Andy Warhol Is a Bitcoin Star for 15 Minutes

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The world of finance isn’t done yet with its effort to turn artistic masterpieces into tradeable securities. A decade ago it was hedge funds and bankers selling small shares in works by Andy Warhol and his ilk as investment opportunities. Today it's the cryptocurrency crowd.

If history’s a guide, the risk and cost of owning a tiny part of an illiquid, hard-to-value asset still outweighs the rewards. And all that without ever getting to hang the picture on your wall.

The new tilt at art trading is as much a throwback to pre-crisis financial engineering as it is about crypto-futurism. A British gallery is promising to sell up to 49 percent of Warhol’s 14 Small Electric Chairs in a blockchain-powered online auction. Buyers can pay in Bitcoin, Ether or other tokens. They’ll take cash too if you’re that way inclined.

How To Sell It

Cryptocurrency prices have been hit by a speculative unraveling and a regulatory crackdown

Source: Bloomberg

These micro-stakes would then be traded on a marketplace. There may be a blockchain verifying transactions, and crypto-currencies changing hands, but we've seen art investment pools and art stock markets before. They don't always end well.

Despite all the airy talk about democratizing art ownership and disrupting the gilded world of auction houses and dealers, this doesn’t really do that. Nobody owning a piece of the Warhol will take it home. It's locked up in a tax-free zone somewhere. What’s being traded is a stake in the special purpose vehicle that holds it.

Bank Canvas

A ranking of the world's most valuable artworks, as of Nov. 17, 2017

Source: World Economic Forum

This may be a wonderful way for the ultimate owner to make money from an artwork without taking it out of storage or ceding control, but it's hardly the Barnes Foundation.

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As for the idea that this is a clever bet on the future value of a piece of art, these assets are as risky as any others. The art market is illiquid and can be volatile. Blue-chip artists are no protection against a market crash. Even Warhols were sold at a loss during the financial crisis. Do punters know the difference between this “Electric chairs” canvas, which the gallery says has been valued at 4.2 million pounds ($5.6 million), and others by the same artist?

Artistic Temperament

Global art market sales growth tends to fluctuate

Source: UBS/Art Basel

Imagine what the combined volatility of cryptocurrency markets and the art market might create in times of stress. Liquidity would evaporate. That initial buy-in fee of 2 percent wouldn’t seem so cheap then.

Warhol himself might have enjoyed the idea of trading and owning pieces of art that you've never seen. And there is at least one tangible thing on offer: The people running the auction say buyers can choose to receive a special scanned print of the work in question, which to the naked eye looks just as good as the original. As David Bowie once sang in a song about Warhol: “Can't tell them apart at all.”

If people do manage to make money from this, then finance truly will have reached its post-modern apotheosis.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Lionel Laurent at [email protected]

    To contact the editor responsible for this story:
    James Boxell at [email protected]

    Read more: https://www.bloomberg.com/view/articles/2018-06-08/andy-warhol-bitcoins-are-famous-for-15-minutes

    This bitcoin explainer created with AI is phenomenally insane

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    Look, understanding cryptocurrency can be confusing. We here at Mashable are dedicated to helping our readers understand the complexities of this new form of currency and how it affects our day-to-day lives.

    But even we are having our collective minds blown by this video, an “explainer” of cryptocurrency created by Botnik Studios that was “written using predictive keyboards trained on dozens of Bitcoin explainers.” 

    And the results are as insane as you might expect: 

    • “To understand how bitcoin transactions are created, randomly pick a number between 1 and 30,000. Now spend that amount of money on Ethereum.”

    • “Despite the risk, one benefit of bitcoin is that you can upload a version of your future self on the dark net.”

    • “The popular form of bitcoin is the ‘Wild Richard.'”

    You get the idea: absolute nonsense poetry.

    Don’t worry, though. If you need to cleanse your mind and get the real ins-and-outs of crypto down straight, we’ve got you covered

    Read more: https://mashable.com/2018/05/23/bitcoin-explained-by-ai/

    Hot damn, this Bitcoin cat just might convince me to HODL

    Yesssssssss.
    Image:  iridi/getty

    Bitcoin true believers have long promised a blockchain-based revolution, but the only true thing of value to come out of Satoshi’s white paper is this chill-ass cryptocat.  

    Sure, the scams and ransomware and general buffoonery in the blockchain space have all been pretty great, but none of that comes close to this Bitcoin maximalist tabby. 

    I mean, just check the dude out. 

    He’s an absolute unit, with bad-boy appeal. 

    Get it.

    Image: iridi/getty

    And! He’s knows how to accessorize. 

    Oh *hell* yeah.

    Image: iridi/getty

    Let’s not overlook the fact that he believes in saving for retirement. 

    Investing in a feline future.

    Image: iridi/getty

    But he’s not stingy, either. Check this party vibe. 

    Crypto rich!

    Image: iridi/getty

    Also, hell yeah to these shades. My man’s got style. 

    Fresh.

    Image: iridi/getty

    Not only that, he makes a coherent argument about the relative value of cryptocurrency versus fiat. (The tie means he’s legit.)

    Farewell to fiat.

    Image: iridi/getty

    So while the market may be volatile, and the entire blockchain industry is basically a solution in search of a problem, at least it gave us this cat. 🙌 

    Read more: https://mashable.com/2018/06/01/bitcoin-cat/

    Coinbase makes it easier for hedge funds to trade Bitcoin

    Coinbase's new trading platform for institutional investors: Coinbase Prime.
    Image: Coinbase

    Cryptocurrency is going legit in a big way.

    Leading U.S.-based cryptocurrency exchange Coinbase is going after institutional investors with four new major products, all of which cater to the needs of professionals and big institutions, making it easier for them to trade cryptocurrencies such as Bitcoin, Ethereum and Ripple. 

    The new products address many of the issues that big investors such as hedge funds face when trying to enter the cryptocurrency market, providing liquidity, safe storage of assets, quality support and advanced products such as OTC (over-the-counter) and margin trading.

    If institutional investors take the bait — and judging by announcements from banking giants such as Goldman Sachs, they will — Coinbase’s new tools will clear the path for an even larger outpouring of money into cryptocurrencies.

    Coinbase Custody, launched in partnership with “an SEC-regulated broker-dealer,” provides safe storage of cryptoassets, paired with third-party auditing. Coinbase claims it’ll draw on its experience of storing more than $20 billion in cryptocurrency to make this the “most secure crypto storage solution available.”

    Coinbase Prime is a platform with all the bells and whistles institutional investors are used to, and by the end of the year it should have advanced tools such as margin trading, algorithmic orders and multi-user permissions. Note that individual investors should use Coinbase’s trading platform GDAX; Prime is for institutions and professionals only.

    Coinbase Markets is a centralized liquidity pool for all Coinbase products, which, besides Coinbase’s digital wallet and exchange, include trading platform GDAX and now Prime. This product will be headquartered in Coinbase’s new office in Chicago. 

    Coinbase claims that more than 100 hedge funds announced plans to trade/invest in cryptocurrency in the last few months alone. 

    Finally, the Coinbase Institutional Coverage Group will work from Coinbase’s New York City office to provide support to clients including research and market operations.

    This is a major upgrade to Coinbase’s product lineup, which has so far been mostly oriented toward individual investors. “There is clear demand from institutional clients and financial services professionals for more specific solutions with regard to cryptocurrencies that address their sophisticated needs,” Adam White, Vice President and General Manager of Coinbase Institutional, said in a statement. Coinbase claims that more than 100 hedge funds announced plans to trade/invest in cryptocurrency in the last few months alone. 

    Coinbase was reportedly adding more than 100,000 users per day in late 2017, when the cryptocurrency craze — and Bitcoin price levels — was going off the charts. The company reportedly had more than $1 billion in revenue in 2017, and valued itself at $8 billion in April 2018. 

    Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. 

    Read more: https://mashable.com/2018/05/15/coinbase-institutional-investors/

    Consensus 2018: Dispatches from the ‘Coachella of Bitcoin’

    Nightmare fuel has moved to the blockchain.
    Image: jack morse/mashable

    It’s 8:15 a.m. at the Hilton hotel in Midtown Manhattan, and the escalator has a bouncer. 

    An estimated 8,500 blockchain experts and cryptocurrency evangelists have come from around the globe to be here at the 2018 Consensus conference, and the line to pick up attendee badges shows no sign of moving. A security guard in a suit, talking into his sleeve, eventually gives a small group the go-ahead to ride up to the second floor where another line awaits. 

    It feels like we’re trying, and failing, to get into New York’s hottest nightclub.

    “This is like the Coachella of Bitcoin,” a passerby whispers to her companion as they breeze by. 

    You can taste the excitement.

    Image: jack morse/mashable

    And indeed, while it lacks Beyonce and the questionable wardrobe choices of the Southern California music festival, the Coindesk organized Consensus more than makes up for it in its sheer opulence and buffoonery — a fact made obvious before you even walk through the conference doors.

    Parked outside the hotel were three Lamborghinis — an inside joke within the cryptocurrency community — and, opposite them, a man claiming that the developers of NEM screwed him out of over $1.5 million USD worth of cryptocurrency. 

    Across the street was an entirely different type of show: specifically, a fake protest. Chanting “hey hey, ho ho, Bitcoin has got to go,” the group of self-described bankers and CEOs (one man told me he got his suit out of a dumpster) carried signs reading “paper checks use less electricity” and “we thought this was a bubble.”

    According to a rambling statement on the group’s website, the Genesis Mining-backed demonstrators were actually protesting aspects of the financial industry, but either way, they generated enough of a scene to draw a crowd and put conference attendees in what can only be described as an appropriately absurdist frame of mind. 

    Because as soon as those who came to hear the blockchain gospel made it past the aforementioned escalator bouncer and the formidable registration line, they were met with what can only be described as a hodler’s paradise. 

    Want 18-karat gold crypto-jewelry to commemorate your ride-or-die status as a Bitcoin maximalist? Consensus 2018 is the place for you. 

    But can you verify ownership on the blockchain?

    Image: Jack Morse/mashable

    I’ll take two, please.

    Image: Jack Morse/mashable

    And sure, you may know about beer, but have you heard of cryptobeer?

    If that’s not your thing, don’t fret, just make you way over to the cyptopuppy (yes, this dog was described to me as a “cryptopuppy”) named after Margaret Thatcher chilling on the fourth floor. 

    Still recovering from the Mt. Gox hack.

    Image: jack morse/mashable

    But just like the SEC trying to shit all over the decentralized parade, the real world did poke its annoying head into the immutable bubble of joy. That’s right, someone ticketed the Lambos. 

    Sad times.

    Image: jack morse/mashable

    What’s more, in what definitely isn’t a metaphor for the entire industry, it turned out that the fancy cars weren’t even the fruit of early Bitcoin adoption. They were just a promotional stunt

    But push that all to the back on your head, fellow believer. Because if there’s one thing “the Coachella of Bitcoin” makes clear, it’s that these are serious people with serious ideas — even if, as one major player in the cryptocurrency space told me on background, 80 percent of people in the scene are likely scammers. 

    Because scammer or no, at the 2018 Consensus conference we’re all heading to the moon.

    Read more: https://mashable.com/2018/05/14/consensus-blockchain-cryptocurrency-conference/

    Revolut adds Ripple and Bitcoin Cash support

    Fintech startup Revolut is adding Bitcoin Cash and Ripple to its cryptocurrency feature. While cryptocurrency isn’t really Revolut’s focus point, it’s a good way to get started with cryptocurrencies.

    If you have a Revolut account, you can now buy and hold Bitcoin, Litecoin, Ethereum, Ripple and Bitcoin Cash. Behind the scene, the startup has partnered with Bitstamp to process the transactions. Revolut currently charges a 1.5 percent fee for cryptocurrency transactions. There are currently 100,000 cryptocurrency transactions per day.

    Compared to a traditional cryptocurrency exchange, you can’t send or receive cryptocurrencies from your Revolut account. You don’t get a bitcoin address for instance. All you can do is buy tokens in the app. If you want to transfer those tokens somewhere else, you’ll have to sell them for USD, GBP, etc. and then buy cryptocurrencies on a traditional exchange using your fiat money.

    Recently, the startup also announced a new feature called Vaults. Revolut users can set up a vault to save money over time.

    You can round up your spare change every time you make a transaction. For instance, if you pay $3.47 for that delicious ice cream, you’ll save 53 cents in your vault. You can also multiple that amount so that you save multiple times your spare change with each transaction. Many fintech startups also provide this feature.

    You can also set up recurring payments to set aside a bit of money each day, each week or each month. Interestingly, you get to choose the currency of your vault. So it means that you can decide to buy ethers with spare change and weekly payments for instance. It’s a great way to hedge against the volatility of cryptocurrencies.

    Users don’t earn interests on vaults. It’s just a way to set some money aside that doesn’t appear in your main Revolut account. You can decide to close your vault whenever you want.

    Read more: https://techcrunch.com/2018/05/23/revolut-adds-ripple-and-bitcoin-cash-support/

    A Bitcoin mining company just organized a fake protest

    It's the dirty bankers, man.
    Image: jack morse/mashable

    It’s difficult to stand out in the often bonkers world of cryptocurrency.

    With all the scams, hacks, and animated dancing coins, it can be really hard to break through the noise and into the public’s consciousness with your surely revolutionary tech. That’s where the fake protest comes in. 

    As the 2018 Consensus blockchain conference kicked off today in Midtown Manhattan, one bitcoin mining company apparently decided that the best way to make a splash was with a few shouts. As the event was getting started, a group of people could be found marching in front of the hotel hosting the 8,500-person-strong gathering. They chanted slogans like “hey hey, ho ho, Bitcoin has got to go,” and held signs informing anyone who passed by that “paper checks use less electricity!”

    And, as things often go in the world of Bitcoin, everything was not as it seemed. 

    The “protest” was ostensibly organized by a group calling itself Bankers Against Bitcoin, which, as you have probably guessed, is not a 100-percent real protest group. It does have real backing, though. Specifically, that of Bitcoin mining company Genesis Mining

    Importantly, it’s not like Genesis Mining is trying to hide it. As the organizer’s website explains, the company wants everyone to get on the cryptocurrency rocket ship before it’s too late. 

    “This protest is representative of what will happen to those industries and companies that fail to understand times have changed,” explained Genesis Mining CEO Marco Streng on the Bankers Against Bitcoin website. “The consumer abuse that’s been possible due to a lack of competition is over. The biggest competitor big banks have ever faced has arrived and it’s not a company or organization, it’s a decentralized technology.”

    And Genesis Mining is here to help you avoid the soon-to-be grisly fate of the big banks with a “small,” “medium,” or “large” mining package for the low cost of $1,520, $4,440, or $12,960, respectively. 

    Act now! Before it’s too late!

    Image: genesis mining

    We reached out to Genesis Mining with the hope of getting a little more background info on what appears to be, in effect, a well executed publicity stunt. Were the protesters, for example, paid? Unfortunately we don’t know, as we didn’t hear back as of press time. 

    But that shouldn’t surprise anyone. After all, when it comes to making it in the world of cryptocurrency, simply grabbing headlines is often good enough. 

    Read more: https://mashable.com/2018/05/14/consensus-2018-bankers-against-bitcoin/

    Facebook reportedly working on its own Bitcoin-like cryptocurrency

    Image: mashable

    Hoping to invest in the next Bitcoin? Keep an eye on Facebook. No, but really. According to a Cheddar report, the company is hard at work on its own cryptocurrency. 

    Cheddar, citing sources familiar with the matter, claims that Facebook users could use the new “digital token” to buy and sell through the platform. The social network is also “exploring other ways” that it could use such a currency. 

    Mark Zuckerberg announced in January that Facebook planned to “go deeper and study the positive and negative aspects of” new technologies such as cryptocurrency. 

    Four months later, it seems his vision is coming to fruition. Earlier this week, Facebook announced that its head of Messenger, David Marcus, would spearhead a group researching potential uses of blockchain across Facebook’s platforms. Marcus is a former Paypal president and CEO, and a member of cryptocurrency exchange Coinbase’s board of directors, so it’s pretty clear what they’re going for here. 

    We’re a bit puzzled as to why exactly Facebook would want to create a new currency, but it would certainly make it easier for customers in different countries to buy and sell through the platform without extra conversion fees. It could also be a transaction resource for Facebook buyers in countries with more volatile currencies. 

    At least, that may be what Facebook tells us in order to pass this all off as a project for the greater good. Of course, it’s also likely to come with a transaction fee, so we’re guessing it won’t hurt Facebook’s bottom line.

    Read more: https://mashable.com/2018/05/11/facebook-working-on-cryptocurrency/

    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

    Tim Draper makes a splash with Bitcoin-themed tie and pin

    I’ll say this for venture capitalist Tim Draper: he is fully committed to the gimmick. 

    Appearing on the Fox News show of sentient bowtie Tucker Carlson, Draper donned a Bitcoin tie and big Bitcoin broach to discuss his plan to divide the state of California up into three separate states: Northern California, Southern California, and Bitcoinlandia California.

    While the “Cal 3” plan is Draper’s big current initiative — he says the proposal has garnered enough signatures to qualify for the November ballot — Draper is a huge proponent of Bitcoin and has been for a while, having scooped up thousands of bitcoin seized from dark web marketplace Silk Road and auctioned off by the U.S. government. 

    Besides appearing on Carlson’s show, Draper also hosted a 2018 Block (Chain) Party on Thursday night where he came away with rather lofty expectations for the future value of the volatile cryptocurrency.

    As for the tie, Draper actually has worn a Bitcoin tie before, and he has a penchant for questionable tie choices overall. Most prominent is the tie he used to flash for his previous splitting up California plan, Six Californias.  

    Maybe once Bitcoin hits that high value again, Tim can afford some slightly more stylish ties. 

    Via Reddit

    Read more: https://mashable.com/2018/04/13/bitcoin-tie-fox-news-tim-draper/