Daily Archives: May 3, 2021

The Department of Justice said it has arrested a Russian-Swedish national who allegedly operated a long-running cryptocurrency laundering site. According to a news release from the DOJ, Roman Sterlingov ran Bitcoin Fog, a cryptocurrency tumbler or mixer which hides a cryptocurrencys source by mixing it with other funds.

Bitcoin Fog gained notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement, according to the DOJ. The department says over the course of 10 years, Bitcoin Fog moved more than 1.2 million bitcoin, valued at the time of the transactions at around $335 million.

Bitcoin Fog has received a fair amount of coverage from cryptocurrency blogs and news sites since its inception, with some recommending it as the best option for hiding the origin of bitcoin. The blockchain keeps track of bitcoin transactions, making services like Bitcoin Fog key for those looking to do business on the black market.

The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer fraud and abuse activities, and identity theft, the DOJ said.

According to the IRS, the largest senders of bitcoin through Bitcoin Fog were darknet markets, such as Agora, Silk Road 2.0, Silk Road, Evolution, and AlphaBay, that primarily trafficked in illegal narcotics and other illegal goods.

The IRS said it appeared from Bitcoin Fog transaction activity that Sterlingov took commissions of as much as $8 million on the bitcoin he helped clients launder. The current value of the Bitcoin Fog cluster the large database of transactions is about $70 million, the IRS said.

Sterlingov is charged with money laundering, operating an unlicensed money transmitting business, and money transmission without a license in the District of Columbia.

Read more here:
Feds arrest founder of bitcoin mixer they say laundered $335 million over ten years - The Verge

Rule III: Do Not Hide Inflation in the Fog

A reimagination of Beyond Order by Jordan Peterson through the lens of Bitcoin.

This writing mirrors the exact chronological structure of Beyond Order, offering reflection through a Bitcoin lens. This is part 3 of a 12-part series. If you read the book, it adds a second dimension. All quotes credited to Jordan Peterson. All reflections inspired by Satoshi Nakamoto.

Do not pretend you are happy with something if you are not, and if a reasonable solution might, in principle, be negotiated. Have the damn fight.

Governments assume the guise of the savior handing out trillions in stimulus money. When prices rise, they deny. Dont pretend to be happy with your countrys monetary policy if you are not. The wealthy who already own assets get richer, the middle-class savers lose purchasing power, and the lower class watch the little they have vanish. The government is not here to save you. All currencies are being debased. Central banks are in a race to the bottom. The United States is printing with such intensity the Federal Reserve Bank of St. Louis (FRED) discontinued updates to its M1 Money Stock and M2 Money Stock charts. This censorship hides the unwanted in the fog.

Bitcoin gives the ordinary worker a fighting chance. Check out John Vallis podcast on Decentralized Grazing. His guests, UntappedGrowth and BitcoinAndCows, apply the Bitcoin ethos, restoring Americas soil bank, earning self-sovereignty and sidestepping fiat debt. His model forms a mutually beneficial trinity between investors, ranchers and landowners, who serve their own interests but create exponentially more fruit together through the wisdom of low time preference collaboration. That clears the fog. It puts the farmers and ranchers back to being caretakers of the soil instead of strip miners. This allows them to become stewards again because they are providing for themselves not just today but for tomorrow. Landowners by healing the land, herd owners by preserving the heritage cattle, and ranchers by doing the work. All together as one. Its easier to aim at a brighter future when you step outside the fiat fog.

Have the damn fight, because you may not be able to take advantage of monetary debasement but monetary debasement is taking advantage of you. Adopt a Bitcoin state of mind and learn how to negotiate a better solution for yourself.

Life is what repeats, and it is worth getting what repeats right.

We are creatures of habit and routine. We use currency throughout our days. Its worth getting the money right. When a better option presents itself with a low barrier to entry, it is your burden to bear if you do not seize that opportunity. An easy on-ramp is with the Fold App, a bitcoin rewards program for your fiat spending. Change your reward system: change your life without changing your day-to-day.

It is difficult to win an argument, or even begin one, if you have not carefully articulated what you want (or do not) and need (or do not).

Bitcoin exists in many layers of resolution. Figuring out where to start can be confusing. My breakthrough came from reading The Internet of Money series by Andreas Antonopoulos. It is a quick read that covers both the problem and the solution at a high level. Lay this foundation and you will be able to carefully articulate what you want and do not want.

However, it is the easiest of matters, particularly in the short term, to ignore the prick of conscience and let the small defeats slide, day after day. This is not a good strategy.

We all accept unfavorable status quos, including our money. In 2008, we were all taken aback when the government announced plans to print billions to stabilize markets. In 2020, billions became trillions. These stimulus plans are sold as short-term solutions conveniently omitting the detrimental long-term consequences. Like the fable of the boiling frog, we are being slowly boiled alive. No-coiners hypocritically claim the intellectual high ground. They complain about the unjust disparity caused by our monetary system and simultaneously plead ignorance to their participation as the accomplice looking for their handout. This short-term relief is not a good long-term strategy. It is desperate high time preference thinking. Recalibrate your lifestyle toward low time preference and youll be on your path to prosperity.

People generally believe that actively doing something bad (that is a sin of commission) is, on average, worse than passively not doing something good (that is the sin of omission).

We all witnessed Wall Street commit crimes of commission against the r/wallstreetbets community over GameStop. It is bad enough that our money is being debased but GameStop adds insult to injury. When institutions collude in broad daylight, it inalienably exposes the asymmetrical game we all play just to stay ahead of inflation. Wall Street has created wealth for Boomers for decades, but their past success leaves them vulnerable to normalcy bias. Whats worked in the past no longer applies when something larger than Wall Street comes along. That thing is bitcoin. Bitcoiners have long memories and time continues to vindicate us. The internet never forgets and the writing is on the wall, continue ignoring bitcoin and trusting the bankers on Wall Street at your own peril. Heres a snapshot of how it started and how its going.

Dancing on graves is, admittedly, unsportsmanlike conduct and a Bitcoin pastime. It is in poor taste, but I sympathize with the fact that Bitcoiners have endured years of ridicule by everyone. What can I say besides this is that we are all victims of our pride. Buy bitcoin if you prefer dancing on graves to becoming a cautionary tale. Refusal to add bitcoin to your portfolio to protect your pride (or staying on the sidelines because you take issue with Bitcoiners dancing on graves) is a lie of omission where you are both the actor and the victim.

you are afraid that if you specify what you want precisely you will simultaneously discover (and all too clearly) what constitutes failure; you are afraid that failure is the most likely outcome; and, finally, you are afraid that if you define failure and then fail, you will know beyond a shadow of a doubt that it was you that failed, and that is was your fault.

Kobe Bryant dominated because he knew our generation is soft like Charmin. Society is littered with leaders who actively minimize skin in the game while attempting to maximize gains. Weve exchanged human courage for computed risk adjustment. Bitcoin is a terrifying proposition to those individuals who have built careers on shirking responsibility while still capturing upside. In Bitcoin, you are the backstop. Bitcoin has no FDIC insurance. Bitcoins have infamously been lost forever. Mistakes tend to be terminal. Bitcoin ownership is similar to gun ownership. Its a serious commitment and the consequence of failure falls squarely on your shoulders. That level of full responsibility removes weak hands or calluses them natural selection. As the Bitcoin adage goes, Not your keys, not your bitcoin. Buy a hardware wallet. Learn to use multisig service like Unchained Capital and reduce the finality of mistakes take on the burden of responsibility and clear the fog.

The fog that hides is the refusal to notice to attend to emotions and motivational states as they arise, and the refusal to communicate them both to yourself and to the people who are close to you.

All investors misread markets leading to missed opportunities. The worst investors insist on staying on the sidelines after new information is revealed. Weve all doubled down on a bad position to appease our pride. Are you certain bitcoin is a scam? Or are you certain your financial woes can be overcome by doubling down on fiat currency? Put your cards on the table and be honest with yourself.

Best to find out what is true best to disperse the fog and find out if the sharp objects you feared were lurking there are real or fantastical. And there is always the danger that some of them are real. But it is better to see them than to keep them occluded by the fog, because you can at least sometimes avoid the danger that you are willing to see.

There is no end to Bitcoin FUD. Mainstream media has celebrated Bitcoin obituaries since Bitcoins birth. To know the truth requires searching through the fog first hand. That is the best way to turn confusion into clarity. Part of clearing the fog surrounding bitcoin is knowing that owning bitcoin can be dangerous but not owning bitcoin can be deadly. Disperse the fog so you know if bitcoin can work to your advantage.

We want to know what happened but, more importantly, we want to know why. Why is wisdom. Why enables us to avoid making the same mistake again and again, and if we are fortunate helps us repeat our successes.

Its good to know what purpose bitcoin serves, better to know how it works, and best to know why bitcoin matters. Why takes you to the level of architecture. The architect recognizes invisible patterns and has the ability to modify intelligently without jeopardizing collapse. An -80% downturn is sufficient to shake out most who simply know what bitcoin is as well as how it works. Knowing why bitcoin matters is the only path to unshakeable conviction capable of HODLing through an -80% downturn. Bitcoin maximalists who understand why it matters hold for reasons beyond price. Fiat currencies are a blueprint for obsolescence. Bitcoin is a blueprint for predictable success: Plan Bs Stock to Flow model predictably traces halving cycles. Bitcoin creates positive feedback loops.

Do not hide inflation in the fog.

This is a guest post by Nelson Chen. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

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Bitcoin Illuminates Inflation In The Fog - Bitcoin Magazine

The Tesla logo is seen at its store in New York on March 24. The automaker posted record earnings on Monday, thanks in part to a profit from its sale of Bitcoin. (Photo by John Smith/VIEWpress) VIEW press/Corbis via Getty Images hide caption

The Tesla logo is seen at its store in New York on March 24. The automaker posted record earnings on Monday, thanks in part to a profit from its sale of Bitcoin. (Photo by John Smith/VIEWpress)

Electric automaker Tesla reported record earnings this quarter, with a substantial boost from its cryptocurrency speculation.

The company announced $438 million in net income for the quarter, with a $101 million "positive impact" on profits from selling Bitcoin, according to its quarterly earnings report.

The company put $1.5 billion into the volatile cryptocurrency earlier this year, then sold about ten percent of its holdings to realize that profit, the company said.

"Elon and I were looking for a place to store cash that wasn't being immediately used, trying to get some level of return on this, but also preserve liquidity," Zach Kirkhorn, Tesla's chief financial officer and "master of coin" said on the earnings call.

Kirkhorn also cited the extremely low rate of return that conventional cash-like investments are offering at the moment.

"Bitcoin seemed at the time, and so far has proven to be, a good decision a good place to place some of our cash that's not immediately being used," he said.

Tesla CEO Elon Musk later said on Twitter that the sale was "essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet," rather than to take advantage of appreciation in the cryptocurrency's value.

Tesla is also accepting cryptocurrency as payment for its vehicles. Some critics have noted that the environmental impact of Bitcoin, which is very energy-intensive, is at odds with with the eco-friendliness of an electric vehicle.

Tesla also reported record production figures for the quarter, despite struggling with the same supply chain issues other automakers are grappling with.

As usual, the company also brought in significant revenue as a result of initiatives designed to boost electric vehicles. When other automakers don't produce enough zero-emissions vehicles to meet government requirements, they pay Tesla for "regulatory credits" that allow them to count Tesla's battery-powered vehicles against their own quotas.

Read the rest here:
Tesla Reports Record Earnings, With More Than A Bit Of Help From Bitcoin - NPR

A chief economist at UBS, the largest bank in Switzerland, sees a number of problems with bitcoin. In attempting to answer the question of whether the cryptocurrency defies the zeitgeist, he claims that bitcoin is denied to those minority groups who have reduced online access.

Paul Donovan, Chief Economist of UBS Global Wealth Management, published a weekly update entitled Does Bitcoin defy the Zeitgeist? on the UBS website Friday outlining a number of issues he sees with the cryptocurrency. UBS is the largest bank in Switzerland.

There is something weird about Bitcoin. Bitcoin seems to specifically defy the spirit of the age, in a way other cryptos do not, he began, adding:

Some suggest bitcoin is a safe haven from runaway inflation. But controlling supply does not guarantee value Bitcoin has a history of extreme price fluctuation.

We cannot keep living on environmental credit and must become increasingly sustainable, he continued, claiming that Bitcoin is increasingly destructive to the environment the more that is created and used, the worse the environmental damage.

Furthermore, he asserted: There is a global focus on reducing inequality. Bitcoin has extraordinarily unequal ownership. Holdings are concentrated amongst a tiny number of people, and its governance is more plutocratic than democratic. The economist additionally claimed:

Politicians and economists increasingly value inclusion, yet bitcoin is denied to those minority groups who have reduced online access.

As for the zeitgeist, he concluded that The modern trend that Bitcoin embraces is the power of narrative. Story telling matters hugely to Bitcoins evolution. Otherwise, Bitcoin seems opposed to the modern zeitgeist.

Many bitcoiners took to social media to counter Donovans argument. Bitcoin proponent Max Keiser tweeted: UBS doesnt understand the meaning of Zeitgeist. Faced with an existential threat from Bitcoin as the real popular zeitgeist moves against them Paul Donovan blabs boomer claptrap to the banks geriatric constituency hoping to stave off extinction. It wont work. Another Twitter user concurred: Im not sure you understand what the word zeitgeist means else youd be saying that Bitcoin is an integral part of it.

Regarding Donovans claim of bitcoins reduced access for minority groups, many people pointed out the hypocrisy. A different Twitter user commented:

Yeah sure, a UBS bank account is more available to these poor minority groups than a free bitcoin wallet on a cheap Android phone.

Another emphasized several flaws in Donovans claims, including that UBS requires a balance of 10,000 Swiss Franks to have an open account. I think people in crypto and bitcoin would agree this is a barrier for the people you claim to support.

In January, Donovan wrote that cryptocurrency has a fundamental flaw and that bitcoins fixed supply could cause the collapse of its value and spending power.

What do you think about Paul Donovans view on bitcoin? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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UBS Chief Economist Says 'Bitcoin Is Denied to Minority Groups Who Have Reduced Online Access' News Bitcoin News - Bitcoin News

Ether (ETH) has ascended to the apex of cryptocurrency in the last couple of weeks, taking the top spot from bitcoin (BTC).

As of this writing,ether has grown 40.23%so far since April 1 to a new all-time high of $2,700. In the same period, bitcoin has experienced adrop off of 7.39%from $58,772 on April 1 to $54,428, this morning.

JPMorgan points out the difference between ether and bitcoin as it pertains to this study. Bitcoin is much more a commodity than a currency at this juncture, competing with gold as a store of value. On the flipside, ethereum is the backbone of the cryptocurrency economy and serves as an exchange medium. JPMorgan commented:

To the extent owning a share of this [ethers] potential activity is more valuable, the theory goes, ether should outperform bitcoin over the long run.

They go on to say, As a consequence, a higher proportion of ether tokens behave as if highly liquid than bitcoin, 11% versus 4% by some estimates over the past month. In a market with significantly higher spot turnover, it is plausible that the underlying base of long exposure is less reliant on leverage in the form of futures and swaps.

In response to this grand divide between the two cryptocurrencies this month, JPMorgan has released their thoughts on why this occurred and provided three main reasons for the shift.

Last week, the cryptocurrency industry was hit hard by aliquidity shockthat originated in the derivatives market, according to JPMorgan. All were affected but, bitcoin was hit harder than most and much harder than ethereum. Ethers resistance to these events is pegged as reason number one for ethers ability to hang on while bitcoin slipped.

This liquidity shockoriginated in the derivatives market, leading to sizable liquidations. The effect was arguable greater in bitcoin futures, where liquidations of net longs since that event total 23% of the ex-ante open interest; that said ether is not behind with 17% of net long liquidations over the same period, JPMorgan states.

Story continues

While on-screen liquidity on BTC markets continues to improve on traditional asset classes, the risk reportedly remains high. As with many other global markets, the majority of liquidity comes from traders who are high-frequency-style. These types tend to run for the hills when volatility spikes and can cause these shocks to reverberate across the industry.

The second reason that JPMorgan points out is ethers lack of reliance on derivatives markets to transfer, or warehouse, risk.

In a market with significantly higher spot turnover, it is plausible that the underlying base of long exposure [in ether] is less reliant on leverage in the form of futures and swaps [than bitcoin].

The third and final major reason for the discrepancy in BTC and ETH right now is ether has a more durable underlying demand base.

The ethereum network has long been characterized by a higher pace of transactions on the public blockchain than does bitcoin, likely due in no small part to increased activity on DeFi and other platforms, JPMorgan points out.

Based on this, JPMorgan believes that a disproportionate amount of ether tokens act as highly liquid than bitcoin. Some estimates put the number at 11% (ETH) and 4% (BTC).

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Ether Should Outperform Bitcoin Over the Long Run, Says JPMorgan - Yahoo Finance

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Stocks with exposure to cryptocurrencies have gotten a turbo-boost this year.

As the price of Bitcoin and other coins has soared, public companies seen as proxies for the new asset class have sometimes risen even more than the cryptocurrencies themselves. One reason for that dynamic is that traditional investors have limited options for buying Bitcoin in their portfolios, and some appear to be trying to gain exposure through the handful of stocks that have embraced the technology.

With several companies saying they are incorporating Bitcoin or blockchain technology into their business models, or buying Bitcoin outright, it can be hard for investors to gauge which stocks are truly bound to benefit or suffer based on Bitcoin price moves. Goldman Sachs has put together a screening tool that tries to make that easier. Analyst Ben Snider used three main criteria to identify stocks that are closely tied to Bitcoin or the blockchain technology that powers it. His search was limited to stocks with market caps greater than $1 billion.

First, Goldman looked for stocks that had mentioned Bitcoin or blockchain in public filings, presentations, or transcripts of their earnings calls. News articles about them where the technology was mentioned also counted.

Next, they looked for companies whose stock prices had been most correlated with changes in Bitcoins price over the prior 12 months.

And lastly, they looked at membership in six blockchain-related indexes and exchange-traded funds, such as the Siren Nasdaq NexGen Economy ETF (ticker: BLCN).

On average, the 19 stocks on the list have risen 46% this year, versus 12% for the S&P 500. Bitcoin is up 86%.

Being on this list also tends to come with new risks. Most of the stocks are pricier than average. The median blockchain-related stock in the screen is trading at twice the price to earnings and enterprise value to sales multiples as the median U.S. stock.

The stocks in the list are: Marathon Digital Holdings (MARA), Riot Blockchain (RIOT), MicroStrategy (MSTR), Silvergate Capital (SI), Square (SQ), PayPal Holdings (PYPL), Overstock.com (OSTK), Nvidia (NVDA), Investview (INVU), Ideanomics (IDEX), Tesla (TSLA), JPMorgan Chase (JPM), Visa (V), Bank of New York Mellon (BK), Facebook (FB), Mastercard (MA), Broadridge Financial Solutions (BR), IBM (IBM), and Coinbase Global (COIN).

The first seven of those received the highest possible score of nine; Nvidia scored a seven; and the rest scored a six.

The main reason Coinbase isnt a nine (which it almost certainly would be) is that Goldman gives points only for stock correlation to Bitcoin if a stock has been trading for at least 12 months, and Coinbase just went public.

The list itself is not particularly novel, though it does at least create criteria for investors to consider if they want to embrace or avoid the industry. Those who believe in Bitcoin should probably just buy it outright. Dabbling in these crypto-pioneers is a poor facsimile for the real thing, and it still leaves portfolios with exposure on the downside if the industry goes south.

Write to avi.salzman@barrons.com

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19 Stocks With Exposure to Bitcoin - Barron's

Mila Kunis revealed that she gave her husband Aston Kutcher some bad financial advice.

During a recent appearance on"The Late Show with Stephen Colbert,"the 37-year-old actress spoke about Kutcher being aventure capitalistwho's built asuccessful fundover the last decade.

"The best part about him is he's really smart about including me in everything and making sure that I am aware of everything that's happening," Kunis told Colbert. "He's also really smart at knowing that sometimes, you shouldn't listen to your wife."

Kunis explained that while she offers solid advice when investing in consumer goods, she's "not the right person to ask" when it comes to venture capital opportunities.

"Early into our dating, two things came up. He was like, 'Hey, there's this company. It's kind of like a rideshare ... it's kind of like a cab company, but anybody can drive the cab," Kunis said. "I was like, 'That's the worst idea ever."

Kunis added that Kutcher tried to persuade with a demonstration, but she was still skeptical.

Kunis said: "He was like, 'Let me get you this thing. It's called Uber. Let me just order it for you. You can test this out.' And I was like, 'You're going to putmein a car with a stranger? What is wrong with you?'"

She also said that she was hesitant when Kutcher first introduced her to Bitcoin.

"Second time, it was, he sat me down and was like, 'Hey, babe, I got to explain this thing to you. Tell me if I'm crazy.' And I was like, 'Cool. What is it, babe?'" said Kunis. "He's like, 'There's this thing, it's like mining for money. It's called cryptocurrency, and there's this company' this is eight-plus years ago he's like, 'It's called Bitcoin."

The former "That 70s Show" star was concerned about investing in cryptocurrency because the Federal Deposit Insurance Corp didn't insure it.

"And I was like, 'Well, I think this is a horrible idea," Kunis continued. "And he went, 'Cool, we're investing in it.' So he didn't listen to me. I mean, this happens all the time."

Kutcher was anearly investor in Uber, Airbnb, and Spotify. He's made millions of dollars from his venture capitalist fund, A-Grade Investments, which grew from$30 million to $250 millionin six years.

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Mila Kunis warned Ashton Kutcher against investing in Uber and Bitcoin - Insider