Category Archives: Bitcoin

Bitcoin has been on a bull run for much of this year, increasing from $920 to now stand at $1,239, surpassing gold parity by around $2 at the time of publishing.

Bitcoin Surpassed Gold Parity image from cryptowatch

The currency has broken its all-time high while retaining value at current levels for some time. Benefiting from monetary mismanagement by authorities across the world during the second half of last year, its adoption has increased with bitcoins market cap now a hairbreadth away from $20 billion.

Gold has also increased during this year after reaching a low of $1,122 as some apparently began diversifying to bitcoin. For much of 2016, the two appeared to be inversely correlated, but began increasing at the same time this year. Gold, however, has fallen in value by $20 over the past 4 days.

Golds Price image from tradingview

The main reason for bitcoins current rise is probably due to the much-anticipated Bitcoin ETF. Only nine days to go now before a decision deadline. If it is not rejected by the 11th of March, then the ETF is automatically approved.

The two commissioners, Michael Piwowar and Kara Stein were profiled for CCN earlier this week. Piwowar probably leans towards approval. Stein is less certain, but as Piwowar is acting chairman, his decision would prevail. It is more probable, however, they will either both approve, reject or if they are split then allow the deadline to pass and thus default approve the ETF.

Prediction Markets have now moved to almost equally split, leaning slightly towards approval, with bets giving the ETF a 51% chance of approval at the time of writing. At one point, it reached a 70% chance of approval.

They can be gamed and there would be good reasons to do so in this case, but, as the deadline nears the chances of approval might increase.

Analysts are predicting stratospheric price rises if the ETF is approved, with some targeting a price of more than $3,000 per bitcoin. Hundreds of millions are expected to move in during the first week of trading as stock investors diversify with bitcoin a unique asset which does not correlate with anything else.

Piwowar has recently made some comments which appear to be directed towards the bitcoin ETF, including a mention of uncorrelated assets. In a speech at the SEC Speaks conference six days ago, Piwowar states:

In my view, there is a glaring need to move beyond the artificial distinction between accredited and non-accredited investors. I question the notion that non-accredited investors are truly protected by regulations that prevent them from investing in high-risk, high-return securities available only to the Davos jet-set.

In further comments, which seem to indicate the commissioner is in favor of approving the ETF, Piwowar states:

By holding a diversified portfolio of assets, investors reap the benefits of diversification. That is, the risk of the portfolio as a whole is lower than the risk of any individual asset. The correlation of returns is the mathematical key. When adding high-risk, high-return securities to an existing portfolio, so long as the returns from the new securities are not in perfect positive correlation with the existing portfolio, investors may reap higher returns with little to no change in overall portfolio risk. In fact, if the correlations are low enough, the overall portfolio risk can even decrease.

Kevin Lu, a hedge fund analyst, concludes in a detailed article for Seeking Alpha:

Bitcoin is a unique, uncorrelated asset class that is not strongly affected by the macroeconomic factors that drive most asset classes. There are extremely few assets that are this uncorrelated with other assets and that makes bitcoin extremely desirable from a portfolio construction perspective.

The commissioner has probably read that article and appear to be referring to it, but we wont know for certain until a decision is made or the deadline passes. For now, the market is trying to place their bets as well as price in a potential approval.

Featured image from Shutterstock.

Follow this link:
Bitcoin Just Surpassed Gold Parity - CryptoCoinsNews

This week, gold rose to a new short-term high and Bitcoin to a new all-time price peak. Gold is traditionally a safe-haven asset. In times of uncertainty and fear, gold tends to outperform other assets. Gold is also a traditional hedge against inflation that eats away at the value of many assets. Gold metal has a long history as a commodity and a means of exchange, a currency.

Over the course of history, gold has been around a lot longer than all of the currencies now traded in the foreign exchange market around the world. Gold is a commodity, and in the United States the Commodities Futures Trading Commission (CFTC) regulates the largest and most respected gold futures market in the world, the COMEX division of the Chicago Mercantile Exchange.

Meanwhile, Bitcoin is a cryptocurrency that is new on the financial scene. The Commodities Futures Trading Commission has defined Bitcoin as a commodity but it is much more than that. Bitcoin is a pan-global currency. Central banks, monetary authorities, or supranational financial institutions around the world do not control Bitcoin in any way, shape, or form.

So far in 2017, the prices of both gold and Bitcoin are moving higher. The bullish price action in these two assets could be telling us a lot about the value of paper money these days as well as the future for the status quo of foreign exchange markets.

Gold takes off in December, again

After a sharp and painful correction that took gold from over $1345 on November 9 to lows of $1127.20 on the active month COMEX April futures contract on December 15, the yellow metal shifted back into bullish mode.

Source: CQG

As the daily chart highlights, gold took off to the upside again after making lows in the middle of December and traded to a high of $1264.90 on Monday, February 27. The next level of technical resistance for the yellow metal is above $1300 per ounce. Gold has moved higher as fear and uncertainty in markets has caused a flight to quality assets and gold has a long history as a safe haven for investors.

The all-time nominal high for the price of gold came back in September 2011 when it traded to $1920.70. Gold has been making a statement about the faith in paper currencies since it initially rallied from the $1046.20 level in December 2015 and the trajectory of price is, in many ways, a commentary on faith in currencies and other asset prices these days. While gold has been shinning, another alternative currency has blown the roof off and traded to a new all-time high this week.

Bitcoin moves to a new all-time high

The price action in Bitcoin has been more bullish than in gold.

Source: CoinDesk

On March 1, the cryptocurrency traded to its highest level in history when the price hit over $1225 against the U.S. dollar, and by the time you read this piece, it is possible that Bitcoin is even higher.

The price action in both gold and Bitcoin has been bullish in 2017, which I interpret as an important event for the future value of world foreign exchange markets.

Paper currencies are losing value - backed by nothing but goodwill

Paper currencies around the world have the backing of the full faith and credit of the governments that print the dollars, euros, yen, Swiss francs, pound sterling, RMB, and many other world foreign exchange instruments. Gold and Bitcoin have appreciated against all of these currencies so far in 2017.

There are virtually no countries in the world today that back their monetary units with gold, silver or any other hard asset. While central banks, monetary authorities, and supranational financial institutions continue to hold gold as part of their foreign exchange reserves, the days of a gold standard ended decades ago.

The global financial crisis of 2008 and slowdown in Chinese economic growth over recent years has caused a tremendous amount of volatility in markets across all asset classes. Central banks have used monetary tools such as low short-term interest rates and quantitative easing to stimulate economic conditions. While many of these tools have avoided financial disaster by encouraging spending and borrowing and inhibiting savings, the trend in monetary policy and effects of massive liquidity has diluted the value of currencies to a point where faith in central banks and governments has been on the decline.

The value of a currency is a reflection of both economic and political conditions within the nation that prints legal tender. In China, a devaluation of the RMB has led many within the nation who have seen their wealth grow over recent years to seek more stable vehicles to preserve the value of their savings.

In Europe, Japan, and many other nations around the world, economic conditions remain lethargic. Only in the United States has the economy seen a turn of events with unemployment declining and GDP starting to show signs of growth. However, the new administration in the U.S. does not wish to see a runaway dollar when it comes to value against other currencies.

The administration wants the dollar lower

In 2014, the U.S. central bank began tapering off its quantitative easing program, and in late 2015, the short-term Fed Funds rate rose above zero for the first time since the financial crisis of 2008.

Source: CQG

As the monthly chart of the U.S. dollar index illustrates, the greenback took off against other world currencies in 2014 and rose from 79.83 to 100.38 in only ten short months. The over 27% appreciation of the dollar caused hardship for multinational U.S. companies, which found their products less competitive on world markets as a result of the rally in the dollar.

The dollar index stabilized and traded in a range from 92-100.60 during a twenty-month consolidation period that following the ten-month rally. However, after the election of Donald Trump as the forty-fifth President of the United States, the U.S. currency broke above technical resistance on the upside and rallied to the highest level since 2002 when it traded at 103.815 at the beginning of January 2017.

In the past, administrations in the United States followed a strong dollar policy. However, there are signs that the Trump Administration under Treasury Secretary Steve Mnuchin will not be advocates for a strong dollar at this time. Additionally, when the U.S. Federal Reserve released their monthly minutes of the latest FOMC meeting last week, one of the biggest concerns voiced by members of the body that determines short-term interest rates was that a strong dollar could weigh on economic growth.

The bottom line is that the dollar is strong against virtually all other currency instruments but the administration and central bank do not want to see the dollar continue to rise to new heights versus the world's other major currency instruments. Therefore, it is probable that the rallies in gold and Bitcoin are a reflection of a world where all paper currencies are losing value.

So many issues on the horizon favor both Bitcoin and gold

Currencies are a reflection of politics and economics. It was the financial crisis of 2008, an economic event that caused central banks to add liquidity to markets to avoid recessions or worse around the globe. However, today it seems that political forces have taken over and weigh on the value of monies printed by the governments of the world.

In China, the devaluation of the yuan and the non-convertibility of the currency for many Chinese, has led to an increase in the demand for pan-global monetary instruments like gold and Bitcoin. The rest of Asia depends on China, the world's second richest nation, for economic growth and stability. Therefore, the Chinese economic slowdown and currency devaluation could be leading other Asian citizens to safe haven and pan-global monetary instruments. In Japan, short-term interest rates at negative forty basis points make the yen a less than attractive currency to hold.

In Europe, the Brexit vote last June was likely the first shoe to drop on the political front. With the United Kingdom leaving the European Union, the economic might of Europe suffered a blow. In 2017, three other major E.U. member nations will go to the polls to elect leaders for the coming years. In the U.K., many voted to exit the E.U. because of immigration policies made in Brussels. These policies are not popular with many in other member nations and it is possible that the other member nations will also go rogue and decide to elect candidates that are not supportive of E.U. policy.

The first election will take place in March when citizens of the Netherlands go to the polls to elect a Prime Minister. A populist candidate is currently close to the top of the polls. In April, France will elect their next leader and Marine Le Pen, a far-right, anti-immigration, and anti-E.U. candidate is also receiving a lot of support in the polls leading up to the election. Later in this year, Germans will go to the voting booth to either give Chancellor Andrea Merkel another term or replace her with another candidate.

Germany is the largest and most influential economy in Europe. The Brexit vote in the United Kingdom started a nationalistic trend in Europe and if these three nations decide to reject the status quo in the months ahead, it will have dire ramifications for the future of the European Union and the euro currency.

Source: CQG

As the monthly chart of the euro currency highlights, the currency has declined from around the $1.40 level against the dollar in May 2014 to under $1.06, the lowest level since 2003. A rejection of the current leadership and those who favor the Union over a nationalistic solution will likely cause the euro currency to weaken further in the months ahead. Like in Japan, the short-term yield on the euro is at negative forty basis points and the European Central Bank continues to follow a course of quantitative easing making the euro currency a less than attractive instrument to hold.

The election of Donald Trump as the forty-fifth President of the U.S. was yet another blow to the trend towards globalism in the world. President Trump has pledged to "put America first" when it comes to relations with the rest of the world. The new administration ran on a platform that was against many multilateral trade agreements negotiated by former administrations. President Trump has told the world that trade agreements will be on a bilateral basis going forward.

He also told the rest of the world that protection comes at a price and that other allied nations around the world will need to start contributing their fair share as America has been shouldering the financial burden of keeping the world safe causing the nation's deficit to grow to over $20 trillion. A dramatic change in U.S. relations with the rest of the world is yet another reason for uncertainty and fear when it comes to the future of financial markets.

Gold and Bitcoin are moving higher so far in 2017 and the value of paper currencies are in question as citizens across many nations are going to the polls and expressing dissatisfaction with the status quo. It is interesting that a move away from globalism towards nationalistic candidates in the political world is causing gold and Bitcoin to appreciate. After all, in many ways, gold and Bitcoin are pan-global currency instruments that attract safe haven buying.

For centuries, gold has been not only a store of value, it has been an instrument used when the political climate creates the need for flight capital. When it comes to Bitcoin, the cryptocurrency is a means for people all over the world to avoid the manipulation and restrictions placed on money by central banks and governments so they can money wealth and savings around the globe. Many around the world are rejecting the politics of globalism in exchange for nationalism.

The world has become a smaller place because of advances in technology. The strength in gold and Bitcoin is telling us that many embrace a global view towards economics and that their money and wealth should not be under control of the governments and central banks in power. It will be interesting to see if global wealth and free flowing money that travels under the radar of governments can coexist with nationalistic political policies around the world and if the governments can do anything about the increasing popularity of these assets.

The Chinese have a saying that goes something like this, "May you live in interesting times." It will be interesting to see if the trend that started in 2016 with the Brexit vote and Presidential election in the United States continues in Europe and around the globe in 2017. Right now, both gold and Bitcoin are saying that the trend is firmly in place.

I have introduced a new weekly service through Seeking Alpha Marketplace. Each Wednesday, I will provide subscribers with a detailed report on the major commodity sectors covering over 30 individual commodity markets, most of which trade on U.S. futures markets. The report will give an up, down or neutral call on these markets for the coming week and will outline the technical and fundamental state of each market.

At times, I will make recommendations for risk positions in the ETF and ETN markets as well as in commodity equities and related options. You can sign up for The Hecht Commodity Report on the Seeking Alpha Marketplace page. Additionally, check out my website for more information about commodities.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

View original post here:
What Are Bitcoin And Gold Saying About Paper Money - Seeking Alpha

CoinDesk, the leading trade publication covering bitcoin and blockchain news, has a new CEO, its first: Kevin Worth, former CFO of Bloomberg Digital Media.

While digital currency may be a non-traditional coverage area, the jobotherwise looks like an obviousfit withWorths background in managing digital content businesses.

In the late 90s, Worth worked in corporate strategic planning at the New York Times. Then he was founding CEO of The Deal, the financial data and news site funded by investment banker Bruce Wasserstein. Worth stayed on for a year after The Deal sold to The Street. He spent the pastcouple of years as CFO of Bloombergs digital and television businesses.

Just over 12 months ago, in January 2016, CoinDesk sold to Digital Currency Group, the biggest investment firm in bitcoin and blockchainstartups (withinvestments in over 90), led by Barry Silbert, the founder of SecondMarket. DCG placed its own Ryan Selkis in charge of CoinDesk on the business side, but pledged that Selkis and DCG would have no involvement in editorial decisions at the site.

Selkis was never CoinDesks CEO; Worth is its first. He will run business and editorial, the way that a typical magazine publisher would; the sites editor is Pete Rizzo.

Kevin Worth, new CEO of CoinDesk

CoinDesk has 13 full-time employees.Last month, the sitemade its first acquisition: the bitcoin data app Lawnmower. Lawnmowers historical price data and charts, as well as its staff, got folded into CoinDesks in-house research arm(which produces reports such asa new one on blockchains for insurance), a sign it is serious about the information-selling side of its business.

DCGs main interest in CoinDesk was always for Consensus, its live bitcoin conference in May, first held in 2015. Last year, the event attracted 1,5000 attendees. Worth, from his time at Bloomberg, has seen the growth of live events as a money-maker for publishers. These days, live programming is a vital arm of the business for news organizations like Time Inc, Business Insider, and Re/code.

Under Worth, expect CoinDesk to place further emphasis on two pillars: live events like Consensus, and research reports for a fee. To me, if you look at where the value in the content marketplace is being created, Worth says, its live events and business information products. I see an opportunity for CoinDesk to gain a pole position in becoming the must-have, go-to resource for the industry.

Worth sounds more fired up about events and information than the news side, which is what CoinDesk is for many of its readers: a vital news outlet. He confirms that Consensus, for now, is his main focus.

So, moving forward, will CoinDesk look more like a data resource, or a news blog?

I think its a little all-of-the-above, Worth says. I can tell you that the playbooks I have had in the past think about having many different audiences, and how to serve all of them. What got me so excited about coming is that its pretty much a whiteboard.

A look at CoinDesks homepage on Feb. 28, 2017

Read More

In terms of news coverage, it sounds like CoinDesk may soon see itself less as a mainstream news site covering bitcoin and blockchain news for the masses. When asked if other business news outlets that cover bitcoin news are competitors, Worth says, If they are serving a broad, general interest community, then no. We are keeping our eye on serving industry professionals.

Just a few months ago, Worth knew very little about the digital currency bitcoin, and the blockchain technology that underpins it. (What exactly is blockchain? Watch this video.) After Barry Silbert called, I did a lot of research and started to learn a lot more, and I drank the kool-aid, if you will, says Worth.

He hasnt bought any bitcoin as an investment just yet.

Digital currency, Worth says, feels a little bit to me like when the first Internet hype came. There is a tremendous need to understand all the potential implications, people trying to understand it and make sense of it. From my time at Bloomberg Im close to the world of institutional finance, and thats an industry that hasnt really had the amount of transformation that has gone on in, say, the media business. So, lets see where the opportunity is for those businesses to transform, which are much more fundamental to the global economy.

As the interest in blockchain technology (especially from banks) has grown, CoinDesk has grown and expanded its purview from bitcoin, to additional digital assets like Litecoin, Ripple, and Ethereum, to blockchain news. In the near future, Worth sees the challenge and competition coming from data providers, not necessarily media outlets.

I see this as a wide open field, he says. What Im focused on, to be honest with you, its not other media or content companies that are the competition, but other information providers who might move into the space, whether thats consulting firms or other information providers. But we ought to be smarter than them, because they may just have two or three people looking at it and we have a whole team.

Other information providers that might move into the bitcoin and blockchain space? That sounds like it could include Bloomberg, his old employer. And thats fine for Worth, who says he learned a great deal while there. I understand what their business model is about. Its really the only company I can think of where they have scale but its still dominated by the owner, who is still the CEO and its his capital and you follow his lead, Worth says. After his years there, hes ready for something entrepreneurial.

And thats why Silbert tapped Worth, he says: corporate experience that can help turn a modest-sized blog into a full-scale information seller.

I believe digital currency is a transformational asset class that will attract meaningful amounts of capital over time, Silbert says. (Its a sound bite he likes to repeat.) And then theres a lot of interest in blockchain, and distributed ledger technology, to make processes more efficient Were obviously super bullish on bitcoin, blockchain technology, and all the applications that are going to come. All we needed was an experienced operator like Kevin to come in and help scale the business.

CoinDesk expects to become profitable this year.

Daniel Roberts is a writer at Yahoo Finance, covering technology and media. Follow him on Twitter at @readDanwrite.

Read more:

Bitcoin is becoming the new gold

Expect more blockchain hype in 2017

Heres where big banks stand on blockchain

Why 21.co is the most exciting bitcoin company right now

See more here:
Bitcoin site CoinDesk poaches Bloomberg exec as new CEO - Yahoo Finance

DURHAM, N.C., March 1, 2017 /PRNewswire/ --MGT Capital Investments, Inc. (MGTI) today announced that its Bitcoin Mining Pool is scheduled to be fully available to the Bitcoin network early in the second quarter of 2017. Code development has been completed and security testing is underway. Upon launch, MGT plans to offer the world's most secure mining pool, branded MacPool, using the Company's proprietary cybersecurity utilities, and hosted exclusively on U.S. based servers.

Bitcoin mining pools are a mechanism for Bitcoin mining nodes to combine resources, share hashing power and split rewards on a pro-rata basis. With Bitcoin valued at all-time highs, and consumer adoption reaching an inflection point, transaction numbers are expected to grow significantly. The growth in daily commerce using Bitcoin will increase the importance of aggregated mining pools to verify and report transactions to the Blockchain.

John McAfee, Chief Executive Officer and Executive Chairman of MGT stated, "Our mining pool is a natural outgrowth of our investment in Blockchain technology as a foundation for future cybersecurity products. Large and respected Bitcoin mining operators will rapidly take over the enormous transaction processing requirements necessary for all companies to secure themselves in the near future. As a publicly-traded company, MGT leverages our unique opportunity to provide investors with a suitable proxy to participate in the profitable bitcoin mining space."

About MGT Capital Investments, Inc.MGT Capital Investments, Inc. (MGTI) is in the process of acquiring and developing a diverse portfolio of cybersecurity technologies. With industry pioneer John McAfee at its helm, MGT is positioned to address various cyber threats through advanced protection technologies for mobile and personal tech devices, as well as corporate networks.

Also as part of its corporate efforts in secure technologies, MGT is growing its capacity in mining Bitcoin. Currently at 5.0 PH/s, the Company's facility in Washington state produces about 100 Bitcoins per month, ranking it as one of the largest U.S.-based Bitcoin miners. Further, MGT is in active discussions with financial partners to grow Bitcoin output materially.

Lastly, MGT stockholders have voted to change the corporate name of MGT to "John McAfee Global Technologies, Inc." Following a dispute over ownership and permitted usage of the name McAfee, The Company and Intel have agreed to a mediation process to avoid unnecessary legal costs.

For more information on the Company, please visit:http://ir.stockpr.com/mgtci.

Forwardlooking StatementsThis press release contains forwardlooking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forwardlooking statements." All information set forth in this news release, except historical and factual information, represents forwardlooking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forwardlooking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forwardlooking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.

Read More

Original post:
Development Completed on MGT Bitcoin Mining Pool - Yahoo Finance

Digital cryptocurrency bitcoin hit a record above $1,200 last week. Thats in large part because of speculation about the potential launch of the first-ever U.S. bitcoin ETF, but it also may be because of the uncertainty around all manner of investments in 2017.

After all, bitcoins advocates claim that it is a safe haven asset akin to gold. And according to a recent CNBC analysis, the digital currency has performed better than any other currency in every year since 2010 apart from 2014.

In an age where central banks in Europe and Japan continue to keep rates in negative territory and accusations of currency manipulation are a fixture of the Trump administration, you can understand why a digital currency like bitcoin has some appeal.

But its worth noting that bitcoin US:BTCUSD is notoriously volatile, and that its underperformance in 2014 was highlighted by a tremendous flop of about 70% from roughly $950 in January to under $300 at the end of that year. And since the currency has digital roots and was launched less than a decade ago, its also a popular target for internet crooks from small-scale phishing scams targeting would-be investors to hackers making off with a cool $65 million in bitcoin from Hong Kong exchange Bitfinex.

So whats the future of bitcoin? Will an ETF launch legitimize the digital currency and create a new option for investors looking to diversify into alternative assets? Or will the ups and downs of bitcoin continue, with a lucky few winning on their gamble even as volatility and outright criminal activity bankrupt others?

Here are some pros and cons of investing in this digital currency:

Long-term staying power: Bitcoin has reached roughly $19 billion in market value about 60% more than the total value of the digital currency during its previous peak in the 2014 bitcoin bubble. That rise hasnt been without serious volatility, of course, but the long-term gains in the last few years are dramatic as the currency has soared from roughly $15 as the start of 2013 to roughly $1,200 at present.

Playing nice with regulators: Despite a bitcoin user base that is sometimes generalized as libertarian or even anarchistic in their politics, there are many digital currency advocates who are quite comfortable playing by the rules of Washington and Wall Street going forward. A representative of the Bitcoin Foundation, for instance, told policy makers in 2013 that the organization wishes to craft a sane regulatory environment, and that it is comfortable with oversight so long as rulemaking is open and transparent. And outside the U.S., digital currency advocates in Australia and India are pushing self-regulation as a first step toward a shared set of rules in these marketplaces. This is all very good for the future of bitcoin as a legitimate alternative asset.

Former U.S. Chief Information Security Officer Brig. Gen. Gregory Touhill and Former Central Intelligence Director James Woolsey rank about the actors that pose the greatest threat to U.S. security. They speak with WSJ's Gerald Seib at the CIO Network in San Francisco.

Bitcoin isnt the problem bureaucracy is: There is a very real risk that the SEC will continue to drag its feet and we may not see a bitcoin ETF in the near future. But that could be a commentary on market bureaucracy rather than the future of bitcoin. As the former head of ETF listings at the New York Stock Exchange recently told MarketWatch, Bitcoin is new and different, and theres no incentive for regulators to be innovative. Even if there are setbacks, the rapid adoption of bitcoin is encouraging and like many technologies, it simply needs to wait for everyone else to catch up. Being an early adopter has been highly lucrative for bold investors in recent years, and things may only improve as the market and merchants catch up.

Crazy volatility: Bitcoin is hardly the only volatile investment out there. Take three-times leveraged gold miner investments Direxion Daily Gold Miners Bull 3X ETF NUGT, +1.79% and Direxion Daily Gold Miners Bear 3X ETF DUST, -2.19% as the poster children of aggressive, short-term instruments that can make a lucky few rich or bankrupt the unprepared.

In a typical retirement portfolio, there is no real place for bitcoin or leveraged ETFs or naked short selling or other risky strategies.

Former U.S. Chief Information Security Officer Brig. Gen. Gregory Touhill talks about some of the motivations of the hackers attacking U.S. companies. He speaks with WSJ's Gerald Seib at the CIO Network in San Francisco.

Hackers and scandals: The 2015 Silk Road scandal and the 2016 Bitfinex theft are pretty dramatic examples of the risks that come with an asset that isnt tangible. And even if you just isolated incidents, you have to acknowledge what such events do to investor sentiment. Just as the Wells Fargo WFC, +3.20% fraud scandal of 2016 had real consequences for the stock, further data breaches or bitcoin thefts could create huge headwinds for bitcoin investors and the adoption of the cryptocurrency. Throw in continued chatter about how bitcoin is the preferred currency for drug lords and sex traffickers, and even the most enthusiastic supporter must admit the risk of real tarnish to the bitcoin brand if these headlines continue.

Bitcoins big risk is its big reach: A 2016 report from a group of regulators that includes the Treasury, the SEC and the Federal Reserve warned that risks of bitcoin may not become apparent until they are deployed at scale and specifically highlighted potential problems arising simply because of the speed and volume of transactions.

There are plenty of other honest reasons to be concerned but when bitcoins biggest systemic challenge is simply executing transactions and reliably integrating into the financial system, that is a big red flag. It doesnt mean bitcoin doesnt have staying power, but it should warn investors of just how risky this currency remains despite talk of a mainstream ETF.

See the original post here:
Opinion: Should you invest in a bitcoin ETF? - MarketWatch

Kraken, which runs an exchange for trading bitcoin and other digital assets, has acquired Cryptowatch, a charting and trading platform.

With the acquisition, Kraken released an upgraded trading interface on Wednesday, too. Cryptowatch is used by thousands of traders to chart more than 150 markets in real time and trade as many as 22 digital assets. Terms were not disclosed.

The deal comes as bitcoin's exchange rate with the dollar is hitting all-time highs, partly on expectations that a proposed exchange-traded fund will receive SEC approval. The digital currency, controlled by no central bank or authority, is also seen by some investors as a gold-like haven from instability and capital controls.

Artur Sapek, Cryptowatch's founder, is joining Kraken to continue developing Cryptowatch and lead the development of Krakens interface, the buyer said.

Im thrilled to welcome the Cryptowatch trading platform and its founder into the Kraken family, said Kraken CEO Jesse Powell. We plan to devote more resources and talent to further enhance its offering."

The acquisition of Cryptowatch is the most recent in a series of deals struck by Kraken in the last year as it looks to leverage it global client base, add services and recrruit talent to its team.

Kraken previously acquired bitcoin exchanges Coinsetter, Cavirtex and CleverCoin, as well as wallet funding service Glidera. That firm will soon be rebranded as Kraken Direct.

Robert Barba is the technology editor of American Banker.

Read the rest here:
Crypto exchange Kraken acquires trading platform as bitcoin soars - American Banker

Bobby Lee, BTCCs co-founder and CEO recently tweeted a bitcoin price prediction, which is between $5,000 and $11,000 by 2020, after the block reward halving. The entrepreneur, who regularly makes predictions, also stated the daily inflow would scale accordingly from the current $2 million a day level, up to $5-$10 million a day.

Bobby Lee also reminded his 5,600 Twitter followers his medium-term price target for bitcoin is of, well, $5,600. There was, however, no mention of how long it will take bitcoin to reach that value. Later on, Lee also said that a $5-$10 million daily inflow isnt a lot. He compared it to golds inflow of $340 million a day.

The CEOs enthusiastic bitcoin price prediction comes after BTCC, one of Chinas biggest bitcoin exchanges, suspended bitcoin and litecoin withdrawals until March 15, in order to introduce new security requirements and comply with requests from the Peoples Bank of China (PBOC). Recently, Chinas big 3 bitcoin exchanges enforced a suspension of cryptocurrency withdrawals, and in response, traders turned to peer-to-peer marketplace LocalBitcoins.

As reported by CryptoCoinsNews, LocalBitcoins recently recorded a global all-time high, as Chinas trading volume surged in response to the exchanges decision. Its worth mentioning LocalBitcoins is blocked in China, as it uses Googles reCAPTCHA system, so users need to use a VPN to access the platform.

In the past,the CEO has addressed bitcoinsfuture in a positive way, by urging to community to scale responsibly and to be patient, so as to focus on maintaining bitcoin as a reliable digital asset. His upbeat attitude hasnt changed with time, as tough times for bitcoin in China never seem to have bothered him that much. He also sees bitcoins low volatility as a sign of maturity, just alike a few other experts, as bitcoin needs low volatility in order to maintain its growth and stability

Positivity is always welcomed in the bitcoin community. PBOCs interference with bitcoin has taken a toll on the cryptocurrencys value in the past, as it even forced HaoBTC, a prominent bitcoin company, to shut down its exchange. Nevertheless, bitcoin recently bounced back and managed to go beyond its new all-time high.

Image from Shutterstock.

Read the original post:
BTCC CEO Lee Pegs Bitcoin Price Between $5000 and $11000 by 2020 - CryptoCoinsNews

Marco Strengs computer servers are what make Ethereum tick.

Thousands strong, they whir day and night, solving the complex math riddles that are essential to verifying transactions on the hottest new platform in the world of cryptocurrencies and blockchains. Without these machines, or those deployed by Strengs biggest rivals, there would be no Ethereum.

But mining, as the practice is called, is costly and inefficient and, frankly, a bit weird. And Ethereums developers have always envisioned a time in which the cumbersome process of brute-force computing would be replaced by a system that relies simply on collateral. That time, some four years after the network was first proposed, is now. The developers want to put this proof-of-stake model, called Casper, into place by year-end.

The stakes are high. If Ethereum is going to take advantage of the potential that companies like JPMorgan, Microsoft and IBM see in its underlying transaction technology, the blockchain, as the potential backbone that could reshape modern business and finance, it needs to gain wide adoption to become something of a de facto standard.

Without mining, Ethereum will be more usable, more secure and more scalable too, said Vlad Zamfir, whos been working on Casper since 2014.

The main draw of the blockchain is that its a cryptographically secured list of transactions that can be shared, which backers say could dramatically improve how financial services, supply-chain and health-care industries are run. (Think immediate settlement of bank transfers and securities trades, as well as near-real-time tracking of food products or research samples.) Ethereum also allows for the use of smart contracts, or pieces of computer code that make the terms of such agreements operate automatically.

Miners have been critical to the growth of Ethereum. The market for ether, the digital currency used to pay miners who support the network, has soared 90 percent this year alone. Its the second-most popular cryptocurrency behind bitcoin, which has gained 24 percent in the same span, setting records almost every day as investors look to hedge against potential global uncertainty and hope for a bitcoin-based exchange-traded fund to get regulatory approval.

Even before Ethereum was first released in 2015, developers had envisioned moving away from the mining-based model, known among tech geeks as proof-of-work.

As the network gets more popular, the computations the miners need to complete to validate transactions get harder and harder. Not only has this created the potential for bottlenecks, like those already plaguing bitcoin, but its also set off an environmentally taxing arms race among the biggest miners, which run server farms consuming vast amounts of electricity.

And to many techno-utopian enthusiasts, using all that computing power to continually solve what amounts to pointless problems is a big waste.

Thats where Casper comes in.

Rather than rewarding miners with the most computing power, the proof-of-stake model requires that users put up collateral if they want to collect fees for validating transactions. The more collateral you put up, the more money you can get paid for verifying transactions.

It would take power away from miners like Streng, who have to approve software changes, and make it easier to implement improvements on the fly. A handful of bitcoin miners in China have already hamstrungsome attempts to increase that cryptocurrencys capacity. (Miners cant vote against the switch.)

The move will make Ethereum more attractive in large-scale applications, said William Mougayar, author of The Business Blockchain.

Your cheat sheet on life, in one weekly email.

Get our weekly Game Plan newsletter.

Hyperledger, a blockchain venture with more than than 100 members including IBM, JPMorgan and American Express, could adopt Ethereums proof-of-stake model if its successful, according to Brian Behlendorf, the consortiums executive director. It could also help put the network in a league of our own, Andrew Keys, head of global business development at startup ConsenSys, the worlds largest Ethereum-centric blockchain software engineering company.

Making proof-of-stake work is hardly a foregone conclusion.

Caspers rollout has been delayed before. And the use of deposits potentially increases the risk of hacking. (While Zamfir said hes working to make sure hackers cant steal deposits, he couldnt rule out the possibility, however remote, that an attack could, in effect, delete the money.)

Streng, who stands to lose out if Casper is implemented, is wary.

Theres a lot of incentive for people to game the system, he said.

Trust in Ethereum was badly shaken last summer, when a hacker stole millions from a projectcalled the DAO. Developers had to rush to implement a software change, which ended up splitting the Ethereum community in two. Now, each operates its own, separate blockchain.

Zamfir says the benefits outweigh the risks. One of the biggest is transaction finality. Unlike most blockchain technologies, which require multiple verifications, settlement on Casper can occur much faster. With some enhancements, the feature could ultimately enable Ethereum to process more payments faster -- a key selling point for financial companies.

Mona El Isa, a formerGoldman Sachs trader who runs Melonport AG, which builds software for fund managers who invest in digital assets on Ethereum, is confident that developers can work out any kinks with Casper.

In these early stages of this new technology, you cant expect everything to go right, El Isa said.

If Casper ultimately happens, Streng says it wont be the end of the world. He can redeploy his servers to mine other cryptocurrencies or become a depositor on Ethereum instead. But he isnt holding his breath just yet. Implementing such a sweeping change isnt going to be easy and its still possible the plan could be scrapped altogether, he says.

The developers have very bright minds, he said. Nevertheless, they wouldnt risk the Ethereum network, in my opinion.

See original here:
Bitcoin's Top Rival Is Up 90% and Ready to Ditch Mining - Bloomberg

In a bid to create transparency and build credibility, bitcoin startups Zebpay, Unocoin, Coinsecure and Searchtrade on Monday launched Digital Asset and Blockchain Foundation of India (DABFI), a self regulatory body for the orderly and transparent growth of virtual currency market.A committee spearheaded by Saurabh Agrawal, CEO of Zebpay with representation from each of the startups has been set up.DABFI will lay down self-regulatory regimes for trading of bitcoins and other blockchain based digital assets.They will also standardise norms such as KYC for member companies. The body intends to liaise with regulators and get clarity on taxation, attract investment, build global relations and actively engage with International community and spread awareness on the cryptocurrency . "This organization aims to drive education and create market for blockchain and bitcoin in India which is now on the path towards digitisation. Our vision would be to work with regulators and develop strong framework for our industry to provide required impetus for growth of the industry ," said Agarwal of Zebpay . Providing legal support to DABFI, Nishith Desai said, "Bitcoin and other cryptocurrencies have tremendous benefits for most marginalised people, merchants, tax departments and regulatory authorities. It has better price discovery , is anti-inflationary and the transactions are irreversible. Globally , the demand for cryptocurrency is increasing and in the future, we might see several countries adopt currencies like Bitcoin as their legal tender." Today, legal authorities across the globe are struggling to understand bitcoins and draft suitable regulations. While an estimated over 6 million bitcoins are traded on a daily basis, the currency however, is yet to see adoption by a large majority in India. "It is absolutely important to check the `bad' use of cryptocurrencies. Industry has to play an important role in shaping the future of CC and blockchain. ," said Agarwal.

See more here:
Bitcoin startups join hands, set up self regulatory body - Times of India

Forbes

New Guidelines Give Bitcoin Startups In The Philippines 'A Fighting Chance' Forbes Earlier this month, the Filipino government issued regulatory guidelines concerning Bitcoin use in the country. The guidelines were welcomed by startups in the country, as official clarity and endorsement of the cryptocurrency are expected to help ... Latest Regulatory Changes Give Bitcoin Startups in the Philippines A Chance to SurvivenewsBTC all 2 news articles »

See more here:
New Guidelines Give Bitcoin Startups In The Philippines 'A Fighting Chance' - Forbes