Fundstrat Global Advisers co-founder Thomas Lee said that the recent Bitcoin pullback is healthy.
In his tweet, Lee also addressed concerns over the recent decrease in Google searches for Bitcoin:
“As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in Bitcoin has not been accompanied by massive hype.”
According to search analytics service Google Trends, Google searches for Bitcoin from within the United States have decreased by about 45% since their recent peak at the end of June.
Google search data for Bitcoin in the U.S. Source: Google Trends
The CEO of major cryptocurrency exchange Binance, Changpeng Zhao, said in an interview with Bloomberg on July 12 that the recent rally has been mostly driven by retail investors, who still account for about 60% of total trading volume. Zhao said:
“We have not seen institutions growing faster. […] What we’ve seen is pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet.”
Bloomberg also suggests that margin trading is another catalyst for the recent growth. As Cointelegraph reported on July 11, Binance has rolled out margin trading features, allowing traders to use their existing balances as collateral to open both long and short positions on crypto assets. Zhao commented:
“I would say the majority of people by the end of the year will be using margin in some capacity. […] It’s quite safe to use to be honest. There will be more trading volume and potentially higher volatility.”
At the end of June, Thomas Lee suggested that Bitcoin’s volatility makes a long-term approach toward it more appropriate for most traders.
Ethereum co-founder Vitalik Buterin believes that Bitcoin Cash has the best network to become a temporary scalability solution for Ethereum.
Ethereum co-founder Vitalik Buterin has proposed to use the Bitcoin Cash blockchain as a temporary scalability solution for the Ethereum network. The programmer introduced a summary of the idea in a July 13 post on the Ethereum Research.
As previously reported, the Ethereum network has experienced some scalability issues, with its native blockchain capable of processing as few as 15 transactions per second (TPS), while its major competitor Ripple is reportedly estimated to have a TPS capacity of 1,500.
As such, the Ethereum community has been working on Ethereum 2.0, a major network upgrade that is expected to improve its scalability once ETH shifts from proof-of-work to the proof-of-stake algorithm.
While the first stages of the Ethereum 2.0 shift are expected to come in early 2020, Buterin has now suggested deploying other blockchains as a new option for improving Ethereum scalability in the short term. Specifically, Buterin said the Bitcoin Cash blockchain is a perfect match for this purpose as the hard fork cryptocurrency provides a data throughput of around 53 kilobytes (KB) per second, as opposed to Ethereum’s 8 KB.
Additionally, Buterin outlined three other compelling reasons for using the blockchain, including low fees, the readiness of necessary machinery and the Bitcoin Cash community’s openness to people using the blockchain “for whatever they want as long as they pay the transaction fees.”
In the post, Buterin noted Bitcoin Cash’s 10 minute block time as the main impediment to becoming a good Ethereum scalability solution. However, the expert noted that this problem could be solved by zero-confirmation payments using techniques like Avalanche pre-consensus.
The crypto community on Twitter took a negative view on Buterin’s new Bitcoin Cash integration proposal, with some commentators forecasting that such a scenario could lead both Ethereum and Bitcoin Cash to a faster collapse.
Francis Pouliot, co-founder of blockchain consulting firm Catallaxy, tweeted that the recent proposal by Buterin signifies a failure of the Ethereum project, while Bitcoin integration will just delay and unsolved scalability crisis.
Recently, another Ethereum co-founder, Joseph Lubin, claimed that Ethereum has “already scaled quite significantly.”
Two subsidiaries of cryptocurrency derivatives firm Seed CX have received Bitlicenses from the New York State Department of Financial Services.
New York state financial regulators have issued virtual currency licenses to two subsidiaries of crypto derivatives firm Seed CX: Seed Digital Commodities Market LLC (SCXM) and Zero Hash LLC.
In a press release published on July 15, Financial Services Superintendent Linda A. Lacewell announced that the New York State Department of Financial Services (DFS) has approved the applications of SCXM and Zero Hash for virtual currency licenses. SCXM operates as a spot exchange for digital asset commodities while Zero Hash is a calculation and settlement agent for digital assets.
With the license, SCXM will now be able to provide a matching engine service for buyers and sellers of digital currencies, as well as block trades for financial institutions and trading firms. Zero Hash — which also received a money transmitter license — will operate as the money transmitter for trading activity resulting from SCXM, which is its affiliated exchange. Lacewell said:
“The Department’s approval of these new licenses will provide institutional customers with more choice while also protecting consumers and the public through strong Anti-Money Laundering, cybersecurity and other compliance standards in a continuously evolving global financial services marketplace.”
Earlier in July, Chicago-based crypto exchange ErisX procured a derivatives clearing organization (DCO) license from the United States Commodity Futures Trading Commission. ErisX is planning to make digital asset futures contracts available for trade on its regulated derivatives market later this year via its new DCO.
Royal Mint, the sole manufacturer of coins in the U.K., will store private keys for crypto in its digital vault for the first time.
Royal Mint, a government-owned manufacturer of coins in the United Kingdom, will provide crypto custodial services for the first time ever, according to a press release shared with Cointelegraph on July 15.
The 1,100 year-old financial institution is participating in the launch of new cryptocurrency temtum (TEM), which is expected to go live on July 17.
Specifically, Royal Mint will act as the storage for temtum genesis private keys and currency reserve, while the original private keys will be stored in the Royal Mint vault forever, the press release notes.
The transaction data will be written on temtum’s Temporal blockchain, the company said, adding that TEM will be initially launched for purchases and trading on CoinAll, a major Hong Kong-based crypto exchange and a strategic partner of major global exchange OKEx.
On the official website of the project, temtum is described as a zero-fee peer-to-peer cryptocurrency supporting Temporal Blockchain network to create a “new world of financial freedom away from centralised institutions.” According to its website, the new coin has a block confirmation speed of 12 seconds and mined at a rate of five blocks per minute.
In January 2018, Royal Mint broke the news by announcing the launch of gold-backed coin Royal Mint Gold. However, the company was eventually reported to cancel its plans due to a veto by the government.
Recently, two major financial regulators of the United States, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), released a joint statement on crypto custodial services. Specifically, the regulators suggested that crypto custodians may not be able to demonstrate that it actually control the assets it claims to hold, while simply holding a private key is not sufficient to demonstrate ownership of crypto.
American entrepreneur and vocal crypto advocate John McAfee has doubled down on his $1 million by 2020 price prediction for Bitcoin.
American entrepreneur and vocal crypto advocate John McAfee has doubled down on his $1 million by 2020 prediction for Bitcoin (BTC).
Taking stock of community sentiment in light of Bitcoin’s recent price fluctuations, McAfee wrote on July 15 that he was “laughing his f—— ass off” at the seemingly overblown negativity:
“Bitcoin is at the mid 10’s and people worry. LMFAO!! Why do you pay attention to weekly fluctuations? Look at the past few months FFS! It’s rising drastically. I’m still positive about my $1 mil BTC price by the end of 2020. Alt coins like MTC and Apollo will rise ten times more.”
As of press time, Bitcoin has indeed lost a round 9% on the week — almost 4% on the day — according to Cointelegraph’s Bitcoin Price Index, and is trading just north of $10,300.
Yet on the month, the coin’s chart shows a 23% gain — and caps a 100% gain over the three-month period to press time.
Bitcoin 3-month price chart. Source: Cointelegraph Bitcoin Price Index
This summer, a Wall Street Journal report had revealed that the dizzying returns from Grayscale Investments’ Bitcoin Trust — which is up almost 300% on the year — had secured its spot as the best-performing fund in the market.
In a recent interview with Cointelegraph, McAfee predicted than 10 years from now, “there’ll be no fiat anywhere in the world […] everything will be cryptocurrency.”
A passionate, anti-government crusader whose charisma has secured him a presumably welcome degree of notoriety, McAfee is currently in exile in Cuba., due to alleged U.S. income tax evasion charges — and is running his second campaign for the American presidency.
Fellow Bitcoin bull Anthony Pompliano — co-founder of Morgan Creek Digital Assets — recently predicted the coin would hit $100,000 by the end of 2021.
In contrast to McAfee’s bullish view of alts like Marinecoin (MTC) and Apollo (APL), American broadcaster Max Keiser has predicted that the altcoin phenomenon is over and all value will flow into bitcoin in the latest crypto bull market.
By John Yearwood
Amid a dramatic Bitcoin bull run, two of the most influential names in the blockchain finance industry have launched a platform to expand global lending and earning on investments in cryptocurrency.
The partnership between Bitcoin.com and Cred allows Bitcoin.com customers to earn up to 10 percent interest on Bitcoin and six percent on Bitcoin Cash invested with Cred, the companies said.
Customers with investments over $25,000 have been benefiting from the partnership for the last few months but it opens to all users, regardless of investment size, on July 15, 2019.
“We’re thrilled to offer Bitcoin.com customers the opportunity to earn interest on their digital assets,” said Dan Schatt, co-founder and president of Cred, a Silicon Valley-based decentralized global lending platform that facilitates open access to credit anywhere and anytime.
A major feature of the program is that interest will be offered in a customer’s choice of Bitcoin, Bitcoin Cash or Cred’s LBA Token. This new offering is a departure from only earning interest in USD and is based on community feedback asking for more interest options. It gives customers more freedom when it comes to reinvesting earned interest, Schatt said.
“Customers benefit by receiving the full upside on the amount of crypto they originally committed,” he said.
Bitcoin has surged by double digits this year, with the coin at one point pricing above $13,000 before retreating. Bitcoin.com, based in Tokyo but with offices around the world, is the leading source for Bitcoin information with more than four million Bitcoin wallets.
“At Bitcoin.com, we believe borrowing and earning services like Cred are a natural next step for Bitcoin wallet holders and will be very attractive to users of Bitcoin Cash,” said Roger Ver, CEO of Bitcoin.com. “In Cred, we have found a like-minded partner who shares our vision and brings significant experience and a solid track record in offering reliable, secure crypto-backed lending and borrowing services to the crypto community.”
Cred, founded by former executives of PayPal and Goldman Sachs, has taken numerous steps to ensure that its investments are safe. The company, which has secured more than $300 million in lending capital, has implemented the industry’s most comprehensive set of risk management, information security, and insurance protections, Schatt said.
“Crypto is still in many ways the Wild West when it comes to the fundamental safeguards most of us have come to expect when ensuring the protection of financial assets,” Schatt said. “Cred is on a mission to dramatically improve that. If the worst happens and Cred loses customer funds, customers deserve certainty that they will be made whole.”
The new program comes as the decentralized finance industry gets a boost from Facebook, which announced last month that it plans to introduce a Libra coin next year. The coin faces regulatory hurdles but experts predict it’s poised to transform the industry, which has a current market cap in the hundreds of billions of dollars. The U.S. Congress will discuss Facebook’s plans in hearings this week.
Bitcoin.com customers will be required to make a six-month commitment to benefit from the partnership. They will have the option to roll over assets for additional periods if they wish. Those who stake their investments with Cred’s LBA token will enjoy the best interest rates and the option for early withdrawal at no penalty before the six-month term.
Investments in the program will be used to help increase crypto lending globally, including with retail investors and money managers who have a well-established track record on a fully collateralized and guaranteed basis, Cred officials said.
“It’s important to note that Cred does not lend to short-sellers,” said Meghan Gardler, director of marketing at Cred. “These are two strong companies coming together to offer Bitcoin Cash holders a secure opportunity to diversify their investments, which will benefit business owners and others around the world seeking access to capital.”
The post PR: Cred and Bitcoin.com Join Forces to Boost Crypto Lending appeared first on Bitcoin News.
A proposed “Keep Big Tech Out Of Finance Act” is reportedly being circulated by House Democrats to prevent big tech firms such as Facebook from issuing crypto.
A proposed bill to fine major tech firms such as Facebook $1 million per day if they issue cryptocurrencies is being circulated by Democrats, Reuters reports on July 15.
Reuters cites a copy of draft legislation — reported on by Cointelegraph when it first surfaced online last week — and notes that it proposes to impose a $1 million fine daily upon any firm that violates its proposed rules.
Per Reuters, the bill is being put forward for discussion by the Democratic majority leading the United States House Financial Services Committee, and reportedly states that:
“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”
The report notes that the draft bill — entitled the “Keep Big Tech Out Of Finance Act” — appears to be a mark of increased scrutiny from legislators sparked by Facebook’s recent unveiling of its forthcoming Libra coin, which would have potential exposure to a combined 2.7 billion users each month.
Reuters nonetheless anticipates that “pro-innovation” Republicans will put their muscle behind blocking such a move, and that the bill could face yet steeper resistance should it pass the lower chamber and be debated in the U.S. Senate.
Jerome Powell, head of the U.S. Fed, has meanwhile said that he recognizes both potential benefits and risks to Libra. He further claimed that for now, the central bank is not overly concerned about no longer being able to implement monetary policy because of cryptocurrencies more broadly, given the relative infancy of the asset class.
The renewed flurry of interest in crypto — in part sparked by Libra’s announcement — even prompted U.S. President Donald Trump to publicly voice his opposition to cryptocurrencies last week, with specific reference to both Bitcoin and Libra. Multiple commentators have taken the president’s engagement as a huge milestone for the industry.
Bitcoin Lightning Network nodes have claimed 2.2 BTC in “justice transactions” to deter potential thieves since Dec. 2017, according to BitMEX Research.
A so-dubbed “justice transaction” is a punitive mechanism involving the closure of a lightning channel that is suspected to be attempting theft. As the report outlines:
“… by design, when a thief attempts to steal funds on the lightning network, if caught, they do not only lose the money they tried to steal, they lose all the funds in the relevant channel. This “punishment” is expected to act as a deterrent and is sometimes called “justice”.
BitMEX researchers claim to have potentially identified 241 justice transactions since the second-layer network’s in December 2017 — all the while noting that there is a possibility the data “includes false positives” and that other, more robust tools exist to identify such transactions than the “basic search methodology” used for their report.
BitMEX’s data apparently reveals that the highest number of justice transactions — over 60 apparent instances — occurred in October 2018. April 2018 saw the second-highest number of justice transactions — over 30.
Notably, while the period from February to April 2019 saw a relatively high number of justice transactions — between 20 and 30 instances — it eclipsed both October 2018 and April 2018 in terms of the absolute value in BTC claimed by honest nodes via the mechanism. February 2019 alone represented the absolute peak in terms of monthly total, at roughly 0.67BTC:
BTC reclaimed by honest nodes using justice transactions. Source: BitMEX Research
BitMEX’s report further qualifies the findings by noting that 2.22 BTC does not necessarily indicate that thieves tried and failed to steal that amount — given that potential thieves may have been punished by an amount larger than the value they tried to steal.
Instead, the figure represents:
“… the total funds claimed by honest non channel closing nodes, part of this value is funds originally owned by the dis-honest nodes and part of the value will be the value they tried to steal.”
In conclusion, the report notes that the total number of justice transactions on Lightning since its inception represent just 0.7% of the number of currently active channels: while an optimal proportion of justice transactions is hard to determine, BitMEX Research notes, this current level appears to be a reasonable figure sufficient to prevent the risk of “large systemic channel thefts” in future.
As reported, Bitrefill has recently made it possible for users of major American crypto exchange Coinbase to access its full suite of Lightning services directly from within their native exchange accounts.
Even if he crushed exchanges, making Bitcoin illegal would likely see rejection by lawmakers.
Publishing a dedicated thread on the chances of Trump banning the cryptocurrency, Krueger argued he could theoretically have some success.
By targeting entry and exit points for retail and institutional investors, the president would turn Bitcoin into an isolated, more illiquid asset as it is used by lay consumers.
“Trump could also go after fiat onramps, by simply forbidding banks to service crypto exchanges, or by requiring banks to not service exchanges unless conditions XYZ are fulfilled (and make that practically impossible),” Krueger summarized.
In reality, however, Trump would need to convince Congress of the need to ban Bitcoin, and lawmakers could overturn his demands, even if they occurred via an executive order or similar emergency measures.
A ban is thus feasible but the probability of it becoming law is extremely low, Krueger concluded.
His comments came several days after mainstream media suggested Trump had inadvertently made Bitcoin a campaign issue for the upcoming 2020 presidential elections.
Trump tells the world what he thinks of Bitcoin, Facebook vows to cooperate with Congress on Libra, and an angry mob descends on Tron’s office in Beijing.
Top Stories This Week
Shrinking violet Donald Trump doesn’t often share his views, so it was refreshing to see him share an opinion for once on Twitter. The United States president declared that he isn’t a fan of Bitcoin and other cryptocurrencies — telling his 61.9 million followers they fuel unlawful behavior. Trump also had Libra in his sights during the three-tweet tirade and warned Facebook’s upcoming digital currency will have “little standing or dependability.” He rounded off by reminding his followers that there’s only one real currency in America, the U.S. dollar (and this really came as a surprise, as I thought it was the Vietnamese dong.) Bitcoin prices actually reacted positively to Trump’s proclamations, as it’s unclear whether this amounts to a policy of any kind. His tweets came two days after Libra co-creator and Calibra head David Marcus assured Congress that Facebook is willing to cooperate with its hearings — even though politicians’ pleas to halt the project seem to have fallen on deaf ears at Menlo Park.
Rumblings from other U.S. institutions did have the potential to spook crypto users this week. In a joint statement on Monday, the Securities and Exchange Commission and the snappily named Financial Industry Regulatory Authority said they are unconvinced that crypto custodians can comply with strict rules designed to ensure that assets can be returned to customers if a company collapses. Tuesday saw the Internal Revenue Service raise eyebrows when leaked documents suggested the taxman planned to force tech giants to check download histories and report on crypto activity by its users. And to round it all off, Bitcoin prices took a hit on Wednesday when Federal Reserve Chair Jerome Powell said he thinks Libra “cannot go forward” unless there is “broad satisfaction” that Facebook has addressed regulatory concerns.
Bitfinex and Tether’s annus horribilis continues. The crypto exchange and stablecoin firm, accused of defrauding investors to the tune of $850 million, have been trying to get the case thrown out of a New York court by arguing that they didn’t operate their businesses in the state. But the attorney general is not going down without a fight — and submitted dozens of documents that allegedly prove this is a lie. In one document filed to the courts, government lawyers said the defendants’ “ties to New York are many and deep” and expressed opposition to their motion to dismiss. Tether’s headaches don’t end here. Also this week, the Metropolitan Commercial Bank announced it has shut down accounts associated with the stablecoin issuer.
A genteel question-and-answer session hosted on Twitter by the European Central Bank turned fiery on Tuesday when the institution doubled down on its anti-crypto stance. When asked whether it planned to add Bitcoin to its reserves, chief economist Philip Lane gave a blunt reply: “No. Bitcoin is not a currency, it rather is an asset and it is very volatile.” Crypto fans took umbrage at the bank’s dismissive answer. One Twitter user criticized the euro’s inflation levels, which mean 100 euros worth of goods in 1999 would cost 139.27 euros today, adding, “Better volatile than toilet paper.” Burn. Another responded to the bank by writing, “Bitcoin is money,” along with a GIF of Jeff Bridges in “The Big Lebowski” saying, “Yeah, well, that’s just, like, your opinion, man.” Somehow, I’m not sure the central bank will get the reference.
The youths of today… what are they like? Generation Z, the young whippersnappers who are currently between four and 24 years old, doesn’t seem that interested in what the crypto world has to offer. Granted, although it is unlikely that a six-year-old is going to become a hardcore Bitcoin evangelist, a Business Insider survey has revealed what an older part of this age group thinks. Just 5% of the 13 to 21 year olds polled said it was “extremely likely” they would buy cryptocurrency in the next six months — and 52% said they had absolutely zero plans to get involved. Trying to strike an optimistic note, the researchers stressed that the survey was conducted before the recent bull run and suggested sudden price rises may have encouraged some of the crypto-cautious kids to reconsider.
Winners and Losers
At the end of the week, Bitcoin is at $11,142.85, Ether at $266.13 and XRP at $0.33. The total market cap is at $305,929,043,649.
The top three altcoin gainers of the week are Bolenum, Bata and Constant. The top three altcoin losers of the week are Posscoin, SegWit2x and TrustNote.
For more info on crypto prices, make sure you read Cointelegraph’s market analysis.
Most Memorable Quotations
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
Donald Trump, U.S. president
“When the mining rewards get cut in half, some miners will not be profitable and they will shut off their machine. If a big percentage does that, then blocks will slow down for some time.”
Charlie Lee, Litecoin creator
“It [Libra] has the potential to completely disintermediate commercial banks entirely, and destroy their revenue-generating possibilities. […] PayPal is f—ed anyway.”
Arthur Hayes, CEO of BitMEX
“Deutsche Bank plans to fire almost 20,000 employees. Bitcoin has no employees to fire. DB is built for the old world. And Bitcoin is built for the new world.”
Anthony “Pomp” Pompliano, co-founder of Morgan Creek Digital Assets
“We need to define what cryptocurrency is at the legislative level. Then there is a fork in the road: we either prohibit organizing infrastructure for the purchase and sale of cryptocurrencies in Russia, or allow it.”
Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets
“Most people just don’t care about blockchain at this point. Maybe they should, but they don’t. And that’s just a fact that we have to deal with.”
Larry Sanger, co-founder of Wikipedia
Prediction of the Week
We have the Winklevoss twins to thank for the prediction of the week. Tyler and Cameron, who co-founded the crypto trading platform Gemini, think every FANG company — the “Big Four” internet companies (i.e., Facebook, Amazon, Netflix and Google) — will have their own digital currency in just two years’ time. According to the dynamic duo, it’s only a matter of time before tech giants follow in the footsteps of Mark Zuckerberg and his nascent stablecoin. The Winklevosses even suggested that they might list Libra on Gemini if it’s an open protocol.
FUD of the Week
Protesters descended on Tron’s Beijing office this week in a tragic case of mistaken identity. A crypto scam in the city, which had a similar name, is believed to have swindled investors out of $30 million. Crowds jostled with police officers and reportedly yelled “Tron is a scam” — with the pictures spreading like wildfire on social media. In a statement following the unrest, the Tron Foundation said: “Tron officials expressed their sympathy and understanding for those who had been deceived, however, the company strongly condemns acts of violence that may be perpetrated as a result of events that are not in its direct control.”
Following several weeks of red flags, Poland’s BitMarket crypto exchange abruptly shut down on Monday. The company blamed a loss of liquidity for the closure. In the run-up to its demise, customers were reportedly forced to change their passwords and API keys for no reason — and speculation on Reddit suggested that some withdrawal attempts had been halted because additional Know Your Customer checks had been suddenly imposed on users. One critic claimed that BitMarket had failed to address allegations that it had concealed a hack.
We’re dangerously close to launching a Hack of the Week section, as it’s such a frequent occurrence. This week, it’s the Japanese crypto exchange Bitpoint. It suspended all services after $32 million in XRP, Bitcoin and other digital currencies was taken from its hot wallet. About two-thirds of the lost funds belonged to customers. Thankfully, it is not believed that the exchange’s cold storage was compromised. Bitpoint was recently served a business improvement order by Japan’s Financial Services Agency. At least eight exchanges have fallen victim to large-scale hacking incidents so far this year.
Best Cointelegraph Features
Speaking to Cointelegraph from Cuba as palm trees swayed in the background, John McAfee said he could bring down the U.S. government and expressed skepticism about Libra — warning it will be used to monitor and trace what everyday citizens do with their money. We also asked him about his stance on income tax, which he hasn’t paid for eight years.
With central banks, governments and crypto companies voicing their opposition to Libra, Cointelegraph takes a look at why they are concerned. As Facebook has been embroiled in some headline-grabbing scandals in the past, issues surrounding user data, privacy and censorship-resistance are among the main themes.
Several big players are currently putting the finishing touches to crypto projects they are planning to unveil to the world — each with vastly different aims, business models and technology. Here, we compare JPM Coin, Libra and Telegram’s TON side by side, and examine whether these incoming blockchains are the superheroes who will unlock mass adoption or villains the industry should be wary of.