Bitcoin Jumps Back Above $6,000 to Give Respite to Investors

The weekend is offering some respite for Bitcoin investors.

The bellwether of the cryptocurrency world rose 8 percent to $6,338.22 as of 5:30 p.m. in New York on Saturday, according to Bitstamp prices. The gain, which comes after the digital asset crashed through the $6,000 threshold last week for the first time since February, means the token has still lost about two-thirds of its value since reaching a record high of nearly $20,000 in December.

Saturday’s rise marks a pause from the jarring decline through most of 2018. It follows the increase of more than 1,400 percent last year as Bitcoin exploded onto the mainstream. The peer-to-peer currency developed after the 2008 global financial crisis traded at as little as 30 cents at the end of 2010.

While it’s difficult to identify specific catalysts for Bitcoin’s decline, the bursting of a speculative bubble may be at the heart of the matter as questions about the long-term viability of the virtual currency and price manipulation abound.

Bitcoin was “very much” a bubble, Robert Shiller, the Nobel laureate economist whose warnings about dot-com mania proved prescient, said in an interview with Bloomberg Television’s Tom Keene on June 26. Last year’s surge was “not a rational response.”

(Updates with latest price in second paragraph.)

    Read more: https://www.bloomberg.com/news/articles/2018-06-30/bitcoin-jumps-back-above-6-000-to-provide-respite-for-investors

    Steve Bannon backs bitcoin and eyes his own ‘deplorables’ cryptocurrency

    Ex-Trump strategist calls cryptocurrency disruptive populism and says he is interested in making a currency of his own

    Its been a tough few days for bitcoin. On Sunday, the South Korean cryptocurrency exchange Coinrail was hacked, which caused the price of bitcoin to tumble. Prices fell again on Wednesday after a study found bitcoins huge spike last year (the currency reached nearly $20,000) might have been the result of strategic price manipulation.

    Despite all the bad news, bitcoin still has its believers, including Steve Bannon. In an interview with the New York Times, the former White House strategist said that he has a good stake in bitcoin and is interested in working with entrepreneurs and countries interested in creating their own cryptocurrencies. Bannon may also have ambitions to create a currency of his own. Earlier this year, in a meeting at Harvard University, he apparently discussed creating a new digital currency called deplorables coin.

    Bannon says he isnt interested in cryptocurrencies solely for the financial potential; he sees decentralized money as a key component of his political mission. Cryptocurrency is disruptive populism, it takes control back from central authorities, said Bannon. It was pretty obvious to me that unless you got somehow control over your currency, all these political movements were going to be beholden to who controlled the currency control of the currency, is control of everything.

    The deplorables coins name references the time Hillary Clinton called half of Trump supporters a basket of deplorables during the 2016 election. Clinton later said she regretted it; it had handed Trump a political gift.

    White nationalists were interested in the political potential of cryptocurrency long before bitcoin entered the mainstream. In 2014 Andrew Auernheimer, a neo-Nazi who goes by the name weev, wrote on his blog: I heartily encourage you to consider cryptocurrency, including bitcoin. And in March 2017 Richard Spencer declared on Twitter that Bitcoin is the currency of the alt-right.

    A number of neo-Nazis have also been pushed into cryptocurrency because they have been barred by traditional payment platforms. Shortly after the violent white supremacist rally in Charlottesville last year, Apple and PayPal disabled payment support for websites that support hate groups.

    Bitcoin is the most well-known digital currency, although white nationalists are beginning to gravitate towards Monero, which Wired recently called the dark webs favorite currency. Monero, which claims to be more untraceable and secure than bitcoin, has, for example, been enthusiastically promoted by white nationalist podcaster Christopher Cantwell. Cantwell is offering 10% subscriptions to his site if you pay in Monero.

    Despite recent dips in cryptocurrency prices, their astronomical rise last year made a lot of white nationalists, including weev, very rich indeed. In his interview, Bannon didnt say how much money he has made from cryptocurrency, but one imagines hes got more than enough to start minting baskets of digital deplorables.

    Read more: https://www.theguardian.com/us-news/2018/jun/14/steve-bannon-cryptocurrency-deplorables-bitcoin

    Rest Easy, Cryptocurrency Fans: Ether and Bitcoin Aren’t Securities

    The world's second-most popular cryptocurrency isn't an investment vehicle, at least according to the Securities and Exchange Commission. William Hinman, the agency's director of the division of corporate finance, said Thursday that ether—the currency that powers the Ethereum network—shouldn't be regulated in the same way as stocks and bonds.

    His statements follow similar ones made in April by SEC chair Jay Clayton about bitcoin. Taken together, the two sets of remarks provide the clearest understanding of how the regulatory agency views the cryptocurrency market. In essence, when a cryptocurrency becomes sufficiently decentralized, as the widely popular bitcoin and ether have, the agency no longer views it as a security. In contrast, smaller initial coin offerings, or ICOs, are almost always securities in the SEC's eyes. That distinction matters, because securities are subject to the same regulations as normal stocks.

    “Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions,” Hinman said at Yahoo's All Market Summit: Crypto in San Francisco. "And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value."

    'Current offers and sales of ether are not securities transactions.'

    William Hinman, SEC

    Joe Lubin, a cofounder of Ethereum and the founder of CosenSys, a major Ethereum application company, says he is grateful for the SEC's decision. "We applaud the clarity provided by Director Hinman and the SEC today," Lubin said in a statement. "Ether and other next-generation consumer utility tokens will continue evolving the web towards networks that are more fair, secure, and evenly distributed. ConsenSys looks forward to continuing to engage with regulators around the globe to promote responsible adoption of this transformative technology."

    Hundreds of different developers run applications on top of the Ethereum network and contribute to its code. A similar number, if not more, help to develop Bitcoin. "The network and the software development is sufficiently decentralized that there isn't a discernible third party upon whom we would really expect investors to be reliant," says Peter Van Valkenburgh, the director of research at Coin Center, a think tank focused on policy issues facing blockchain technology. That's an important distinction from traditional securities, like Apple or Microsoft stock, in which you're betting on a specific company's efforts to develop products and services and generate income.

    The SEC's Hinman notably stopped short of declaring that the initial investments made in ether weren't securities. It's possible that investments made early, before the currency became truly decentralized, could still be viewed as traditional investment vehicles. "The director was pretty clear to not be definitive about that activity," says Van Valkenberg, who also suggests that this indicates the people who got in first—and have likely made the most money—could someday face regulation.

    Hinman also said that other cryptocurrencies may become "sufficiently decentralized" in the future, to the point where "regulating the tokens or coins that function on them as securities may not be required." But this doesn't mean all cryptocurrencies can evade scrutiny from US regulators. The SEC has held that most so-called token sales and ICOs are likely subject to regulation, because they generally power a single startup's product or application. ICOs are opportunities for investors to purchase the tokens that power a blockchain startup, typically before its product has gone live.

    Complicating the issue: Many tokens run on top of the Ethereum network itself. So while buying and trading ether is not seen as making a traditional investment, buying and selling specific tokens that run on top of that network would be.

    The SEC has ramped up its enforcement efforts against fraudulent ICO schemes in recent months. In December, the agency's new cyber unit announced it had filed its first ever complaint, against the cryptocurrency PlexCorps, for allegedly swindling customers out of $15 million. A month later, it halted one of the largest ICOs ever, for the Dallas-based startup AriseBank.

    This doesn't mean all cryptocurrencies can evade scrutiny from US regulators.

    In February, the SEC told the Senate's Committee on Banking, Housing, and Urban Affairs that it was open to "exploring with Congress, as well as our federal and state colleagues," whether to regulate cryptocurrency exchanges, websites that allow customers to convert and trade different coins for a fee.

    And then in April, the agency charged the two founders behind an ICO that raised over $32 million, for allegedly selling fraudulent and unregistered investments. The scheme had received endorsements from professional boxer Floyd Mayweather and music producer DJ Khaled.

    Owners of bitcoin and ether, however, now appear safe from that sort of close scrutiny. That doesn't mean that investing in either cryptocurrency is necessarily safer. Researchers at the University of Texas found that a price manipulation campaign may have partially accounted for an increase in bitcoin's price last year, for example. All that the SEC's declarations really say is that you're betting on an entire ecosystem, rather any one player.

    Predictably though, both ether and bitcoin prices spiked Thursday, likely in response to the news.


    More Great WIRED Stories

    Read more: https://www.wired.com/story/sec-ether-bitcoin-not-securities/

    The crypto-future is female: bitcoin innovators push for inclusion

    At the worlds largest blockchain conference, female leaders in the industry sought to shake off bitcoins boyish image

    Satoshi is female was one of the more pervasive slogans at Consensus 2018, the worlds largest blockchain conference that saw thousands of crypto-believers descend on midtown New York for a packed, three-day meet-and-greet last week.

    Satoshi refers to Satoshi Nakamoto, the still mysterious creator of Bitcoin who has never been identified but who, nonetheless, is credited as the founding father of cryptocurrency, or a digital form of money, and blockchain, a public and uneditable system for recording transactions. Both developments are hailed by their evangelists as potentially revolutionary technological tools.

    As crowds packed Manhattans midtown Hilton to listen to leadingtechnology figures such as Twitters Jack Dorsey and the cryptography pioneer Bailey Whitfield Whit Diffie, the question of Satoshis gender was purely symbolic. But it was also understood by many attendees: blockchain should not simply perpetuate the white male tech nerd stereotypical worldview of Silicon Valley.

    We think cryptocurrencies should be built with a different system and values in mind, said Nyla Rodgers, the creator of the Satoshi Is Female group. Silicon Valley is completely run by men. Women only receive 2% of venture capital funding so their ideas never rise to the top. Weve been living with a very one-sided view of the world.

    The launch of #satoshiisfemale at the Women of Crypto event in Puerto Rico.

    A post shared by Satoshi Is Female (@satoshiisfemale) on

    The expression of a male-led crypto world is already self-evident. The frothy, unstable cryptocurrency sector is dominated by images of Lamborghinis Lambos and going moon as cryptocurrencies surge in price.

    Cryptocurrency and blockchain has already received bad press for being overly gendered and insufficiently woke. In February, the North American Bitcoin Conference wrapped up 10 hours of speeches by inviting 5,000 attendees to what it called a networking party in a 20,000 sq ft strip club.

    To women in the crypto sector attending Consensus, theres no time to lose if blockchain technology isnt going to follow the same path as Silicon Valley.

    A recent study found that while there was improvement in the number of women in the industry in the wake of several sexism and discrimination scandals, the participation of racial minorities was worsening.

    The blockchain sector has only been around for 18 months so we, as women, can help define what the culture looks like at the beginning, said Rodgers who is raising money to fund women-led tech groups, many in the developing world, through her charity Mama Hope. The urgency is there for women and minorities to create a system that actually values them.

    On the first day of New Yorks crypto-week, the entrepreneur Cindy Chin held a seminar Women on The Block with the express purpose of creating a sense of inclusion in the blockchain world.

    We think theres an opportunity to change what has really been an all-male space, Chin says. We want to be part of the conversation, we want to drive the leadership, to be part of the deal-flow and we want to be invested in we want the money!

    Read more: https://www.theguardian.com/technology/2018/may/17/consensus-2018-conference-bitcoin-satoshi-is-female

    As Bitcoin Plunged, These Crypto Hedge Funds Kept Making Money

    • Amber AI’s PTD2 fund surged 30% in first three months of 2018
    • Hedge fund advised by BitSpread made 5.7% in quarter

    Bitcoin’s terrible start to 2018 is highlighting the appeal of cryptocurrency hedge funds that make money in both bull and bear markets.

    Funds specializing in virtual currency market making and arbitrage strategies delivered first-quarter gains even as their mostly bullish peers lost 40 percent on average. That’s a big reversal from last year, when digital assets soared and market-making funds lagged far behind their long-biased counterparts.

    Pivot Digital Trading-2, managed by Hong Kong-based Amber AI Group, generated some of the biggest gains among cryptocurrency funds that avoid directional bets. It rose 4.3 percent in March to bring its first-quarter return to 30 percent, according to the firm. Market Neutral Liquidity SP-Institutional, domiciled in the Cayman Islands, earned 5.6 percent in the first quarter, said Cedric Jeanson of BitSpread Group, investment adviser to the portfolio.

    The results suggest some managers are finding ways to profit from wild swings in cryptocurrencies without having to predict whether the coins will rise or fall. Such tactics may appeal to investors who want exposure to digital assets without their extreme volatility.

    As a group, cryptocurrency hedge funds are still highly correlated to the market. A Eurekahedge index for the category posted its biggest three-month slump on record last quarter as Bitcoin sank more than 50 percent. The index soared 1,709 percent in 2017, when Bitcoin jumped about 1,400 percent.

    Among funds that lost money was Silver 8 Partners. It dropped 25 percent in March and 32 percent in the first quarter, according to a commentary sent to investors. Silver 8 invests in digital assets, along with fintech, blockchain and machine learning companies.

    "High levels of uncertainty and low market liquidity make investments in blockchain-related assets volatile," the firm said in a newsletter. "They tend to overreact to cycles of euphoria and pessimism, where the market price itself acts as a catalyst for further momentum."

    The fund has made more than 1,000 percent for investors since its inception in 2016, including a more than 750 percent gain in 2017.

    While funds from Amber AI and BitSpread tend to not post such high returns during boom times, they provide investors with some protection when prices of digital assets fall.

    Weathering Turmoil

    Market-neutral crypto hedge funds fared better in 2018

    Sources: Companies and investors

    2018 returns for the first quarter

    Read more on crypto hedge funds that made a killing last year

    PDT2, as the Amber AI fund is otherwise known, trades the 25 largest digital currencies on exchanges including Huobi, OKEX, Bitfinex, Binance, Kraken and BitStamp, said Tiantian Kullander, one of the four former Morgan Stanley traders who started the firm with a one-time programmer at Bloomberg LP, the parent of Bloomberg News.

    The fund began trading early this year and oversees about $25 million, said Kullander. Its quantitative trading strategies include market-making, short-term trend following and exploiting pricing discrepancies between different currency pairs and exchanges.

    Market Neutral Liquidity SP-Institutional, with more than $100 million of assets under management, makes markets for currencies such as Bitcoin, Ethereum and Ripple, BitSpread’s Jeanson said.

    Read more: http://www.bloomberg.com/news/articles/2018-04-19/as-bitcoin-plunged-these-crypto-hedge-funds-kept-making-money

    Bitcoin Is One of the Few Things Surging in a Sea of Losses

    Amid a sea of red in financial markets, Bitcoin is still flashing green.

    The biggest cryptocurrency climbed as much as 5.4 percent Tuesday to $9,412, the highest since March 7. Bitcoin has gained 20 percent in the past week and 37 percent in April, on track for its best month since its record-breaking December.

    Bitcoin is rebounding from its worse start to a year ever, as it slumped more than 50 percent in the first quarter and plunged to as low as $5,922 from almost $20,000 at the end of last year. The cryptocurrency market is gaining as tax-related selling ends and regulatory-related headlines fade, while Wall Street signals increasing interest in the space.

    Goldman Sachs Group Inc. said Monday that it hired Justin Schmidt as head of digital asset markets to help clients gain exposure to cryptocurrencies, and cryptocurrency-focused hedge funds have continued to open even amid the market slump earlier this year.

    Read more: https://www.bloomberg.com/news/articles/2018-04-24/bitcoin-is-one-of-the-few-things-surging-amid-a-sea-of-losses

    Bitcoin, the Biggest Bubble in History, Is Popping

    The greatest bubble in history is popping, according to Bank of America Corp.

    The cryptocurrency is tracking the downfalls of the other massive asset-price bubbles in history less than one year out from its record, analysts lead by Chief Investment Strategist Michael Hartnett wrote in a note Sunday.

    The cryptocurrency has fallen more than 65 percent since peaking in December at $19,511. Bitcoin rose 2.2 percent to $6,750 on Monday.

    Read more: http://www.bloomberg.com/news/articles/2018-04-09/bitcoin-seen-popping-like-the-greatest-bubbles-by-bofa

    Bitcoin Whale Sightings Are Leaving Cryptocurrency Traders Jumpy

    Occasional sighting of Bitcoin whales are leaving advocates of the biggest cryptocurrency anxious after what’s already been a choppy week of trading.

    Sudden market swings in the cryptocurrency this week have left price charts looking like a jack-o-lantern’s smile. And some investors are blaming the gyrations on actions by large Bitcoin holders, known as whales.

    “The best explanation is coming from those whales in the market who want to have some sort of control on what’s going on,” said Jonathan Benassaya, the founder and chief executive officer at San Francisco-based IronChain Capital. “It’s some sort of manipulation from actors."

    Bitcoin’s recent choppy moves aren’t that unusual, cautioned Tom Lee, head of research at Fundstrat Global Advisors. "I think it feels off right now because, you know, we’ve been on a down trend since December, and now, even though the volatility hasn’t changed much, it’s hard to tell if Bitcoin is trying to stage a recovery or if it’s continuing its down trend," Lee said.

    In a less mature market that lacks the same history and complexity that the stock market holds, the digital currency is a lot more vulnerable to liquidity movements. "It’s the state of it now because there isn’t a ton of liquidity and there is regulatory uncertainty and general nervousness," he said.

    Read more: https://www.bloomberg.com/news/articles/2018-04-18/bitcoin-whale-sightings-are-leaving-cryptocurrency-traders-jumpy

    Bitcoin tools could make finance system safer, says IMF boss

    Christine Lagarde believes revisiting crypto-assets could harness gains and avoid pitfalls

    The advance of bitcoin and other digital currencies could make the global financial system safer despite the prospect of inevitable accidents waiting to happen, the head of the International Monetary Fund has said.

    Christine Lagarde said some tools built using the technology behind bitcoin, which are known collectively as crypto-assets, hold the potential to revolutionise the world of high finance by making it faster, cheaper and safer. Among them, there are real threats and needless fears, she said.

    Writing in a blogpost as politicians and central bankers gather in Washington for the IMFs regular spring meetings, she said there was hope for a world where firms using digital currencies could coexist alongside traditional banks.

    That level of diversity could build a financial ecosystem that is more efficient and potentially more robust in resisting threats, she said.

    An increasing number of consumers have used cryptocurrencies as an alternative to the old ways of holding and moving money and prefer them to traditional banks, which crashed in the 2008 financial crisis. However, many have lost money from volatile price movements and after some cryptocurrency exchanges have been hacked.

    Lagarde has previously issued warnings over the risks posed by bitcoin and other digital currencies, calling for global regulators to stage a crackdown by using its technology to fight fire with fire.

    Last month, she said authorities around the world could harness the potential of cryptocurrencies to help bring them under control. Failure to do so would allow the unfettered development of a potentially major new vehicle for money laundering and the financing of terrorism, she added.

    The governor of the Bank of England, Mark Carney, has called bitcoin and other cryptocurrencies inherently risky and that they have failed to fulfil their most basic function as money. Bitcoin hit almost $20,000 (13,958) in value in the run-up to Christmas, before crashing by more than half earlier this year.

    But ahead of the IMFs forthcoming global financial stability report, which looks at emerging risks from the world of banking, Lagarde said there were merits from looking again at crypto-assets. A clear-eyed approach can help us harness the gains and avoid the pitfalls, she said.

    Comparing recent developments to the advances of the 1990s – when thousands of technology companies were started only to collapse a few years later during the dot-com crash – she said many crypto-assets were bound to fail. More than 1,600 digital currencies are in circulation, having ballooned in number in recent years.

    However, just as a few technologies that emerged during the dot-com era have since transformed the world, she said crypto-assets that survived this process of creative destruction could have a significant impact on how we save, invest and pay our bills.

    Read more: https://www.theguardian.com/technology/2018/apr/16/bitcoin-tools-could-make-finance-system-safer-says-imf-christine-lagarde

    Bitcoin Ban Expands Across Credit Cards as Big U.S. Banks Recoil

    A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife.

    JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said.

    Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess.

    And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said.

    For more on cryptocurrencies, check out the podcast:

    Allowing purchases of cryptocurrencies can create big headaches for lenders, which can be left on the hook if a borrower bets wrong and can’t repay. There’s also the risk that thieves will abuse cards that were purloined or based on stolen identities, turning them into crypto hoards. Banks also are required by regulators to monitor customer transactions for signs of money laundering — which isn’t as easy once dollars are converted into digital coins.

    Bitcoin has lost more than half its value since Dec. 18, falling below $8,000 on Friday for the first time since November. The drop occurred amid escalating regulatory threats around the world, fear of price manipulation and Facebook Inc.’s ban on ads for cryptocurrencies and initial coin offerings.

    Now, cutting off card purchases could exacerbate those pressures by making it more difficult for enthusiasts to buy into the market. Capital One Financial Corp. and Discover Financial Services previously said they aren’t supporting the transactions.

    Mastercard Inc. said this week that cross-border volumes on its network — a measure of customer spending abroad — have risen 22 percent this year, fueled partly by clients using their cards to buy digital currencies. The firm warned that the trend already was beginning to slow as cryptocurrency prices fell.

    Discover Chief Executive Officer David Nelms was dismissive of financing cryptocurrency transactions during an interview last month, noting that could change depending on customer demand. For now, “it’s crooks that are trying to get money out of China or wherever,” he said of those trying to use the currencies.

      Read more: http://www.bloomberg.com/news/articles/2018-02-02/bofa-to-decline-all-cryptocurrency-transactions-on-credit-cards