Navigating the treacherous cryptocurrency market is not for the faint of heart. While the gains over the past year have certainly been spectacular, the recent whipsaw reversal is a reminder of just how wrenching it can be.

As you can see, bitcoins BTCUSD, -1.04% path to recent nosebleed levels has seen its share of sizable drawdowns, including the current one.

So whats a trader to do? And in this case, whats a 13-year-old whos already turned $2,200 in profits dabbling in the crypto market to do?

Thats the question Sam of the popular Financial Samurai blog tackled after one middle-schooler asked for some help plotting his financial future.

Heres the letter he received:

Im 13, live in an upper middle-class family, have good grades in school, and want to start planning out my future now. I want to learn the major mistakes other people have made before I can even grasp the chance to do the same.

I run an eBay .account where I make ~$400 gross a month buying and reselling high tier shoes and clothing. The money usually ends up in my desk drawer, but I have been dabbling in the investment of cryptocurrency and I have turned around a $2,200 profit so far.

I know that money comes with work and gambling for it is the worst thing you could do. I want to be able to live a happy and wealthy life and I know I have all the utilities but I dont know what to do. I am willing to work and take risks to sustain financial growth but I dont know where to start.

If anyone is willing to give me three pieces of advice for my future I will take them with full consideration. Thanks! Daniel

Wise beyond his years, clearly. But its just as clear that Daniel has a lot to learn, and quite likely, a lot of lumps to take in the coming years.

First off, Sam, who acknowledges that he was much more interested in girls, skateboards and beer at that age, told Daniel to go ahead and be a kid while he can. Dont get too bogged down in real life just yet. Enjoy middle school while it lasts, then hit the books hard when high school rolls around.

People today who complain about life not being fair more often than not didnt take school extremely seriously. Education is what will set you free, he said. Get the best grades and test scores possible to give yourself as many options as possible.

His second piece of advice is to learn from the inevitable mistakes. At this age, Daniel can recover from any sort of hits he takes.

Investing in cryptocurrencies sounds like a great way to make and lose everything, Sam said. If you end up losing your $2,200 profit by not at least taking some profits, youll always be reminded about this loss before making more significant investments.

He explained that people who only started investing after 2009 are in for a rude awakening.

Never ever confuse brains with a bull market, he said. Study the previous bubble implosions to better prepare yourself for the next one.

Lastly, Sam tells Daniel to always focus on building his personal brand, and take care in crafting an online image that wont backfire. The internet never forgets.

Dont post compromising pictures of yourself that might come back to haunt you. Dont write hateful commentary, only love or nothing at all, he said. Focus on helping someone first before asking for help. Be resilient. And never fail due to a lack of effort. If you can consistently tilt towards the positive, you will surround yourself with other positive people in return.

And, of course, listen to mom and dad.

Any more advice for Daniel? Share in the comments section.

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3 life pro tips for the teen cryptocurrency trader who's already made thousands - MarketWatch

Less than a year ago, the average human did not know what cryptocurrency was. The market was limited mostly to a techy crowd of developers and very early adopters, considering Bitcoin was the only major currency on the block back then. But thanks to a number of really smart entrepreneurs, rising prices, and a powerful community, everything is changing and crypto is going mainstream.

Ethereum, Stratis, Sia, AntShares/NEO, TenX, and others are leading the charge of the technological revolution that is blockchain. Cryptocurrency-based crowdfunding known as Initial Coin Offerings (ICOs) are also a major player in the revolution. Blockchain startups like TenX have raised $80 million dollars in a matter of literal minutes to solve a big challenge for cryptocurrency holders--actually spending the currency in the real world.

Entire governments, such as China's, are considering utilizing a national digital currency. Even the president of Russia, Vladimir Putin, met with the founder of Ethereum, Vitalik Buterin. All of this good press and positive outlook has caused many billions of dollars to be added to the market in the last seven months.

The excitement about the cryptocurrency market has attracted a lot of entrepreneurs who are looking to disrupt big industries through Blockchain technology.

I think of Blockchain disruption as creating disrupters to the disrupters. This new wave of Blockchain startups, such as Sia, are looking to disrupt companies like Dropbox and Amazon AWS. If they are even remotely successful, we are looking at many 10s if not 100s of billions of dollars being added to the overall cryptocurrency market as they continue to grow.

Another example of entrepreneurship at its finest is TenX. They are literally solving the biggest spending issue in cryptocurrency, actually making the tokens spendable in the real world. They are using debit/credit cards that physically store cryptocurrency then instantly convert them into Fiat (USD, EUR, YEN, etc.).

Stratis is considered a sleeper cryptocurrency because of its relative low price compared to its technological advancement. It's a BaaS (Blockchain as a Service) platform that aims to provide enterprise level Blockchains and services to companies like Microsoft. AntShares/NEO is also considered a sleeper cryptocurrency by many.

The cryptocurrency market can seem volatile compared to traditional markets. There is more up and down movement, but the general trend line is a strong uptrend. A lot of people believe Ethereum alone will be worth over $1,000 a token in the next year or two. That will drive the prices of many other currencies up a lot.

Bitcoin, the oldest of popular cryptocurrencies and current market leader in terms of market cap, but not technology, is facing a potential split on or around August 1. There are a number of possible scenarios, including breaking Bitcoin into two separate coins. This could cause what is referred to as The Flippening to occur, and if it does, look for Ethereum to rapidly gain in price and for Bitcoin to fall from its first-place market share.

If (or, most likely, when) this event does happen, Ethereum could be more of the market indicator than Bitcoin currently is. Meaning, if Ethereum goes up, everything else tends to go up, which has been the case for Bitcoin recently, as it tends to control the market.

The market as a whole has been particularly strong in recent weeks. Ethereum was worth as much as $420 a token and as little as the $180 range in the last few weeks. But the strength of the market really shined when the $180 "drop" happened and it quickly re-tested $200 multiple times and showed that $200 was the current floor price. This creates a sense of security in the market and helps people believe in it more long term when they see these quick rebounds from drops in price.

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Here's How Entrepreneurs Are Making Cryptocurrency Mainstream And Starting A Revolution - Inc.com

On July 11, 2017, the United States Patent and Trademark Office granted Goldman Sachs a patent for a Cryptographic currency for securities settlement. The patent, which was originally filed in October 2014, includes a cryptographic protocol and a supporting virtual wallet that, in various embodiments, is a security and cash account for storing and managing the cryptographic currency.According to the document, the virtual multi-asset wallet possesses the ability to generate, manipulate, and store SETLcoins, a new cryptocurrency for exchanging assets, like securities, cash, and cash equivalents, through a peer-to-peer network.

For example, a virtual wallet can exchange (e.g., via a transaction method described below, such as a two-phase transaction) one or more SETLcoins for, e.g., U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity. Alternative or additionally, U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity can be exchanged for one or more SETLcoins in virtual wallet on the peer-to-peer network.

SETLcoins can house one or more securities. Using the wallet, traders can immediately exchange stocks in companies like IBM and Google for cryptocurrenciesby sending transaction messages. Each transaction message includes a transaction and digital signature. And once a message is broadcasted to the network, settlement is immediately processed by a two-phase commitment protocol and/or trusted node that both traders mutually agree to have act as coordinator (including each other).

SETLcoins are exchangeable for, e.g., other SETLcoins and/or other cryptographic currencies (e.g., peercoins). For example, a single IBM-S SETLcoin may be exchangeable for one or more "GOOG" SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins.

Since the introduction of bitcoin in 2008, the popularity of cryptocurrencies and blockchain technology has increased tremendously in the financial service industry. Due to a sizeable market cap and wide array of sought-after options like Ethereum, Litecoin, NEM, and Ripple, the cryptocurrency market is becoming more attractive as an investment opportunity for financial magnates. This has led banking giants like Goldman Sachs to begin analyzing the market for clients and concentrating investments in technologies, like SETLcoins, that bridge cryptocurrency and blockchain technology with the financial sector.

Dan is a US Army veteran and Los Angeles-based writer passionate about science and technology, current events, human rights, economic impacts, and strategic calculus. Dan is a full time staff writer for ETHNews and holds value in Ether.

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Goldman Sachs Awarded Cryptocurrency Patent - ETHNews

Tezos, a new cryptocurrency network that could compete with Ethereum, raised a record-breaking $232 million in a nearly two-week-long token sale that closed on Thursday.

Although the first version of its network has yet to launch, Tezos has piqued the interest of major investors and cryptocurrency experts. It promises to support smart contracts and offer innovations in governance for decentralized systems that could prevent the sort of infighting that has consumed the bitcoin community for more than a year.

Among those who see value in it are venture capitalist Tim Draper and Olaf Carlson-Wee, formerly the first employee at Coinbase and now the founder and CEO of Polychain Capital, a San Francisco hedge fund that focuses exclusively on blockchain assets. Zooko Wilcox, the founder and CEO of privacy-focused cryptocurrency Zcash, serves as a Tezos adviser.

Tezos's founders, the husband-and-wife team Arthur and Kathleen Breitman, have been developing the technology since mid-2014, when they published the white paper describing what they hoped to accomplish. Between them, they have backgrounds at Goldman Sachs, Morgan Stanley and R3, a blockchain consortium of which dozens of banks are members.

When Tezos's token salea special kind of crowdfunding campaign also known as an "initial coin offering," or ICOfinally launched on July 1, it inspired a mad dash among investors. The project ultimately took in 65,627 bitcoins and 361,122 ether, according to its website.

The value of both cryptocurrencies has fallen sharply in recent days, but, even at relatively low current prices, Tezos raked in enough digital money to smash the previous ICO record of about $150 million set by another blockchain project, Bancor, in June.

Thanks in large part to Bancor and Tezos, the amount of money raised by blockchain startups through ICOs has far surpassed the amount raised through traditional venture capital in 2017. Because of the extreme volatility of the cryptocurrencies used to fund ICOs, it is tough to pin down a round number for the total amount raised so far this year, but it appears to be more than $700 million at then-current prices.

Most of the projects that have raised funds through token sales are built on top of an existing blockchain, usually Ethereum's. But Tezos will be an entirely new protocol with its own rules.

Tezos is also one of the few token projects that has gained support from traditional investors. Tim Draper participated in the ICO and also invested an undisclosed sum in Dynamic Ledger Solutions, the Breitmans' startup that is behind Tezos.

Participants in the crowdsale will be given Tezos network tokens, known as "tezzies," in exchange for their investment, but not until the network launches. That is expected to happen in four months or so. Investors are betting that as the network grows and proves its worth, the exchange value of their tokens will riseperhaps exponentially.

Ethereum's own crowdsale raised about $18 million in 2014. The total market capitalization of ether is now more than $19 billion, according to CoinMarketCap, which tracks the fluctuating value of blockchain assets.

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Tezos raises $232 million for new cryptocurrency project - American Banker

Bitcoin Magazine

Latest Cryptocurrency Exchange Hack Highlights Need for Better ... Bitcoin Magazine It comes with the territory that digital currency will be susceptible to digital threats. Hacking and theft have almost grown up side by side with things like Bitcoin, ... and more »

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Latest Cryptocurrency Exchange Hack Highlights Need for Better ... - Bitcoin Magazine

News wallets and exchanges

In anticipation of the upcoming user-activated soft fork on the Bitcoin blockchain, Japans Cryptocurrency Business Association is creating guidelines for virtual currency exchanges to protect customer investments.

According to a report by Nikkei Asian Review, Japans Cryptocurrency Business Association (JCBA) has begun preparing for the looming bitcoin fork that is expected on August 1. The association brings together leaders from banks, securities firms, exchanges, and other virtual currency businesses in Japan. It counts board members from Kraken, Coincheck, and Money Partners among its ranks. The association is chaired by director Tadayoshi Okuyama (Japanese: ).

Ahead of the user activated soft fork on the Bitcoin blockchain, the JCBA has issued guidance to key stakeholders and association members. Through a freeze, the association hopes to protect customer assets. The halt in trading may last anywhere from one day to a full week.

However, the report by Nikkei attests that some exchange operators (including Bitbank and Tech Bureau) will allow trading to continue, simply suspending deposits and withdrawals until the dust has settled from the fork. As of this publication, the countrys largest bitcoin exchange, BitFlyer, has not chosen a course of action.

As demonstrated by the GDAX flash crash, thin trading books could threaten investors. With this in mind, its vital for bitcoin exchanges (in Japan and worldwide) to plan for a few contingencies.

First, companies ought to keep their customers apprised of the forks implementation and the timeline for exchange freezes, if applicable. Next, the exchanges should provide customers with sufficient time to withdraw their investments if desired. After the fork, companies ought to provide a roadmap for which chain (or chains) they will support. This will help restore investor confidence and ensure that customers receive exactly what they are due. Coordinating disbursement of fork funds may prove challenging initially, so its crucial to keep customers in the loop.

The US-based GDAX has already taken that step, posting on its blog about the companys intentions to implement safeguards for addressing the fork.

Fortunately, for the most part, Japanese exchanges also appear to be proactive in their preparation. At this point, its virtually impossible to determine which Bitcoin blockchain will become dominant or how market share will be impacted. Still, investor protection should remain a priority for all.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles.

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Freeze! Japan Cryptocurrency Business Association Prepares For Bitcoin Fork - ETHNews

Ethereum cryptocurrency code is used, which means the following options:

The technology of blockchain proved itself as perhaps the safest way of keeping records of transactions performed within a certain society, each member of which owns a copy of the database distributed among members of the given society.

Blockchain - a chain built from the formed blocks with records of all transactions. A copy of the Blockchain chain or its part is simultaneously stored on multiple computers and synchronized according to the formal rules for constructing the chain of blocks. The information in the blocks is not encrypted and is available in clear form, but is protected from cryptographic changes through hash chains. Thus, the Blockchain database is distributed (decentralized) and cryptographically protected (https://en.m.wikipedia.org/wiki/Blockchain).

The possibility of mining, which gives the use of the methodology of protection against false data and fraud PoW, is by far the most widespread and reliable crypto currency in the environment.

A proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. Producing a proof of work can be a random process with low probability so that a lot of trial and error is required on average before a valid proof of work is generated (https://en.bitcoin.it/wiki/Proof_of_work).

The minimum unit is 10^-4, 0,0001 RCN.

The conclusion of the block will occur every 20.5s (Similar to the Ethereum software environment, https://bitinfocharts.com/ru/ethereum/ ). The block volume limit is 12 KBytes.

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REcoin is a new Ethereum-based cryptocurrency

With the meteoric rise in popularity of Ethereum, cryptocurrencies and blockchains are back in the news again. Graphics card prices have soared with the promise that those who have the computers and know-how to do some serious mining can take home huge sums in a Bitcoin-like gold rush to snatch up as much virtual currency as possible. But how easy is it to make your fortune in cryptocurrency? And is it worth your while getting started?

For the uninitiated, mining for currencies like Bitcoin and Ether means devoting a huge amount of computer processing power to doing accounting sums for the platforms behind them, helping to verify the accuracy of the public blockchain ledgers.

Youre essentially getting rewarded for keeping the books for these platforms, which weve explained in more detail here, and the rise of cryptocurrencies like Bitcoin and others has led to a flood of amateur enthusiasts jumping into the mining businessthe idea of having your computer whirring away making you free money sounds almost too good to be true.

And in reality, it almost isyou can get rich from cryptocurrencies, but you need to put in plenty of work, and have luck on your side. Youre more likely to get a windfall due to market pressures than the quality of your mining rig, which is why its only worth a shot for the most committed and the most adventurous.

Mining for cryptocoin requires some free software tools and a dedicated rig. Turn the clock back several years and you could get away with a powerful home PC and make a few bucks. These days you can waste a weekend and a months wages on building a machine with four graphics cards purring away in a row and still not make a profit.

GPUs are now established as the mining processors of choice in most situationsgraphics cards are even built for and marketed towards miners nowbasically because theyre better at doing lots of laborious, repetitive tasks, whereas CPUs are better suited to switching between many tasks quickly.

The trouble is, the serious players have got whole farms of these computers, and unless youve got a warehouse and some life savings to spare, youre going to be lagging a long way behind. Youre up against huge foreign operations running off cheap electricity and hardware bought wholesale.

Even if you do get yourself a rig set up and find a currency with a bit of a profit margin, youre still putting yourself at the whims of the cryptocurrency marketsmining can start or stop becoming profitably depending on a currencys current value.

There are several profit calculators on the web that will tell you how much computing power and electricity you need to make a certain amount of cash, so you can see exactly how much (or more likely, how little) you could make. Take Bitcoin, for example, which is now just about impossible to mine profitably for average users at homeyoud need thousands of GPUs running before youd get close to getting more back in Bitcoin than youd be paying for electricity.

You can fork out thousands of dollars on specialized kit, if you want to, but even then youre only going to be raking in a handful of dollars a day with Bitcoin. That of course can go up or down as the currency value fluctuates, and whats profitable one day might not be the next if your chosen cryptocurrency dips in value, or gets some bad media coveragethats where the slice of luck we mentioned earlier comes in.

Other options, like Feathercoin and Ether, have a better profit potential than Bitcoin right now, with the caveats weve already mentioned: If youre serious about your mining then you need to keep a very close eye on the market trends, because the situation can change on a weekly or even daily basis. A single Litecoin, another cryptocurrency, has swung from costing you between $10 and $55 this year alone.

For instance, a huge $64m Ether heist carried out last year was severe enough to cause a fork in the Ethereum platform it runs on top of, and a halving in price of Ether itselfif youve got a powerful, expensive, cryptocurrency mining operation going on in your basement then thats a serious hit on your profits through factors completely out of your control. Sure, a swing the other way can make you relatively rich, but its a risk, and the upward trend wont necessarily continue.

Many modern-day miners join a mining pool, combining resources with other users and getting a share of the profits, but the same risks remain. Fork out a few thousand on a mining rig, take the time to study the market trends, go through the process of setting up the programs, join up with a mining pool, and yes you canif the prices stay buoyant and youve picked your cryptocurrency wiselymake a few thousand dollars a year. Whether or not its worth the risk and investment is up to you.

And if your investment isnt already precarious enough, remember the scene is constantly changing: In the near future Ethereum is set to switch from its existing Proof of Work (PoW) system for extending the blockchain to a new Proof of State (PoS) system which is easier to scale and less energy intensive.

Without going too far into the technical details, it essentially makes the mining process more like earning interest on money youve already got: Racks of graphics cards wont be able to generate wealth as they did in the past, which is bad news for miners looking for a profit even if its good news for your electricity bill. Instead, earning money will rely on staking (investing) rather than mining.

In other words, if youre already halfway through building your Ethereum mining machine you might want to pick a new cryptocurrency... at least until the ground rules change on that one too. (Remember what we said about the constant state of flux?) And thats really the only way to squeeze any profit out of cryptocurrency mining operationskeep moving as fast as the market does, and switch up the currencies you target as conditions change.

As soon as one cryptocurrency becomes profitable to mine, as weve seen with Bitcoin and Ethereum, everyone wants a piece of the action and making money gradually gets harder. Its then time to get in early on another currency. In short, if you want to get rich (or at least make a profit), you need to pick and keep picking the right cryptocurrencies, have a serious amount of graphics processing power in hand, hope that your chosen currencies stay secure and keep increasing in value, and put in a lot of time and effort.

Its not impossible, but we can think of easier ways to make a buck. If youre determined to jump in and get involved in cryptocurrency mining, if only for the educational and geek appeal rather than to make any money, your best bet is to immerse yourself in one of the many mining forums out there, which will give you the inside track on the latest news and market trends.

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How Exactly Do You Get Rich of the Hot New Cryptocurrency? - Gizmodo

Unless you've been under a rock, you've likely read a lot about ICOs (initial coin offerings) in the last few weeks. These are offerings by companies starting their own variant of blockchain-based digital currencies.

This year has not only seen the explosion in the price of bitcoin itself but also the second and third most popular cryptocurrencies Ethereum and Ripple.

More interesting, there's been a rise of many additional cryptocurrencies such as Steem, Dash, AntShares and Dogecoin. In fact, if you measure bitcoin's market capitalization as a percentage of the market capitalization for all cryptocurrencies, it's currently at 45.5 percent, down from 94 percent a year ago.

The value of all cryptocurrencies now is $88 billion, which is actually down from $114 billion a few days ago.

New ICOs have raised $500 million so far this year. One community that is showing great interest in becoming part of the trend of launching a new cryptocurrency is start-ups.

Last week, Thai fintech start-up Omise raised $25 million in an ICO to develop a decentralized payment platform. The company had already raised $20 million in traditional VC funding.

Rahul Sood's esports betting company Unikrn is launching its own cryptocurrency called UnikoinGold as the way to place esports bets on its platform. Unikrn has raised $10 million from Mark Cuban, Shari Redstone's Advancit Capital, Elisabeth Murdoch's Freelands Ventures and others.

However, social messaging company Kik has bigger plans for its upcoming ICO. In a recent talk given by Kik founder and CEO Ted Livingston, he explained that Kik saw its ICO of a currency called Kin as a potential alternative exit for them.

Like the Omise and Unikrn examples, Kik has also raised traditional venture capital money more than $120 million, including $50 million from Tencent most recently valuing the company at $1 billion. Kik's ICO will help bring it more money. Kik will sell 10 percent of its Kin currency (half to institutional investors and half to retail investors). Kik will keep 30 percent of Kin and 60 percent of Kin will be overseen by a nonprofit Kin Foundation aimed at making Kin a popular cryptocurrency. That foundation will give away 20 percent of its stock of Kin every year to developers and others who help build out the economy for Kin.

Kin will be used as the currency on the Kik social network for things like emojis, stickers, hosting and participating in group chats, building apps like bots, etc. However, the stated goal is for Kin to also be used as currency outside of the Kik app.

Even if stays confined within the Kik community, Kik has 15 million monthly active users. It's currently ranked in the 60s in terms of popularity on the App Store. That community alone will make the currency among the more popular cryptocurrencies.

But here is what's interesting, Livingston said that, if all goes well, this ICO could be Kik's liquidity event. Up until now, Kik has been thinking it had to translate its popular youthful community chat service into ad dollars in order to make a successful business similar to what Facebook has done. The problem is that Facebook and Google continue to suck up more and more of the ad dollars that are getting spent in the space.

Livingston said in the talk that the penny dropped for him when he saw Snap's S-1 IPO filing in February. Here was a young Facebook competitor seemingly doing everything right and yet still failing in its growth of its ad-based revenue. If Snap was failing, Livingston thought, what hope did Kik have of building a better ad mouse trap?

Yet, he thought, if Kik could develop a cryptocurrency that became a self-sustaining economy and Kik owned a big chunk of that supply limited currency the value of that stake in Kin could end up being more valuable than the potential exit valuation for Kik as an ad-based business in an IPO or through an acquisition. Luckily, one of Kik's earliest investors was Fred Wilson of Union Square Ventures, also a big investor in the cryptocurrency space. He agreed with Ted.

Can you name the fourth most popular cryptocurrency? It's Litecoin and has a market cap of $2.5 billion. If Kin got that kind of valuation and with an established community of 15 million monthly active users, it could be a currency worth more Kik's 30 percent stake in Kin would be worth $750 million, almost equal to the valuation of Kik's last round. If Kin became as valuable as Ripple the third most popular cryptocurrency today Kik's stake would be worth $2.5 billion.

Livingston pointed out that, in this kind of scenario, an exit via M&A or an IPO would be unnecessary for Kik. Its existing backers could simply convert their shares into Kin and liquidate them. Kik could stop trying to win advertiser dollars, if it wanted. It could simply focus on developing the community's use of Kin and helping Kin proliferate outside of the Kik ecosystem.

In this scenario, according to Livingston, "we just step back and watch it continue."

Will it work out this way? Possibly for some lucky start-ups but certainly not for all. The world likely doesn't need 1,000 different cryptocurrencies. The current gold rush mentality with ICOs will probably only get bigger in the months and years to come but will probably also meet the inevitable bust of the dot-com era.

But some cryptocurrencies will endure especially ones with strong use cases and/or communities supporting them. It's intriguing to imagine if some ad-dependent companies like Kik will opt to stop competing with Facebook and Google on a battlefield they can never succeed at and go for an alternative cryptocurrency path to value creation.

Kik is truly breaking new ground with its ICO. It will be intriguing to see if it causes other unicorns to follow its lead.

Commentary by Eric Jackson, sign up for Eric's monthly Tech & Media Email. You can follow Eric on Twitter @ericjackson .

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Disclosure: CNBC parent NBCUniversal is an investor in Snap

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Kik looks to cryptocurrency instead of an IPO commentary - CNBC.com - CNBC

The cryptocurrency Cassandras are starting to look right.

The sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum and ripple are getting hit even harder.

When when we look for signs of excess in the market, I look at bitcoin and to me that looks pretty scary, Richard Turnill, global chief investment strategist at BlackRock Inc., said during a midyear outlook presentation in New York on Tuesday.

Whether the virtual currencies were caught up in an asset-price bubble was debated as the market capitalization of the sector soared this year, raising skepticism from pundits including tech billionaire Mark Cuban. Backers such as Ripple Chief Executive Officer Brad Garlinghouse, whose money-transfer company is tied to the third-largest cryptocurrency by market value, said he isnt convinced.

"I would be surprised if there was a major crash," Garlinghouse said in an interview at Bloombergs New York headquarters Monday. "Could we see digital assets continue to double or triple or quadruple from where we are today? That wouldnt surprise me at all."

Digital coins are currently worth around $80 billion, down from a market capitalization of $100 billion on Friday and $115 billion on June 14, according to data from Coinmarketcap.com.

This weeks slump coincides withinitial hearings in the trial of the former head of Mt. Gox, the bankrupt Japan-based bitcoin exchange that imploded in 2014 after losing hundreds of millions of dollars worth of bitcoin. Chief Executive OfficerMark Karpeles pleaded not guilty in Tokyo on Tuesday to charges of embezzlement and inflating corporate financial accounts.

The turbulence may be far from over, too, as rival bitcoin enthusiasts are set to adopt two competing software updates at the end of July. This has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the market.

Read more on the dispute between bitcoin developers

Volatility is nothing new for cryptocurrency buyers, who have faced losses in recent months as exchanges grapple with outages and poor performance, struggling to keep up with the volume surge that has swept the market amid speculation about the potential for widespread adoption of virtual assets and blockchain technology.

"It is easy to look at the appreciation that we have seen this year and conclude that we are witnessing a bubble, said Martin Garcia, vice president of sales and trading at Genesis Global Trading. While I understand that the prices we are seeing now a more than a little frothy, I think that we are in the very early stages of the development of an entirely new asset class."

Read more from our TOPLive Q&A with Martin Garcia

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Cryptocurrencies Are Getting Crushed - Bloomberg - Bloomberg