kramer 
Image Credit: Source: Shutterstock

Bitcoin Bulls Stampede Past $3,700 & Wider Crypto Market Rallies with Them

Everyone knew a breakout was coming. A tight trading pattern lasted for weeks, which is almost always a precursor to big activity, one way or the other. In the case of Bitcoin and most everything else in the crypto market over the past 24-hours, things went very positive.

Bears lost their stranglehold on the market and plenty of short positions were likely vaporized. Traders in recent weeks had become accustomed to movements of sometimes less than $100 in a whole day. Like as not, plenty of positions were primed for movements of that size. But virtually every market saw Bitcoin go over $3,700 in the past 24 hours, and the rest of the market is lifted as a result.

The increased valuation of Bitcoin had a side effect of bringing Ripple (XRP) back over $0.30. Ethereum’s rise to just under $120 wasn’t enough to launch it into the second spot in the market cap rankings, where Ripple currently sits. This reporter still feels bearish about XRP, at least for the interim. Mass adoption is an important vector in considering the prospects of cryptocurrencies.

Flippening Lite

Litecoin price
Source: Shutterstock

The other notable happening on the markets was the reshuffling of the top 5 by market capitalization. Litecoin displaced EOS for the fourth spot in the rankings.

Litecoin grew more on its own merit than it did by virtue of the overall market capitalization increase, which was significant. Yesterday, as this capture shows, the overall market cap of the top 10 cryptos was around $95 billion. Today it’s more like over $103 billion.

Judging by the green percentages all the way down the top 100 cryptocurrencies, the money wasn’t coming from other crypto markets. It’s new money. The only big question is: will it stay or run? If we’re in a true bull run, anything is possible. Let’s keep in mind that sharp pops in either direction can often precede massive breaks in the opposite direction.

Bitcoin Price Stampedes Past $3,700

After some faltering in the $3,800 range on Bitfinex, Bitcoin is still shuffling up 8%. This is hundreds of dollars per share, in old world terms, which is a significant change that any user will feel. The purchasing power of BTC has increased overnight.

Bitfinex traders used levers to propel the price consistently higher than other markets.

As we said before, the money doesn’t appear to be entering from other wings of the crypto market. Instead, it’s new money. Bitcoin wasn’t the biggest gainer today. Litecoin holds that mantle. But Bitcoin’s gains are serious.

Where will we be Monday? Hardened crypto traders will tell you that’s a long time away. There are plenty of people who bought the extended dip, after all, and could dump on the renewed strong market.

Ethereum Gets Some Breathing Room

Ethereum has officially shoved off the $100 mark, to the relief of everyone. Ether needs to retain a strong market capitalization to float the thousands of tokens it supports.

Goodbye, $100! Cheap Ether might be on the way out.

Versus Bitcoin, Ether pulled out all the stops at Coinbase. If this is an indication as to how trading will go for Bitcoin in the coming days, prepare for a wild ride.

As we can see, most of the price shifts took place this morning. Could there be a psychological aspect to this? Everyone’s been expecting a big movement. At the same time, a comfortable majority of investors believe in the strength of crypto assets. Perhaps a few small changes catalyzed the bigger movements. Deeper data would need to be made public by Coinbase.

Perhaps in the future when decentralized exchanges are the rule of the day, we’ll be better able to analyze the size of the trades that actually precipitate these types of changes.

Litecoin is Absolutely Killing It

Litecoin’s been playing possum, it seems. Hovering around $30 over the past several weeks, with an occasional dip to $28 or on some markets worse, we were curious what would happen if Bitcoin’s price continued its downward trend but Litecoin’s didn’t.

Litecoin’s volume was double the norm. It also sustained double the gains of Bitcoin percentage-wise. The exercise shows Litecoin is no longer as reliant on Bitcoin as it was.

What we saw today was a similar story, however. Litecoin gained a lot more than any other top 10 crypto. By and large, on a day like this, you can attribute rises to the rise of Bitcoin itself. But Litecoin added half a billion. Charlie Lee reportedly increased confidence in Litecoin with his note that confidential transactions – the type available on Monero or Zcash (or even MimbleWimble) – are coming to LTC.

Litecoin’s future seems bright. It’s managing to maintain its price targets over massive trading volumes. The 24-hour volume for Litecoin was double the usual, at $1.5 billion. If this becomes the new norm, the next move for Litecoin could be back to the #2 market cap spot it hasn’t held for years.


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Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock. Price Charts from TradingView.

$136 Million in Missing Crypto From QuadrigaCX Could be Gone Forever: WSJ

Canada’s largest digital asset exchange QuadrigaCX has claimed to have lost more than $136 million worth of crypto in cold wallets controlled by its CEO Gerald Cotten.

In an official affidavit filed with the Nova Scotia Supreme Court by Jennifer Robertson, the widow of Cotten, Robertson claimed Cotten passed away in India with the sole control over user funds.

Affidavit Filed With Nova Scotia Supreme Court, Source: CoinDesk.com

On February 6, at a court hearing, the exchange confirmed that it has lost 250 million CAD, roughly $188 million in user funds, mostly in crypto and partially in fiat, which the exchange still cannot access.

According to CBC, a Canadian mainstream media outlet, 116,000 users of QuadrigaCX are currently left without their funds.

Controversy Intensifies, Missing Crypto May Be Gone, Not Locked

On Thursday, The Wall Street Journal reported that there exists a possibility the missing cryptocurrencies from QuadrigaCX may be missing, not locked in cold wallets.

Several researchers including James Edwards, an editor at Zerononcense, suggested that there is no evidence to prove the existence of QuadrigaCX’s cold wallets.

Most of the main wallets, those identified to date, are said to have processed the types of transactions that are normally not settled through cold wallets.

Cryptocurrency exchanges often go extra lengths to secure their cold wallets, which are offline wallets containing digital assets. To ensure the majority of user funds are out of the reach of hackers, exchange utilizes cold wallets to store most of its funds.

When a cold wallet transaction is initiated, as seen in one transaction initiated by Binance in November 2018, the transaction typically involves many millions of dollars.

Source: Blockchain.com

However, most transactions initiated by the main wallets of QuadrigaCX were small in size and were processed at a rate in which it is difficult to justify they were cold wallets.

According to WSJ, researcher James Edwards obtained 50 accounts of QuadrigaCX clients and carried out an analysis of the addresses. Edwards could not link any of the addresses to the cold wallet QuadrigaCX is referring to.

The report published by Edwards read:

“Based on the analysis of dozens of aggregated wallet addresses and transaction IDs for bitcoin withdrawals and deposits on the exchange, there is no evidence that a cold wallet for QuadrigaCX is currently in existence.”

Speaking to CCN, MyCrypto CEO Taylor Monahan also suggested that there may be no cold wallets in existence for the Ethereum holdings.

While Monahan emphasized that one main wallet holding 500,000 transactions is yet to be analyzed, it is highly unlikely that it is a cold wallet.

“Oh, and just in case you weren’t shaking your head enough, don’t forget that Quadriga ran an exchange with KYC. They have a pile of user’s KYC data. They could turn around and open an exchange account with any of that KYC data to move money,” she added.

No Report Can be Definitively Proven But Suspicions Remain

As David Jevans, the CEO of CipherTrace, said, it is not possible to definitively prove any of the claims against QuadrigaCX and its lack of cold wallets is accurate.

“In my opinion, that’s an impossibility to determine,” Jevans said, referring to the reports that have been published since the QuadrigaCX case went public.

But, if funds in the supposedly lost wallets of QuadrigaCX, which are traceable on the public blockchain networks of Bitcoin, Ethereum, and other major crypto assets, then the story of QuadrigaCX could quickly fall apart.

For now, both investors and the cryptocurrency community are waiting on a thorough investigation to be completed in the QuadrigaCX situation.

The claims of researchers in the cryptocurrency sector are that if no cold wallets or reserves of the exchange cannot be identified, how would it be possible, whether it is the exchange or third-party firms to even attempt to recover millions of dollars in user funds?


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Author: Joseph Young
Image Credit: Source: Shutterstock

How Apple & Google Transformed into a Systemic Risk to the US Stock Market

According to Credit Suisse strategists, the “reversal of fortunes” seen by tech behemoths Apple and Google-parent Alphabet are dragging down the performance of the overall US stock market. The S&P 500 forecast has been “skewed” by companies suddenly transitioning from high growth forecasts to much more modest outlooks.

This Bad Apple Could Roil the S&P 500

An “unusually high” number of big US companies have revised previously-bullish earnings forecasts downwards. These include Alphabet and Apple, as well as Exxon Mobile, GM, Micron, Chevron, and ConocoPhillips. Oil and technology companies are also pushing US stock market growth downward.

The S&P 500, according to Refinitiv, will now only grow by 0.3% in the first quarter of 2019 compared to 23% in all four quarters of 2018. Overall S&P 500 growth for 2019 is now expected to be 4.5%.

Apple, Alphabet, and Others See a Reversal of Fortune in 2019 Impacting the US Stock Market | Source: Credit Suisse

There have only been three other times since 1990 that so many companies have seen such a reversal of growth. Per the chart above, 71 quarters have seen two or fewer top 20 growth contributors move to the worst-performing segment. Thirty-five quarters have seen less than a handful of companies reverse so rapidly, and just three have seen more than seven do so, including the first quarter of 2019.

Cited in CNBC, Patrick Palfrey, a US equities strategist at Credit Suisse, says:

“For the typical company, are they seeing a problem? The answer is not really. You can get a few bad apples distort the underlying trend.”

US Stock Market at Mercy of Mega Companies and Tax Cuts

Palfrey believes other companies on the S&P 500 are growing at between 5% and 6%, adding:

“There is this massive skew for these mega cap companies that had really great years, over the past several years and in 2019, the trends are uninspiring for them.”

Credit Suisse also points to the importance of Trump’s recent tax cuts in skewing stock market growth. The cuts added 7% to 8% to earnings growth in 2018 but are now acting as a headwind, dropping profit growth by 1%. Benefits included last year, like deductions for capital expenditures, are no longer available.

Breaking Down Growth Struggles at Apple and Google

Apple reported profit growth of over 40% in the third-quarter of 2018 and is now expected to see a 12.3% decline. Alphabet’s profits grew 23.9% in the third-quarter of 2018 but are likely to fall 21% in the first quarter of 2019.

S&P 500 (Blue) Apple (Red) Alphabet (Orange) Performance Over the Last Year Source: TradingView

The two have moved from being at the top of the S&P 500 for growth to the bottom 20%. They are joined by Exxon Mobil – dropping from 51% growth to a 14.5% decline – and Chevron, dropping from 148% growth to a 21% decline for the same period.

Apple’s ability to swing the US stock market has never been in doubt. Its shocking sales forecast revision in early January dropped its own share price 10% and sent the Dow Jones Industrial Average plummeting by a whopping 500 points. Apple and Microsoft are still battling to be America’s largest company by market value and are closely followed by Alphabet and Amazon.

These Silicon Valley giants helped propel the US stock market to record highs in 2018, but as the economy moves deeper into 2019, they may prove to be its greatest foil.


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Author: Melanie Kramer
Image Credit: Featured Image from AP Photo / dapd, Martin Oeser

Why the Latest Bitcoin Dump Could Actually Launch the Crypto Market into Bullish Territory

The bitcoin price on Wednesday depreciated as much as 2.56 percent on the back of a stronger US dollar. Paradoxically, that might not be such a bad thing for the crypto market.

The bitcoin-to-dollar exchange rate (BTC/USD) bottomed at $3,340 on an intraday basis, while retesting the low of January 29 trading session. There was a little attempt from bulls to reverse the price action with the bearish bias intact. Nevertheless, the pair consolidated above $3,340, which served as an opportunity to reclaim $3,400 in the near-term.

Bitcoin’s Six Triangles

BITCOIN (BTC/USD) 4H | SOURCE: COINBASE, TRADINGVIEW.COM

In our previous analysis published Monday, we had predicted a bitcoin dump as the cryptocurrency’s volatility and volume went lower than normal. We also noted a strikingly similar pattern between bitcoin’s current and previous price actions. In this analysis, we aim to elaborate on the same to predict where the next bitcoin move could be.

In the Coinbase chart above, we can see bitcoin trending lower inside a falling wedge formation. Inside the wedge, the price consolidated inside a small symmetrical triangle (1). It attempted a breakout that eventually failed to blossom. The price reversed and formed a large bear flag, then continued to consolidate again inside a new symmetric triangle (2). The price action repeated four times, excluding the current scenario (6) which has yet to mature.

A Closer Look at the Bitcoin Price

Let’s have a closer look at the same chart.

BITCOIN (BTC/USD) 4H | SOURCE: COINBASE, TRADINGVIEW.COM

As period 6 develops, bitcoin could form a smaller symmetrical triangle as it attempts to retest the falling wedge resistance to the upside (depicted as a dotted falling trendline). Meanwhile, the price would keep pressure on $3,430 to remain its interim resistance. Based on the previous price actions, bitcoin should continue its downside momentum. However, as we are reaching the apex of the falling wedge, the price should technically attempt a strong upside breakout action.

As we wrote in our previous analysis:

“Technically, a falling wedge pattern is a bullish indicator. It begins broadly at the top but squeezes as the asset moves lower while forming reaction highs and reactions lows that eventually converge. Upon closing in towards the cone’s apex, the asset undergoes a resistance breakout to find a new support area.”

Consequently, there is a strong chance for bitcoin to break above its wedge pattern on the next upside move. Traders should watch out for reversal indicators such as a doji — which occurs when a candle has an open and close at the same price — coupled with a spike in trading volume.

Conversely, an extended downside action would push the bitcoin price towards $3,100 – the current bottom level.


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Author: Yashu Gola 
Image Credit: Featured Image from Shutterstock. Charts from TradingView.

Tesla Cheats with New Battery Supplier, Panasonic Forecast Plunges

Panasonic wasted no time lowering its guidance after its bread-and-butter customer, Tesla, announced it was buying another battery supplier to power its electric vehicles.

The lucky company Tesla chose to replace Japan-based Panasonic is California-based Maxwell Technologies.

On the news, Panasonic lowered its profit expectations by 9%. The possible loss of Tesla isn’t the only culprit that led to the lowered guidance. The struggling tech player revealed it was also being hurt by weak demand in China for auto components and factory equipment. China’s slowing economy and the overhang of trade wars have weighed on countries and tech companies all over the world.

Musk Praised Panasonic Just Three Months Ago

Back in November, it appeared that the partnership between Tesla and Panasonic was going well. CEO Elon Musk took to Twitter to sing the praises about Panasonic helping it boost profits.

Here’s the tweet.

However, Musk had other plans. CCN raised the caution flag on Panasonic last month. We pointed to Tesla’s November indication that it would diversify its sources after experiencing several problems with its Model 3 supply chain.

On the heels of that announcement, rumors swirled that Tesla was on the lookout for a new battery supplier.

In previous reports, CCN noted that Panasonic was also feeling the effects of the possibility of losing Tesla. Its stock price was down by more than 2% on the news that the carmaker was looking for a new supplier.

Tesla Giveth Then Taketh Away

Elon Musk | Source: Shutterstock

Interestingly, when this supply agreement was announced, Tesla stated:

“The agreement supplies Tesla with Panasonic’s lithium-ion battery cells to build more than 80,000 vehicles over the next four years. It guarantees the availability of enough cells in 2012 to meet Tesla’s aggressive production ramp-up and fulfillment of more than 6,000 existing Model S reservations. This supply agreement helps ensure Tesla will meet its cost and margin targets for Model S.”

The purchase of Maxwell Technologies comes less than a decade since Musk and company inked the deal with Panasonic. The electric vehicle maker had lauded Panasonic as being a battery cell manufacturer and a diverse supplier to the global automotive industry.

Musk’s Always Up To Something, Could Be Good This Time

The move is a disappointing one for Panasonic, but it’s a solid one for Tesla, which has been under financial pressure.

In January, CCN reported that Tesla enjoyed a solid Q4 2018 with record production and delivery numbers driving the company’s first profit in two years. The company posted a net profit of $311.5 million and $891 million in free cash flow. However, the company’s stock price slumped 9% after it failed to meet investor targets for delivery and production numbers.

Tesla’s stock price has traded wildly over the past several months.

Owning battery supplier Maxwell should help the company lower its operating costs. The heavily indebted electric car company, whose CFO stepped down just four days ago, is making the acquisition in an all-stock deal.

A Tesla stock shorter (Musk has extreme disdain for them) responded to the Maxwell announcement with this tweet.

Maxwell already supplies batteries to General Motors and Volkswagen subsidiary Lamborghini. Specifically, it provides so-called ultracapacitors that store electricity and complement battery cells.


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Author: Tedra DeSue 
Image Credit: Featured Image from Shutterstock

Bitcoin Was ‘Total Bubble’ & 95% of Crypto ‘Will Die Painful Death’: Bitwise Exec.

The bitcoin bull market was a bubble that burst in 2018, but the “painful” event had a major upside: It attracted a lot of money and talent to the burgeoning industry. That’s the assessment of Matt Hougan, the global head of research at Bitwise, creator of the world’s first cryptocurrency index fund.

“It was a massive run-up and a massive pullback,” Hougan told Bloomberg’s Barry Ritholtz on his podcast. “[It was a] total bubble.”

While financial “bubbles” understandably carry a negative connotation, Hougan says the bitcoin bubble fueled intense media interest in blockchain and the crypto market.

Moreover, soaring crypto prices lured a tremendous talent pool to the industry that it otherwise might not have wooed but for the spectacular daily headlines in 2017.

Hougan: Bitcoin Bubble Resembles Tech Bubble

Bitwise research boss Matt Hougan: Bitcoin was definitely a bubble. (screenshot)

In this sense, Hougan says the bitcoin bubble is not dissimilar to the Internet bubble of 1996 to 2001, which imparted similar collateral benefits to the then-nascent tech industry.

“It did the same thing that happened with the Internet, which is it attracted a huge amount of talent. It did bring a lot of capital and interest in development to the ecosystem.”

“So, I do think interesting things will be born from that. But, yes, it was a difficult year in 2018.”

“I think [bitcoin] is the next dotcom. Remember, the dotcom bubble created Pets.com, but it also created Amazon.”

Hougan also says that 95% of cryptocurrencies that exist today will crater into extinction ― and that’s a good thing for the market.

“There are 2,000 cryptocurrencies out there; 95 percent of them are useless and will die a painful death. The sooner that happens, the better.”

“But from those ‘ashes,’ will merge important things. Just like from the dotcom ashes emerged Amazon, Google, and Facebook, etc.”

So basically, Hougan says it’s important for the crypto market to purge all the sham virtual currencies so that the worthy ones can survive and thrive.

Bitcoin Is the New Millennial Gold

Hougan also says bitcoin is the millennial generation’s version of gold. He pointed to recent surveys showing that millennials (individuals born from 1981 to 1996) have a favorable view of cryptocurrencies compared to baby boomers (people born between 1946 and 1964).

“Every generation has an asset that they love or a way of getting exposure that they love.”

“The Greatest Generation love gold, then people loved active mutual funds. Gen X loved hedge funds. Millennials love crypto.”

Hougan attributes this to the decentralized nature of crypto, which cuts out the middle man. He believes that’s particularly appealing to the younger generation.

Hougan’s optimistic view of millennials is a stark contrast to that of CNBC analyst Scott Nations, who says millennials are too stupid to realize that bitcoin is a bubble they should avoid like the plague.

(Blockchain Capital/Twitter)

Matt Hougan: Don’t Lose Perspective

As for the crypto market’s wild daily price swings, Hougan noted that established corporate juggernauts like Amazon, Apple, and GE have all weathered massive stock market fluctuations on their rise to the top.

Accordingly, he doesn’t pay too much attention to the constant media hype that bitcoin is dead. He says all this cyclical lurching is part for the course, so everyone needs to calm down.

“Bitcoin’s gone through six or seven, 70 percent-plus drawdowns in the past. And each of those has set the stage for a new rally.”

“I’m not saying that will necessarily happen here, but it’s down 70 percent. It’s up 300 percent over last two years. So it depends on your perspective.”

Institutional Investments Will Come

Like bitcoin bull Mike Novogratz, Matt Hougan is confident that institutional money will eventually pour into the market; it’s just a matter of time.

To buttress this claim, Hougan noted that Fidelity is building up its blockchain unit to facilitate the mainstream adoption of crypto.

“Fidelity is hiring up to 150 people to build a way for institutional investors to buy crypto and store it with a name they trust. One of the greatest brand names in the future.”

“We know, we had conversations with 2,000 institutional and financial advisers last year. There is dramatic interest in crypto. They want good ways to get exposure.”


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Author: Samantha Chang
Image Credit: Featured Image from Shutterstock

First Look: Elon Musk Teases SpaceX’s Bold New Raptor Rocket

Elon Musk posted four tweets last night demonstrating the new Raptor rocket engine. SpaceX engineers have been hard at work finalizing the next-generation rocket technology that will eventually power trips for the exploration of Mars.

Musk Tweets Proof of Rocketry

While most of America was focused on the Super Bowl, Musk was in Texas at the SpaceX testing site. The rockets had recently been shipped from California to the testing site near McGregor, Texas. Musk and his team were up late preparing for the first test late Sunday night. A few hours later, the first video went live on Twitter.

Viewed more than a million times by press time, the 4-second video shows an extremely long flame shooting out of the Raptor. A second video went shortly thereafter, twice as long and loud:

Local Civilian Spots Reusable Rocket Test at SpaceX Facility

A Central Texas local reportedly noticed what was going on at SpaceX and tweeted about it:

Intended to be reusable, the engines use cryogenic liquid methane and liquid oxygen. Previous SpaceX rockets used RP-1 Kerosene and liquid oxygen. Developing the rockets in-house was part of Musk’s business plan from the start, according to an early SpaceX investor.

When the rockets were first shipped from California to Texas, Musk noted that the company is working hard to get a moon-worthy rocket to ready. The ultimate goal of the Raptor rockets is still for Mars exploration. The Raptor is intended to replace existing rockets already in production, the Falcon 9, Falcon Heavy, and Dragon.

The Raptor product is currently on track. Musk has previously tweeted that the company will attempt a moon trip first.

SpaceX: Mars Exploration is the Goal

While SpaceX keeps its eyes on human exploration of Mars, heavily developing the Raptor, it is under financial pressure to actually develop revenues. The company is good at winning open contracts from governments and large companies around the world, but recently suffered a spate of layoffs. Musk blamed these layoffs on the “absolutely insane”  Starlink global high-speed internet project as well as a co-existing Mars rocket project.

Musk says the company needs to be “spartan” in its expenditures. The revamped approach to Raptor appears to be an attempt to cut costs by developing the rocket in stages. First it will go to the Moon and potentially function as an orbiting product around Earth. Later it will be further developed and upgraded into a rocket with the potential to explore Mars.

While Musk believes that layoffs at his day job — electric carmaker Tesla — were necessary in order to keep the company’s products relatively affordable, he thinks the SpaceX research projects are costing too much and seems to regret the SpaceX layoffs. He reportedly said during an investor call last week:

“And so, SpaceX has to be incredibly spartan with expenditures until those programs reach fruition.”

When Musk says “insane,” he doesn’t necessarily mean it in a negative way. As a businessman, he’s referring to the fact that his company is engaged in services once only provided by governments with virtually unlimited resources. When SpaceX eventually develops a space highway to Mars for mankind, they will either be the only company doing it or the only one doing it well. Untold fortunes await SpaceX at that point.

SpaceX IPO: Will It Ever Happen?

Still, SpaceX has yet to reach out for public money via an IPO. In 2017, rumors rocked the investor community: SpaceX would be launching an IPO that year. A year later, the company went for more venture capital funding, selling some shares at $135 to Fidelity. Its valuation at that time was $27.5 billion.

While SpaceX could focus on more terrestrial projects like competitive satellites, which they are also into, the company’s true mission is deep space exploration. The potential for profit from space exploration is an unknown quantity, but it could easily go into the trillions. As profit goes, one potential area of investment would be minerals acquisition. The quantities of gold, platinum, and other rare materials in space by definition outsize supplies on earth. Developing a profitable method of extraction from foreign planets and space rocks is but one way that SpaceX could, in the long run, become the most profitable company in history.

Tesla Opens A Chaotic Trading Day After SpaceX Tweets

As for Tesla, trading early this morning showed a big sell-off. Buy orders kicked in and kicked it up momentarily. After an hour or so of trading, things were on a recovery path.

While SpaceX is a separate company from Tesla, its fate is very much tied to Tesla. Good news about SpaceX can reflect well on Tesla, and vice versa.

Certainly the weekend’s activities demonstrate one thing about Musk: he is fully grounded. He understands that SpaceX needs to get realistic in its endeavors, and completion of rockets for near-term use (and potential sale to governments and others) is one of many ways they can do so. As for SpaceX engineers, this was likely not the first or last time they’ll be putting in long weekend hours in pursuit of a noble dream.


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Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock. Charts from Tradingview.

MyCrypto CEO: QuadrigaCX May Not Have Ethereum Cold Wallet, Where’s the Missing $150m?

Taylor Monahan, the founder and CEO of MyCrypto, one of the most widely utilized non-custodial wallets in crypto, has said that QuadrigaCX may never have had an Ethereum cold wallet.

Crypto Wallet CEO Raises Questions about QuadrigaCX’s Claims

After evaluating three main Ethereum addresses used by QuadrigaCX, Monahan said that all of the addresses were likely owned by customers, not by the exchange.

“Based o[n] the actions via ShapeShift, I can only assume they were trading the ETH for BTC on Bitfinex/Poloniex as well. Regardless, these were customer funds. All 3 main addresses ultimately receive ALL customer deposits, which were then sent to a variety of exchanges,” she said.

Earlier this month, as CCN extensively reported, Canada’s largest crypto exchange QuadrigaCX lost its access to customer funds worth $190 million in crypto and fiat.

The exchange stated that its CEO, who had sole control of the exchange’s cold wallet private keys, passed away and the firm is no longer able to access the funds as a result.

Experts Skeptical Toward QuadrigaCX Case, Can $150 Million in Crypto be Recovered?

Throughout the past several days, several reports claimed that QuadrigaCX’s cold wallet addresses have been moving funds.

But, most of the addresses turned out to be hot wallets given the size of the transactions initiated by the wallets.

Large exchanges often store the majority of user funds in cold wallets that are stored offline and cannot be targeted by hackers.

Exchanges like Binance and Coinbase are known to have implemented sophisticated systems to safeguard and protect holdings stored in cold wallets.

Before initiating transactions from cold wallets, major exchanges go through weeks to even months of planning to ensure no technical mishap occurs.

The three main addresses of QuadrigaCX evaluated by MyCrypto CEO Taylor Monahan sent many transactions to different wallets including the addresses of Bitfinex and Poloniex.

Considering that cold wallets of exchanges usually deal with millions of dollars in customer funds, the several thousand ETH sent out by the three wallets show they are unlikely to be the cold wallets of QuadrigaCX.

Speaking to CCN, Monahan said she has yet to evaluate the main ETH address of QuadrigaCX that contains more than 500,000 transactions.

But, based on the pattern of the three addresses, it is entirely possible that QuadrigaCX never had an Ethereum cold wallet.

“I’m seeing NO indication of Quadriga ever having cold / reserve wallets for ETH,” Monahan said.

The MyCrypto CEO added:

“Oh, and just in case you weren’t shaking your head enough, don’t forget that Quadriga ran an exchange with KYC. They have a pile of user’s KYC data. They could turn around and open an exchange account with any of that KYC data to move money.”

Red Flags

In previous interviews, as revealed by Cornell Professor Emin Gün Sirer, former QuadrigaCX CEO Gerry Cotten claimed that the exchange employed a multi-signature system to protect user funds.

A multi-signature system allows individuals or businesses to hold private keys to a certain address. Only when the majority of the keys are combined can the individuals or businesses obtain access to the funds stored in the address.

However, the exchange evidently had not employed a multi-signature system in all of its cold wallets because it was reported that the CEO had full control over the funds.

Jesse Powell, the CEO of Kraken, also raised suspicion on the case involving QuadrigaCX given the absurdity of the situation.

“We have thousands of wallet addresses known to belong to QuadrigaCX and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if the Royal Canadian Mounted Police are looking into this, contact Kraken,” he said.


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Author: Joseph Young 
Image Credit: Featured Image from Shutterstock

‘Stay the Course’: Billionaire Bitcoin Bull Mike Novogratz Has Advice for the Bitter Crypto Winter

Mike Novogratz — the CEO of cryptocurrency merchant bank Galaxy Digital — admits that the Crypto Winter will probably last longer than he had anticipated. However, the Goldman Sachs alum still believes that institutional investors will eventually enter the market, and remains an avowed bitcoin bull.

Mike Novogratz ‘Very Confident’ of Institutional Entry

Novogratz tweeted: “Don’t think we head north for at least a few more months. Always take longer for institutions to move. Very confident they will. Tons of activity under the hood. Stay the course.”

Had Set $20,000 Bitcoin Price Target for 2019

The protracted market slump has caused many a crypto enthusiast to scale back their exuberance. And Novogratz is one of them.

In November 2018, Novogratz boldly set a $10,000 bitcoin price target for the end of the first quarter of 2019. He also predicted that bitcoin would top $20,000 this year.

But as the market slump continues with no signs of an immediate reversal, Novogratz has now apparently adopted a more sober outlook.

Crypto Executive: Stop Freaking Out

That said, don’t expect bitcoin stalwarts to jump ship anytime soon. We’re at the beginning of February, and there’s still almost 11 full months left in 2019.

Crypto evangelists like Dan Morehead — the CEO of bitcoin investment firm Pantera Capital — say it’s time for those with short-term mindsets to stop freaking out. Why? Because the industry has weathered bear markets before, and this one is different from the others, Morehead insists.

“In the previous one, I had more of a worry in the pit of my stomach about whether blockchain was actually going to work.

With this one, the underlying fundamentals are much, much stronger than they were in the 2014-2015 Crypto Winter.”

The Few Who Do Versus the Many Who Talk

Critics may say that bitcoin bulls like Dan Morehead, Mike Novogratz, the Winklevoss twins, and Circle CEO Jeremy Allaire are unrealistically optimistic. That’s probably because they have skin in the game.

They’re not just talking the talk; they’re walking the walk. They have invested a lot of their own money in the success of the industry. Therefore, they are highly motivated to ensure it thrives.

Last month, Novogratz increased his holdings in Galaxy Digital to 79.3% after acquiring an additional 2.7% of its outstanding shares for $5.4 million. He previously held a 76.6% stake.

The former Wall Street banker is now Galaxy Digital’s single largest shareholder, with 221 million shares. If that’s not a sign of conviction or personal accountability, it’s hard to say what is.

In response to skeptics who are gleefully cheering the current abysmal state of the market, Novogratz sagely points out that “revolutions don’t happen overnight.”

bitcoin bulls billionaires jack dorsey tim draper
These tech billionaires are bitcoin bulls. Would you bet against them? (YouTube screenshots)

Trader: Bitcoin Will Crater Into Extinction

Meanwhile, skeptics are betting that the crypto market will crater into extinction. Not surprisingly, the most vocal opponents are people from traditional financial institutions and legacy banks whose existence is threatened by the rise of the crypto industry.

Three weeks ago, futures trader Anthony Grisanti predicted that the bitcoin price would soon tank below $3,000 amid a mass sell-off.

Grisanti is an analyst at CNBC who previously traded energy futures at Bear Stearns. Like other crypto naysayers, Grisanti believes it’s only a matter of time before bitcoin totally collapses.

He claims that whenever the bitcoin price rallies a little, it’s because people are liquidating their positions. “Whether or not they’re liquidating outright or the futures, they are liquidating,” Grisanti claims.

CNBC Analyst: Bitcoin Fans Are Clueless

Grisanti’s fellow CNBC commentator, Scott Nations, also blasted bitcoin, saying it has no value. He also dissed millennial crypto fans, saying they’re too inexperienced to understand that they’re witnessing a bubble that’s bursting.

“If you are in your 20s, you have never seen an asset bubble. You were a teenager during the housing bubble. You were not even a teenager during the dotcom bubble. Well, baby, this is a bubble! And right now, it’s coming unglued.”


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Author: Samantha Chang 
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