Ethereum Slayers 2.0: Crypto’s Usual Suspects, or New Kids on the Blockchain?

Whenever a new blockchain platform launched between 2017 and 2018, it was inevitably heralded as a future replacement for the largest, most successful cryptocurrency platform of all. In short, it came bearing the name of Ethereum Killer.

Those prophecies turned out to be premature, and by 2019 the hit that’s been put out on Ethereum is still waiting to be cashed.

A year is a long time in the crypto space, and many would argue that the lineup of possible contenders for Ethereum’s throne has changed already. New upstarts have come to the fore, while some who’ve been in the fight for too long are starting to weaken due to falling coin prices.

So let’s take a look at the so-called Ethereum Killers in 2019. Are we looking at a new crop of assassins – or just the usual suspects?

Zilliqa (ZIL) Draws First Blood

Zilliqa has perhaps already drawn first blood in the battle against Ethereum – last year the Ethereum-based game Etheremon was packed up by developers and emigrated to the Zilliqa blockchain. | Source: Shutterstock

Zilliqa has perhaps already drawn first blood in the battle against Ethereum – last year the Ethereum-based game Etheremon was packed up by developers and emigrated to the Zilliqa blockchain.

The move was in response to rising gas prices on Ethereum, and the assertion that Ethereum’s lack of scalability solutions was draining the game’s potential. The Zilliqa team announced at the time:

“We are glad to announce that we will work with the Zilliqa team to explore Zilliqa as a scalability solution for Etheremon. The higher throughput and low gas of Zilliqa’s sharding solution offer players better experience.”

More on Zilliqa can be read here, in CCN’s interview with Zilliqa CEO, Xinshu Dong where he goes into detail on Zilliqa’s sharding process:

“Imagine a sample network of 1,000 nodes. ZILLIQA will automatically divide the network into 10 shards each with 100 nodes. Each shard can now process transactions in parallel. If each shard is capable of processing 100 transactions per second, then all shards together can process 1000 transactions per second.”

If all of this sounds too good to be true, read my deep-dive on Zilliqa which covers some of the technical difficulties still facing this possible Ethereum slayer.

Holo (HOT) – The Non-Blockchain Wildcard

In this sense Holo opts for a distributed network as opposed to a decentralized one (however, a distributed network is by nature decentralized). | Source: Apollo Capital/Medium

wildcard compared to some in this list, Holo (HOT) sets itself apart from the rest of the crowd by not actually utilizing a blockchain. Instead, Holo uses distributed hash tables (DHT), which are more similar to a torrent network than a blockchain.

In this sense, Holo opts for a distributed network as opposed to a decentralized one (however, a distributed network is by nature decentralized).

Already, several projects have opted to build on the Holochain network, including a Holo-based Reddit competitor named Comet; an open-source legal system called Ulex; as well as several others in industries ranging from social media to supply-chain.

In early 2018, the CFO of Mozilla, Jim Cook, named Holo as one of the projects which was creating an agent-centric model that could wrestle control of the internet back from the hands of Google and friends. Holo’s association with Mozilla is extended by their common use of the Rust programming language.

When Binance’s CEO and founder, Changpeng Zhao, sent out job posts for Rust developers last year, the effect was such that the HOT coin price responded by jumping 26%.

Waves (WAVES) – The Old Guard

Waves launched in early 2016, and within two years over 100 projects had opted to launch ICO’s on the Waves platform. The most successful of those is the gaming-focused MobileGo (MGO), which briefly broke onto CoinMarketCap’s front page in November, and now has a market cap of $18 million.

That could soon change, however, as $120 million was just raised via the Waves platform for its Vostok ICO. With Waves holders set to be airdropped a portion of the Vostok tokens, it could be speculated that Vostok was the driving force behind Waves’ 300% ascent throughout December 2018.

Waves can boast of its own decentralized cryptocurrency exchange and a strong position around the top twenty by market cap. It was launched just one year after Ethereum.

Read More: The Ethereum Killers – A Hit Still Waiting to Be Carried Out

Tron (TRX) – The Young Pretender

No other coin has leveraged the Ethereum Killer label as much as Tron – the trouble is, it’s usually being leveraged by the Tron’s CEO and founder, Justin Sun. | Source: Shutterstock

No other coin has leveraged the Ethereum Killer label as much as Tron. The trouble is, it’s usually being leveraged by Tron’s CEO and founder, Justin Sun. We only have to go back to the start of this month to find the last time Sun wielded the term – this time in reference to Tron’s domination of the dApp rankings compared to Ethereum.

That domination is genuine – Tron dApps account for six out of the ten most utilized in existence. The proliferation of dice games and gambling dApps on Tron may also account for its soaring transaction rate towards the end of 2018.

But statistics can make anything look good, and one should ask what value these gambling dApps have in comparison to the tried and tested blockchain platform that remains Ethereum’s main use-case.

The arrival of blockchain projects and ICO launches on the platform will have to wait until the completion of the Odyssey phase of Tron’s roadmap – scheduled to for completion in mid-2019.

Notable Mention – Stellar (XLM)

Despite a recent increase in the number of projects being launched on its platform, Stellar isn’t really compared to Ethereum in that way. | Source: Shutterstock

Stellar (XLM) has been around for one year longer than Ethereum, and despite a recent increase in the number of projects being launched on its platform, Stellar isn’t really compared to Ethereum in that way.

Often regarded as one of the ‘finance coins,’ along with Ripple, Stellar’s priorities can be ascertained from the opening line which greets visitors to its website (emphasis theirs):

“Stellar is an open platform for building financial products that connect people everywhere.”

That’s not to say Stellar can’t fulfill some of Ethereum’s roles, as evidenced when one of its recent progeny, Repo Coin (REPO), hit 1,437% growth within the space of a month in early January.

Ethereum Killers Not Living up to Their Name?

EOS is still the fifth highest capped cryptocurrency, but the enthusiasm surrounding its potential dislodging of Ethereum is much less than this time last year, at the height of its $4 billion ICO. | Source: Shutterstock

One of last year’s Ethereum Killers looks to be in much worse shape this time around, as the EOS blockchain flirts with being a money-losing machine for its block producers. EOS is still the fifth highest capped cryptocurrency, but the enthusiasm surrounding its potential dislodging of Ethereum is much less than this time last year, at the height of its $4 billion ICO.

Meanwhile, a project which didn’t make last year’s list, but was at one point in contention with the coins listed above, is NEM (XEM). The NEM blockchain was tipped to play host to Nicolas Maduro’s Venezuelan Petro cryptocurrency, although much of the Petro’s existence was clouded in confusion, as was its launch.

By the end of January 2019, the ‘crypto winter’ was such that the NEM Foundation had begun to freeze over – with the team announcing a suspension of all projects and partnerships due to lack of funds.

Ultimately, Ethereum is still alive and well, and with upgrades to scalability and speed on the horizon, it may yet be a long time before it is displaced.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.


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Author: Greg Thomson 
Image Credit: Featured Image from Shutterstock

$1 Million: IBM Crypto Chief Sets Massive Bitcoin Price Target

IBM VP of Blockchain and Digital Currencies Jesse Lund is bullish on Bitcoin – so bullish, in fact, that he set a long-term $1 million price target.

Bitcoin Price Has Million-Dollar Potential

Lund revealed his long-term Bitcoin price target at the recent Think Conference, in an interview with Fred Schebesta.

The IBM executive pointed out that the higher the price of a crypto asset, the more utility it has. Therefore, he thinks people should focus less on the moving prices of crypto assets and more on their utility.

“If the price of Bitcoin were higher, there would be more liquidity on the network, we could be having a really different discussion with banks right now,” he says.

He adds that speculators are hurting the value of cryptocurrencies “because they’re thinking about it wrong.”

Lund sees the Bitcoin price rallying by more than $1,000 before the end of 2019.

Later in the interview, Lund made an astonishing remark as to the future of cryptocurrencies. By New Year’s Eve, he predicts the price of Bitcoin will be $5,000. However, his long-term outlook is much different.

“I have a long-term outlook. […] It goes back to that discussion about the utility of the network with a higher price. I see Bitcoin at a million dollars someday. I like that number because if Bitcoin’s at a million dollars, then the satoshi is on value parity with the US penny. And that means there’s over $20 trillion of liquidity in this network. Think about $20 trillion in liquidity and how that changes things like corporate payments.”

Lund’s view is that when the Bitcoin price gets high enough, serious banks take more interest. When this happens, the utility of the token increases at its core value proposition – less-expensive transfers of value. Both IBM and R3 Corda are working hard on creating solutions for cross-border payment solutions using multiple digital assets.

It’s not every day that someone from the old world of technology predicts such a high price for Bitcoin. The $5,000 figure may even be debatable from here, as speculators make anything possible.

Lund: Stellar is a ‘Viable Settlement Instrument’

stellar
IBM exec. Jesse Lund praised Stellar’s utility for settlement. | Source: Shutterstock

IBM recently launched its World Wire product, which in part relies on major cryptocurrency Stellar. Lund explained that Stellar is useful for cross-border payments, despite its smaller market cap.

“There’s no technical reason or technical barriers that should prevent money from flowing the same way [as information]. […] The architecture of World Wire is really a cross-border payment network, the magic of which, if you will, the novelty of it, is the ability to send payment instructions saying, ‘Hey, I’m sending you something, get ready.’ And on the other end, the receiver is making sure that who you’re sending it to is not some nefarious actor or bad actor.”

“Once that happens, and that happens really fast, then we send the value along with it. That transfer of value is made possible by digital instruments, settlement instruments, of which Lumens is one. So we see Lumens as a viable settlement instrument in this ecosystem of cross-border payments.”

Lund believes that a variety of assets should be available when making cross-border settlements. Most blockchain protocols outside of smart contract platforms don’t allow for the transfer of multiple assets. In essence, IBM’s World Wire is an alternative to R3’s Corda settlement layer, which in part uses Ripple.

Featured Image from Shutterstock. Price Charts from TradingView.


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Author: P.H. Madore
Image Credit: Source: Shutterstock

$8 Billion Coinbase Faces Backlash for Latest Acquisition

Bitcoin exchange giant Coinbase has acquired Chainalysis competitor Neutrino in an effort to enhance its compliance efforts and regulatory relationships. Neutrino uses blockchain analytics to identify potential money laundering or other illegal transactions on the blockchain. Until its acquisition, it was one of a few companies growing in the space of analyzing blockchains. Its work mainly benefits crypto exchanges, regulators, and other centralized powers.

According to Coinbase, companies like Chainalysis, Whitestream, and Elementus are “necessary” in an “open financial system.”

“Blockchain intelligence is increasingly important in the crypto ecosystem, and is necessary to achieve our mission of bringing the open financial system to the world. By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors. It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations.”

Coinbase has chosen to buy the company outright for an undisclosed price. Neutrino’s team will move from its base in Italy to Coinbase’s offices in London.

Coinbase: Bitcoin Bank Extraordinaire

Long the subject of derision at the community level of Bitcoin and other cryptocurrencies, Coinbase’s acquisition is one more in a list of “anti-crypto” charges against it.

Neutrino’s CEO, Giancarlo Russo, formerly worked as Chief Operating Officer for HackingTeam, the government security contractor that was famously hacked in 2015. Documents leaked by the HackingTeam attackers showed that the company willingly aided repressive governments including Saudi Arabia, who wanted to buy the company.

Crypto community members are unfriendly to anything which can lead to censorship. That is the bottom line for many.

If it leads to censorship, it’s poison.

Very little of Coinbase’s business model has been favored by long-time members of the crypto community.

Nevertheless, Coinbase has grown to be an $8 billion company in spite of regular complaints. Its notorious customer support and various compliance initiatives frequently raise ire. Whatever you have to say against them, they’ve done a great job onboarding millions of people. People who might not otherwise have been able to join the cryptocurrency world.

Now Can We Have a Crypto ETF?

According to Coinbase, Neutrino is superior to Chainalysis, a leader in the space.

“Neutrino’s technology is the best we’ve encountered in this space, and it will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world.”

Coinbase director of product and engineering Varun Srinivasan added in a CoinDesk interview:

“We want to bring them to the American market and the international market and introduce them to companies that are doing all kinds of things with crypto that need blockchain intelligence.”

Is blockchain intelligence the last mile?

We have regulated custodians, exchanges, payment processors, and a thriving community of enthusiastic users. We also have several multi-million dollar firms dedicated to preventing fraud and money laundering. Now can we have a Bitcoin ETF?

Venerability of markets is an important part of the SEC’s concerns toward cryptocurrency investment products. One persistent fear is the potential for market manipulation in Bitcoin. Such concerns aren’t helped any by the accusations against Bitfinex and Tether regarding the 2017 bull run.


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Author: P.H. Madore 
Image Credit: Source: Shutterstock

Put Your Money On Crypto for the Long-Term, Says Major Wealth Manager for Pensions

It’s time institutional whales put their money into cryptocurrency according to major investment management firm Cambridge Associates.

IT’S TIME TO ‘BEGIN EXPLORING’ SAYS CAMBRIDGE ASSOCIATES

The Boston-based consultancy only advises major institutions who manage more than $300 billion worth of clients’ assets. Cambridge was quoted in Bloomberg on Monday as saying:

“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term. Though these investments entail a high degree of risk, some may very well upend the digital world.”

That’s a remarkably on-point statement in a space dominated by optimistic cheerleading and deathly pronouncements. Cambridge specializes in pensions and endowments, and its declaration of support for crypto is probably not a spur of the moment decision.

The firm advise would-be investors to conduct an industry-wide deep-dive on the various aspects of cryptocurrency; from investing in venture capital to trading tokens on exchanges.

Despite the year-long decline in the value of the cryptocurrency market, Cambridge believes we are still in the developing stages of the industry:

“The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.”

SIGNS OF A TURNING TIDE AMONG FINANCIAL INSTITUTIONS?

Last week Grayscale released this report detailing the steady influx of institutional money to the crypto space in the past year. The fact that institutional investments only increased as coin prices declined is an encouraging sign, and suggests that major firms see potential for a reversal.

Grayscale went so far as to declare cryptocurrency a new asset class, and suggested they could play a ‘diversifying role’ within the average investor’s portfolio:

“Despite a slowdown in investment across products in the fourth quarter, we continue to see evidence that digital assets are here to stay as a new asset class. Moreover, we believe in a future where multiple digital assets survive, thrive, and complement one another in the digital economy.”

Days ago it was revealed that two public pensions – the Virginia’s Police Officer’s Retirement System, and Employees’ Retirement System in Fairfax County – had invested in the new $40 million cryptocurrency fund started by Morgan Creek.

Katherine Molnar, the chief investment officer overseeing the Fairfax County pensions said:

“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents.”

On top of all this, the much derided JPM Coin marked a major change of sentiment for JP Morgan Chase CEO Jamie Dimon this week. While the coin is unlikely to add anything in the way of innovation, it stands as another example of rapidly growing sentiment for the crypto space among financial institutions.


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Author: Greg Thomson
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Bloomberg Editor Says JPMorgan’s Cryptocurrency Will ‘Obliterate’ Ripple; is XRP in Trouble?

On February 14, JPMorgan, the $340 billion banking giant, launched a stablecoin called JPM Coin. Industry experts foresee the stablecoin thrashing Ripple and its cryptocurrency XRP in the long run.

Joe Weisenthal, co-host of Bloomberg’s What’d You Miss? said:

“If it turns out that the Blockchain/Coin framework turns out to be a good one for banks transferring money around, then the JPM Coin should absolutely obliterate Ripple.”

“Think about it, let’s say you were in the business of transferring money, why would you take on the exchange rate volatility risk associated with having Ripple as a bridge currency, when you could have a fiat-coin backed by JPMorgan. No brainer.”

Executives at major cryptocurrency investment firms such as Multicoin Capital raised a similar issue for XRP.

Could the Price of Ripple (XRP) Decline Due to JPMorgan’s Crypto?

The Ripple blockchain network is a payment infrastructure for cross-border transactions which banks and financial institutions can utilize to send and receive payments with low costs and faster clearing time.

RippleNet and XRP serve as the main tools on the Ripple blockchain network that enable financial institutions to clear transactions using the blockchain.

The value of any settlement network comes from its liquidity and on a banking network, the liquidity comes from the number of banks that exist on the network.

Ripple, the company, has been focused on establishing partnerships with both banks and fintech service providers throughout the past several years, primarily to improve the liquidity of the network.

The concerns of industry executives and experts on the long-term growth trend of XRP is that if JPMorgan uses JPM Coin to settle payments between its clients, as the bank said, it will put XRP in direct competition with JPM Coin.

Speaking to CNBC, Umar Farooq, JPMorgan blockchain projects head, said that JPM Coin will have three core use cases and the primary use case is international payments for corporations.

“The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift,” CNBC reported.

The problem is, that is exactly what Ripple was built for and the company has the same vision as JPM Coin: to overtake SWIFT and establish a global blockchain network for financial institutions.

In November 2018, Ripple CEO Brad Garlinghouse said in an interview with Bloomberg:

“The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market. Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.

Essentially, JPM Coin and Ripple have the same use case, are targeting the same market, and are both aiming to overtake the SWIFT network.

Tushar Jain, a general partner at Multicoin Capital, said JPMorgan will “wipe the floor with Ripple,” emphasizing that banks would rather use a technology developed by banks rather than a company outside of the traditional financial sector.

XRP in Trouble?

In the past three months, the price of XRP has fallen from $0.565 to $0.298, by more than 47 percent.

The decline in the XRP was accelerated by the inability of the cryptocurrency market to maintain the momentum created in the last quarter last year.

But, in comparison to other well-performing cryptocurrencies such as Binance Coin and Bitcoin, XRP has underperformed.

It remains to be seen whether the increasing competition in the blockchain sector and cross-border transactions market will directly lead toward a decline in the price of XRP.

The concerns in the long-term growth of XRP are in the challenging environment Ripple is in following the release of JPM Coin to secure banking partners.

Click here for a real-time Ripple price chart.

Featured Image from Shutterstock. Price Charts from TradingView.


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Author: Joseph Young 
Image Credit: Source: Shutterstock

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 
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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

‘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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Why Nasdaq’s Bitcoin Exchange Partnerships Prove the Crypto Industry is Growing up

A total of seven cryptocurrency exchanges have contracted with Nasdaq to use its surveillance technology. The technology, which has various products including SMARTS (which was adopted by Gemini), enables Bitcoin exchanges to identify fraudulent trading patterns.

How Nasdaq Evaluates Crypto Exchanges

According to Forbes writer Michael del Castillo, Bitcoin exchanges must have more than enough capital to cover the steep fees Nasdaq charges to license its technology. Nasdaq conducts a means test which focuses on the backgrounds of exchange executives as well as practices within them. Exchanges must list reputable tokens and must have a solid process through which they add them.

Only two exchanges have publicly revealed that they are using the Nasdaq technology. According to a Nasdaq exec, five more have passed the test and contracted to use the software. Gemini and SBI Virtual Currency both use Nasdaq’s program to monitor the use of their exchanges. The same tech is used by Nasdaq to assure investors that liquidity and volume of traditional assets are legitimate.

The question of honest volume has repeatedly come up over time in the cryptocurrency space in recent months. An in-depth study of volume reported by South Korea’s Bithumb found that the exchange was likely pumping its numbers.

Uncovered patterns show Bithumb would do as much as 95% of its volume in a space of two hours over a 24-hour trading day. Some tokens, like WaltonChain, were pumped to incredible heights this way. The metric of volume done on an exchange is one that plays an important role at various ranking sites and also helps traders determine where to do business. Exchanges with more volume have greater liquidity. The prices reflect real sentiments. That is, unless they’re falsifying said volume.

Honest Trading Volume Will Create A Bitcoin Market for Grown-Ups

bitcoin exchange crypto
It’s hard to tell how many Bitcoin exchanges are faking volume numbers. | Source: Shutterstock

This reporter has been told by several experienced traders and industry insiders that nearly every Asian exchange fluffs its volume numbers. One researcher has even concluded that it’s impossible for exchanges not to be faking volume and even prices – the business model is so hard to profit from, it wouldn’t make sense otherwise. The rapidity with which exchanges have to respond to declining interest in cryptocurrency demonstrates they’re not making enough, after all. A well-tuned business model will give a company reserves to weather long periods of poor performance.

Gemini is a hyper-regulated exchange. They’re so regulator-friendly that they advertise based on their status. They are far from the most popular exchange. Assuming their volume is honest (no indications to the contrary), they rank 65th by adjusted volume at press time.

A Crypto-Native Solution Might Be Necessary

Booming crypto exchanges like Binance might be better off building their own surveillance technology rather than licensing it from the legacy financial sector. | Source: Shutterstock

Binance is king and has been since it took the scene by storm. It likely would not pass the means test in terms of the tokens it lists – mostly anything the customers want. Binance is more likely to create their own monitoring product than outsource the job, however. More than once, they have acted to ensure justice in the case of stolen funds or questionable business practices.

As the Bitcoin industry grows up and goes mainstream, it will be necessary that Nasdaq’s surveillance software or something like it is operational on crypto markets. Such things ensure that everyone’s playing by the same rules.

However, as del Castillo writes:

“In crypto, innovation would come not from top down but from the grassroots. While Nasdaq has shown a willingness to work with some unusual clients in the crypto space, the ones we know about support what these questions reveal about Nasdaq’s interest in working with proven entities, something other regulated exchanges and technology providers will likely follow.”

Indeed. An innovative alternative to Nasdaq technology may be in order. Companies like Chainalysis and Elementus already work in this space. Blockchains are about transparency. A crypto-native solution would probably gain more favor among crypto exchanges.

Questionable exchanges — along with hacks, theft, and usability problems — are still chief among the problems that crypto faces in gaining mass adoption.


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Image Credit: Featured Image from Shutterstock

Dow Pounds Toward 250 Point Gain, Fidelity Brings out the Bitcoin Bulls

Both Dow futures and the bitcoin price are making strides ahead of the US trading session, with bulls in the stock market and nascent cryptocurrency sector finding much to be optimistic about.

Dow Pounds to Monster Gain

As of 8:31 am ET, Dow Jones Industrial Average futures had gained 223 points or 0.91 percent, implying a monster opening bell rally of 234 points. S&P 500 futures climbed 0.44 percent, and Nasdaq futures responded with a 0.88 percent upside pop.

Dow Jones Industrial Average (blue), S&P 500 (red), and Nasdaq (orange) futures are all trading up ahead of Wednesday’s open.

The US stock market had been a mixed bag for investors on Tuesday. Following a wobbly start, the Dow closed the day in the green with a 51.74 point or 0.21 percent gain. Both the S&P 500 and Nasdaq, on the other hand, slipped into the red. The S&P 500 posted a minor 0.15 percent decline, but the tech-heavy Nasdaq plunged 0.81 percent.

Apple, Boeing Earnings Reports Power Dow’s Pre-Market Advance

Wednesday’s major pre-market rally came the day after Silicon Valley giant Apple delivered its quarterly earnings report. Analysts weren’t exactly impressed with the firm’s results — Apple barely hit revenue estimates and iPhone revenue plunged — but most of this had already been baked in when CEO Tim Cook slashed guidance targets earlier in the month. For shareholders, it seems, no news is good news, and AAPL stock popped in after-market trading

The stock market rally continued ahead of Wednesday’s open, thanks to a blockbuster earnings report from Boeing, whose shares are up nearly 6 percent in pre-market trading.

Earning season has thus far not been the wrench-in-the-recovery that bears had warned it would be. According to FactSet, almost three-fourths of S&P 500 companies who have published their quarterly earnings have beat estimates.

Trump to Congress: Don’t Waste Your Time Negotiating if a Wall’s Not on the Table

Though not likely to influence the direction of the stock market today, a variety of storm clouds remain on the horizon.

One of these is the potential for a second US government shutdown, which would kick in when the three-week continuing resolution runs out on Feb. 15. President Donald Trump continues to demand the border wall funding he failed to achieve during the previous shutdown, which lasted a record 35 days.

Tweeting on Wednesday, he warned Congress that their spending package negotiations and border security proposals are a waste of time if they do not include wall funding, or at the very least what he calls a “physical barrier.”

“If the committee of Republicans and Democrats now meeting on Border Security is not discussing or contemplating a Wall or Physical Barrier,” Trump said, “they are Wasting their time!”

The first government shutdown already cost the US around $11 billion, according to a Congressional Budget Office estimate — almost double the $5.7 billion Trump wanted to spend on the wall.

Rating agency Moody’s warns that a second shutdown would hit the US economy even harder.

“If another shutdown occurs, there could be a more severe impact on the US economy than during the recently ended shutdown,” Moody’s said in a statement, per a Reuters report, forecasting that it would stunt GDP growth and batter corporate earnings.

Fidelity, SWIFT Spark Crypto Market Advance

On the cryptocurrency front, asset outlooks remain bearish, though bitcoin and most other large-cap tokens entered the day on a moderate incline.

Bitcoin Price Outlook Bearish, But Fidelity Brings Hope

The bitcoin price made an intraday recovery following reports that Fidelity would launch its crypto custody service in March.

The bitcoin price enters the day at $3,441, which represents a 24-hour recovery of around 1.38 percent.

That minor turnaround followed reports on Tuesday that major asset manager Fidelity is just weeks away from launching its long-awaited bitcoin custody service, which will allow institutional investors to store their cryptocurrency assets with a trusted name from the mainstream financial sector. Bulls such as Galaxy Digital founder and former Fortress principal Mike Novogratz have long said that developments such as these will help power the next bitcoin bull run, and now they’re finally beginning to arrive.

That said, many technical analysts remain bearish on the short-term direction of the bitcoin price. Most chart-watchers expect the flagship cryptocurrency to at least test its $3,000 support level, and how that support responds to the gravity of bitcoin’s 13-month bear market could determine whether the floor is in or if the bears have more room to run.

Ripple Price Pops on SWIFT Speculation

There was a bit more action in the altcoin markets, as bitcoin’s smaller competitors took advantage of the day’s positive sentiment to recoup a bit of market share from the dominant cryptocurrency.

Ripple (XRP), the second (or third) largest cryptocurrency, outperformed the large-cap cryptocurrency index thanks to some bullish news from mainstream finance, namely that enterprise blockchain consortium R3 signed a partnership with mega-payments network SWIFT.

Despite some past disagreements — and lawsuits — R3 and crypto startup Ripple are closely aligned. Indeed, Ripple CEO Brad Garlinghouse was on stage during the panel discussion where the R3-SWIFT partnership was announced, and SWIFT CEO Gottfried Leibbrandt had some kind words for XRP.

“I think that the big part of Ripple’s value proposition is the cryptocurrency XRP,” he said.

The ripple price surged on speculation that SWIFT could one day adopt XRP.

That was more than enough to shake the ripple bulls out of their slumber, and as of the time of writing XRP had leaped by nearly 7 percent to just under $0.31.

The majority of other large cryptocurrencies rose by 2 percent to 3 percent on the day, carrying the overall crypto market cap to a present value of almost $115 billion.


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Author: Josiah Wilmoth 
Image Credit: Featured Image from Shutterstock. Price Charts from TradingView.